Exhibit 10.5

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this "Agreement") is made this 28th day of
September, 2017, between BRANCH BANKING AND TRUST COMPANY, a North Carolina
banking corporation (together with its successors and assigns, "Lender"), and
APPLIED OPTOELECTRONICS, INC., a Delaware corporation ("Company").

 

Recitals:

 

Company desires to obtain loans and other financial accommodations from Lender
pursuant to that certain Loan Agreement dated the date hereof (as at any time
amended, restated, supplemented or otherwise modified, the "Loan Agreement") by
and between Company and Lender.

 

Lender is willing to make loans and other financial accommodations to Company
from time to time, pursuant to the terms of the Loan Agreement, provided that,
among other things, Company executes this Agreement.

 

NOW, THEREFORE, for Ten Dollars ($10.00) in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Company hereby agrees with Lender as follows:

 

1.                   Capitalized terms used herein (including those used in the
Recitals hereto), unless otherwise defined, shall have the meanings ascribed to
them in the Loan Agreement. As used herein, the term "Full Payment" shall mean
full and final payment of the Obligations (as defined in the Security Agreement)
(hereinafter, the "Obligations") and termination of Lender's financing
arrangements with Company; and the term "UCC" shall mean the Uniform Commercial
Code as in effect from time to time in the State of Texas.

 

2.                   To secure the prompt payment and performance of all of the
Obligations, Company hereby grants, assigns and pledges to Lender a continuing
security interest in and lien upon all of the following property of Company,
whether now owned or existing or hereafter created or acquired and wherever
located (collectively, the "Trademark Collateral"):

 

(a)                all state (including common law), federal and foreign
trademarks, service marks and trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or other business identifiers, domain names, designs and general
intangibles of like natures, together with and including all licenses therefor
held by company (unless otherwise prohibited by any license or related licensing
agreement under circumstances where the granting of the security interest would
have the effect under applicable law of the termination or permitting
termination of the license for breach and where the licensor has elected such
termination remedy), and all registrations and recordings thereof, and all
applications filed or to be filed in connection therewith, including
registrations and applications in the United States Patent and Trademark Office,
any State of the United States or any other country or any political subdivision
thereof (but excluding any "intent-to-use" application for registration of the
trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. Section
1051, prior to the filing of a "Statement of Use" pursuant to Section 1(d) of
the Lanham Act or an "Amendment to Allege Use" pursuant to Section 1(c) of the
Lanham Act with respect thereto, solely to the extent, if any, that, and solely
during the period, if any, in which, the grant of a security interest therein
would impair the validity or enforceability of any registration that issues from
such intent-to-use application under applicable federal law), and all extensions
or renewals thereof, including any of the foregoing identified on Exhibit A
hereto (as the same may be amended, modified or supplemented from time to time),
and the right (but not the obligation) to register claims under any state or
federal trademark law or regulation of any foreign country and to apply for,
renew and extend any of the same, to sue or bring opposition or cancellation
proceedings in the name of Company or in the name of Lender for past, present or
future infringement or uncontested use thereof, and all rights arising therefrom
throughout the world (collectively, the "Trademarks");

 

 

 

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(a)                all claims, causes of action and rights to sue for past,
present or future infringement or unconsented use of any Trademarks and all
rights arising therefrom and pertaining thereto;

 

(b)                all general intangibles (as defined in the UCC) related to or
arising out of any of the Trademarks and all the goodwill of Company's business
symbolized by the Trademarks or associated therewith; and

 

(c)                all proceeds of any and all of the foregoing Trademark
Collateral, including, without limitation, license royalties, rights to payment,
accounts receivable, proceeds of infringement suits and all payments under
insurance or any indemnity, warranty or guaranty payable by reason nor loss or
damage to or otherwise with respect to the foregoing Trademark Collateral.

 

3.                   Company represents and warrants to Lender that:

 

(a)                Each of the Trademarks is subsisting and has not been
adjudged invalid or unenforceable;

 

(b)                To be best of its knowledge, no claim has been made that the
use of any of the Trademarks does or may violate the rights of any Person;

 

(c) Company has the unqualified right to enter into this Agreement and perform
its terms;

 

(d) To the best of its knowledge, each of the Trademarks is valid and
enforceable; and

 

(e)                Company is the sole and exclusive owner of the entire right,
title and interest in and to all of the Trademark Collateral, free and clear of
any Liens, charges and encumbrances (except licenses permitted pursuant to
paragraph 6 below), including, without limitation, pledges, assignments,
licenses, registered user agreements and covenants by Company not to sue third
Persons.

