Exhibit
10.9


 


PATENT
SECURITY AGREEMENT


 


This PATENT SECURITY
AGREEMENT (this “Agreement”), dated as of March 24, 2005, is made
between each of the entities listed on the signature pages hereof (each a “Grantor”
and, collectively, the “Grantors”), in favor of General Electric Capital
Corporation (“GECC”), as U.S. collateral agent (in such capacity,
together with its successors and permitted assigns, the “Collateral Agent”)
for the benefit of itself and the U.S. Secured Parties.


 


W I T N E
S S E T H:


 


WHEREAS pursuant to the
terms of that certain Credit Agreement, dated as of March [—], 2005 (as it may
be amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Progress Rail Services Holdings Corp.
(the “Parent”), each of Parent’s domestic subsidiaries identified on the
signature pages thereof (the Parent and such subsidiaries, collectively, the “U.S.
Borrowers”), Progress Rail Canada Corporation, Progress Rail Transcanada
Corporation (the “Canadian Borrowers”; the Canadian Borrowers and the
U.S. Borrowers, collectively, the “Borrowers”), GECC, as U.S.
Administrative Agent, GE Capital Finance Holding Co., as Canadian
Administrative Agent, the Lenders and the other parties thereto, the U.S.
Administrative Agent, the Canadian Administrative Agent, the Lenders and the
other parties thereto have agreed to extend credit and make certain financial
accommodations to the Borrowers;


 


WHEREAS pursuant to that
certain Domestic Pledge and Security Agreement, of even date herewith (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”), between Grantors and Collateral Agent,
each Grantor has granted to the Collateral Agent a security interest and
continuing lien on al1 of such Grantor’s right, title and interest in, to and
under all Collateral, including the Patent Collateral (as defined below), and
all Collateral in each case whether now owned or existing or hereafter acquired
or arising and wherever located to secure the prompt and complete payment and
performance of all Secured Obligations (as defined in the Security Agreement)
including the obligations of the Borrowers under the Credit Agreement; and


 


WHEREAS pursuant to the
Credit Agreement, the Grantors are required to execute and deliver this
Agreement.


 


NOW, THEREFORE, in
consideration of the premises and to induce the Lenders, the Issuing Banks, and
the Administrative Agents to enter into the Credit Agreement and to induce the
Lenders and the Issuing Banks to make their respective extensions of credit to
the Borrowers thereunder, each Grantor hereby agrees with the Collateral Agent
as follows:


 


Section 1.              Defined
Terms


 


Unless otherwise defined
herein, terms defined in the Security Agreement and used herein have the
meaning given to them in the Security Agreement.


 


Section 2.              Grant
of Security Interest in Patents


 


Each Grantor hereby
grants to the Collateral Agent a security interest and continuing lien on all
of such Grantor’s right, title and interest in, to and under the following


 

















 


Collateral of such Grantor, in each case whether owned
or existing or hereafter acquired or arising and wherever located
(collectively, the “Patent Collateral”):


 


(i)            all of its Patents and all
Intellectual Property Licenses providing for the grant by or to such Grantor of
any right under any Patent, including, without limitation, those referred to on
Schedule 1 hereto;


 


(ii)           all reissues, reexaminations,
continuations, continuations-in-part, divisionals, renewals and extensions of
the foregoing; and


 


(iii)          all income, royalties, proceeds and
liabilities at any time due or payable or asserted under and with respect to
any of the foregoing, including, without limitation, all rights to sue and
recover at law or in equity for any past, present and future infringement,
misappropriation, dilution, violation or other impairment thereof.


 


Section 3.              Security
for Obligations


 


This Agreement secures,
and the Patent Collateral is collateral security for, the prompt and complete
payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a)
(and any successor provision thereof)), of all Secured Obligations.


 


Section 4.              Security
Agreement


 


The security interests
granted pursuant to this Agreement are granted in conjunction with the security
interests granted to the Collateral Agent pursuant to the Security Agreement
and each Grantor hereby acknowledges and affirms that the rights and remedies
of the Collateral Agent with respect to the security interest in the Patent
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. In the event of any irreconcilable
conflict between the terms of this Agreement and the terms of the Security
Agreement, the terms of the Security Agreement shall control.


 


Section 5.              Grantor
Remains Liable


 


Each Grantor hereby
agrees that, anything herein to the contrary notwithstanding, such Grantor
shall remain liable for all obligations under the Collateral, and shall assume
full and complete responsibility for the prosecution, defense, enforcement or
any other reasonably necessary or desirable actions in connection with their
Patents and Intellectual Property Licenses subject to a security interest
hereunder.


 


Section 6.              Counterparts


 


This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.


