BILL 610                                                                                 RESOLUTION ________

 

A RESOLUTION AUTHORIZING THE LOAN OF MISSOURI DEVELOPMENT ACTION GRANT FUNDS PREVIOUSLY RECEIVED THROUGH THE STATE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM AND THE ECONOMIC DEVELOPMENT ADMINISTRATION GRANT PROGRAM TO HANFORD NUCLEAR SERVICES, INC.

 

            WHEREAS, the City of West Plains is interested in enlarging its tax base and providing employment for low to moderate income persons which would be economically beneficial to the citizens of the City of West Plains, and

 

            WHEREAS, Hanford Nuclear Services, Inc. has made application to the City of West Plains for a loan of $100,000 for Missouri Development Action Grant Funds and the Economic Development Administration Grant Program which the City had previously received through the State and Federal Programs, and

 

            WHEREAS, the loan of said funds should create new jobs in the City of West Plains.

 

NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:

 

Section 1: The City of West Plains shall loan to Hanford Nuclear Services, Inc. the sum of $100,000 evidenced by executed documents (EXHIBIT A)  to be hereto attached and made a part hereof upon execution

 

Section 2: That this Resolution shall be effective from and after its date of passage and approval.

 

PASSED AND APPROVED THIS 31ST DAY OF May 2002

 

                                                            CITY OF WEST PLAINS, MISSOURI

 

 

                                                            __________________________________

                                                            MAYOR JOE PAUL (J.P.) EVANS

ATTEST:

 

 

______________________________

CITY CLERK CONNIE SHELTON

 

 

 

 

 

 

 

PROMISSORY NOTE

 

$100,000.00    June 1, 2002

 

FOR VALUE RECEIVED, the undersigned, Hanford Nuclear Services, Inc., (“Maker”) hereby promises to pay the City of West Plains (“Holder”) the total principal sum of One Hundred Thousand Dollars and no cents ($100,000.00) with interest upon unpaid balance at the rate of five percent (5%) per annum payable monthly with the first interest only payment due June 1, 2003 and quarterly payments of interest and principal due beginning on September 1, 2003 until paid in full (SEE EXHIBIT A SCHEDULE).

 

The total principal borrowed under this Promissory Note shall be disbursed as follows:

 

(a)            $50,000 shall be paid to Maker, on June 1, 2002, of which $5,000 shall be withheld by Holder as payment in full of the interest only payment due to Holder as of June 11, 2002 by Maker under the terms of that certain Promissory Note dated June 11, 2001 by and between Maker and Holder;

 

(b)            $25,000 shall be paid to Maker, on July 1, 2002; and

 

(c)            $25,000 shall be paid to Maker, on August 1, 2002.

 

Payments of principal and interest under this Promissory Note shall be made at City Hall, 1910 Holiday Lane, West Plains, Missouri.

 

The undersigned hereby agrees to the following conditions of this Promissory Note:

 

If a default shall occur and continue for 60 days in the payment of any of the interest or principal becoming due hereon, Holder may at any time hereafter without notice and during the continuance of such default, declare immediately due to its entirety the unpaid principal hereof and proceed to collect or enforce payment thereof with accrued and unpaid interest to the date of such collection or payment.

 

If a default shall occur in the payment of this Promissory Note at its maturity, whether by acceleration or otherwise and this Promissory Note be placed in the hands of an attorney for collection, Maker shall pay, in addition to the other payments herein required, a reasonable attorney’s fee.

 

Maker waives presentment for payment, demand, protest and notice of protest and of non-payment and notice of and all defenses on account of extension of time for payment or change in the method of payment.

 

HANFORD NUCLEAR SERVICES, INC.

BY:                 

SIGNATURE:

DATE:            

 

STATE OF MISSOURI

COUNTY OF HOWELL

 

On this ____ day of _______, 2002 before me personally appeared ___________________________ to me known to be the person described in and who executed the foregoing instruments, and acknowledged that they executed the same as their free act and deed.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal at my office in West plains, MO the day and year first above written.

