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Exhibit 10.28    
    

PLEDGE AGREEMENT

(Subsidiary) 

        This
PLEDGE AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this "Agreement") is made as of the 8th day of February, 2008 by
ALDILA GOLF CORP., a Delaware corporation ("Pledgor"), in favor of KEYBANK NATIONAL ASSOCIATION ("Lender"). 

        1.    Recitals.    

        ALDILA, INC.,
a Delaware corporation (together with its successors and assigns, "Borrower"), is entering into that certain Credit and Security Agreement, dated as of
February 8, 2008, with Lender (as the same may from time to time be amended, restated or otherwise modified, the "Credit Agreement"). Pledgor desires that Lender grant the financial
accommodations to Borrower as described in the Credit Agreement. 

        Pledgor,
a subsidiary of Borrower whose financing is provided by the Loans, as defined in the Credit Agreement, deems it to be in the direct pecuniary and business interests of Pledgor
that Borrower obtain from Lender the Commitment, as defined in the Credit Agreement, and the Loans, provided for in the Credit Agreement. 

        Pledgor
understands that Lender is willing to enter into and grant the financial accommodations to Borrower provided for in the Credit Agreement only upon certain terms and conditions,
one of which is that Pledgor grant to Lender a security interest in and an assignment of the Collateral, as hereinafter defined, and this Agreement is being executed and delivered in consideration of
each financial accommodation granted to Borrower by Lender and for other valuable consideration. 

        2.    Definitions.    Except as specifically defined herein, (a) capitalized terms used herein that are defined
in the Credit Agreement shall have their respective meanings ascribed to them in the Credit Agreement and (b) unless otherwise defined in the Credit Agreement, terms that are defined in the
U.C.C. are used herein as so defined. As used in this Agreement, the following terms shall have the following meanings: 

        "Collateral"
means, collectively, (a) the Pledged Securities and each addition, if any, thereto and each substitution, if any, therefor, in whole or in part, (b) the
certificates representing the Pledged Securities, and (c) the dividends, cash, instruments and other property distributed in respect of and other proceeds of any of the foregoing. 

        "Event
of Default" means an event or condition that constitutes an Event of Default pursuant to Section 7.1 hereof. 

        "Obligations"
means, collectively, (a) all Indebtedness and other obligations now owing or hereafter incurred by Borrower to Lender pursuant to the Credit Agreement and the other
Loan Documents, and includes the principal of and interest on all Loans; (b) each extension, renewal, consolidation or refinancing of any of the foregoing, in whole or in part; (c) all
interest from time to time accruing on any of the foregoing, and all fees and other amounts payable by Borrower or Pledgor pursuant to the Credit Agreement or any other Loan Document; (d) all
obligations and liabilities of any Company now existing or hereafter incurred to Lender (or any affiliate of Lender) under, arising out of, or in connection with any Hedge Agreement; (e) every
other liability, now or hereafter owing to Lender (or any affiliate of Lender) by any Company or Pledgor, and includes, without limitation, every liability, whether owing by only Borrower or Pledgor
or by Borrower or Pledgor with one or more others in a several, joint or joint and several capacity, whether owing absolutely or contingently, whether created by note, overdraft, guaranty of payment
or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred directly to Lender (or such affiliate) or acquired by Lender (or such affiliate) by purchase, pledge
or 

 

otherwise
and whether participated to or from Lender (or such affiliate) in whole or in part; and (f) all Related Expenses. 

        "Pledged
Securities" means, subject to Section 5 hereof, all of the shares of stock or other equity interest of each Subsidiary of Pledgor owned by Pledgor, as listed on the
attached Exhibit A, and all additional shares of stock or other equity interest of each Subsidiary of Pledgor owned by Pledgor from time to time
or acquired by Pledgor in any manner. 

        3.    Security Interest.    Pledgor hereby grants to Lender a security interest in and an assignment of the Collateral
as security for the Obligations. For the better protection of Lender hereunder, Pledgor has executed appropriate transfer powers, in the form of the attached  Exhibit B, with respect to the Pledged
Securities and, concurrently herewith, is depositing the Pledged Securities and the aforesaid transfer
powers with Lender. Pledgor authorizes Lender, at any time after the occurrence and during the continuation of an Event of Default, to transfer the Pledged Securities into the name of Lender or
Lender's nominee, but Lender shall be under no duty to do so. Notwithstanding any provision or inference herein or elsewhere to the contrary, Lender shall have no right to vote the Pledged Securities
at any time unless and until there shall have occurred and be continuing an Event of Default. 

        4.    Pledgor's Representations and Warranties.    Pledgor hereby represents and warrants to Lender as follows: 

        4.1.    Pledgor
is the legal record and beneficial owner of, and has good and marketable title to, the Pledged Securities, and the Pledged Securities are not subject to any
pledge, lien, mortgage, hypothecation, security interest, charge, option, warrant or other encumbrance whatsoever, nor to any agreement purporting to grant to any third party a security interest in
the property or assets of Pledgor that would include such Pledged Securities, except the security interest created by this Agreement or otherwise securing only Lender. 

