Exhibit 10.2

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This Intellectual Property Security Agreement, as it may be amended, restated or
otherwise modified from time to time (this “Agreement”), is executed and
delivered at Newark, New York as of this 1st day of May, 2019, by SOUTHWEST
ELECTRONIC ENERGY CORPORATION, a corporation organized under the laws of the
State of Texas (together with its successors and assigns, “Pledgor”), to KEYBANK
NATIONAL ASSOCIATION (together with its successors and assigns in its capacity
as agent, “Agent”), as agent for the financial institutions which are now or
which hereafter become a party to the Credit Agreement, as hereinafter defined
(collectively, “Lenders”).

 

RECITALS:

 

Pledgor, CLB, INC., a Texas corporation (“CLB”), ULTRALIFE CORPORATION, a
Delaware corporation (“Existing Borrower”, and together with the Pledgor and
CLB, collectively, the “Borrowers”, and each individually a “Borrower”), Lenders
and Agent are entering into that certain First Amendment Agreement, dated as of
the date hereof (the “First Amendment”).

 

Pledgor and CLB, concurrently with the First Amendment, are joining as a
Borrower to that certain Credit and Security Agreement dated as of May 31, 2017
(as amended and as it may from time to time be further amended, restated or
otherwise modified or supplemented, the “Credit Agreement”) among Borrowers,
certain other Credit Parties (as defined in the Credit Agreement) which from
time to time become party to the Credit Agreement, Lenders and Agent. Pledgor
desires that Lenders continue to grant to Borrowers the financial accommodations
as described in the Credit Agreement.

 

Pledgor deems it to be in its direct pecuniary and business interests that it
obtain from Lenders the Loans (as defined in the Credit Agreement), and other
financial accommodations provided for in the Credit Agreement.

 

Pledgor understands that Agent and Lenders are willing to enter into the First
Amendment and continue to grant to Borrowers the Loans and Letters of Credit and
such financial accommodations only upon certain terms and conditions, one of
which is that Pledgor grant to Agent, for the benefit of Lenders, a security
interest in, and a collateral assignment of, the IP Collateral, as hereinafter
defined, and this Agreement is being executed and delivered in consideration of
Agent and Lenders entering into the First Amendment, continuing to grant to
Borrowers the Loans and Letters of Credit and such other financial
accommodations and for other valuable consideration.

 

NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.     Definitions. As used herein, the following terms shall have the following
meanings:

 

“Assignment” shall mean an Assignment in the form of Exhibit A hereto.

 

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“Debt” shall mean the Secured Debt, as such term is defined in the Credit
Agreement.

 

“IP Collateral” shall mean, collectively, all of Pledgor’s existing and future
(a) Patents; (b) Trademarks; (c) Licenses; (d) all of the goodwill of Pledgor’s
business, including, but not limited to, all goodwill connected with and
symbolized by the Trademarks; and (e) proceeds of any of the foregoing;
provided, however, that notwithstanding any other provisions of this Agreement
or the Credit Agreement, in no event shall IP Collateral include “intent-to-use”
Trademarks until such time as Pledgor begins to use such trademarks and evidence
of use of such trademarks in interstate commerce is submitted to and accepted by
the PTO, for so long as the grant of such security interest shall constitute or
result in: (x) the abandonment, invalidation, unenforceability or other
impairment of any right, title or interest of any Credit Party therein, or (y)
in a breach or termination pursuant to the terms of, or a default under, any
such lease, license, contract, agreement or other property right, but only so
long as any restriction, prohibition and/or requirement of consent resulting in
(x) or (y) above is effective and enforceable under applicable law and is not
rendered ineffective by applicable law (including, without limitation, pursuant
to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC).

 

“Licenses” shall mean any license agreement with any other party which is
material to the business of Pledgor and which is not an “off the shelf” license,
whether Pledgor is a licensor or licensee under any such license agreement, if
any, including, without limitation, the licenses listed on Schedule C attached
hereto and made a part hereof, and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter owned by Pledgor and now or
hereafter covered by such licenses.

 

“Patents” shall mean any patent and patent application, including, without
limitation, the inventions and improvements described and claimed therein, if
any, and including those patents listed on Schedule A attached hereto and made a
part hereof, and (a) the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof; (b) all income, royalties, damages
and payments now and hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for past or future
infringements thereof; (c) the right to sue for past, present and future
infringements thereof; (d) all rights corresponding thereto throughout the
world.

 

“Obligor” shall mean a Person whose credit or any of whose property is pledged
to the payment of any portion of the Debt and includes, without limitation, (a)
any Borrower, (b) any Guarantor and (c) any signatory to a Related Writing.

 

“PTO” shall mean the United States Patent and Trademark Office.

 

“Trademarks” shall mean any registered trademark, trademark registration, trade
name and trademark application, registered service mark, service mark
registration, service name and service mark application, if any, including,
without limitation, the trademarks, trademark registrations, trade names and
trademark applications, service marks, service mark registrations, service names
and service mark applications listed on Schedule B attached hereto and made a
part hereof, and (a) renewals thereof; (b) all income, royalties, damages and
payments now and hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payment for past or future
infringements thereof; (c) the right to sue for past, present and future
infringements thereof; and (d) all rights corresponding thereto throughout the
world.

