EXECUTION COPY
TRADEMARK SECURITY AGREEMENT
THIS TRADEMARK SECURITY AGREEMENT ("Agreement") is made as of
February 5, 1998, by and between PK TECHNOLOGY, INC., a Delaware corporation
("Grantor"), and The First National Bank of Chicago, as contractual
representative (the "Agent") for its benefit and the benefit of the "Holders
of Secured Obligations" (as such term is defined in the "Credit Agreement"
defined below).
W I T N E S S E T H:
WHEREAS, IFR Systems, Inc., a Delaware corporation (the
"Borrower"), the Agent and certain financial institutions from time to time
party thereto (the "Lenders") are parties to that certain Credit Agreement of
even date herewith (as the same may hereafter be modified, amended, restated
or supplemented from time to time, the "Credit Agreement"), pursuant to which
the Lenders may, from time to time, extend credit to Borrower; and
WHEREAS, Grantor and the Agent are parties to that certain Security
Agreement of even date herewith (as the same may hereafter be modified,
amended, restated or supplemented from time to time, the "Security
Agreement"), pursuant to which Grantor has granted a security interest in
certain of its assets to the Agent for the benefit of the Agent and the
Holders of Secured Obligations; and
WHEREAS, the Lenders have required Grantor to execute and deliver
this Agreement (i) in order to secure the prompt and complete payment,
observance and performance of all of the "Secured Obligations" (as defined in
the Credit Agreement) and (ii) as a condition precedent to any extension of
credit to the Borrower under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor agrees as follows:
1. DEFINED TERMS.
(a) Unless otherwise defined herein, each capitalized term used
herein that is defined in the Credit Agreement shall have the meaning
specified for such term in the Credit Agreement. Unless otherwise defined
herein or in the Credit Agreement, each capitalized term used herein that is
defined in the Security Agreement shall have the meaning specified for such
term in the Security Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of like
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular
provision of this Agreement, and section references are to this Agreement
unless otherwise specified.
(c) All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and VICE VERSA, unless otherwise
specified.
2. INCORPORATION OF PREMISES. The premises set forth above are
incorporated into this Agreement by this reference thereto and are made a
part hereof.
3. INCORPORATION OF THE CREDIT AGREEMENT. The Credit Agreement
and the terms and provisions thereof are hereby incorporated herein in their
entirety by this reference thereto.
4. SECURITY INTEREST IN TRADEMARKS. To secure the complete and
timely payment, performance and satisfaction of all of the Secured
Obligations, Grantor hereby grants to the Agent, for the benefit of the
Holders of Secured Obligations, a security interest in, as and by way of a
first mortgage and security interest having priority over all other security
interests, with power of sale to the extent permitted by applicable law, all
of Grantor's now owned or existing and hereafter acquired or arising:
(i) trademarks, registered trademarks, trademark applications, service
marks, registered service marks and service xxxx applications, including,
without limitation, the trademarks, registered trademarks, trademark
applications, service marks, registered service marks and service xxxx
applications listed on SCHEDULE A attached hereto and made a part hereof,
and (a) all renewals thereof, (b) all income, royalties, damages and
payments now and hereafter due and/or payable under and with respect
thereto, including, without limitation, payments under all licenses entered
into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (c) the right to xxx for past, present
and future infringements and dilutions thereof, (d) the goodwill of
Grantor's business symbolized by the foregoing and connected therewith, and
(e) all of Grantor's rights corresponding thereto throughout the world (all
of the foregoing trademarks, registered trademarks and trademark
applications, and service marks, registered service marks and service xxxx
applications, together with the items described in CLAUSES (a)-(e) in this
PARAGRAPH 4(i), are sometimes hereinafter individually and/or collectively
referred to as the "Trademarks"); and
(ii) rights under or interest in any trademark license agreements or
service xxxx license agreements with any other party, whether Grantor is a
licensee or licensor under any such license agreement, including, without
limitation, those trademark license agreements and service xxxx license
agreements listed on SCHEDULE B attached hereto and made a part hereof,
together with any goodwill connected with and symbolized by any such
trademark license agreements or service xxxx license agreements, and the
right to prepare for sale and sell any and all Inventory now or hereafter
owned by Grantor and now or hereafter covered by such licenses (all of the
foregoing are hereinafter referred to collectively as the "Licenses").
