has no notice of any suits or
actions commenced or threatened with reference to any Trademark; and
(iv)
Pledgor has the unqualified right to execute
and deliver this Security Agreement and perform its terms.
4.
RESTRICTIONS ON FUTURE AGREEMENTS.
PLEDGOR AGREES THAT UNTIL PLEDGOR'S
LIABILITIES SHALL HAVE BEEN SATISFIED IN FULL AND THE LOAN DOCUMENTS SHALL HAVE
BEEN TERMINATED, PLEDGOR SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF
PLEDGEE, SELL OR ASSIGN ITS INTEREST IN ANY TRADEMARK OR ENTER INTO ANY OTHER
AGREEMENT WITH RESPECT TO ANY TRADEMARK WHICH WOULD AFFECT THE VALIDITY OR
ENFORCEMENT OF THE RIGHTS TRANSFERRED TO PLEDGEE UNDER THIS SECURITY AGREEMENT.
5.
NEW TRADEMARKS.
PLEDGOR REPRESENTS AND WARRANTS THAT, BASED ON A DILIGENT
INVESTIGATION BY PLEDGOR, THE TRADEMARKS LISTED ON SCHEDULE A CONSTITUTE
FEDERALLY REGISTERED TRADEMARKS, AND FEDERAL APPLICATIONS FOR REGISTRATION OF
TRADEMARKS (OTHER THAN "INTENT TO USE" APPLICATIONS (WHICH SHALL NOT BE SUBJECT
TO THE SECURITY AGREEMENT) UNTIL A VERIFIED STATEMENT OF USE IS FILED WITH
RESPECT TO SUCH APPLICATIONS) NOW OWNED BY PLEDGOR.
IF, BEFORE PLEDGOR'S
LIABILITIES SHALL HAVE BEEN SATISFIED IN FULL OR BEFORE THE LOAN DOCUMENTS HAVE
BEEN TERMINATED, PLEDGOR SHALL (I) BECOME AWARE OF ANY EXISTING TRADEMARKS OF
WHICH PLEDGOR HAS NOT PREVIOUSLY INFORMED PLEDGEE, OR (II) BECOME ENTITLED TO
THE BENEFIT OF ANY TRADEMARKS, WHICH BENEFIT IS NOT IN EXISTENCE ON THE DATE
HEREOF, PLEDGOR SHALL GIVE TO PLEDGEE PROMPT WRITTEN NOTICE THEREOF.
PLEDGOR
HEREBY AUTHORIZES PLEDGEE TO MODIFY THIS SECURITY AGREEMENT BY AMENDING
SCHEDULE A TO INCLUDE ANY SUCH TRADEMARKS.
6.
TERM.
THE TERM OF THIS SECURITY AGREEMENT SHALL EXTEND UNTIL THE PAYMENT IN
FULL OF PLEDGOR'S LIABILITIES AND THE TERMINATION OF THE LOAN DOCUMENTS.
PLEDGOR
3
AGREES THAT UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, THE USE BY PLEDGEE OF
ALL TRADEMARKS SHALL BE WITHOUT ANY LIABILITY FOR ROYALTIES OR OTHER RELATED
CHARGES FROM PLEDGEE TO PLEDGOR.
7.
PRODUCT QUALITY.
PLEDGOR AGREES TO MAINTAIN THE QUALITY OF ANY AND ALL PRODUCTS
IN CONNECTION WITH WHICH THE TRADEMARKS ARE USED, CONSISTENT WITH COMMERCIALLY
REASONABLE BUSINESS PRACTICES.
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT,
PLEDGOR AGREES THAT PLEDGEE, OR A CONSERVATOR APPOINTED BY PLEDGEE, SHALL HAVE
THE RIGHT TO ESTABLISH SUCH ADDITIONAL PRODUCT QUALITY CONTROLS AS PLEDGEE, OR
SAID CONSERVATOR, IN ITS REASONABLE JUDGMENT, MAY DEEM NECESSARY TO ASSURE
MAINTENANCE OF THE QUALITY OF PRODUCTS SOLD BY PLEDGOR UNDER THE TRADEMARKS.
8.
RELEASE OF SECURITY AGREEMENT.
THIS SECURITY AGREEMENT IS MADE FOR COLLATERAL
PURPOSES ONLY.
UPON PAYMENT IN FULL OF PLEDGOR'S LIABILITIES AND TERMINATION OF
THE LOAN DOCUMENTS, PLEDGEE SHALL TAKE SUCH ACTIONS AS MAY BE NECESSARY OR
PROPER TO TERMINATE THE SECURITY INTERESTS CREATED HEREBY AND PURSUANT TO THE
LOAN DOCUMENTS.
9.
EXPENSES.
ALL EXPENSES INCURRED IN CONNECTION WITH THE PERFORMANCE OF ANY OF
THE AGREEMENTS SET FORTH HEREIN SHALL BE BORNE BY PLEDGOR.
ALL FEES, COSTS AND
EXPENSES, OF WHATEVER KIND OR NATURE, INCLUDING REASONABLE ATTORNEYS' FEES AND
LEGAL EXPENSES, INCURRED BY PLEDGEE IN CONNECTION WITH THE FILING OR RECORDING
OF ANY DOCUMENTS (INCLUDING ALL