 

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Capitalized terms used in this Agreement without definition have the meanings
ascribed to such terms in the Credit Agreement.

 

2.      Grant of Security Interest. In consideration of and as security for the
full and complete payment of all of the Debt, Pledgor hereby agrees that Agent
shall at all times have, and hereby grants to Agent, for its benefit and for the
ratable benefit of each Lender, a security interest in all of the IP Collateral,
including (without limitation) all of Pledgor’s future IP Collateral,
irrespective of any lack of knowledge by Agent or Lenders of the creation or
acquisition thereof.

 

3.      Warranties and Representations. Pledgor represents and warrants to Agent
and Lenders that as of the date hereof:

 

(a)     Pledgor owns all of the existing IP Collateral, whether the same are
registered or unregistered and no such IP Collateral has been adjudged invalid
or unenforceable, and each License is a valid and binding obligation of Pledgor
and, to the knowledge of Pledgor, the other parties thereto;

 

(b)     except as set forth on Schedule 5.9 of the Credit Agreement, Pledgor has
no written knowledge of any claim that the use of any of the IP Collateral
violates the rights of any Person;

 

(c)     except for Permitted Liens and for licenses granted by Pledgor as
licensor listed on Schedule 5.9 of the Credit Agreement, Pledgor is the sole and
exclusive owner of the entire and unencumbered right, title and interest in and
to the existing IP Collateral, free and clear of any liens, charges and
encumbrances, including, without limitation, pledges, assignments, licenses,
registered user agreements and covenants by Pledgor not to sue third Persons;

 

(d)     Pledgor has full power, authority and legal right to pledge the existing
IP Collateral and enter into this Agreement and perform its terms;

 

(e)     Pledgor has used, and shall continue to use, for the duration of this
Agreement, proper statutory notice in connection with its use of the IP
Collateral;

 

(f)     Pledgor represents and warrants that it is the true and lawful owner of
the Trademarks listed on Schedule B attached hereto and made a part hereof, and
that said listed Trademarks constitute all the marks registered in the PTO that
such Pledgor now owns or uses in connection with its business, other than any
such marks which are (i) owned but not used and (ii) not material to its
business. Pledgor represents and warrants that it is the true and lawful
licensee of the Trademarks listed on Schedule C attached hereto and made a part
hereof, and that said listed Trademarks constitute all the marks that such
Pledgor uses in connection with its business that are not owned by it. Pledgor
represents and warrants that it owns or is licensed to use all Trademarks that
it uses, and that it owns all of the registrations listed on Schedule B. Pledgor
further warrants that it is not aware of any third party claim that any aspect
of Pledgor’s present or contemplated business operations infringes or will
infringe on any registered trademark or registered service mark; and

 

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(g)     Pledgor represents and warrants that it is the true and lawful owner or
assignee of all rights in the Patents listed on Schedule A attached hereto and
made a part hereof, that said Patents constitute all the United States patents
and applications for United States patents that Pledgor now owns, other than any
such patents, applications and registrations which are (i) owned but not used
and (ii) not material to its business. Pledgor represents and warrants that it
is the true and lawful licensee of all rights in the Patents listed on Schedule
C attached hereto and made a part hereof, that said Patents constitute all the
United States patents and applications for United States patents that Pledgor
now uses in its business which are licensed by it. Pledgor represents and
warrants that it owns, or is licensed, or had been assigned the right to use or
practice under all Patent registrations and applications that it owns, uses or
practices under, and that it owns all of the Patent registrations, and it is
entitled to be named as assignee in all applications listed on Schedule A.
Pledgor further warrants that it is not aware of any third party claim that any
aspect of Pledgor’s present or contemplated business operations infringes or
will infringe on any patent except as may be disclosed in Schedule 7.4 of the
Credit Agreement.

 

4.     Further Assignment Prohibited. Pledgor shall not enter into any agreement
that is inconsistent with Pledgor’s obligations under this Agreement and shall
not otherwise sell or assign its interest in, or grant any license or sublicense
with respect to, any of the IP Collateral other than licenses in the ordinary
course of business as permitted under the Credit Agreement or with Agent’s prior
written consent. Absent permission under the Credit Agreement or such prior
written consent, any such attempted sale or license is null and void.

 

5.     Right to Inspect. Pledgor hereby grants to Agent and Lenders and their
respective employees and agents the right to visit any location of Pledgor and
to inspect Pledgor’s books and records and to make excerpts therefrom and
transcripts thereof at such times and upon such notice as is set forth in the
Credit Agreement.

 

6.     Standard Patent and Trademark Use. Pledgor shall not knowingly use the IP
Collateral in any manner that would jeopardize the validity or legal status
thereof. Pledgor shall comply with all patent marking requirements as specified
in 35 U.S.C. §287. Pledgor shall further conform its usage of any trademarks to
standard trademark usage, including, but not limited to, using the trademark
symbols ®, ™, and SM where appropriate.

