Patent and Trademark Security Agreement between JPMorgan Chase Bank, N.A. and the Registrant and certain of the Registrants subsidiaries dated March 11, 2016

THIS PATENT AND TRADEMARK SECURITY AGREEMENT (this “Agreement”) is entered into as of March 11, 2016 by and among Arotech Corporation, a Delaware corporation (the “Borrower”), FAAC Incorporated, a Michigan corporation (“FAAC”), Electric Fuel Battery Corp., a Delaware corporation (“EFBC”), UEC Electronics, LLC, a South Carolina  limited liability company (“UEC”, and each of the Borrower, FAAC, EFBC and UEC, a “Grantor”, and the Borrower, FAAC, EFBC and UEC, collectively, the “Grantors”), and JPMorgan Chase Bank, N.A., a national banking association (the "Lender"), in connection with the Security Agreement referred to below.

A.           The Borrower, the other Grantors and the Lender are entering into a Credit Agreement dated as of the date hereof (as it may be amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement").

 

B.           In connection with the Credit Agreement, the Grantors entered into that certain Pledge and Security Agreement dated as of the date hereof (as amended or modified from time to time, the "Security Agreement") with the Lender.

 

C.           Pursuant to the terms of the Security Agreement, each Grantor pledged, assigned and granted to the Lender a first-priority security interest in substantially all of the assets of each Grantor, including all right, title and interest of each Grantor in, to and under all now owned and hereafter acquired Patents (as defined in the Security Agreement), patent applications, patent licenses, Trademarks (as defined in the Security Agreement), trademark applications and trademark licenses, and all products and proceeds thereof, to secure the prompt and complete payment and performance of the Secured Obligations as defined in the Credit Agreement and Security Agreement.

 

D.           Pursuant to the terms of the Security Agreement, the Grantors are required to execute and deliver to the Lender this Agreement.

In consideration of the recitals set forth above and the mutual agreements contained herein and in the Credit Agreement and other Loan Documents (as defined in the Credit Agreement), each Grantor hereby grants to the Lender, to secure the Secured Obligations, a continuing security interest in all of each Grantor’s right, title and interest in, to and under the following, whether now owned by or owing to, or hereafter acquired by or arising in favor of each Grantor (including any trade name or derivations thereof):

 

The security interests granted to the Lender herein are granted in furtherance, and not in limitation of, the security interests granted to the Lender pursuant to the Security Agreement; provided, however, that nothing in this Agreement shall expand, limit or otherwise modify the security interests granted in the Security Agreement.  Each Grantor acknowledges and affirms that the rights and remedies of the Lender with respect to the security interest in the Trademark Collateral and the Patent Collateral made and granted hereby are more fully set forth in the Credit Agreement and the Security Agreement, the terms and provisions of which are incorporated herein by reference as if fully set forth herein.  In the event of any conflict between the terms of this Agreement and the Security Agreement, the terms of the Security Agreement shall govern.  All capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Security Agreement.

IN WITNESS WHEREOF, the parties hereto executed this Agreement as of the date first set forth above.