Notwithstanding the foregoing provisions of this SECTION 4, the Licenses
shall not include any license agreement in effect as of the date hereof
which by its terms prohibits the grant of the security contemplated by this
Agreement; provided, however, that upon the termination of such
prohibitions for any reason
whatsoever, the provisions of this SECTION 4 shall be deemed to apply
thereto automatically.
5. RESTRICTIONS ON FUTURE AGREEMENTS. Grantor will not, without
the Agent's prior written consent, enter into any agreement, including,
without limitation, any license agreement, which is inconsistent with this
Agreement, and Grantor further agrees that it will not take any action, and
will use its best efforts not to permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would in any respect affect the validity or enforcement of the rights
transferred to the Agent under this Agreement or the rights associated with
the Trademarks or Licenses.
6. NEW TRADEMARKS AND LICENSES. Grantor represents and warrants
that, from and after the Closing Date, (a) the Trademarks listed on SCHEDULE
A include all of the trademarks, registered trademarks, trademark
applications, service marks, registered service marks and service xxxx
applications now owned or held by Grantor, (b) the Licenses listed on
SCHEDULE B include all of the trademark license agreements and service xxxx
license agreements under which Grantor is the licensee or licensor and (c) no
liens, claims or security interests in such Trademarks and Licenses have been
granted by Grantor to any Person other than the Agent. If, prior to the
termination of this Agreement, Grantor shall (i) obtain rights to any new
trademarks, registered trademarks, trademark applications, service marks,
registered service marks or service xxxx applications, (ii) become entitled
to the benefit of any trademarks, registered trademarks, trademark
applications, trademark licenses, trademark license renewals, service marks,
registered service marks, service xxxx applications, service xxxx licenses or
service xxxx license renewals whether as licensee or licensor, or (iii) enter
into any new trademark license agreement or service xxxx license agreement,
the provisions of PARAGRAPH 4 above shall automatically apply thereto.
Grantor shall give to the Agent written notice of events described in CLAUSES
(i), (ii) and (iii) of the preceding sentence promptly after the occurrence
thereof, but in any event not less frequently than on a quarterly basis.
Grantor hereby authorizes the Agent to modify this Agreement unilaterally (i)
by amending SCHEDULE A to include any future trademarks, registered
trademarks, trademark applications, service marks, registered service marks
and service xxxx applications and by amending SCHEDULE B to include any
future trademark license agreements and service xxxx license agreements,
which are Trademarks or Licenses under PARAGRAPH 4 above or under this
PARAGRAPH 6, and (ii) by filing, in addition to and not in substitution for
this Agreement, a duplicate original of this Agreement containing on Schedule
A or B thereto, as the case may be, such future trademarks, registered
trademarks, trademark applications, service marks, registered service marks
and service xxxx applications, and trademark license agreements and service
xxxx license agreements.
7. ROYALTIES. Grantor hereby agrees that the use by the Agent of
the Trademarks and Licenses as authorized hereunder in connection with the
Agent's exercise of its rights and remedies under PARAGRAPH 15 or pursuant to
Section 17 of the Security Agreement shall be coextensive with Grantor's
rights thereunder and with respect thereto and without any liability for
royalties or other related charges from the Agent or the other Holders of
Secured Obligations to Grantor.
8. RIGHT TO INSPECT; FURTHER ASSIGNMENTS AND SECURITY INTERESTS.
The Agent may at all reasonable times (and at any time when an Unmatured
Default or Default exists) have access to, examine, audit, make copies (at
Grantor's expense) and extracts from and inspect
Grantor's premises and examine Grantor's books, records and operations
relating to the Trademarks and Licenses; PROVIDED, that in conducting such
inspections and examinations, the Agent shall use reasonable efforts not to
disturb unnecessarily the conduct of Grantor's ordinary business operations.
From and after the occurrence of a Default, Grantor agrees that the Agent, or
a conservator appointed by the Agent, shall have the right to establish such
reasonable additional product quality controls as the Agent or such
conservator, in its sole and absolute judgment, may deem necessary to assure
maintenance of the quality of products sold by Grantor under the Trademarks
and the Licenses or in connection with which such Trademarks and Licenses are
used. Grantor agrees (i) not to sell or assign its respective interests in,
or grant any license under, the Trademarks or the Licenses without the prior
and express written consent of the Agent, (ii) to maintain the quality of
such products as of the date hereof, and (iii) not to change the quality of
such products in any material respect without the Agent's prior and express
written consent.
