Exhibit 4.5
EXECUTION COPY
COLLATERAL ASSIGNMENT OF TRADEMARKS
(SECURITY AGREEMENT)
COLLATERAL ASSIGNMENT OF TRADEMARKS (SECURITY AGREEMENT) dated as of
February 4, 1997, between ATLANTIC EXPRESS TRANSPORTATION CORP., a New York
corporation with offices at 0 Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000
("Assignor"), and CONGRESS FINANCIAL CORPORATION, a California corporation with
an office at 1133 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx 00000 ("Assignee").
Capitalized terms used in this Agreement which are defined in the Loan Agreement
(as hereinafter defined) shall have the respective meanings given them in the
Loan Agreement, unless otherwise defined herein.
W I T N E S S E T H:
WHEREAS, Amboy Bus Co., Inc., Atlantic-Conn. Transit, Inc., Atlantic
Xxxxxx, Inc., Atlantic Paratrans, Inc., Atlantic Paratrans of Kentucky Inc.,
Atlantic Express Coachways, Inc., Atlantic Express of Missouri Inc., Atlantic
Express of Pennsylvania, Inc., Brookfield Transit Inc., Courtesy Bus Co., Inc.,
X. Xxxx, Inc., Merit Transportation Corp., Metropolitan Escort Service, Inc.,
Xxxxxxx Bus Service, Inc., Xxxxxxx Capital Corp., Xxxxxxx Equity Corp., Staten
Island Bus, Inc. (each a "Borrower" and collectively, "Borrowers"), Assignor,
and Assignee have entered into a Loan and Security Agreement dated the date
hereof (together with all supplements and amendments thereto and all extensions,
renewals, restatements and replacements thereof, the "Loan Agreement," and such
Loan Agreement together with all agreements, instruments and documents now or
hereafter entered into or delivered in connection therewith, collectively, the
"Financing Agreements"), pursuant to which Assignee may make loans and advances
and provide other financial arrangements to Borrower, subject to the terms and
provisions of the Financing Agreements;
WHEREAS, Assignor is the sole stockholder of each Borrower;
WHEREAS, Assignor owns all right, title, and interest in and to,
among other things, certain United States and foreign trademarks and service
marks, trademark and service xxxx registrations, and trademark and service xxxx
applications and trade names, including, but not limited to, those set forth on
Exhibit 1 hereto (the "Trademarks"), which are used in the business of one or
more of the Borrowers, along with the goodwill of the business symbolized
thereby and the Licenses (as hereinafter defined);
WHEREAS, in order to secure Borrowers' Obligations (as defined in
the Loan Agreement) to Assignee, Assignor has agreed to grant to Assignee a
security interest and continuing lien in, to and under the Trademarks, the
goodwill and the Licenses and certain
other assets with respect to the Trademarks, the goodwill and the Licenses, as
further set forth herein, and Assignee has requested Assignor to enter into this
Agreement to evidence such security interest.
NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for
valuable consideration received and to be received, as security for the full
payment and performance of the Obligations, and to induce Assignee to make loans
and advances to Borrowers, Assignor hereby grants to Assignee a security
interest in and continuing lien on Borrowers' right, title and interest in, to
and under the following property of Assignor to the extent, and only to the
extent, that the following property is part of, is related to, or arises in
connection with or from any "Accounts" or "Inventory" of Assignor (as such terms
are defined in the Loan Agreement):
(a) the Trademarks;
(b) all applications and registrations of the Trademarks in any
state of the United States and any foreign countries and
localities;
(c) all trade names, trademarks and service marks and trademark
and service xxxx applications and registrations hereafter
adopted or acquired and used by Assignor or any Borrower in
its business, including, but not limited to, those which are
based upon or derived from the Trademarks or any variations
thereof (the "Future Trademarks");
(d) all extensions, renewals, and continuations of the Trademarks
and Future Trademarks and the registrations and applications
referred to in clause (b) above;
(e) all rights to xxx for past, present and future infringements
of the Trademarks and Future Trademarks, and any trademarks
and service marks covered by any licenses of trademarks,
trademark applications or registrations, or trade names used
in the business of one or more of Borrowers and under which
Assignor is licensee, to the extent that the assignment
thereof will not result in Assignor's loss of the benefits
thereof ("Licenses");
(f) all packaging, labeling, trade names, service marks, logos,
and trade dress including or containing the Trademarks, Future
Trademarks, and the trademarks and service marks covered by
the Licenses, or a representation thereof, or any variation
thereof;
(g) all licenses and other agreements under which Assignor is
licensor, and all fees, rents, royalties, proceeds or monies
thereunder, relating to the Trademarks, Future Trademarks, and
the trademarks and service marks covered by the Licenses, and
the use thereof, to the extent that the
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assignment thereof will not result in Assignor's loss of the
benefits thereof;
(h) all goodwill of Assignor's business connected with, symbolized
by or in any way related to the items set forth in clauses (a)
through (g) above; and
(i) all proceeds of the foregoing, including without limitation,
license royalties, income, payments, claims, damages and
proceeds of suit.
