TRADEMARK SECURITY AGREEMENT
THIS AGREEMENT is made as of June 11, 1997, by and between
VODAVI COMMUNICATIONS SYSTEMS, INC., an Arizona corporation formerly known as V
Technology Acquisition Corp., having a mailing address at 0000 Xxxx Xxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000 ("Debtor"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation having a mailing address at 000 Xxxxx
Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (the "Secured Party").
Statement of Facts
------------------
In connection with the financial accommodations to be extended
by the Secured Party to Debtor under the Amended and Restated Credit Agreement,
dated as of April 11, 1994 as amended and restated effective as of June 11,
1997, between Debtor and Secured Party (as the same may hereafter be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), Debtor has agreed to collaterally assign to the Secured Party
certain trademark rights in accordance with the terms of this Agreement.
In consideration of the foregoing premises and other good and
valuable consideration, Debtor hereby agrees with the Secured Party as follows:
Statement of Terms
------------------
Grant of Security Interest. To secure the complete and timely
satisfaction of all of Debtor's obligations hereunder, as well as to secure all
of the rights of the Secured Party hereunder, and to secure the payment and
performance of any and all Obligations (as such term is defined in the Credit
Agreement) (all such Obligations being herein collectively called the "Secured
Obligations"), Debtor hereby grants to the Secured Party a present and
continuing security interest in the entire right, title and interest of Debtor
in and to the trademark application(s) and trademark(s) listed on Schedule 1
attached hereto together with all goodwill of Debtor's business relating thereto
and all other assets of Debtor necessary to produce the products for which such
applications will be or such trademarks are used, including without limitation
all proceeds thereof (such as, by way of example, license royalties and proceeds
of infringement suits), the right to xxx for past, present and future
infringements, all rights corresponding thereto throughout the world and all
renewals, extensions and other proceeds thereof (collectively called the
"Trademarks").
Representations and Warranties. Debtor represents and warrants
that:
The Trademarks are subsisting and have not been adjudged invalid
or unenforceable, in whole or in part;
To the best of Debtor's knowledge, each of the Trademarks is
valid and enforceable;
Debtor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Trademarks, free
and clear of any liens, charges and encumbrances, including without limitation
licenses and covenants by Debtor not to xxx third persons, except for any
Permitted Exceptions (as such term is defined in the Credit Agreement); and
Debtor has the unqualified right to enter into this Agreement
and perform its terms.
No Inconsistent Licenses. Debtor agrees that, so long as this
Agreement is in effect, it will not enter into any agreement (for example, a
license or assignment agreement) which is inconsistent with Debtor's obligations
under this Agreement, without the Secured Party's prior written consent.
Event of Default. The failure of the Debtor to perform any of
its obligations hereunder, any breach in any material respect of any
representation or warranty of the Debtor herein, or the occurrence of any Event
of Default under (and as such term is defined in) the Credit Agreement will also
constitute a default by Debtor under this Agreement (herein referred to as an
"Event of Default").
Remedies on Default. If any Event of Default shall have occurred
and be continuing, the Secured Party shall have, in addition to all other rights
and remedies given it by this Agreement, those allowed by law and the rights and
remedies of a secured party under the Code (as such term is defined in the
Credit Agreement) and, without limiting the generality of the foregoing, the
Secured Party may immediately, without demand of performance and without other
notice or demand whatsoever to Debtor, sell at public or private sale or
otherwise realize upon, the whole or from time to time any part of the
Trademarks, or any interest which the Debtor may have therein and, after
deducting from the proceeds of sale or other disposition of the Trademarks all
expenses (including all reasonable expenses for legal services actually incurred
without giving effect to any statutory presumption), shall apply the residue of
such proceeds toward the payment of the Secured Obligations (which application
shall be made, first, to the Secured Party's costs and expenses of such
collection, sale or other disposition, including reasonable attorney's fees
actually incurred without giving effect to any statutory presumption, and then
to the payment of the other Secured Obligations then due). Debtor shall be
liable for any deficiency remaining after the application of such proceeds. Any
remainder of the proceeds after payment in full of the Secured Obligations shall
be paid over to the Debtor. If required by applicable law, notice of any sale or
other disposition of the Trademarks shall be given to Debtor at least ten (10)
days before the time of any intended public or private sale or other disposition
of the Trademarks is to be made, which Debtor hereby agrees shall be reasonable
notice of such sale or other disposition. At any such sale or other disposition
the Secured Party may, to the extent permissible under applicable law, purchase
the whole or any part of the Trademarks sold, free from any right of redemption
on the part of Debtor, which right is hereby waived and released.
-2-
No Waiver. No course of dealing between Debtor and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
Severability. The provisions of this Agreement are several, 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.
Modification. This Agreement is subject to modification only by
a writing signed by the Debtor and the Secured Party.
Benefit of Agreement. The benefits and burdens of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties.
Governing Law. The validity and interpretation of this Agreement
and the rights and obligations of the parties shall be governed by the laws of
the State of New York (without giving effect to its conflict of law rules) and
the United States of America.
Terminology; Headings. All singular terms used herein shall
include the plural and vice versa, and all pronouns used herein shall be deemed
to cover all genders. All section headings used herein are for convenience of
reference only and do not constitute a substantive part of this Agreement.
Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which counterparts when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same Agreement.
Expenses; Indemnity. Debtor will upon demand pay to the Secured
Party the amount of any and all expenses, including reasonable attorney's fees
and fees of other experts, which the Secured Party may from time to time
actually incur (and calculated without giving effect to any statutory
presumption) in connection with (i) the administration of this Agreement, (ii)
the preservation of or the sale or other disposition of or other realization
upon any of the Trademarks, (iii) the exercise or enforcement of any of the
rights of the Secured Party hereunder or (iv) the failure by the Debtor to
perform or observe any of the provisions hereof. Debtor also hereby agrees to
indemnify the Secured Party and hold the Secured Party harmless from and against
any liability, loss, damage, suit, action or proceeding ever suffered or
incurred by the Secured Party as a result of (i) Debtor's failure to observe,
-3-
perform or discharge Debtor's duties hereunder or (ii) the Secured Party's
holding or administering this Agreement or its rights,titles or interests in the
Trademarks, unless with respect to any of the above, the Secured Party is
determined to have acted with gross negligence or to have engaged in wilful
misconduct. The obligations of the Debtor under this paragraph 14 shall survive
the termination of this Agreement.
Security Agreement; Intercreditor Agreement, Entire Agreement;
Termination. (a) The Secured Party also has a Lien in the Trademarks under the
terms of the Security Agreement, dated April 11, 1994, executed by the Debtor in
favor of the Secured Party (the "Security Agreement"), and this Agreement is
intended to supplement such Security Agreement, but in the event of any
inconsistency between the terms of this Agreement and those of such Security
Agreement, the terms of such Security Agreement shall control, and the Secured
Party may elect to pursue its rights and remedies with respect to the Trademarks
under either or both of this Agreement or such Security Agreement.
(b) This Agreement, together with all other instruments,
agreements and certificates executed by the parties in connection herewith or
with reference hereto, embodies the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings and inducements, whether express or implied,
oral or written.
(c) This Agreement shall terminate with, and in accordance with
the terms of, the Security Agreement, and all of the Secured Party's security
interests hereunder shall be automatically terminated and released on such date
(subject to reinstatement as provided in Section 11 of the Security Agreement).
-4-
WITNESS the execution hereof as of the day and year first above
written.
DEBTOR:
VODAVI COMMUNICATIONS
SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Title: CFO, V.P.
-----------------------------
SECURED PARTY:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Title: Duly Authorized Signatory
-----------------------------
-5-