        4.2.    All
of the Pledged Securities have been duly authorized and validly issued, and are fully paid and non-assessable. 

        4.3.    Pledgor
has full power, authority and legal right to pledge all of the Pledged Securities pursuant to the terms of this Agreement. 

        4.4.    No
consent, license, permit, approval or authorization, filing or declaration with any Governmental Authority, and no consent of any other Person, is required to be
obtained by Pledgor in connection with the pledge of the Pledged Securities hereunder, that has not been obtained or made, and is not in full force and effect. 

        4.5.    The
pledge, assignment and delivery of the Pledged Securities hereunder creates a valid first lien on, and a first perfected security interest in, the Pledged
Securities and the proceeds thereof. Other than pursuant to the Agreement, Pledgor has not granted any other liens on, or security interests in, the Pledged Securities. 

        4.6.    The
Pledged Securities constitute (a) sixty-five percent (65%) of the total combined voting power of all classes of equity interests or stock of each
first-tier Foreign Subsidiary, (b) one hundred percent (100%) of the non-voting equity interests or stock of each first-tier Foreign Subsidiary of Pledgor,
and (c) one hundred percent (100%) of the
outstanding capital stock or other equity interest owned by Pledgor of each Domestic Subsidiary of Pledgor. 

        4.7.    Pledgor
has received consideration that is the reasonably equivalent value of the obligations and liabilities that Pledgor has incurred to Lender. Pledgor is not
insolvent, as defined in any applicable state or federal statute, nor will Pledgor be rendered insolvent by the execution and delivery of this Agreement to Lender. Pledgor is not engaged or about to
engage in any business or transaction for which the assets retained by Pledgor are or will be an unreasonably 

2

 

small
amount of capital, taking into consideration the obligations to Lender incurred hereunder. Pledgor does not intend to incur debts beyond Pledgor's ability to pay them as they mature. 

        4.8.    If
the Pledged Securities are "restricted securities" within the meaning of Rule 144, or any amendment thereof, promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), Pledgor further represents and warrants that, except as disclosed in writing to Lender, (a) Pledgor has been the beneficial owner of the Pledged Securities for a
period of at least two years prior to the date hereof, (b) the full purchase price or other consideration for the Pledged Securities has been paid or given at least three years prior to the
date hereof, and (c) Pledgor does not have a short position in or any put or other option to dispose of any securities of the same class as the Pledged Securities or any other securities
convertible into securities of such class. 

        5.    Foreign Subsidiaries.    Notwithstanding anything in this Agreement to the contrary, Pledgor shall not be
required to pledge more than sixty-five percent (65%) of the total combined voting power of all classes of equity interests or stock of any first tier Foreign Subsidiary if Pledgor is not
required to do so pursuant to Section 5.20 of the Credit Agreement. 

        6.    Additional Covenants of Pledgor.    

        6.1.    Pledgor
covenants and agrees to defend the right, title and security interest of Lender in and to the Pledged Securities and the proceeds thereof, and to maintain and
preserve the lien and security interest provided for by this Agreement against the claim and demands of all Persons, so long as this Agreement shall remain in effect. 

        6.2.    Except
as expressly permitted by the Credit Agreement, Pledgor covenants and agrees not to sell, assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to, or create, incur or permit to exist any pledge, lien, mortgage, hypothecation, security interest, charge, option or any other encumbrance with respect to any of the Pledged
Securities, or any interest therein, or any proceeds thereof, except for the lien and security interest provided for by this Agreement and any security agreement securing only Lender. 

        6.3.    Pledgor
covenants and agrees (a) to cooperate, in good faith, with Lender and to do or cause to be done all such other acts as may be necessary to enforce the
rights of Lender under this Agreement, (b) not to take any action, or to fail to take any action that would be adverse to the interest of Lender in the Collateral and hereunder, and
(c) to make any sale or sales of any portion or all of the Pledged Securities valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales at Pledgor's expense. 

        7.    Events of Default.    

        7.1.    The
occurrence of an Event of Default, as defined in the Credit Agreement, shall constitute an Event of Default hereunder. 

        7.2.    Upon
the occurrence of an Event of Default hereunder, and at all times thereafter, Lender, in its discretion, may sell, assign, transfer and deliver any of the
Collateral, at any time, or from time to time. No prior notice need be given to Pledgor or to any other Person in the case of any sale of Collateral that Lender determines to be declining speedily in
value or that is customarily sold in any securities exchange, over-the-counter market or other recognized market, but in any other case Lender shall give Pledgor no fewer than
ten (10) days prior notice of either the time and place of any public sale of the Collateral or of the time after which any private sale or other intended disposition thereof is to be made.
Pledgor waives advertisement of any such sale and (except to the extent specifically required by the preceding sentence) waives notice of any kind 

3

 

in
respect of any such sale. At any such public sale, Lender may purchase the Collateral, or any part thereof, free from any right of redemption, all of which rights Pledgor hereby waives and
releases. After deducting all Related Expenses, and after paying all claims, if any, secured by liens having precedence over this Agreement, Lender may apply the net proceeds of each such sale to or
toward the payment of the Obligations, whether or not then due, in such order and by such division as Lender in its sole discretion may deem advisable. Any excess, to the extent permitted by law,
shall be paid to Pledgor, and the obligors on the Obligations shall remain liable for any deficiency. In addition, Lender shall at all times have the right to obtain new appraisals of Pledgor or the
Collateral, the cost of which shall be paid by Pledgor. 