 

Notary Public:                          Commission Expires:           

 

Hanford Nuclear Services, Inc. – Resolution _______ June 1, 2002

 

Loan Amortized at 5%

 

 

 

Date

Payment Number

Payment Amount

 

Principal

 

Interest

Principal Balance

            Opening Balance

100,000.00

09/01/2003

1

6,934.67

5,684.67

1,250.00

94,315.33

12/01/2003

2

6,934.67

5,755.73

1,178.94

88,559.60

03/01/2004

3

6,934.67

5,827.67

1,107.00

82,731.93

06/01/2004

4

6,934.67

5,900.52

1,034.15

76,831.41

09/01/2004

5

6,934.67

5,974.28

960.39

70,857.13

12/01/2004

6

6,934.67

6,048.96

885.71

64,808.17

03/01/2005

7

6,934.67

6,124.57

810.10

58,683.60

06/01/2005

8

6,934.67

6,201.12

733.55

52,482.48

09/01/2005

9

6,934.67

6,278.64

656.03

46,203.84

12/01/2005

10

6,934.67

6,357.12

577.55

39,846.72

03/01/2006

11

6,934.67

6,436.59

498.08

33,410.13

06/01/2006

12

6,934.67

6,517.04

417.63

26,893.09

09/01/2006

13

6,934.67

6,598.51

336.16

20,294.58

12/01/2006

14

6,934.67

6,680.99

253.68

13,613.59

03/01/2007

15

6,934.67

6,764.50

170.17

6,849.09

06/01/2007

16

6,934.70

6,849.09

85.61

0.00

GRAND TOTAL

 

 

110,954.75

 

100,000.00

 

10,954.75

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROMISSORY NOTE

 

$100,000.00    June 1, 2002

 

FOR VALUE RECEIVED, the undersigned, Hanford Nuclear Services, Inc., (“Maker”) hereby promises to pay the City of West Plains (“Holder”) the total principal sum of One Hundred Thousand Dollars and no cents ($100,000.00) with interest upon unpaid balance at the rate of five percent (5%) per annum payable monthly with the first interest only payment due June 1, 2003 and quarterly payments of interest and principal due beginning on September 1, 2003 until paid in full (SEE EXHIBIT A SCHEDULE).

 

The total principal borrowed under this Promissory Note shall be disbursed as follows:

 

(a)            $50,000 shall be paid to Maker, on June 1, 2002, of which $5,000 shall be withheld by Holder as payment in full of the interest only payment due to Holder as of June 11, 2002 by Maker under the terms of that certain Promissory Note dated June 11, 2001 by and between Maker and Holder;

 

(b)            $25,000 shall be paid to Maker, on July 1, 2002; and

 

(c)            $25,000 shall be paid to Maker, on August 1, 2002.

 

Payments of principal and interest under this Promissory Note shall be made at City Hall, 1910 Holiday Lane, West Plains, Missouri.

 

The undersigned hereby agrees to the following conditions of this Promissory Note:

 

If a default shall occur and continue for 60 days in the payment of any of the interest or principal becoming due hereon, Holder may at any time hereafter without notice and during the continuance of such default, declare immediately due to its entirety the unpaid principal hereof and proceed to collect or enforce payment thereof with accrued and unpaid interest to the date of such collection or payment.

 

If a default shall occur in the payment of this Promissory Note at its maturity, whether by acceleration or otherwise and this Promissory Note be placed in the hands of an attorney for collection, Maker shall pay, in addition to the other payments herein required, a reasonable attorney’s fee.

 

Maker waives presentment for payment, demand, protest and notice of protest and of non-payment and notice of and all defenses on account of extension of time for payment or change in the method of payment.

 

HANFORD NUCLEAR SERVICES, INC.

BY:                 

SIGNATURE:

DATE:            

 

STATE OF MISSOURI

COUNTY OF HOWELL

 

On this ____ day of _______, 2002 before me personally appeared ___________________________ to me known to be the person described in and who executed the foregoing instruments, and acknowledged that they executed the same as their free act and deed.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal at my office in West plains, MO the day and year first above written.