 

7.     Event of Default.

 

(a)     Pledgor expressly acknowledges that Agent may record this Agreement with
the PTO. Contemporaneously herewith, Pledgor shall also execute and deliver to
Agent the Assignment, which Assignment shall have no force and effect and shall
be held by Agent, in escrow, until the occurrence of an Event of Default (as
defined in the Credit Agreement); provided that, anything herein to the contrary
notwithstanding, the security interest granted herein shall be effective as of
the date of this Agreement. After the occurrence and during the continuance of
an Event of Default and after the expiration of any applicable cure period, the
Assignment shall take effect immediately upon certification of such fact by an
authorized officer of Agent in the form attached as Exhibit A and upon written
notice to Pledgor and thereafter Agent may, in its sole discretion, record the
Assignment with the PTO. The provisions of this paragraph (a) shall not limit or
contradict the provisions of the following paragraph (b) or any of the rights
and remedies of Agent described therein.

 

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(b)     If an Event of Default shall occur and be continuing and after the
expiration of any applicable cure period, in addition to Agent’s rights to elect
to make the Assignment effective as provided for in paragraph (a) above, Pledgor
irrevocably authorizes and empowers Agent, on behalf of Lenders, to terminate
Pledgor’s use of the IP Collateral and to exercise such rights and remedies as
allowed by law, including without limitation all rights and remedies of a
secured party under the UCC. Without limiting the generality of the foregoing,
Agent may sell at public or private sale, in a commercially reasonable manner,
or otherwise realize upon all or, from time to time, any of the IP Collateral,
together with the associated goodwill, or any interest that Pledgor may have
therein, and, after deducting from the proceeds of sale or other disposition of
the IP Collateral all reasonable expenses (including all expenses for attorneys’
and brokers’ fees and other legal services), Agent shall apply such proceeds
against payment of the Debt in accordance with the terms of the Credit
Agreement. Notice of any sale or other disposition of the IP Collateral shall be
given to Pledgor at least ten (10) days before the time of any intended public
or private sale or other disposition of the IP Collateral is to be made, which
Pledgor hereby agrees shall be reasonable notice of such sale or other
disposition. At any such sale or other disposition, Agent or any Lender may, to
the extent permissible under applicable law, purchase the whole or any part of
the IP Collateral sold, free from any right of redemption on the part of
Pledgor, which right is hereby waived and released.

 

8.     Termination. At such time as the Debt has been irrevocably paid in full,
the commitments of Lenders under the Credit Agreement terminated, and the Credit
Agreement terminated, this Agreement shall terminate and Agent shall, upon
Pledgor’s request, execute and deliver to Pledgor, at Pledgor’s expense, all
deeds, assignments, and other instruments as Pledgor shall reasonably request to
evidence the release of Agent’s security interest in the IP Collateral in
connection with such termination, subject to any disposition thereof that may
have been made by Agent pursuant hereto; provided, however that the provisions
of Sections 9 (except the first sentence), 11, 22, 23, 24, 25, 26 and 27 shall
survive any termination of this Agreement.

 

9.     Maintaining IP Collateral, Attorneys’ Fees, Costs and Expenses. Pledgor
shall have the obligation and duty to perform all acts reasonably necessary to
maintain or preserve the IP Collateral to the extent such IP Collateral is
material in value or used in the ordinary course of business by Pledgor. Any and
all fees, costs and expenses, of whatever kind or nature, including, without
limitation, the attorneys’ fees and legal expenses incurred by Agent and Lenders
in connection with the amendment and enforcement of this Agreement, all
renewals, required affidavits and all other documents relating hereto and the
consummation of this transaction, 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 protecting, maintaining or preserving the IP Collateral, or in
defending or prosecuting any actions or proceedings arising out of or related to
the IP Collateral, shall be borne and paid by Pledgor, within ten (10) days of
demand by Agent, and, until so paid after demand, shall be added to the
principal amount of the Debt and secured by the IP Collateral (and all other
“Collateral” as defined in the Credit Agreement).

 

10.     Pledgor’s Obligations to Prosecute. Except as otherwise agreed to by
Agent in writing, Pledgor shall have the duty to prosecute diligently any patent
application or trademark application pending as of the date of this Agreement or
thereafter until the Debt shall have been paid in full, and to do any and all
acts that are reasonably necessary or desirable to preserve and maintain all
rights in the IP Collateral that are material and used in the ordinary course of
business by Pledgor, including, but not limited to, payment of any maintenance
fees. Any expenses incurred by Agent in connection with the IP Collateral shall
be borne by Pledgor. Pledgor shall not abandon any IP Collateral without the
prior written consent of Agent.

 

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11.     Agent’s Rights to Enforce. Pledgor shall have the right but not the
obligation to bring any opposition proceedings, cancellation proceedings or
lawsuit in its own name to enforce or protect the IP Collateral. Agent and
Lenders shall have the right, but shall have no obligation, to join in any such
action during the existence of an Event of Default. Pledgor shall promptly, and
in any event within ten (10) days of demand, reimburse and indemnify Agent and
Lenders for all damages, and expenses, including attorneys’ fees incurred by
Agent in connection with the provisions of this Section 11, in the event Agent
and Lenders elect to join in any such action commenced by Pledgor.