        8.    Attorney-In-Fact.    Pledgor hereby authorizes and empowers Lender to make, constitute
and appoint any officer or agent of Lender as Lender may select, in its exclusive discretion, as Pledgor's true and lawful attorney-in-fact, with the power to endorse Pledgor's
name on all applications, documents, papers and instruments necessary for Lender to take actions with respect to the Collateral after the occurrence and during the continuation of an Event of Default,
including, without limitation, actions necessary for Lender to assign, pledge, convey or otherwise transfer title in or dispose of the Collateral to any Person. Pledgor 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. 

        9.    Maximum Liability of Pledgor.    Anything in this Agreement to the contrary notwithstanding, in no event shall
the amount of the Obligations secured by this Agreement exceed the maximum amount that (after giving effect to the incurring of the obligations hereunder and to any rights to contribution of Pledgor
from other affiliates of Borrower) would not render the rights to payment of Lender hereunder void, voidable or avoidable under any applicable fraudulent transfer law. 

        10.    Costs and Expenses.    If Pledgor fails to comply with any of its obligations hereunder, Lender may do so in
the name of Pledgor or Lender, but at Pledgor's expense, and Pledgor hereby agrees to reimburse Lender in full for all expenses, including reasonable attorneys' fees, incurred by Lender in protecting,
defending and maintaining the Collateral. Without limiting the foregoing, any and all reasonable fees, costs and expenses, of whatever kind or nature, including the attorneys' fees and expenses
incurred in connection with the filing or recording of any documents (including all taxes in connection therewith) in public offices, the payment or discharge of any taxes, maintenance fees,
encumbrances or otherwise protecting, maintaining or preserving the Collateral, or in defending or prosecuting any actions or proceedings arising out of or related to the Collateral, shall be borne
and paid by Pledgor upon request of Lender. 

        11.    Notice.    All notices, requests, demands and other communications provided for hereunder shall be in writing
and, if to Pledgor, mailed or delivered to it, addressed to it at the address specified on the signature page of this Agreement, and, if to Lender, mailed or delivered to it, addressed to the address
of Lender specified on the signature pages of the Credit Agreement, or, as to each party, at such other address as shall be designated by such party in a written notice to each of the other parties.
All notices, statements, requests, demands and other communications provided for hereunder shall be deemed to be given or made when delivered or two Business Days after being deposited in the mails
with postage prepaid by registered or certified mail, addressed as aforesaid, or sent by facsimile with telephonic confirmation of receipt, except that notices pursuant to any of the provisions hereof
shall not be effective until received. 

        12.    Interpretation.    Each right, power or privilege specified or referred to in this Agreement is in addition to
any other rights, powers and privileges that Lender may have or acquire by operation of law, by other contract or otherwise. No course of dealing in respect of, nor any omission or delay in the
exercise of, any right, power or privilege by Lender shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further or other exercise thereof or of any other,
as each right, power or privilege may be exercised by Lender either independently or concurrently with other 

4

 

rights,
powers and privileges and as often and in such order as Lender may deem expedient. No waiver or consent granted by Lender in respect of this Agreement shall be binding upon Lender unless
specifically granted in writing, which writing shall be strictly construed. 

        13.    Assignment and Successors.    This Agreement shall not be assigned by Pledgor without the prior written consent
of Lender. This Agreement shall bind the successors and permitted assigns of Pledgor and shall benefit the successors and assigns of Lender. 

        14.    Severability.    If, at any time, one or more provisions of this Agreement is or becomes invalid, illegal or
unenforceable in whole or in part, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

        15.    Termination.    At such time as the Obligations shall have been irrevocably paid in full, the Commitment, as
defined in the Credit Agreement, terminated, and the Credit Agreement terminated and not replaced by any other credit facility with Lender, Pledgor shall have the right to terminate this Agreement.
Upon written request of Pledgor, Lender shall promptly execute and deliver to Pledgor appropriate releases with respect to the Collateral and return all of the Pledged Securities to Pledgor. 

        16.    Headings; Execution.    The headings and subheadings used herein are for convenience of reference only and
shall be ignored in interpreting the provisions of this Agreement. This Agreement may be executed by facsimile signature, which, when so executed and delivered, shall be deemed to be an original. 

        17.    Governing Law; Submission to Jurisdiction.    The provisions of this Agreement and the respective rights and
duties of Pledgor and Lender hereunder shall be governed by and construed in accordance with Ohio law, without regard to principles of conflict of laws. Pledgor hereby irrevocably submits to the
non-exclusive jurisdiction of any Ohio state or federal court sitting in Cleveland, Ohio, over any action or proceeding arising out of or relating to this Agreement, any Loan Document or
any Related Writing, and Pledgor hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Ohio state or federal court. Pledgor, on behalf
of itself and its Subsidiaries, hereby irrevocably waives, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of venue in any such action or proceeding in
any such court as well as any right it may now or hereafter have to remove such action or proceeding, once commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise. Pledgor
agrees that a final, nonappealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law. 

