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EXHIBIT 10.54
[LITIGATION]
EXECUTION COPY
PATENT SECURITY AGREEMENT
PATENT SECURITY AGREEMENT, dated as of October 24, 1997, by CODE-ALARM,
INC., a Michigan corporation ("Grantor"), in favor of GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation, in its capacity as Agent for Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Litigation L/C and Term Loan C Agreement
dated as of the date hereof by and among Grantor, Agent and the Persons
signatory thereto from time to time as Term Lenders (including all annexes,
exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), such Term Lenders
(collectively, the "Lenders") have agreed to incur Litigation Obligations for
the benefit of Grantor;
WHEREAS, Agent and Lenders are willing to incur Litigation L/C Obligations
and certain other Litigation Obligations, including the obligations
constituting Term Loan C, or to advance the Term Loan C, as provided for in the
Credit Agreement (collectively, hereinafter, "Obligations") but only upon the
condition, among others, that Grantor shall have executed and delivered to
Agent, for itself and the ratable benefit of Lenders, that certain Security
Agreement dated as of the date herewith (including all annexes, exhibits or
schedules thereto, as from time to time amended, restated, supplemented or
otherwise modified, the "Security Agreement");
WHEREAS, pursuant to the Security Agreement, Grantor is required to
execute and deliver to Agent, for itself and the ratable benefit of Lenders,
this Patent Security Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor hereby agrees as follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein have the meanings given to them in Annex A thereto to the Credit
Agreement.
2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Grantor hereby grants
to Agent, on behalf of itself and Lenders, as security for all of Grantor's
Obligations a continuing security interest in all of Grantor's right, title and
interest in, to and under the following, other than Permitted Encumbrances,
whether presently existing or hereafter created or acquired (collectively, the
"Patent Collateral"):
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(a) all of its Patents and Patent Licenses to which it is a
party, including, without limitation, those referred to on
Schedule I hereto;
(b) all reissues, continuations or extensions of the
foregoing;
(c) all products and proceeds of the foregoing,
including, without limitation, any claim by Grantor against
third parties for past, present or future (i) infringement or
dilution of any Patent or Patent licensed under any Patent
License.
3. SECURITY AGREEMENT. The security interests granted pursuant to this
Patent Security Agreement are granted in conjunction with the security
interests granted to Agent, on behalf of itself and Lenders, pursuant to the
Security Agreement. Grantor hereby acknowledges and affirms that the rights
and remedies of 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.
* * * *
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IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.
CODE-ALARM, INC.
By: /s/ Rand Mueller
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Name: Rand Mueller
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Title: President
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ACCEPTED AND ACKNOWLEDGED BY:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By: /s/ Timothy S. Van Kirk
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Name: Timothy S. Van Kirk
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Title: Duly Authorized Signatory
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ACKNOWLEDGMENT OF GRANTOR
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 24th day of October, 1997 before me personally appeared Rand, proved to
me on the basis of satisfactory evidence to be the person who executed the
foregoing instrument on behalf of Code-Alarm, 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.
/s/ Monique Wilson
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{seal} Notary Public
Monique Wilson
Notary Public, State of New York
No. 01W15054453
Qualified in Queens County
Commission Expires: 1-16-98
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SCHEDULE I
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to
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS
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Mark Patent No. Issue Date
AUTOMOBILE BURGLAR 4,740,775 4/26/88
ALARM
SECURITY SYSTEM 5,543,778 8/6/96
VEHICLE ANTITHEFT 4,107,543 8/15/78
SYSTEM
SECURITY SYSTEM 4,333,074 6/1/82
PATENT APPLICATIONS
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Serial No. Filing Date
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08/624,146 5/28/93
08/774,954 4/19/93
08/842,374 4/23/97
08/838,684 4/9/97
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PATENT LICENSES
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Name of Agreement Parties/Purpose Date of Agreement
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MAGNADYNE/NUTEK: Code-Alarm licensed April 1996
Cross License "Price" patent to
Agreement Magnadyne/Nutek;
Magnadyne/Nutek
licensed "Chen"
patent to
Code-Alarm
BULLDOG Code-Alarm, Inc. Septmeber 1994
licensed "Price"
patent use to
Bulldog
AUDIOVOX Code-Alarm, Inc. August 1994
licensed "Stouffer"
patent to Audiovox
AUDIOVOX: Cross Code-Alarm licensed August 1994
License Agreement use of "Price"
patent to Audiovox;
Audiovox licensed
use of "Posse"
patent to Code-Alarm
SHERWOOD Code-Alarm licensed January 1997
use of "Price"
patent to Sherwood
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