All of the foregoing items set forth in clauses (a) through (i) are hereinafter
referred to collectively as the "Collateral."
Assignor hereby covenants with Assignee as follows:
1. Assignor's Obligations. Assignor agrees that, notwithstanding
this Agreement, it will perform and discharge and remain liable for all its
covenants, duties, and obligations arising in connection with the Collateral and
any licenses and agreements related thereto. Assignee shall have no obligation
or liability in connection with the Collateral or any licenses or agreements
relating thereto by reason of this Assignment or any payment received by
Assignee relating to the Collateral and Assignee shall not be required to
perform any covenant, duty or obligation of Assignor arising in connection with
the Collateral or any license or agreement related thereto or to take any other
action regarding the Collateral or any such licenses or agreement, except and
only to the extent that Assignee has acquired absolute ownership of the
Collateral upon an exercise of its remedies under Section 4 hereof.
2. Representations and Warranties. Assignor represents and warrants
to Assignee that: (a) Assignor is the beneficial and record owner of the
Collateral, and no adverse claims have been made with respect to its title to or
the validity of the Collateral; (b) the Trademarks and the trademarks and
service marks covered by the Licenses are the only trademarks, service marks,
trademark and service xxxx registrations and applications therefor and trade
names in which Assignor has any or all right, title and interest; (c) none of
the Collateral is subject to any mortgage, pledge, lien, security interest,
lease, charge, encumbrance, settlement or consent, covenant not to xxx,
non-assertion assurance, release or license (by Assignor as licensor), except as
set forth on Exhibit 1; (d) Assignor has performed all acts and has paid all
renewal, maintenance and other fees and taxes required to maintain each and
every registration and application of the Collateral in full force and effect;
(e) no claims have been made that the use of any of the Collateral violates the
asserted rights of any third party; (f) to the best of Assignor's knowledge, no
third party is infringing upon any of the Collateral; and (g) when this
Agreement is filed in and recorded by the United States Patent and Trademark
Office (the "Trademark Office") and the Assignee has taken the other actions
contemplated by the Loan Agreement and in this Agreement, this Agreement will
create a legal and valid perfected and continuing lien on and security interest
in the Collateral in favor of Assignee, enforceable against Assignor and all
third parties, subject to no other mortgage, lien, charge, encumbrance, or
security or other interest except as expressly permitted by the Loan Agreement.
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3. Covenants. Assignor will maintain and renew all items of
Collateral necessary for the conduct of its or any Borrower's business and all
registrations of the Collateral necessary for the conduct of its or any
Borrower's business and will defend the Collateral against the claims of all
persons. Assignor will maintain, and will cause each Borrower or other person
that uses the Collateral to maintain, the same standards of quality for the
goods and services in connection with which the Trademarks and the trademarks
covered by the Licenses are used as Assignor or such other persons maintained
for such goods and services prior to entering into this Agreement. Assignee
shall have the right to enter upon Assignor's premises at all reasonable times
to monitor such quality standards. Assignor shall promptly notify Assignee if it
knows or has reason to know that any of the Collateral may become subject to any
adverse determination or development (including the institution of proceedings)
in any action or proceeding in the United States Patent and Trademark Office or
any court. In the event that any of the Collateral is infringed or diluted by a
third party, promptly after the Assignor becomes aware of such infringement or
dilution, Assignor shall take all reasonable actions to stop such infringement
or dilution and protect its exclusive rights in such Collateral including, but
not limited to, the initiation of a suit for injunctive relief and to recover
damages. Without limiting the generality of the foregoing, Assignor shall not
permit the expiration, termination or abandonment of any Trademark, Future
Trademark or License used in or necessary for the conduct of its or any
Borrower's business without the prior written consent of Assignee. If, before
the Obligations have been satisfied in full, Assignor shall obtain rights to or
be licensed to use any new trademark, or become entitled to the benefit of any
trademark or service xxxx application or trademark or service xxxx registration
not identified on Exhibit 1 hereto, the provisions of Section 1 hereof shall
automatically apply thereto and Assignor shall give Assignee prompt notice
thereof in writing.