        [Remainder
of page intentionally left blank.] 

5

 

        JURY TRIAL WAIVER.    PLEDGOR AND LENDER, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG PLEDGOR, BORROWER AND LENDER, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG 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. 

        IN
WITNESS WHEREOF, the undersigned has executed and delivered this Pledge Agreement as of the date first set forth above. 

	Address:	14145 Danielson Street, Suite B	 	ALDILA GOLF CORP.
	 	Poway, CA 92064	 	 	 
	 	Attn: Chief Financial Officer	 	By:	Peter R. Mathewson
 Peter R. Mathewson

President

Signature
Page to

Pledge Agreement 

6

 

 

 
 

EXHIBIT A    
    
    PLEDGED SECURITIES    

	Name of Subsidiary
 
	 	Jurisdiction
	 	Shares
	 	Certificate Number
	 	Ownership Percentage
	 
	Aldila de Mexico, S.A. de C.V. 	 	Mexico	 	6500

3496	 	8

9	 	99.98	%*
	

Aldila Carbon Fibers Products (Zhuhai) Company Limited	
 	

People's Republic of China	
 	

 	
 	

 	
 	

100	
%*
	

Aldila Composite Products Company Limited	
 	

Vietnam	
 	

 	
 	

 	
 	

100	
%*

	*
	100%
of non-voting shares and equity interests and 65% of voting shares or equity interest constitute Pledged Securities 

E-1

 
 
 

EXHIBIT B    
    
    FORM OF STOCK TRANSFER POWER    

        FOR
VALUE RECEIVED,
                                         
        hereby sells, assigns and transfers unto
                                         
       
(                    ) Shares of the
                                         
        Capital Stock of
                                         
        standing in
                         name on the books of said corporation and represented by Certificate No.
                     herewith and does hereby irrevocably
constitute and appoint                                     
attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. 

	 	 	 	ALDILA GOLF CORP.
	

Date:	

    
	
 	

By:	

    
 Peter R. Mathewson

President

E-2

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Exhibit 10.28

EXHIBIT A PLEDGED SECURITIES

EXHIBIT B FORM OF STOCK TRANSFER POWERQuickLinks
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Exhibit 10.29    
    

 
  INTELLECTUAL PROPERTY SECURITY AGREEMENT
  (Borrower)    

        This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this "Agreement") is made as of the
8th day of February, 2008 by ALDILA, INC., a Delaware corporation ("Pledgor") in favor of KEYBANK NATIONAL ASSOCIATION ("Lender"). 

        1.    Recitals.    

        Pledgor
is entering into that certain Credit and Security Agreement, dated as of February 8, 2008, with Lender (as the same may from time to time be amended, restated or otherwise
modified, the "Credit Agreement"). Pledgor desires that Lender grant the financial accommodations as described in the Credit Agreement. 

        Pledgor
understands that Lender is willing to enter into and grant the financial accommodations provided for in the Credit Agreement only upon certain terms and conditions, one of which
is that Pledgor grant to Lender, a security interest in the Collateral, as hereinafter defined, and this Agreement is being executed and delivered in consideration of Lender entering into the Credit
Agreement each financial accommodation granted by Lender and for other valuable consideration. 

        2.    Definitions.    Except as specifically defined herein, (a) capitalized terms used herein that are defined
in the Credit Agreement shall have their respective meanings ascribed to them in the Credit Agreement, and (b) unless otherwise defined in the Credit Agreement, terms that are defined in the
U.C.C. are used herein as so defined. As used in this Agreement, the following terms shall have the following meanings: 

        "Assignment"
means an Assignment in the form of Exhibit A attached hereto. 

        "Collateral"
means, collectively, all of Pledgor's existing and future right, title and interest in, to and under (a) industrial designs, patents, patent registrations, patent
applications, trademarks, trademark registrations, trademark applications, service marks, trade names and copyright registrations, and other intellectual property or registrations, whether federal,
state or foreign, including, but not limited to, those that are registered or pending as listed on Schedule 1 hereto (as such  Schedule 1 may from
time to time be amended, supplemented or otherwise modified); (b) common law trademark rights, copyrights,
improvements, confidential information and inventions; (c) renewals, continuations, extensions, reissues and divisions of any of the foregoing; (d) rights to sue for past, present and
future infringements or any other commercial tort claims relating to any of the foregoing; (e) all licenses and all income, revenue and royalties with respect to any licenses, whether
registered or unregistered and all other payments earned under contract rights relating to any of the foregoing; (f) all general intangibles and all intangible intellectual or similar property
of Pledgor connected with and symbolized by any of the foregoing; (g) goodwill associated with any of the foregoing; (h) all payments under insurance, including the returned premium upon
any cancellation of insurance (whether or not Lender is the loss payee thereof) or any indemnity, warranty or guaranty payable by reason of loss or damage to or otherwise with respect to any of the
foregoing; and (i) Proceeds of any of the foregoing. 