 

12.     Power of Attorney. Pledgor hereby authorizes and empowers Agent, on
behalf of Lenders, to make, constitute and appoint any officer or agent of Agent
as Agent may select, in its exclusive discretion, as Pledgor’s true and lawful
attorney-in-fact, after the occurrence and during the continuance of an Event of
Default, with the power to endorse Pledgor’s name on all applications,
documents, papers and instruments reasonably necessary for Agent to use the IP
Collateral, or to grant or issue any exclusive or nonexclusive license under the
IP Collateral to any third party, or reasonably necessary for Agent to assign,
pledge, convey or otherwise transfer title in or dispose of the IP Collateral,
together with associated goodwill to a third party or parties, including the
power to execute in the name of Pledgor and deliver to the PTO for recording
instruments of assignment and/or transfer for all or any part of the IP
Collateral naming as assignee or transferee either Agent or any party that may
purchase all or any part of the IP Collateral at any public or private sale
conducted by Agent as a secured creditor. Pledgor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable for the life of this Agreement, but shall
terminate immediately and without further action of the parties upon payment in
full of the Debt and termination of the Credit Agreement.

 

13.     Agent’s Right to Perform Obligations. If Pledgor materially fails to
comply with any of its obligations under this Agreement, Agent, on behalf of
Lenders, may after notice to Pledgor, but is not obligated to, do so in
Pledgor’s name or in Agent’s name, but at Pledgor’s expense, and Pledgor hereby
agrees to reimburse Agent on demand in full for all expenses, including
attorneys’ fees, incurred by Agent in protecting, defending and maintaining the
IP Collateral.

 

14.     Additional Documents. Pledgor shall, upon written request of Agent,
enter into such additional documents or instruments as may be reasonably
required by Agent in order to effectuate, evidence or perfect Agent’s interests
in the IP Collateral as evidenced by this Agreement.

 

15.     New IP Collateral. If, before the Debt shall have been satisfied in
full, Pledgor shall obtain rights to any new IP Collateral, the provisions of
Sections 2 and 7 hereof shall automatically apply thereto as if the same were
identified on Schedules A, B or C attached hereto and made a part hereof as of
the date hereof, and Pledgor shall give Agent prompt written notice thereof as
required in the Credit Agreement.

 

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16.     Modification for New IP Collateral. Pledgor hereby authorizes Agent to
modify this Agreement by amending Schedules A, B and/or C to include any future
IP Collateral as contemplated by Sections 2 and 15 hereof and, at Agent’s
request, Pledgor shall execute any documents or instruments reasonably required
by Agent in order to modify this Agreement as provided in this Section 16,
provided that any such modification to Schedules A, B and/or C shall be
effective without the signature of Pledgor. Pledgor hereby acknowledges that
Agent may refile or re-record this Agreement with the PTO, together with any
such modification to Schedules A, B and/or C.

 

17.     No Waiver. No course of dealing between Pledgor and Agent and Lenders,
nor any failure to exercise, nor any delay in exercising, on the part of Agent
or Lenders, any right, power or privilege hereunder or under any of the Related
Writings 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.

 

18.     Remedies Cumulative. All of the rights and remedies of Agent and Lenders
with respect to the IP Collateral, whether established hereby or by the Related
Writings, or by any other agreements or by law shall be cumulative and may be
executed singularly or concurrently.

 

19.     Severability. The provisions of this 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 Agreement in any jurisdiction.

 

20.     Modifications. Except as provided in Section 16 hereof, this Agreement
may be amended or modified only by a writing signed by Pledgor and Agent, on
behalf of Lenders. In the event that any provision herein is deemed to be
inconsistent with any provision of any other document, other than the Credit
Agreement, the provisions of this Agreement shall control.

 

21.     Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the respective successors and permitted assigns of the parties,
except that Pledgor may not assign any of its rights or duties hereunder without
the prior written consent of Agent. Any attempted assignment or transfer without
the prior written consent of Agent shall be null and void.

 

22.     Notice. All notices, requests, demands and other communications provided
for hereunder shall be given to or made upon Pledgor or Agent as the case may
be, in accordance with the terms of Section 11.4 of the Credit Agreement.

 

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23.     Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York. Any judicial proceeding brought
by or against Pledgor with respect to this Agreement or any related agreement
may be brought in any court of competent jurisdiction in the State of New York,
United States of America, and by execution and delivery of this Agreement,
Pledgor accepts for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Pledgor hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
registered mail (return receipt requested) directed to Pledgor at its address
set forth in the signature pages of the Credit Agreement and service so made
shall be deemed completed five (5) days after the same shall have been so
deposited in the mails of the United States of America, or, at the Agent’s
option, by service upon Borrowing Agent which Pledgor irrevocably appoints as
Pledgor’s agent for the purpose of accepting service within the State of New
York. Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Agent or any Lender to bring
proceedings against Pledgor in the courts of any other jurisdiction. Pledgor
waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. Pledgor waives the right to remove any
judicial proceeding brought against Pledgor in any state court to any federal
court. Notwithstanding anything to the contrary contained in the foregoing, any
judicial proceeding by Pledgor against Agent or any Lender involving, directly
or indirectly, any matter or claim in any way arising out of, related to or
connected with this Agreement or any related agreement, shall be brought only in
a federal or state court located in Wayne County, State of New York.