 

Notary Public:                          Commission Expires:           

 

Hanford Nuclear Services, Inc. – Resolution _______ June 1, 2002

 

Loan Amortized at 5%

 

 

 

Date

Payment Number

Payment Amount

 

Principal

 

Interest

Principal Balance

            Opening Balance

100,000.00

09/01/2003

1

6,934.67

5,684.67

1,250.00

94,315.33

12/01/2003

2

6,934.67

5,755.73

1,178.94

88,559.60

03/01/2004

3

6,934.67

5,827.67

1,107.00

82,731.93

06/01/2004

4

6,934.67

5,900.52

1,034.15

76,831.41

09/01/2004

5

6,934.67

5,974.28

960.39

70,857.13

12/01/2004

6

6,934.67

6,048.96

885.71

64,808.17

03/01/2005

7

6,934.67

6,124.57

810.10

58,683.60

06/01/2005

8

6,934.67

6,201.12

733.55

52,482.48

09/01/2005

9

6,934.67

6,278.64

656.03

46,203.84

12/01/2005

10

6,934.67

6,357.12

577.55

39,846.72

03/01/2006

11

6,934.67

6,436.59

498.08

33,410.13

06/01/2006

12

6,934.67

6,517.04

417.63

26,893.09

09/01/2006

13

6,934.67

6,598.51

336.16

20,294.58

12/01/2006

14

6,934.67

6,680.99

253.68

13,613.59

03/01/2007

15

6,934.67

6,764.50

170.17

6,849.09

06/01/2007

16

6,934.70

6,849.09

85.61

0.00

GRAND TOTAL

 

 

110,954.75

 

100,000.00

 

10,954.75

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PATENT SECURITY AGREEMENT

This Patent Security Agreement (“Agreement”), dated June 1, 2002, is entered into by Hanford Nuclear Services, Inc., a corporation duly organized and existing under the laws of the State of Washington and having a principal place of business at 28 Court Square West Plains, Missouri 65775 (“Grantor”) and delivered to the City of West Plains Missouri, with an address of 1910 Holiday Lane, West Plains, Missouri 65775 (“Grantee”).

Background

A.            This Agreement is being executed in connection with those certain Promissory Notes by and between Grantor and Grantee, dated June 11, 2001 and of even date herewith, respectively, (collectively the “Notes”), pursuant to which, Grantee loaned to Grantor the total principal sum of Two Hundred Thousand Dollars ($200,000) (the “Proceeds”) and Grantor agreed to repay such Proceeds with interest under the terms thereof.

B.            As security for Grantee’s loan of the Proceeds and Grantor’s fulfillment of its obligations under the Notes (collectively the “Obligations”), Grantor is granting Grantee a lien on and security interest in certain assets of Grantor associated with or relating to services or products sold under Grantor’s Patent Collateral (as defined herein), and under which Grantee is entitled to foreclose or otherwise deal with such assets under the terms and conditions set forth therein.

C.            Grantor has adopted, used and/or is using the applications for Letters Patent and the inventions described and claimed therein set forth on Schedule A hereto and any Letters Patent which may be issued upon any of said applications (hereinafter referred to collectively as the “Applications” and any Letters Patent which may be issued upon any of said Applications hereinafter referred to collectively as the “Patents”). In conjunction with the Patents and Applications, Grantor may use and/or adopt any reissues, extensions, divisions or continuations of the Patents or Applications (such reissues, extensions, divisions and continuations being herein referred to collectively as the “Reissued Patents”); and may be entitled to future royalties or other fees paid or payments made to Grantor in respect of the Patents (hereinafter referred to collectively as the “Royalties”), (the Patents, Applications, Reissued Patents and Royalties being herein referred to collectively as the “Patent Rights”).

D.            Grantee is acquiring a lien on and security interest in, among other things, the Patent Collateral (as defined herein) and the registration thereof, as security for all of the Obligations, and Grantee desires to have its security interest in such Patent Collateral confirmed by a document identifying same and in such form that it may be recorded in the United States Patent and Trademark Office.

NOW THEREFORE, with the foregoing Background hereinafter deemed incorporated by reference and made a part hereof, and in consideration of the premises and mutual promises herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:

1.      In consideration of and pursuant to Grantee’s loan of the Proceeds to Grantor and in order to secure Grantor’s Obligations under the Notes, and for other good, valuable and sufficient consideration, the receipt of which is hereby acknowledged, Grantor grants a lien and security interest to Grantee in and to all of the Patent Rights and all proceeds thereof, and in and to all of Grantor’s right, title, interest, claims and demands that Grantor has or may have in profits and damages for past and future infringements of the Patent Rights (such rights, interest, claims and demand being herein called the “Claims”) (the Patent Rights and Claims are collectively herein referred to as the “Patent Collateral”).