 


2

















 


Section 7.              Governing Law


 


This agreement and the
rights and obligations of the parties hereto shall be governed by, and
construed in accordance with the laws of the State of New York, but giving
effect to federal laws applicable to national banks.


 


 


[SIGNATURE PAGE
FOLLOWS]


 


3

















 


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


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FM INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William P. Ainsworth

  
	
   

  	
   

  	
  Name:  William P. Ainsworth

  
	
   

  	
   

  	
  Title:  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHEMETRON RAILWAY PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William P. Ainsworth

  
	
   

  	
   

  	
  Name:  William P. Ainsworth

  
	
   

  	
   

  	
  Title:  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROGRESS VANGUARD

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William P. Ainsworth

  
	
   

  	
   

  	
  Name:  William P. Ainsworth

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROGRESS RAIL SERVICES

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William P. Ainsworth

  
	
   

  	
   

  	
  Name:  William P. Ainsworth

  
	
   

  	
   

  	
  Title:  President
  and Chief Executive Officer

  



 

















 


	
  ACCEPTED AND AGREED

  
	
  as of the date first above written:

  
	
   

  
	
  GENERAL ELECTRIC CAPITAL

  CORPORATION,

  
	
  as U.S. Collateral Agent

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Edward N. Parkes, IV

  	
   

  
	
   

  	
  Name: Edward N. Parkes, IV

  
	
   

  	
  Title: Vice President

  



 

















 


ACKNOWLEDGEMENT OF
GRANTOR


 


	
  STATE OF ALABAMA

  	
  )

  
	
   

  	
  )     SS.

  
	
  COUNTY OF MARSHALL

  	
  )

  



 


On this 18th day of March,
2005 before me personally appeared William P. Ainsworth, proved to me on the
basis of satisfactory evidence to be the person who executed the foregoing
instrument on behalf of FM INDUSTRIES, INC., who being by me duly sworn did
depose and say that he is an authorized officer of said corporation, that the
said instrument was signed on behalf of said corporation as authorized by its
Board of Directors and that he acknowledged said instrument to be the free act
and deed of said corporation.


 


 




	
  Julie A. Ming

  
	
  Notary Public

  






 

















 


ACKNOWLEDGEMENT OF
GRANTOR


 


	
  STATE OF ALABAMA

  	
  )

  
	
   

  	
  )     SS.

  
	
  COUNTY OF MARSHALL

  	
  )

  



 


On this 18th day of March, 2005 before me personally appeared
William P. Ainsworth, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of CHEMETRON RAILWAY
PRODUCTS, INC., who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.


 


 




	
  Julie A. Ming

  
	
  Notary Public

  






 

















 


ACKNOWLEDGEMENT OF
GRANTOR


 


	
  STATE OF ALABAMA

  	
  )

  
	
   

  	
  )     SS.

  
	
  COUNTY OF MARSHALL

  	
  )

  



 


On this 18th day of March, 2005 before me personally appeared
William P. Ainsworth, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of PROGRESS VANGUARD
CORPORATION, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.


 


 




	
  Julie A. Ming

  
	
  Notary Public

  






 

















 


ACKNOWLEDGEMENT OF
GRANTOR


 


	
  STATE OF ALABAMA

  	
  )

  
	
   

  	
  )     SS.

  
	
  COUNTY OF MARSHALL

  	
  )

  



 


On this 18th day of March, 2005 before me personally appeared William
P. Ainsworth, proved to me on the basis of satisfactory evidence to be the
person who executed the foregoing instrument on behalf of PROGRESS RAIL
SERVICES CORPORATION, who being by me duly sworn did depose and say that he is
an authorized officer of said corporation, that the said instrument was signed
on behalf of said corporation as authorized by its Board of Directors and that
he acknowledged said instrument to be the free act and deed of said
corporation.


 


 




	
  Julie A. Ming

  
	
  Notary Public

  






 

















 


SCHEDULE
I




TO




PATENT
SECURITY AGREEMENT




 


A.                                   PATENTS


[Include Issued Number
and Date]


 


B.                                     PATENT
APPLICATIONS

[Include Application Number and Date]


 


C.                                     INTELLECTUAL
PROPERTY LICENSES


[Include complete legal
description of agreement (name of agreement, parties and date)]


 

















 


SCHEDULE
I




TO




PATENT
SECURITY AGREEMENT


 


	
  Party

  	
   

  	
  Patent

  	
   

  	
  Filing
  Date

  	
   

  	
  Registration
  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Ballast Removing Apparatus

  	
   

  	
  US; March 31, 1986

  	
   

  	
  4,674,208

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Method and Apparatus for Conditioning Ballast Along
  a Railroad Track

  	
   

  	
  US; March 31, 1986

  	
   

  	
  4,705,115

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Railway Track Tamping Machine

  	
   

  	
  US; January 22, 1987

  	
   