        "Event
of Default" means an event or condition that constitutes an Event of Default, as defined in Section 8.1 hereof. 

        "Hedge
Agreement" means any Hedge Agreement, as defined in the Credit Agreement, existing between a Company and Lender. 

        "ITU
Application" means a trademark application filed with the USPTO pursuant to 15 U.S.C. § 1051(b). 

        "Obligations"
means, collectively, (a) all Indebtedness and other obligations now owing or hereafter incurred by Pledgor to Lender pursuant to the Credit Agreement and the other
Loan 

 

Documents;
(b) each renewal, extension, consolidation or refinancing of any of the foregoing, in whole or in part; (c) all interest from time to time accruing on any of the foregoing,
and all fees and other amounts payable by Pledgor pursuant to the Credit Agreement or any other Loan Document; (d) all obligations and liabilities of any Company now existing or hereafter
incurred to Lender (or any affiliate of Lender) under, arising out of, or in connection with any Hedge Agreement; (e) every other liability, now or hereafter owing to Lender (or any affiliate
of Lender) by Pledgor, and includes, without limitation, every liability, whether owing by only Pledgor or by Pledgor with one or more others in a several, joint or joint and several capacity, whether
owing absolutely or contingently, whether created by note, overdraft, guaranty of payment or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred directly
to Lender (or such affiliate) or acquired by Lender (or such affiliate) by purchase, pledge or otherwise and whether participated to or from Lender (or such affiliate) in whole or in part; and
(f) all Related Expenses. 

        "Proceeds"
means (a) any proceeds, and (b) whatever is received upon the sale, exchange, collection, or other disposition of Collateral or proceeds, whether cash or
non-cash. Cash proceeds includes, without limitation, moneys, checks, and Deposit Accounts. Except as expressly authorized in this Agreement, the right of Lender to Proceeds specifically
set forth herein or indicated in any financing statement shall never constitute an express or implied authorization on the part of Lender to Pledgor's sale, exchange, collection, or other disposition
of any or all of the Collateral. 

        "Trademark
Act" means the U.S Trademark Act of 1946, as amended. 

        "U.C.C."
means the Uniform Commercial Code, as in effect from time to time in the State of Ohio. 

        "USCO"
means the United States Copyright Office in Washington D.C. 

        "USPTO"
means the United States Patent and Trademark Office in Washington D.C. 

        3.    Grant of Assignment and Security Interest.    In consideration of and as security for the full and complete
payment of all of the Obligations, Pledgor hereby agrees that Lender shall at all times have, and hereby grants to Lender, a security interest in all of the Collateral, including (without limitation)
all of Pledgor's future Collateral, irrespective of any lack of knowledge by Lender of the creation or acquisition thereof. Pledgor and Lender hereby acknowledges and agrees that with respect to any
ITU Application included within the Collateral, to the extent such an ITU Application would under the Trademark Act be deemed to be transferred in violation of 15 U.S.C. § 1060(a)
as a result of the security interest granted herein or otherwise invalidated or made unenforceable as a result of the execution or performance of this Agreement, no security interest shall be deemed
to have been granted in such ITU Application (notwithstanding the provisions of this Agreement or any other Loan Document) until such time as the circumstances that would give rise to such violation,
invalidation or unenforceability no longer exist. 

        4.    Representations and Warranties.    Pledgor hereby represents and warrants to Lender as follows: 

        4.1.    Pledgor
owns all of the Collateral and, whether the same are registered or unregistered, to Pledgor's knowledge, no such Collateral has been adjudged invalid or
unenforceable. 

        4.2.    To
Pledgor's knowledge, the Collateral is valid and enforceable. 

        4.3.    Pledgor
has no knowledge of any material claim that the use of any of the Collateral does or may violate the rights of any Person. 

        4.4.    Except
for liens expressly permitted pursuant to Section 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 Collateral, free and clear of any liens, charges and encumbrances, including, without 

2

 

limitation,
pledges, assignments, licenses, registered user agreements and covenants by Pledgor not to sue third Persons. 

        4.5.    Pledgor
has full power, authority and legal right to pledge the Collateral and enter into this Agreement and perform its terms. 

        4.6.    Pledgor
has used, and shall continue to use, for the duration of this Agreement, proper statutory notice in connection with its use of the Collateral, except where the
failure to do so will not have a material adverse effect on Pledgor. 

        5.    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 Collateral without Lender's prior written
consent, which consent shall not be unreasonably withheld. Absent such prior written consent, any attempted sale or license is null and void. 

        6.    Right to Inspect.    Upon delivery of at least three (3) Business Days advance written notice to Pledgor,
Pledgor hereby grants to Lender and its employees and agents the right, during regular business hours, to visit any location of Pledgor or, if applicable, any other location, and to inspect the
products and quality control records relating thereto at Pledgor's expense. 

        7.    Standard Patent and Trademark Use.    Pledgor shall not use the 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 use commercially reasonable efforts to conform
its usage of any trademarks to standard trademark usage, including, but not limited to, using the trademark symbols ®, TM, and SM where appropriate. 