2.      Grantor hereby covenants and agrees to maintain the Patent Collateral in full force and effect (except to the extent any Patent Collateral expires by its terms) until all of the Obligations are satisfied in full.

3.      Grantor represents, warrants and covenants to Grantee that:

(a)                Grantor is the sole and exclusive respective owner of the entire and unencumbered right, title and interest in and to the Patent Collateral as set forth on Schedule A, subject to the Exclusive License Agreement between Grantor and HNS, LLC dated December 5, 2001 (the “License Agreement”);

(b)               The Patent Collateral is subsisting and has not been adjudged invalid or unenforceable;

(c)                To the best of Grantor’s knowledge, all of the Patent Rights are registered, valid and enforceable;

(d)               All of the Patent Collateral is free and clear of any liens, charges and encumbrances including, without limitation, pledges, assignments, licenses (other than to Grantor and Grantee hereunder and the License) and covenants by Grantor not to sue third persons;

(e)                Grantor has no notice of any suits or actions commenced or threatened against it, or notice of claims asserted or threatened against it, with reference to the Patent Collateral;

(f)                 Grantor has the unqualified right, power and authority to enter into this Agreement and perform its terms;

(g)                Grantor has used and will continue to use for the duration of this Agreement, consistent standards of quality in services or products leased or sold under the Patent Collateral and hereby grants to Grantee and its employees the right (with no obligation of any kind upon Grantee to do so) upon prior notice to visit Grantor’s affiliates, franchises or management locations and to inspect the use of the Patent Collateral and quality control records relating thereto at reasonable times during regular business hours to ensure Grantor’s compliance with this paragraph 3(g).

4.      Grantor further covenants that:

(a)                Until all of the Obligations have been satisfied in full, Grantor will not enter into any agreement, including, without limitation, license agreements or options, which are inconsistent with Grantor’s obligations under this Agreement or its Obligations under the Notes or which restrict or impair Grantee rights hereunder.

(b)               If Grantor shall acquire or hold any new U.S. Patent Collateral associated with the Project that is not listed on Schedule A attached hereto (“Additional Patent Collateral”), then (i) the provisions of this Agreement shall be deemed to automatically apply thereto and such Additional Patent Collateral shall be deemed part of the Patent Collateral, (ii) Grantor shall give Grantee prompt written notice thereof, and (iii) Grantor shall promptly deliver to Grantee with respect to such Additional Patent Collateral, a Supplement to Patent Security Agreement in the form attached hereto as Exhibit 1, duly completed and executed by Grantor and accompanied by a fully completed Schedule A-1 with respect to such Additional Patent Collateral. Each Schedule A-1 attached to each such Supplement to Patent Security Agreement shall be incorporated and become a part of Schedule A attached hereto, and all references to Schedule A contained in this Agreement shall be deemed, for all purposes, to also include each such Schedule A-1.

5.      So long as this Agreement is in effect and so long as Grantor has not received notice from Grantee that an event of default has occurred and is continuing under the Notes and that Grantee has elected to exercise its rights hereunder, (i) Grantor shall continue to have the exclusive right to use the Patent Collateral; and (ii) Grantee shall have no right to use the Patent Collateral or issue any exclusive or non-exclusive license with respect thereto, or assign, pledge or otherwise transfer tide in the Patent Collateral to anyone else.

6.      Grantor agrees not to sell, license, grant any option, assign or further encumber its rights and interest in the Patent Collateral to any entity or person without the prior written consent of Grantee.