9. NATURE AND CONTINUATION OF THE AGENT'S SECURITY INTEREST;
TERMINATION OF THE AGENT'S SECURITY INTEREST. This Agreement is made for
collateral security purposes only. This Agreement shall create a continuing
security interest in the Trademarks and Licenses and shall terminate only
when the Secured Obligations have been paid in full in cash and the Credit
Agreement and the Security Agreement have been terminated. When this
Agreement has terminated, the Agent shall promptly execute and deliver to
Grantor, at Grantor's expense, all termination statements and other
instruments as may be necessary or proper to terminate the Agent's security
interest in the Trademarks and the Licenses, subject to any disposition
thereof which may have been made by the Agent pursuant to this Agreement or
the Security Agreement.
10. DUTIES OF GRANTOR. Grantor shall have the duty, to the extent
desirable in the normal conduct of Grantor's business, to: (i) prosecute
diligently any trademark application or service xxxx application that is part
of the Trademarks pending as of the date hereof or hereafter until the
termination of this Agreement, and (ii) make application for trademarks or
service marks. Grantor further agrees (i) not to abandon any Trademark or
License without the prior written consent of the Agent, and (ii) to use its
best efforts to maintain in full force and effect the Trademarks and the
Licenses that are or shall be necessary or economically desirable in the
operation of Grantor's business. Any expenses incurred in connection with
the foregoing shall be borne by Grantor. Neither the Agent nor any of the
Holders of Secured Obligations shall have any duty with respect to the
Trademarks and Licenses. Without limiting the generality of the foregoing,
neither the Agent nor any of the Holders of Secured Obligations shall be
under any obligation to take any steps necessary to preserve rights in the
Trademarks or Licenses against any other parties, but the Agent may do so at
its option from and after the occurrence of a Default, and all expenses
incurred in connection therewith shall be for the sole account of Grantor and
shall be added to the Secured Obligations secured hereby.
11. THE AGENT'S RIGHT TO XXX. From and after the occurrence of a
Default, the Agent shall have the right, but shall not be obligated, to bring
suit in its own name to enforce the Trademarks and the Licenses and, if the
Agent shall commence any such suit, Grantor shall, at the request of the
Agent, do any and all lawful acts and execute any and all proper documents
required by the Agent in aid of such enforcement. Grantor shall, upon
demand, promptly reimburse the Agent for all costs and expenses incurred by
the Agent in the exercise of its rights under this PARAGRAPH 11 (including,
without limitation, reasonable fees and expenses of attorneys and paralegals
for the Agent).
12. WAIVERS. The Agent's failure, at any time or times hereafter,
to require strict performance by Grantor of any provision of this Agreement
shall not waive, affect or diminish any right of the Agent thereafter to
demand strict compliance and performance therewith nor shall any course of
dealing between Grantor and the Agent have such effect. No single or partial
exercise of any right hereunder shall preclude any other or further exercise
thereof or the exercise of any other right. None of the undertakings,
agreements, warranties, covenants and representations of Grantor contained in
this Agreement shall be deemed to have been suspended or waived by the Agent
unless such suspension or waiver is in writing signed by an officer of the
Agent and directed to Grantor specifying such suspension or waiver.
13. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but 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 hereof, 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.
14. MODIFICATION. This Agreement cannot be altered, amended or
modified in any way, except as specifically provided in PARAGRAPH 6 hereof or
by a writing signed by the parties hereto.
15. CUMULATIVE REMEDIES; POWER OF ATTORNEY. Grantor hereby
irrevocably designates, constitutes and appoints the Agent (and all Persons
designated by the Agent in its sole and absolute discretion) as Grantor's
true and lawful attorney-in-fact, and authorizes the Agent and any of the
Agent's designees, in Grantor's or the Agent's name, to take any action and
execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation,
from and after the occurrence of a Default and the giving by the Agent of
notice to Grantor of the Agent's intention to enforce its rights and claims
against Grantor, to (i) endorse Grantor's name on all applications,
documents, papers and instruments necessary or desirable for the Agent in the
use of the Trademarks or the Licenses, (ii) assign, pledge, convey or
otherwise transfer title in or dispose of the Trademarks or the Licenses to
anyone on commercially reasonable terms, (iii) grant or issue any exclusive
or nonexclusive license under the Trademarks or, to the extent permitted,
under the Licenses, to anyone on commercially reasonable terms, and (iv) take
any other actions with respect to the Trademarks or the Licenses as the Agent
deems in its own or the Holders of Secured Obligations' best interest.