        8.    Event of Default.    

        8.1.    The
occurrence of an Event of Default, as defined in the Credit Agreement, shall constitute an Event of Default. 

        8.2.    Pledgor
expressly acknowledges that Lender shall record this Agreement with the USCO and the USPTO, as appropriate. Contemporaneously herewith, Pledgor shall execute
and deliver to Lender the Assignment, which Assignment shall have no force and effect and shall be held by Lender in escrow until the occurrence and continuation of an Event of Default; provided,
that, anything herein to the contrary notwithstanding, the security interest and collateral assignment granted herein shall be effective as of the date of this Agreement. After the occurrence of an
Event of Default, the Assignment shall immediately take effect upon certification of such fact by an authorized officer of Lender in the form reflected on the face of the Assignment and Lender may, in
its sole discretion, record the Assignment with the USCO and the USPTO, as appropriate, or in any appropriate office in any foreign jurisdiction in which such patent, trademark, copyright or other
intellectual property interest is registered, or under whose laws such property interest has been granted. 

        8.3.    If
an Event of Default shall occur and be continuing, Pledgor irrevocably authorizes and empowers Lender to terminate Pledgor's use of the Collateral and to exercise
such rights and remedies as allowed by law. Without limiting the generality of the foregoing, after any delivery or taking of possession of the Collateral, or any thereof, pursuant to this Agreement,
then, with or without resort to Pledgor or any other Person or property, all of which Pledgor hereby waives, and upon such terms and in such manner as Lender may deem advisable, Lender, in its sole
discretion, may sell, assign, transfer and deliver any of the Collateral, together with the associated goodwill, or any interest that Pledgor may have therein, at any time, or from time to time. No
prior notice need be given to Pledgor or to any other Person in the case of any sale of Collateral that Lender determines to be declining speedily in value or that is customarily sold in any
recognized market, 

3

 

but
in any other case Lender shall give Pledgor no fewer than ten (10) days prior notice of either the time and place of any public sale of the Collateral or of the time after which any private
sale or other intended disposition thereof is to be made. Pledgor waives advertisement of any such sale and (except to the extent specifically required by the preceding sentence) waives notice of any
kind in respect of any such sale. At any such public sale, Lender may purchase the Collateral, or any part thereof, free from any right of redemption, all of which rights Pledgor hereby waives and
releases. After deducting all Related Expenses, and after paying all claims, if any, secured by liens having precedence over this Agreement, Lender may apply the net proceeds of each such sale to or
toward the payment of the Obligations, whether or not then due, in such order and by such division as Lender in its sole discretion may deem advisable. Any excess, to the extent permitted by law,
shall be paid to Pledgor, and the obligors on the Obligations shall remain liable for any deficiency. In addition, Lender shall at all times have the right to obtain new appraisals of Pledgor or the
Collateral, the cost of which shall be paid by Pledgor. 

        9.    Maintaining Collateral; Attorneys' Fees, Costs and Expenses.    Pledgor shall have the obligation and duty to
perform all acts necessary to maintain or preserve the Collateral, provided that Pledgor shall not be obligated to maintain any Collateral in the event Pledgor determines, in the reasonable business
judgment of Pledgor, that the maintenance of such Collateral is no longer necessary in Pledgor's business. Any and all reasonable fees, costs and expenses, of whatever kind or nature, including,
without limitation, the reasonable attorneys' fees and legal expenses incurred by Lender 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 Collateral, or in defending or prosecuting any actions or
proceedings arising out of or related to the Collateral, shall be borne and paid by Pledgor, upon demand by Lender, and, until so paid, shall be added to the principal amount of the Obligations. 

        10.    Pledgor's Obligation to Prosecute.    Except as otherwise agreed to by Lender in writing, Pledgor shall have
the duty to prosecute diligently any patent, trademark, service mark or copyright application pending as of the date of this Agreement or thereafter until the Obligations shall have been paid in full,
to file and prosecute opposition and cancellation proceedings and to do any and all acts that are necessary or desirable to preserve and maintain all rights in the Collateral, including, but not
limited to, payment of any maintenance fees. Any expenses incurred in connection with the Collateral shall be borne by Pledgor. Pledgor shall not abandon any Collateral without the prior written
consent of
Lender, unless such abandonment will not have a material adverse effect on Pledgor or such abandonment is in connection with the abandonment of a product or product line. 

        11.    Lender's Right to Enforce.    Pledgor shall have the right to bring any opposition proceeding, cancellation
proceeding or lawsuit in its own name to enforce or protect the Collateral. Lender shall have the right, but shall have no obligation, to join in any such action. Pledgor shall promptly, upon demand,
reimburse and indemnify Lender for all damages, reasonable costs and expenses, including reasonable attorneys' fees incurred by Lender in connection with the provisions of this Section 11, in
the event Lender elects to join in any such action commenced by Pledgor. 