 

24.     Indemnity: Administration and Enforcement. Pledgor will reimburse each
Lender, on that Lender’s demand from time to time, and Agent, on Agent’s demand
from time to time, for any and all reasonable fees, costs, and reasonable
expenses (including, without limitation, the reasonable fees and disbursements
of legal counsel) reasonably incurred by that Lender or Agent, as the case may
be, in administering this Agreement and in protecting, enforcing, or attempting
to protect or enforce its rights under this Agreement, together with interest
thereon, following notice received by Pledgor, on the terms provided in the
Credit Agreement.

 

25.     Unconditional and Continuing Security Interest. Pledgor’s obligations
under this Agreement and the granting of a security interest to Agent pursuant
to this Agreement are unconditional and effective immediately, and (except for
obligations surviving indefinitely pursuant to Section 8) those obligations and
the security interest so granted shall continue in full effect until the Debt
shall have been paid in full, regardless of the lapse of time, regardless of the
fact that there may be a time or times when no Debt is outstanding, until the
payment in full of all Debt and the termination of the Credit Agreement,
regardless of any act, omission, or course of dealing whatever on the part of
Agent and Lenders, or any of them, and regardless of any other event, condition,
or thing. Without limiting the generality of the foregoing, neither the amount
of the Debt for purposes of this Agreement, nor Pledgor’s obligations under this
Agreement, nor the security interest granted pursuant to this Agreement shall be
diminished or impaired by:

 

(a)     the granting by Agent or any Lender of any credit to any Obligor,
whether or not liability therefor constitutes Debt, or any failure or refusal of
Agent or any Lender to grant any other credit to any Obligor even if Agent or
such Lender thereby breaches any duty or commitment to Pledgor or any other
Person,

 

(b)     the application by Agent or any Lender of credits, payments, or proceeds
to any portion of the Debt,

 

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(c)     any extension, renewal, or refinancing of the Debt in whole or in part,

 

(d)    any amendment, restatement, or other modification of any kind in, to, or
of the Credit Agreement or any Related Writing, or any consent or other
indulgence granted to any Obligor, or any waiver of any Event of Default (under
this Agreement or the Credit Agreement), including without limitation, (i) any
extension or change in the time of payment, and/or the manner, place or terms of
payment of any or all of Debt, (ii) any renewal, extension of the maturity of
the Debt, (iii) any increase or decrease of any loans and extension of credit
(and/or any maximum credit limits or sublimits with respect to any such loans or
extensions of credit) constituting the Debt, and/or making available to Pledgor
or other Credit Parties any new or additional or increased loans or extensions
of credit (whether such new, additional or increased loans or extensions of
credit are the same or of new or different types as the loans and extensions of
credit available to Borrowers and the other Credit Parties under the Credit
Agreement and the other Debt as of the date hereof) and (iv) any modification of
the terms and conditions under which loans and extensions of credit may be made
under the Credit Agreement,

 

(e)     any acceptance of security for or any other Obligor on the Debt or any
part thereof, or any release of any security or other Obligor (or compromise or
settlement of the liability of any Obligor for the Debt), whether or not Agent
or any Lender receives consideration for the release, compromise or settlement,

 

(f)      any discharge of the Debt in whole or in part under any bankruptcy or
insolvency law or otherwise,

 

(g)     the failure of Agent or any Lender to make any presentment or demand for
payment, to assert or perfect any claim, demand, Lien or interest, or to enforce
any right or remedy, or any delay or neglect by Agent or any Lender in respect
of the Debt or any part thereof or any security therefor,

 

(h)    any failure to give Pledgor notice of (i) the making of any loan or other
credit extension or the terms, conditions, and other provisions applicable
thereto, (ii) any dishonor by Pledgor or any other Obligor, or (iii) the
inaccuracy or incompleteness of any representation, warranty, or other statement
made by any Obligor, or

 

(i)     any defense that may now or hereafter be available to any Obligor,
whether based on suretyship, impairment of IP Collateral, accord and
satisfaction, breach of warranty, breach of contract, failure of consideration,
tort, lack of capacity, usury, or otherwise, or any illegality, invalidity, or
unenforceability of the Debt or any part thereof or of any Related Writing.

 

26.     No Setoff; Rights Against Other Obligors. Pledgor hereby (a) waives all
now existing or hereafter arising rights to recoup or offset any obligation of
Pledgor under this Agreement against any claim or right of Pledgor against Agent
or any Lender, (b) waives all rights of exoneration now or hereafter arising out
of or in connection with this Agreement, and (c) agrees that unless and until
all of the Debt shall have been paid in full, Pledgor will not assert against
any other Obligor or any other Obligor’s property any rights (including, without
limitation, contribution, indemnification, reimbursement, and subrogation) now
or hereafter arising (whether by contract, operation of law, or otherwise) out
of or in connection with this Agreement.