Grantor hereby ratifies all that such attorney shall lawfully do or cause to
be done by virtue hereof. This power of attorney is coupled with an interest
and shall be irrevocable until all of the Obligations shall have been paid in
full in cash and the Credit Agreement shall have been terminated. Grantor
acknowledges and agrees that this Agreement is not intended to limit or
restrict in any way the rights and remedies of the Agent or the other Holders
of Secured Obligations under the Security Agreement, but rather is intended
to facilitate the exercise of such rights and remedies.
The Agent shall have, in addition to all other rights and remedies
given it by the terms of this Agreement, all rights and remedies allowed by
law and the rights and remedies of a secured party under the Uniform
Commercial Code as enacted in any jurisdiction in which the Trademarks or the
Licenses may be located or deemed located. Upon the occurrence of a Default
and the election by the Agent to exercise any of its remedies under Section
9-504 or Section 9-505 of the Uniform Commercial Code with respect to the
Trademarks and Licenses, Grantor agrees to assign, convey and otherwise
transfer title in and to the Trademarks and the Licenses to the Agent or any
transferee of the Agent and to execute and deliver to the Agent or any such
transferee all such agreements, documents and instruments as may be
necessary, in the Agent's sole discretion, to effect such assignment,
conveyance and transfer. All of the Agent's rights and remedies with respect
to the Trademarks and the Licenses, whether established hereby, by the
Security Agreement, by any other agreements or by law, shall be cumulative
and may be exercised separately or concurrently. Notwithstanding anything set
forth herein to the contrary, it is hereby expressly agreed that upon the
occurrence of a Default, the Agent may exercise any of the rights and
remedies provided in this Agreement, the Security Agreement and any of the
other Loan Documents. Grantor agrees that any notification of intended
disposition of any of the Trademarks and Licenses required by law shall be
deemed reasonably and properly given if given at least ten (10) days before
such disposition; PROVIDED, HOWEVER, that the Agent may give any shorter
notice that is commercially reasonable under the circumstances.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Grantor and its successors and assigns, and shall inure to the benefit of
each of the Holders of Secured Obligations and its nominees, successors and
assigns. Grantor's successors and assigns shall include, without limitation,
a receiver, trustee or debtor-in-possession of or for Grantor; PROVIDED,
HOWEVER, that Grantor shall not voluntarily assign or transfer its rights or
obligations hereunder without the Agent's prior written consent.
17. GOVERNING LAW. This Agreement shall be construed and enforced
and the rights and duties of the parties shall be governed by in all respects
in accordance with the internal laws and decisions of the State of Illinois.
18. NOTICES. All notices or other communications hereunder shall
be given in the manner and to the address of the Borrower, in the case of the
Grantor, and to the address of the Agent, in each case, as set forth in the
Credit Agreement.
19. SECTION TITLES. The section titles herein are for convenience
of reference only, and shall not affect in any way the interpretation of any
of the provisions hereof.
20. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
21. MERGER. This Agreement represents the final agreement of the
Grantor and the Agent with respect to the matters contained herein and may not
be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Grantor and the Agent or any Holder of
Secured Obligations.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
[ ]
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By:
------------------------------
Name:
Title:
ATTEST:
By:
---------------------------
Title:
Accepted and agreed to as of the day and
year first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
--------------------
Name:
Title:
Schedule A
to
Trademark Security Agreement
Dated as of February ___, 1998
TRADEMARKS
None, except:
TRADEMARK REGISTRATION DATE REGISTRATION NO.
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TRADEMARK AND SERVICE XXXX APPLICATIONS
None, except:
TRADEMARK REGISTRATION DATE REGISTRATION NO.
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Schedule B
to
Trademark Security Agreement
Dated as of February ___, 1998
LICENSE AGREEMENTS
None, except:
STATE OF ILLINOIS )
) SS
COUNTY OF XXXX )
The foregoing Trademark Security Agreement was acknowledged before
me this ___ day of February, 1998, by _____________________, a ____________
of [_______________________], a [___________] corporation, on behalf of such
corporation.
-----------------------------
Notary Public
Xxxx County, Illinois
My commission expires:
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STATE OF ILLINOIS )
) SS
COUNTY OF XXXX )
The foregoing Trademark Security Agreement was acknowledged before
me this ___ day of February, 1998, by _______________, a
__________________________________ of The First National Bank of Chicago, a
national banking association, on behalf of such association.
-----------------------------
Notary Public
Xxxx County, Illinois
My commission expires:
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