 

4.                   Company covenants and agrees with Lender that:

 

(a)                Company will maintain the quality of the products associated
with the Trademarks, at a level consistent with the quality at the time of this
Agreement, and will, upon Lender's request, provide Lender with a certificate to
that effect executed by an officer of Company;

 

(b)                Company will not intentionally change the quality of the
products associated with the Trademarks without Lender's prior written consent;
and

 

 

 

 

 

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(c)                Except for Trademarks abandoned by Company in the ordinary
course of business (provided such abandonment could not be reasonably expected
to have a material adverse effect on Company or its business), Company has used
and will continue to use for the duration of this Agreement, proper statutory
notice in connection with its use of the registered Trademarks, including,
without limitation, filing an affidavit of use with the United States Patent and
Trademark Office and any applicable foreign filing office for each registered
Trademark as required by applicable law to maintain the registration thereof
without loss of protection therefor.

 

5.                   Company hereby grants to Lender and its employees and
agents the right to visit Company's plants and facilities which manufacture,
inspect or store products sold under any of the Trademarks in accordance with
the terms of Section DD.06(b) of Schedule DD to the Loan Agreement.

 

6.                   Until Full Payment of all of the Obligations, Company shall
not enter into any license agreement relating to any of the Trademarks with any
person or entity except non-exclusive licenses to customers, vendors, suppliers,
agents or other service providers of Company in the regular and ordinary course
of Company's business as presently conducted and for reasonable and customary
compensation, and shall not become a party to any agreement with any person or
entity that is inconsistent with Company's obligations under this Agreement.

 

7.                   If, before Full Payment of all of the Obligations, Company
shall obtain rights to any new trademarks, or become entitled to the benefit of
any trademark application or trademark or any renewal of any Trademark, the
provisions of paragraph 2 hereof shall automatically apply thereto, and Company
shall give to Lender prompt notice thereof in writing.

 

8.                   Company irrevocably authorizes and empowers Lender to
modify this Agreement by amending Exhibit A to include any future trademarks and
trademark applications under paragraph 2 or paragraph 7 hereof.

 

9.                   At any time that an Event of Default exists, Lender shall
have, in addition to all other rights and remedies given it by this Agreement
and the other Loan Documents, all rights and remedies of a secured party under
the UCC and all other rights and remedies under applicable law. Without limiting
the generality of the foregoing, Lender may immediately, without demand of
performance and without notice (except as described in the next sentence, if
required by applicable law, or demand whatsoever to Company, each of which
Company hereby expressly waives), collect directly any payments due Company in
respect of the Trademark Collateral, or sell at public or private sale or
otherwise realize upon all or from time to time, any of the Trademark
Collateral. Company hereby agrees that ten (10) days written notice to Company
of any public or private sale or other disposition of any of the Trademark
Collateral shall be reasonable notice; provided, however, that no notice shall
be required hereunder if not otherwise required by applicable law. At any such
sale or disposition, Lender may, to the extent permitted by law, purchase the
whole or any part of the Trademark Collateral sold, free from any right of
redemption on the part of Company, which right Company hereby waives and
releases. After deducting from the proceeds of such sale or other disposition of
the Trademark Collateral all reasonable costs and expenses incurred by Lender in
enforcing its rights hereunder (including, without limitation, all reasonable
attorneys' fees), Lender shall apply the remainder of such proceeds to the
payment of the Obligations in such order and manner as may be authorized or
required by the Loan Agreement. Any remainder of the proceeds after Full Payment
of all of the Obligations shall be paid over to Company. If any deficiency shall
arise, Company shall remain liable therefor.

 

10.                 Company hereby makes, constitutes and appoints Lender and
any officer or agent of Lender as Lender may reasonably select, as Company's
true and lawful attorney-in-fact, with full power to do any or all of the
following if an Event of Default shall exist: to endorse Company's name on all
applications, documents, papers and instruments necessary for Lender to continue
the registration of or to use the Trademarks, or to grant or issue any exclusive
or nonexclusive license under the Trademarks to any other Person, or to assign,
pledge, convey or otherwise transfer title in or dispose of any Trademark
Collateral to any other Person. Company hereby ratifies all that such attorney
shall lawfully do or cause to be done by virtue hereof. This power of attorney,
being coupled with an interest, shall be irrevocable until Full Payment of all
of the Obligations, upon which time such power of attorney will automatically
terminate (unless sooner terminated by the parties).

 

 

 

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11.                 Any and all reasonable fees, costs and expenses, of whatever
kind or nature (including, without limitation, reasonable attorneys' fees and
legal expenses) incurred by Lender in connection with the preparation of this
Agreement and any other documents relating hereto and the consummation of this
transaction, the filing or recording of any documents (including, without
limitation, all taxes in connection therewith) with the United States Patent and
Trademark Office or in any other public offices, the payment or discharge of any
taxes, counsel fees, maintenance fees, and Liens or otherwise protecting,
maintaining, or preserving the Trademark Collateral, or in defending or
prosecuting any actions or proceedings arising out of or related to the
Trademark Collateral, shall be borne and paid by Company (it being the intent of
the Company and Lender that Company shall be responsible for the payment of all
sums, fees, costs and expenses incurred, including, without limitation, all
renewal fees with respect to the Trademarks) or, if paid by Lender in its sole
discretion, shall be reimbursed by Company on demand by Lender and until so paid
shall be added to the principal amount of the Obligations and shall bear
interest at the Default Rate then applicable to the Line of Credit.