4. Remedies Upon Default. Whenever any Event of Default shall occur
and be continuing, Assignee shall have all the rights and remedies granted to it
in such event by the Loan Agreement, which rights and remedies are specifically
incorporated herein by reference and made a part hereof. Assignee in such event
may collect directly any payments due to Assignor in respect of the Collateral
and, subject to any limitations imposed under any license agreements
constituting part of the Collateral, may sell, license, lease, assign, or
otherwise dispose of the Collateral in the manner set forth in the Loan
Agreement. Assignor agrees that, in the event of any disposition of the
Collateral upon any such Event of Default, it will duly execute, acknowledge,
and deliver all documents necessary or advisable to record title to the
Collateral in any transferee or transferees thereof, including, without
limitation, valid, recordable assignments of the Trademarks, Future Trademarks,
and Licenses. In the event Assignor fails or refuses to execute and deliver such
documents, Assignor hereby irrevocably appoints Assignee as its
attorney-in-fact, with power of substitution, to execute, deliver, and record
any such documents on Assignor's behalf. Notwithstanding any provision hereof to
the contrary, during the continuance of an Event of Default, Assignor
may sell, and permit Borrowers to sell, merchandise or services bearing the
Trademarks, Future Trademarks, and trademarks covered by the Licenses in the
ordinary course of their respective business and in a manner consistent with its
past practices, until it receives written notice from Assignee of an intended
sale or disposition of the Collateral. The preceding
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sentence shall not limit any right or remedy granted to Assignee with respect to
Assignor's inventory under the Loan Agreement or any other agreement now or
hereinafter in effect.
5. Power of Attorney. Concurrently with the execution and delivery
hereof, Assignor shall execute and delivery to the Assignee, in the form of
Exhibit 2 hereto, five (5) originals of a Special Power of Attorney for the
implementation of the assignment, sale, license, lease or other disposition of
the Trademarks, Future Trademarks, and Licenses pursuant to Section 4. Assignor
hereby releases Assignee from any claims, causes of action and demands at any
time arising out of or with respect to any actions taken or omitted to be taken
by Assignee in accordance with Section 4 under the powers of attorney granted
therein, other than actions taken or omitted to be taken through the bad faith,
willful misconduct or gross negligence of Assignee, as determined by a final,
non-appealable order of a court of competent jurisdiction.
6. Cumulative Remedies. The rights and remedies provided herein are
cumulative and not exclusive of any other rights or remedies provided by law.
The security interest granted hereby is granted in conjunction with the security
interest granted to Assignee under the Loan Agreement and the other Financing
Agreements. The rights and remedies of Assignee with respect to the security
interest granted hereby are in addition to those set forth in the Loan Agreement
and the other Financing Agreements and those which are now or hereafter
available to Assignee as a matter of law or equity. The exercise by Assignee of
any one or more of the rights, powers or remedies provided for in this
Agreement, in the Loan Agreement, in the other Financing Agreements or now or
hereafter existing at law or in equity shall not preclude the simultaneous or
later exercise by any person, including Assignee, of any or all other rights,
powers or remedies. The rights and remedies provided herein are intended to be
in addition to and not in substitution of the rights and remedies provided by
the Loan Agreement.
7. Amendments and Waivers. This Agreement may not be modified,
supplemented, or amended, or any of its provisions waived at the request of
Assignor, without the prior written consent of Assignee. Assignor hereby
authorizes Assignee to modify this Agreement by amending Exhibit 1 hereto to
include any Future Trademarks or additional licenses.
8. Waiver of Rights. No course of dealing between the parties to
this Agreement or any failure or delay on the part of any such party in
exercising any rights or remedies hereunder shall operate as a waiver of any
rights and remedies of such party or any other party, and no single or partial
exercise of any rights or remedies by one party hereunder shall operate as a
waiver or preclude the exercise of any other rights and remedies of such party
or any other party. No waiver by Assignee of any breach or default by Assignor
shall be deemed a waiver of any other previous breach or default or of any
breach or default occurring thereafter.