  	
  4,744,304

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Sliding Joint for Welded Rail Sections

  	
   

  	
  US; July 13, 1987

  	
   

  	
  4,785,994

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Adzer Cribber

  	
   

  	
  US; January 23, 1989

  	
   

  	
  4,848,426

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Tie Plate Placer

  	
   

  	
  US; May 31, 1996

  	
   

  	
  5,655,455

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Three-Piece Bridge Joint

  	
   

  	
  US; August 7, 2001

  	
   

  	
  6,363,564

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Rail Expansion Joint

  	
   

  	
  US; August 8, 2000

  	
   

  	
  6,393,644

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Railway Frog Wear Component

  	
   

  	
  US; October 8, 2002

  	
   

  	
  6,732,980

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Rail Switch Brace

  	
   

  	
  US; September 23, 2002

  	
   

  	
  6,758,406

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Bridge Joint

  	
   

  	
  US; September 15, 2003

  	
   

  	
  10/662,787

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Bridge Joint

  	
   

  	
  Canada; March 13, 2001

  	
   

  	
  2,340,554

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Three-Piece Bridge Joint

  	
   

  	
  Canada; March 14, 2002

  	
   

  	
  2,376,813

  	
   

  
	
  Progress Rail Services Corporation

  	
   

  	
  Rail Switch Blade

  	
   

  	
  Canada; September 11, 2003

  	
   

  	
  2,440,652

  	
   

  
	
  Progress Rail Canada Corporation

  	
   

  	
  Improved Electroplating Method and Apparatus

  	
   

  	
  Canada; October 7, 1998

  	
   

  	
  2,249,970

  	
   

  
	
  Progress Vanguard Corporation

  	
   

  	
  Electroplating Method and Apparatus

  	
   

  	
  US; July 24, 1998

  	
   

  	
  6,143,156

  	
   

  
	
  Chemetron Railway Products, Inc.

  	
   

  	
  Rail Fastening Assemblies

  	
   

  	
  US; April 30, 1986

  	
   

  	
  4,715,534

  	
   

  
	
  Chemetron Railway Products, Inc.

  	
   

  	
  Method and Apparatus for Flash Butt Welding Railway
  Rails

  	
   

  	
  US; January 8, 1992

  	
   

  	
  5,270,514

  	
   

  



 


Schedule I to
Patent Security Agreement


 

















 


	
  Party

  	
   

  	
  Patent

  	
   

  	
  Filing
  Date

  	
   

  	
  Registration
  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chemetron Railway Products, Inc.

  	
   

  	
  Method and Apparatus for Controlling Forging Force
  During Flash Butt Welding of Railway

  	
   

  	
  US; June 12, 1998

  	
   

  	
  6,163,003

  	
   

  
	
  Chemetron Railway Products, Inc.

  	
   

  	
  Rail Head Inductor

  	
   

  	
  Canada; December 3, 1985

  	
   

  	
  1,254,953

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Railway Cushioning Apparatus

  	
   

  	
  US; September 25, 1986

  	
   

  	
  4,739,889

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Repair of Railway Cushioning Apparatus

  	
   

  	
  US; September 25, 1986

  	
   

  	
  4,741,085

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Double Acting Piston Shock Absorber

  	
   

  	
  US; September 10, 1993

  	
   

  	
  5,388,711

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Rail Car Cushion Unit

  	
   

  	
  US; August 27, 1993

  	
   

  	
  5,415,303

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Single Acting Sliding Sill Cushioning Unit

  	
   

  	
  US; October 7, 1994

  	
   

  	
  5,551,581

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Cushioning Device with Preload Neutral Position

  	
   

  	
  US; June 9, 1996

  	
   

  	
  5,642,823

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Railcar Shock Absorber Backstop

  	
   

  	
  US; January 9, 1997

  	
   

  	
  5,762,214

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Hydraulic Impact Tool

  	
   

  	
  US; January 8, 1997

  	
   

  	
  5,839,419

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Internal Neutral Positioning Spring

  	
   

  	
  US; July 28, 1998

  	
   

  	
  6,237,733

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Backstop Casting

  	
   

  	
  US; January 9, 1997

  	
   

  	
  D389,093

  	
   

  
	
  FM Industries, Inc.

  	
   

  	
  Railway Cushioning Apparatus

  	
   

  	
  Canada; September 14, 1987

  	
   

  	
  1,332,378

  	
   

  
	
  Progress Rail TransCanada

  	
   

  	
  Compromise Rail

  	
   

  	
  US; February 16, 2001

  	
   

  	
  6,398,122

  	
   

  
	
  Progress Rail TransCanada

  	
   

  	
  No Hand Compromise Rail

  	
   

  	
  Canada; June 14, 2001

  	
   

  	
  2,350,385