 

12.                 Company shall use its commercially reasonable efforts to
detect any infringers of the Trademarks and shall notify Lender in writing of
material infringements detected. Company shall have the duty, through counsel
acceptable to Lender, to prosecute diligently any trademark application for a
Trademark pending as of the date of this Agreement or thereafter until Full
Payment of all of the Obligations, to make federal application on registrable
but unregistered Trademarks (subject to Company's reasonable discretion in the
ordinary course of business or, during the existence of an Event of Default or a
Default, promptly upon Lender's request), to file and prosecute opposition and
cancellation proceedings, to file and prosecute lawsuits to enforce the
Trademarks and to do any and all acts which are deemed necessary or desirable by
Lender to preserve and maintain all rights in the Trademarks, unless in any such
case Company has reasonably determined that such Trademark is no longer material
to the conduct of its business. Any expenses incurred in connection with such
applications or proceedings shall be borne by Company. Company shall not abandon
any right to file a trademark application, or any pending trademark application
or trademark without the consent of Lender, unless Company has determined that
such trademark application or trademark is no longer necessary or material to
the conduct of its business.

 

13.                 Notwithstanding anything to the contrary contained in
paragraph 12 hereof, at any time that an Event of Default exists, Lender shall
have the right, but shall in no way be obligated, to bring suit instead in its
own name to enforce the Trademarks and any license hereunder, or to defend any
suit or counterclaim in its own name to protect the Trademarks or any license
hereunder, in either of which events Company shall at the request of Lender do
any and all lawful acts (including bringing suit) and execute any and all proper
documents required by Lender to aid such enforcement, or defense, and Company
shall promptly, upon demand, reimburse and indemnify Lender for all reasonable
costs and expenses incurred in the exercise of Lender's rights under this
paragraph 13.

14.                 If Company fails to comply with any of its obligations
hereunder and at the time of such failure or as a result thereof an Event of
Default exists, then to the extent permitted by applicable law, Lender may
discharge such obligations in Company's name or in Lender's name, in Lender's
sole discretion, but at Company's expense, and Company agrees to reimburse
Lender in full for all expenses, including, without limitation, reasonable
attorneys' fees, incurred by Lender in prosecuting, defending or maintaining the
Trademarks or Lender's interest therein pursuant to this Agreement.

 

 

 

 

 

 

 

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15.                 No course of dealing between Company and Lender, nor any
failure to exercise, nor any delay in exercising, on the part of Lender, any
right, power or privilege hereunder or under any of the other 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.

 

16.                 All of Lender's rights and remedies with respect to the
Trademark Collateral, whether established hereby or by any of the other Loan
Documents, or by any other agreements or by applicable law shall be cumulative
and may be exercised singularly or concurrently.

 

17.                 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.

 

18.                 This Agreement, together with the other Loan Documents,
constitutes and expresses the entire understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings, inducements or conditions, whether expressed or implied, oral or
written. This Agreement is subject to modification only by a writing signed by
the parties, except as provided in paragraph 8 hereof.

 

19.                 The benefits and burdens of this Agreement shall inure to
the benefit of and be binding upon the successors and assigns of Lender and upon
the successors and permitted assigns of Company. Company shall not assign its
rights or delegate its duties hereunder without the prior written consent of
Lender.

 

20.                 Company hereby waives notice of Lender's acceptance hereof.

 

21.                 This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas.

 

22.                 To the fullest extent permitted by applicable law, Company
and Lender each waives the right to trial by jury in any action, suit,
proceeding or counterclaim of any kind arising out of or related to this
Agreement or the Trademark Collateral.

 

23.                 Upon Full Payment, Lender shall execute and deliver to
Company, at Company's request and at Company's expense, all releases,
termination statements, and other instruments as may be necessary or proper to
release or reflect the release of Lender's security interest in the Trademark
Collateral, including all documentation necessary to reflect such release in the
United States Patent and Trademark Office.

 

[Remainder of page intentionally left blank; signatures appear on following
pages.]

 

 

 

 

 

 

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WITNESS the execution hereof as of the date first above written.

 

 

 

  APPLIED OPTOELECTRONICS, INC.   (“Company”)           By: /s/ Stefan
Murry                               Name: Stefan Murry   Title: Chief Financial
Officer       Accepted:       BRANCH BANKING AND TRUST   COMPANY   (“Lender”)  
        By: /s/ Brannon E. Fitch                        Name: Brannon E. Fitch  
Title: SVP            

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

Trademarks

 

 

 

Trademark Jurisdiction Registration/Application Number

Registration/File Date

 

Mark Image [image_001.jpg] United States Patent and Trademark Office

3001557

Registered Date:
September 27, 2005 Mark Image [image_001.gif] United States Patent and Trademark
Office

2832440

Registered Date:
April 13, 2004 AOI United States Patent and Trademark Office

2535730

Registered Date:
February 5, 2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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