        12.    Power of Attorney.    Pledgor hereby authorizes and empowers Lender to make, constitute and appoint any officer
or agent of Lender as Lender may select, in its exclusive discretion, as Pledgor's true and lawful attorney-in-fact, with the power to endorse, after the occurrence and during
the continuation of an Event of Default, Pledgor's name on all applications, documents, papers and instruments necessary for Lender to use the Collateral, or to grant or issue any exclusive or
nonexclusive license under the Collateral to any third party, or necessary for Lender to assign, pledge, convey or otherwise transfer title in or dispose of the Collateral, together with associated
goodwill to a 

4

 

third
party or parties. 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. 

        13.    Lender's Right to Perform Obligations.    If Pledgor fails to comply with any of its obligations under this
Agreement Lender may, but is not obligated to, upon giving reasonable notice to Pledgor, do so in Pledgor's name or in the name of Lender, but at Pledgor's expense, and Pledgor hereby agrees to
reimburse Lender, upon request, in full for all expenses, including reasonable attorneys' fees, incurred by Lender in protecting, defending and maintaining the Collateral. 

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

        15.    New Collateral.    If, before the Obligations shall have been irrevocably paid in full and the Commitment
terminated, Pledgor shall obtain rights to any new Collateral, the provisions of this Agreement hereby shall automatically apply thereto as if the same were identified on  Schedule 1 as of the date
hereof and Pledgor shall give Lender prompt written notice thereof. 

        16.    Modifications for New Collateral.    Pledgor hereby authorizes Lender to modify this Agreement by amending  Schedule 1
to include any future Collateral as contemplated by Sections 1 and 15 hereof and,
at Lender's request, Pledgor shall execute any documents or instruments reasonably required by Lender in order to modify this Agreement as provided by this Section 16, provided that any such
modification to Schedule 1 shall be effective without the signature of Pledgor. 

        17.    Termination.    At such time as the Obligations shall have been irrevocably paid in full, the Commitment, as
defined in the Credit Agreement, terminated, and the Credit Agreement terminated and not replaced by any other credit facility with Lender, Pledgor shall have the right to terminate this Agreement.
Upon written request of Pledgor, Lender shall execute and deliver to Pledgor all deeds, assignments, and other instruments as may be necessary or proper to release Lender's security interest in and
assignment of the Collateral and to re-vest in Pledgor full title to the Collateral, subject to any disposition thereof that may have been made by Lender pursuant hereto. 

        18.    No Waiver.    No course of dealing between Pledgor 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 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. 

        19.    Remedies Cumulative.    All of the rights and remedies of Lender with respect to the Collateral, whether
established hereby or by the Loan Documents, or by any other agreements or by law shall be cumulative and may be executed singularly or concurrently. 

        20.    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. 

        21.    Modifications.    This Agreement may be amended or modified only by a writing signed by Pledgor and Lender. In
the event that any provision of this Agreement is deemed to be inconsistent with any provision of any other document, other than the Credit Agreement, the provisions of this Agreement shall control. 

        22.    Assignment and Successors.    This Agreement shall not be assigned by Pledgor without the prior written consent
of Lender. This Agreement shall bind the successors and permitted assigns of 

5

 

Pledgor
and shall benefit the successors and assigns of Lender. Any attempted assignment or transfer without the prior written consent of Lender shall be null and void. 

        23.    Notice.    All notices, requests, demands and other communications provided for hereunder shall be in writing
and, if to Pledgor, mailed or delivered to it, addressed to it at the address of Pledgor specified on the signature page of this Agreement, if to Lender, mailed or delivered to it, addressed to the
address of Lender specified on the signature pages of the Credit Agreement or, as to each party, at such other address as shall be designated by such party in a written notice to each of the other
parties. All notices, statements, requests, demands and other communications provided for hereunder shall be deemed to be given or made when delivered or two Business Days after being deposited in the
mails with postage prepaid by registered or certified mail, addressed as aforesaid, or sent by facsimile with telephonic confirmation of receipt, except that notices pursuant to any of the provisions
hereof shall not be effective until received. 

        24.    Governing Law; Submission to Jurisdiction.    The provisions of this Agreement and the respective rights and
duties of Pledgor and Lender hereunder shall be governed by and construed in accordance with Ohio law, without regard to principles of conflict of laws. Pledgor hereby irrevocably submits to the
non-exclusive jurisdiction of any Ohio state or federal court sitting in Cleveland, Ohio, over any action or proceeding arising out of or relating to this Agreement, any Loan Document or
any Related Writing, and Pledgor hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Ohio state or federal court. Pledgor hereby
irrevocably waives, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of venue in any such action or proceeding in any such court as well as any right it
may now or hereafter have to remove such action or proceeding, once commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise. Pledgor agrees that a final, nonappealable judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 

[Remainder
of page intentionally left blank.] 

6

 

        JURY TRIAL WAIVER.    PLEDGOR AND LENDER, TO THE EXTENT PERMITTED BY LAW, EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN LENDER AND PLEDGOR, 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. 

        IN
WITNESS WHEREOF, the undersigned has executed and delivered this Intellectual Property Security Agreement as of the date first set forth above. 