 

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JURY TRIAL WAIVER. EACH PARTY TO THIS AGREEMENT, TO THE EXTENT PERMITTED BY LAW,
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND PLEDGOR, OR
ANY OF THEM, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO AND EACH PARTY HEREBY
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR
MODIFY THE ABILITY OF AGENT OR ANY LENDER TO PURSUE REMEDIES PURSUANT TO ANY
PROVISION CONTAINED IN ANY NOTE, OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
AMONG PLEDGOR, AGENT AND LENDERS, OR ANY OF THEM.

 

 

 

SOUTHWEST ELECTRONIC ENERGY

     CORPORATION

          By: /s/ Linda S. Saunders                          Name: Linda S.
Saunders   Title: Vice President of Finance

 

 

 

 

[Signature Page – IP Security Agreement – Southwest]

 

 

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KEYBANK NATIONAL ASSOCIATION,

as Agent and as a Lender

          By: /s/ Peter F. Leonard                             Name: Peter F.
Leonard   Title: Senior Vice President

 

 

 

 

[Continuation of Signature Page – IP Security Agreement – Southwest]

 

 

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SCHEDULE A

 

Patents

 

See attached.

 

 

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Schedule A

 

 

Patents

Country

Patent No./Publication No.

Application No.

Title

EUROPE

Pending - Publication No. EP2124314 A2

9251219.3

System for balancing battery pack system modules

EUROPE

Pending - Publication No. EP2124314 A3

09251219.3

System for balancing battery pack system modules

U.S.A.

7,880,434 B2   

12/417435

System for Balancing a Plurality of Battery pack System Modules Connected in a
Series

U.S.A.

8,575,894 B2

12/976847

Balancing of Battery Pack System Modules

U.S.A.

8,922,166 B2

14/042013

Balancing of Battery Pack System Modules

U.S.A.

EXPIRED

61/054882

System for balancing battery pack system modules

U.S.A.

7,274,170 B2

11/293433

Battery Pack Control Module

U.S.A.

7,199,556 B1

11/293334

METHOD FOR EXTENDING POWER DURATION FOR LITHIUM ION BATTERIES  

U.S.A.

7,157,881 B1

11/293430

SAFETY DEVICE FOR MANAGING BATTERIES -

U.S.A.

7,157,881 B1

11/293430

SAFETY DEVICE FOR MANAGING BATTERIES -

 

 

--------------------------------------------------------------------------------

 

 

EUROPE

ABANDONED

08798407.6

Method for balancing lithium secondary cells and
modules                                                                                                                                

HONG KONG

ABANDONED

11106505.2

METHOD FOR BALANCING LITHIUM SECONDARY CELLS AND MODULES

KOREA

1206686

1020107028480

METHOD FOR BALANCING LITHIUM SECONDARY CELLS AND MODULES

U.S.A.

7,279,867 B2

11/293432

METHOD FOR BALANCING CELLS OR GROUPS OF CELLS IN A BATTERY PACK

U.S.A.

7,570,010 B2

11/560288

SOLAR PANEL WITH PULSE CHARGER

U.S.A.

7,609,031 B2

12/195274

METHOD FOR BALANCING LITHIUM SECONDARY CELLS AND MODULES

WORLD

EXPIRED

PCT/US08/073906

Method for balancing lithium secondary cells and modules

U.S.A.

7,917,315 B1

12/190835

METHOD FOR DETERMINING POWER SUPPLY USAGE

U.S.A.

8,229,689 B2  

13/036435

Method for Determining Power Supply Usage

 

 

--------------------------------------------------------------------------------

 

 

U.S.A.

8,532,946 B2

13/525549

Power Supply Usage Determination

U.S.A

8,825,418 B2  

13/964677

Power Supply Usage Determination

U.S.A

ABANDONED

14/316347

Power Supply Usage Determination

U.S.A.

8,055,462 B1      

12/190872

System Using Fuel Gauge

U.S.A.

8,055,463 B1

12/190893

Fuel Gauge

U.S.A.

9,099,871 B2

12/899413

MODULE BYPASS SWITCH FOR BALANCING BATTERY PACK SYSTEM MODULES

U.S.A.

10,250,043 B2  (granted 4/2/19)  

14/752607

Initializer-based control of a module bypass switch for balancing of battery
pack system modules

CANADA

CA 2,787,866

CA 2,787,866

Module Bypass Switch with Bypass Current
Monitoring                                                                                                                                                                           

EUROPE

EP 2721716 (A1)

EP20120800356 

Module Bypass Switch with Bypass Current
Monitoring                                                                                                                                      

Europe/Hong Kong

PENDING  EP ALLOWANCE

1194540B

12800356.3

MODULE BYPASS SWITCH WITH BYPASS CURRENT MONITORING

 

 

--------------------------------------------------------------------------------

 

 

KOREA

  10-1588188   

10-2014-7001389

MODULE BYPASS SWITCH WITH BYPASS CURRENT MONITORING.

WORLD

EXPIRED

PCT/US12/42056

Module bypass switch with bypass current montioring.  

U.S.A.

9,190,855

13/494,502

Module Bypass Switch with Bypass Current
Montioring                                

U.S.A.