7.      Anything herein contained to the contrary notwithstanding, if and while an event of default exists under the Notes, Grantor hereby covenants and agrees that Grantee as the holder of a security interest under the Uniform Commercial Code, as now or hereafter in effect in the State of Missouri, may take such action permitted hereunder, in its exclusive discretion, to foreclose upon the Patent Collateral covered hereby. For such purposes, and in the event of a default by Grantor and an acceleration of the Obligations under the Notes and while such default exists, Grantor hereby authorizes and empowers Grantee to make, constitute and appoint any officer or agent of Grantee as Grantee may select, in its exclusive discretion, as Grantor’s true and lawful attorney-in-fact, with the power to endorse Grantor’s name on all applications, documents, papers and instruments necessary for Grantee to use the Patent Collateral or to grant or issue any exclusive or non-exclusive license under the Patent Collateral to anyone else, or necessary for Grantee to assign, pledge, convey or otherwise transfer title in or dispose of the Patent Collateral to anyone else including, without limitation, the power to execute a Patent Collateral assignment in the form attached hereto as Exhibit 2. Grantor hereby ratifies all that such attorney or Grantee shall lawfully do or cause to be done by virtue hereof, except for the gross negligence or willful misconduct of such attorney or Grantee.  This power of attorney shall be irrevocable for the life of this Agreement and the Notes, and until all of the Obligations are indefeasibly paid and satisfied in full.

8.      This Agreement shall be subject to the terms, provisions, and conditions set forth in the Notes and may not be modified without the written consent of the party against whom enforcement is being sought.

9.      All rights and remedies herein granted to Grantee shall be in addition to any rights and remedies granted to Grantee under the Notes. In the event of an inconsistency between this Agreement and the Notes, the language of this Agreement shall control.

10.  Upon performance and full and unconditional satisfaction of all of the Obligations under the Notes, Grantee shall execute and deliver to Grantor all documents reasonably necessary to terminate Grantee’s security interest in the Patent Collateral.

11.  Any and all reasonable fees, costs and expenses, of whatever kind or nature, including the reasonable attorneys’ fees and legal expenses incurred by Grantee 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 costs otherwise incurred in protecting, maintaining, preserving the Patent Collateral, or in defending or prosecuting any actions or proceedings arising out of or related to the Patent Collateral, in each case in accordance with the terms of this Agreement, shall be borne and paid by Grantor on demand by Grantee and until so paid shall be added to the principal amount of the Obligations.

12.  Subject to the terms of the Notes and except to the extent that the Grantor reasonably determines such Patent Collateral is not material to its business, Grantor shall have the duty to prosecute diligently any application and/or registration with respect to the Patent Collateral pending as of the date of this Agreement or thereafter, until all of the Obligations shall have been satisfied in full, to preserve and maintain all rights in the Patent Collateral, and upon reasonable request of Grantee, Grantor shall make federal application on registerable but unregistered Patent Collateral belonging to Grantor and licensed to Grantor. Any reasonable expenses incurred in connection with such applications shall be borne exclusively by Grantor. Grantor shall not abandon any Patent Collateral (other than Patent Collateral that the Grantor reasonably determines is not material to its business) without the prior written consent of the Grantee which consent shall not be unreasonably withheld.

13.  Grantor shall have the right to bring suit in its own name to enforce the Patent Collateral, in which event Grantee may, if Grantor reasonably deems it necessary, be joined as a nominal party to such suit if Grantee shall have been satisfied, in its sole discretion, that it is not thereby incurring any risk of liability because of such joinder. Grantor shall promptly, upon demand, reimburse and indemnify Grantee or all damages, costs and expenses, including reasonable attorneys’ fees and costs, incurred by Grantee in the fulfillment of the provisions of this paragraph.

14.  Upon the occurrence and during the continuance of an event of default under the Notes, Grantee may, without any obligation to do so, complete any obligation of Grantor hereunder, in Grantor’s name or in Grantee’s name, but at the expense of Grantor, and Grantor hereby agrees to reimburse Grantee in full for all reasonable expenses, including, without limitation, all reasonable attorneys’ fees incurred by Grantee in protecting, defending and maintaining the Patent Collateral.

15.  No course of dealing between Grantor and Grantee, nor any failure to exercise, nor any delay in exercising, on the part of Grantee, any right, power or privilege hereunder, shall operate as a waiver thereof, and all of Grantee’s rights and remedies with respect to the Patent Collateral, whether established hereby or by the Notes, or by any other future agreements between Grantor and Grantee or by law, shall be cumulative and may be exercised singularly or concurrently.

16.  The provisions of this Agreement are severable and the invalidity or unenforceability of any provision herein shall not affect the remaining provisions which shall continue unimpaired and in full force and effect.

17.  This Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties.

18.  This Agreement shall be governed by and construed in conformity with the laws of