	Address:	14145 Danielson Street, Suite B

Poway, CA 92064	 	ALDILA, INC.
	 	Attn: Chief Financial Officer	 	By:	Peter R. Mathewson
 Peter R. Mathewson

Chairman, CEO and President

Signature
Page to

Intellectual Property Security Agreement 

7

 

 

 
 

SCHEDULE 1    
    
    [Schedules Omitted]    

S-1

 

 

 
 

EXHIBIT A
  FORM OF ASSIGNMENT    

        THIS
DOCUMENT SHALL BE HELD BY LENDER, IN ESCROW PURSUANT TO AND IN ACCORDANCE WITH THE PROVISIONS OF THE INTELLECTUAL PROPERTY SECURITY AGREEMENT (THE "AGREEMENT"), DATED AS OF FEBRUARY
8, 2008, EXECUTED BY ALDILA, INC., A DELAWARE CORPORATION ("PLEDGOR"), IN FAVOR OF KEYBANK NATIONAL ASSOCIATION, (TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, "LENDER"). BY SIGNING IN THE SPACE
PROVIDED BELOW, THE UNDERSIGNED OFFICER OF LENDER CERTIFIES THAT AN EVENT OF DEFAULT, AS DEFINED IN THE AGREEMENT, HAS OCCURRED AND IS CONTINUING AND THAT LENDER HAS ELECTED TO TAKE POSSESSION OF THE
COLLATERAL, AS DEFINED BELOW, AND TO RECORD THIS DOCUMENT WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE OR THE UNITED STATES COPYRIGHT OFFICE, AS APPLICABLE, OR IN ANY APPROPRIATE OFFICE IN ANY
FOREIGN JURISDICTION IN WHICH SUCH PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY INTEREST IS REGISTERED, OR UNDER WHOSE LAWS SUCH PROPERTY INTEREST HAS BEEN GRANTED. UPON RECORDING OF
THIS DOCUMENT WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE OR UNITED STATES COPYRIGHT OFFICE, AS APPLICABLE, OR IN ANY APPROPRIATE OFFICE IN ANY FOREIGN JURISDICTION IN WHICH SUCH PATENT,
TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY INTEREST IS REGISTERED, OR UNDER WHOSE LAWS SUCH PROPERTY INTEREST HAS BEEN GRANTED, THIS LEGEND SHALL CEASE TO HAVE ANY FORCE OR EFFECT. 

	 	 	KEYBANK NATIONAL ASSOCIATION
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

E-1

 
 
 

ASSIGNMENT    

        WHEREAS,
ALDILA, INC., a Delaware corporation ("Pledgor"), is the owner of the Collateral, as hereinafter defined; 

        WHEREAS,
Pledgor has executed an Intellectual Property Security Agreement, dated as of February 8, 2008 (as the same may from time to time be amended, restated or otherwise
modified, the "Agreement"), in favor of KEYBANK NATIONAL ASSOCIATION (together with its successors and assigns, "Lender"), pursuant to which Pledgor has granted to Lender a security interest in the
Collateral as security for the Obligations, as defined in the Agreement; 

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

        WHEREAS,
the Agreement provides that this Assignment shall become effective upon the occurrence and continuation of an Event of Default, as defined in the Agreement, and Lender's
election to take actual title to the Collateral; 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency 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 unto Lender, and its successors, transferees and assigns, all of Pledgor's
existing and future right, title and interest in, to and under (a) patents, patent registrations, patent applications, trademarks, trademark registrations, trademark applications, service
marks, trade names and copyright registrations, whether federal, state or foreign; (b) common law trademark rights, copyrights, improvements and inventions; (c) renewals, continuations,
extensions, reissues and divisions of any of the foregoing; (d) rights to sue for past, present and future infringements or any other commercial tort
claims relating to any of the foregoing; (e) all licenses and all income, revenue and royalties with respect to any licenses, whether registered or unregistered, and all other payments earned
under contract rights, relating to any of the foregoing; (f) all general intangibles and all intangible intellectual or similar property of Pledgor connected with and symbolized by any of the
foregoing; (g) goodwill associated with any of the foregoing; (h) all payments under insurance, including the returned premium upon any cancellation of insurance, (whether or not Lender
is the loss payee thereof) or any indemnity, warranty or guaranty payable by reason of loss or damage to or otherwise with respect to any of the foregoing; and (i) Proceeds of any of the
foregoing (collectively, the "Collateral"), including, but not limited to, the Collateral listed on Schedule 1 hereto that is
(i) registered in the United States Copyright Office in Washington, D.C., (ii) registered in the United States Patent and Trademark Office in Washington D.C. or that is the subject of
pending applications in the United States Patent and Trademark Office, or (iii) registered or pending registration in any foreign jurisdiction. 

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

        IN
WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its duly authorized officer on February 8, 2008. 

	 	 	ALDILA, INC.
	

 	
 	

By:	

    

	 	 	Name:	    

	 	 	Title:	    

E-2

 
 
 

SCHEDULE 1    
    
    [Schedules Omitted]    

E-3

QuickLinks

Exhibit 10.29

INTELLECTUAL PROPERTY SECURITY AGREEMENT (Borrower)

SCHEDULE 1 [Schedules Omitted]

EXHIBIT A FORM OF ASSIGNMENT

ASSIGNMENT

SCHEDULE 1 [Schedules Omitted]

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