9,525,301 B2   

14/936,518

MODULE BYPASS SWITCH FOR BALANCING BATTERY PACK SYSTEM MODULES WITH BYPASS
CURRENT MONITORING

U.S.A

EXPIRED

61/498358

Module bypass switch with bypass current montioring.  

CANADA

CA 2,787,867

CA 2,787,867

SHORT DETECTION IN BATTERY PACKS

Europe

ABANDONED

12810618.4

SHORT DETECTION IN BATTERY PACKS

Korea

10-1568184000

10-2014-7003902

SHORT DETECTION IN BATTERY PACKS

U.S.A.

9097774 B2

13/182998

SHORT DETECTION IN BATTERY PACKS

 

 

--------------------------------------------------------------------------------

 

 

WORLD

EXPIRED

PCT/US12/45948

Short detection in battery packs

Canada

CA 2,788,244

CA 2,788,244

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

EUROPE

ABANDONED

12831057.0

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

Europe/Hong Kong

ABANDONED

12831057.0

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

KOREA

10-1604710   

10-2014-7009891

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

U.S.A.

8,796,993 B2

13/229914

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

U.S.A.

9,395,420 B2  

14/187857

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

 

 

--------------------------------------------------------------------------------

 

 

WORLD

EXPIRED

PCT/US12/53771

HISTORICAL ANALYSIS OF BATTERY CELLS FOR DETERMINING STATE OF HEALTH

CANADA

ABANDONED

11506929

DETECTION AND PREVENTION OF SHORT FORMATION IN BATTERY PACKS

U.S.A.

ABANDONED

13/844350

DETECTION AND PREVENTION OF SHORT FORMATION IN BATTERY CELLS

WORLD

EXPIRED

PCT/US14/21636

DETECTION AND PREVENTION OF SHORT FORMATION IN BATTERY CELLS

CANADA

ABANDONED

2887537

TRI-LAYER MATERIAL FOR HEAT SPREADING IN BATTERY PACK MODULES

U.S.A

ABANDONED

15163396.3

TRI-LAYER MATERIAL FOR HEAT SPREADING IN BATTERY PACK MODULES

 

 

--------------------------------------------------------------------------------

 

 

U.S.A

EXPIRED

61/980361

TRI-LAYER MATERIAL FOR HEAT SPREADING IN BATTERY PACK MODULES

U.S.A

ABANDONED

14/683373

TRI-LAYER MATERIAL FOR HEAT SPREADING IN BATTERY PACK MODULES

U.S.A.

Pending - Publication No. 2016/0149421 A1

14/942888

LOW VOLTAGE CHARGING OF A HIGH VOLTAGE, SERIES-CONNECTED STRING OF BATTERY
MODULES

U.S.A

EXPIRED

62/083786

LOW VOLTAE CHARGING OF A HIGH VOLTAGE, SERIES-CONNECTED STRING OF BATTERY
MODULES

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE B

 

Trademarks

 

See attached.

 

 

--------------------------------------------------------------------------------

 

 

Schedule B

 

 

Trademarks

Country

Registration No./Serial

No.

Mark

U.S.A

77418459 (ABANDONED)

POW-R-SOLVE

U.S.A

77418475

POW-R MINDER

U.S.A

3582521

SWE, SOUTHWEST ELECTRONIC ENERGY GROUP (&DESIGN)

U.S.A

86152660

 SWE, SOUTHWEST ELECTRONIC ENERGY GROUP (&DESIGN)

U.S.A

3296233

POW-R TOTE

BRAZIL

831116196

POW-R BMS

CANADA

TMA876166

POW-R BMS

EUROPE

010101442

POW-R BMS

NORWAY

281792

 POW-R BMS

U.S.A

4298668

 POW-R BMS

NORWAY

281792

POW-R BMS

U.S.A

85533577

  POW-R LIION MODULE

U.S.A

4255516

POW-R LOG

U.S.A

4336436

POW-R LOG SV

BRAZIL

840476736

SWE SEASAFE (& DESIGN)

EUROPE

011648615

 SWE SEASAFE (& DESIGN)

NORWAY

271520

 SWE SEASAFE (& DESIGN)

U.S.A

4506511

SWE SEASAFE (&DESIGN)

U.S.A

4449307

 POW-R LEFT

U.S.A

4604664

SWE SOUTHWEST ELECTRONIC ENERGY GROUP ADVANCED BATTERY SOLUTIONS & DESIGN

EUROPE

14065205

SWE DRILL-DATA OBSERVER

 

 

--------------------------------------------------------------------------------

 

 

EUROPE

012923868

SWE SOUTHWEST ELECTRONIC ENERGY GROUP ADVANCED BATTERY SOLUTIONS & DESIGN

U.S.A

5,138,012

 SWE DRILL - DATA

CANADA

1714804

 SWE DRILL-DATA

GERMANY

302015011754

SWE DRILL-DATA

U.S.A.

4838282

 SWE DRILL-DATA OBSERVER

U.S.A.

86739242

SeaSafe Direct

U.S.A.

5426681

 SWE SEASAFE + DIRECT

Canada

TMA990495

SWE DRILL-DATA

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE C

 

Licenses

 

See attached.

 

 

--------------------------------------------------------------------------------

 

 

Schedule C

 

Licenses

 

1.          Software Services Agreement by and between Southwest Electronic
Energy Corporation and INFOR Global Solutions (Michigan) Inc., dated January 24,
2012.

2.         Restated License Agreement by and between Southwest Electronic Energy
Corporation and APS Technology Inc., dated June 2, 2011.

 

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A

 

FORM OF ASSIGNMENT

 

THIS DOCUMENT SHALL BE HELD BY AGENT IN ESCROW PURSUANT TO AND IN ACCORDANCE
WITH THE PROVISIONS OF THE INTELLECTUAL PROPERTY SECURITY AGREEMENT, DATED AS OF
MAY [__], 2019 (AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED OR
OTHERWISE MODIFIED, THE “AGREEMENT”), EXECUTED BY SOUTHWEST ELECTRONIC ENERGY
CORPORATION, A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS
(TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, “PLEDGOR”), IN FAVOR OF KEYBANK
NATIONAL ASSOCIATION, AS AGENT FOR THE LENDERS, AS DEFINED IN THE AGREEMENT
(TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, “AGENT”). BY SIGNING IN THE SPACE
PROVIDED BELOW, THE UNDERSIGNED OFFICER OF AGENT CERTIFIES THAT AN EVENT OF
DEFAULT (AS DEFINED IN THE AGREEMENT) HAS OCCURRED AND THAT AGENT HAS ELECTED TO
TAKE POSSESSION OF THE IP COLLATERAL (AS DEFINED IN THE AGREEMENT) ON BEHALF OF
AND FOR THE BENEFIT OF THE LENDERS AND TO RECORD THIS DOCUMENT WITH THE UNITED
STATES PATENT AND TRADEMARK OFFICE. UPON RECORDING OF THIS DOCUMENT WITH THE
UNITED STATES PATENT AND TRADEMARK OFFICE, THIS LEGEND SHALL CEASE TO HAVE ANY
FORCE OR EFFECT.

 

  KEYBANK NATIONAL ASSOCIATION       By:                                       
                                                                               
                      Print Name:                                               
                                                                               
Title:                                                                         
                                                                 Date:         
                                                                               
                                              

                        

 

--------------------------------------------------------------------------------

 

 

ASSIGNMENT

 

WHEREAS, SOUTHWEST ELECTRONIC ENERGY CORPORATION, a corporation organized under
the laws of the State of Texas (together with its successors and assigns,
“Pledgor”), is the owner of the IP Collateral, as hereinafter defined;

 

WHEREAS, Pledgor has executed an Intellectual Property Security Agreement, dated
as of even date herewith (as the same may from time to time be amended, restated
or otherwise modified, the “Agreement”), in favor of KEYBANK NATIONAL
ASSOCIATION, as Agent for the Lenders, as defined in the Agreement (“Agent”),
pursuant to which Pledgor has granted to Agent, for the benefit of the Lenders,
a security interest in the IP Collateral as security for the Debt, as defined in
the Agreement;

 

WHEREAS, the Agreement provides that the security interest in and of the IP
Collateral is effective as of the date of the Agreement;

 

WHEREAS, the Agreement provides that this Assignment shall become effective upon
the occurrence of an Event of Default, as defined in the Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, Pledgor, its
successors and assigns, subject to the limitations stated in the paragraph
immediately following, does hereby transfer, assign and set over to Agent, its
successors, transferees and assigns, all of its existing and future IP
Collateral (as defined in the Agreement), including, but not limited to, the IP
Collateral listed on Schedules A, B, and C of the Agreement (which such
schedules shall also be deemed schedules hereto) that is registered in the
United States Patent and Trademark Office or that is the subject of pending
applications in the United States Patent and Trademark Office.

 

This Assignment shall be effective only upon the certification of an authorized
officer of Agent, as provided above, that (a) an Event of Default, as defined in
the Agreement, has occurred and is continuing, and (b) Agent has elected to take
actual title to the IP Collateral.

 

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be executed by
its duly authorized officer on May 1, 2019.

 

 

 

SOUTHWEST ELECTRONIC ENERGY

     CORPORATION

          By: /s/ Linda S. Saunders   Name: Linda S. Saunders   Title: Vice
President of Finance

 

 

--------------------------------------------------------------------------------

 

 

STATE OF New York                        )

                                                            ) SS:

COUNTY OF Wayne                        )

 

BEFORE ME, the undersigned authority, on this day personally appeared Linda S.
Saunders, known to me to be the person and officer whose name is subscribed to
the foregoing instrument and acknowledged to me that the same was the act of
said SOUTHWEST ELECTRONIC ENERGY CORPORATION, a Texas corporation, and that she
executed the same as the act of such corporation for the purposes and
consideration therein expressed, and in the capacity therein stated.

 

GIVEN UNDER MY HAND AND SEAL OF OFFICE this 1st day of May, 2019.

 

 

  /s/ Teresa A. Kemp                              Notary Public  

My commission expires:11-20-2021

 

 

 

[Notary Page – IP Security Agreement –Southwest]

                                  

 

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INTELLECTUAL PROPERTY SECURITY AGREEMENT (SOUTHWEST) – KEYBANK/ULTRALIFE