9. Assignment. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
parties hereto; provided, however, that no interest herein or in or to the
Collateral may be assigned by
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Assignor without the prior written consent of Assignee; and, provided further,
that the Assignee may assign the rights and benefits hereof to any party
acquiring any interest in the Obligations or any part thereof.
10. Further Acts. Assignor shall have the duty to prosecute
diligently any application for the Trademarks and Future Trademarks necessary
for the conduct of its or any Borrower's business pending as of the date of this
Agreement or thereafter, until the Obligations shall have been paid in full, and
to make applications on material unregistered but registrable trademarks
necessary for the conduct of its or any Borrower's business in any location
where Assignor does business and to preserve and maintain all rights in the
Trademarks and the other Collateral necessary for the conduct of its or any
Borrower's business. Any expenses incurred in connection with such applications
shall be borne by Assignor. Assignor shall not abandon any right to file a
trademark or service xxxx application or registration for any trademark or
service xxxx used in or necessary for the conduct of its business, or abandon
any such pending trademark application or registration necessary for the conduct
of its or any Borrower's business, without the consent of Assignee.
11. Enforcement. Upon Assignor's failure to do so after Assignee's
demand, or upon an Event of Default, Assignee shall have the right but shall in
no way be obligated to bring suit in its own name to enforce the Trademarks,
Future Trademarks, Licenses, or the trademarks covered by the Licenses, and any
license under any of the foregoing, in which event Assignor shall at the request
of Assignee do any and all lawful acts and execute any and all proper documents
that may be reasonably requested by Assignee in aid of such enforcement
including, but not limited to, joining as a plaintiff in any such enforcement
action and Assignor shall promptly, upon demand, reimburse and indemnify
Assignee or its agents for all reasonable costs and expenses incurred by
Assignee in the exercise of its rights under this Section 11.
12. Release and Re-Assignment. At such time as all of the
Obligations have been satisfied, and the Financing Agreements have been
terminated, other than upon enforcement of Assignee's remedies under the
Financing Agreements after an Event of Default, Assignee will execute and
deliver to Assignor all deeds, assignments and other instruments as may be
necessary or proper to release Assignor's lien in the Collateral and reassign to
Assignee any and all rights of Assignor therein which were granted to Assignor
hereunder, subject to any dispositions thereof which may have been made by
Assignee pursuant hereto.
13. Severability. If any clause or provision of this Agreement shall
be held invalid or unenforceable, in whole or in part, in any jurisdiction, such
invalidity or unenforceability shall attach only to such clause or provision, or
part thereof, in such jurisdiction, and shall not in any manner affect any other
clause or provision in any other jurisdiction.
14. Notices. All notices, requests and demands to or upon Assignor
or Assignee under this Agreement shall be given in the manner prescribed by the
Loan Agreement.
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15. Governing Law. This Agreement shall be governed by and
construed, applied, and enforced in accordance with the federal laws of the
United States of America applicable to trademarks and the laws of the State of
New York, except that no doctrine of choice of law shall be used to apply the
laws of any other state or jurisdiction.
16. Financing Agreement. This Agreement is one of the Financing
Agreements.
17. Counterparts. This Agreement may be signed in one or more
counterparts, and by each party in separate counterparts, which, when taken
together, shall constitute one and the same document.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have entered into this Agreement as
of the date first above written.
ATLANTIC EXPRESS TRANSPORTATION
CORP.,
Assignor
By:/s/ XXXXXXX XXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Officer
CONGRESS FINANCIAL CORPORATION,
Assignee
By: /s/ XXXXXXX XXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 3rd day of February 1997 before me personally came Xxxxxxx Xxxxxx, to
me known, who being by me duly sworn, did depose and say that he is the
President of ATLANTIC EXPRESS TRANSPORTATION CORP., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of said corporation.
/s/ XXXXXX X. XXXXXXXXXXX
-----------------------------------------
Notary Public
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 4th day of February 1997, before me personally came Xxxxxxx Xxxxx, to
me known, who being by me duly sworn, did depose and say that she is a Senior
Vice President of CONGRESS FINANCIAL CORPORATION, the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of said corporation.
/s/ XXXXXX X. XXXXXX
-----------------------------------------
Notary Public
EXHIBIT 1
LIST OF ASSIGNOR'S TRADEMARKS
Registered Trademarks
and Service Marks U.S. Registration No. Date Registered
----------------- --------------------- ---------------
ATLANTIC EXPRESS 1,964,915 4/2/96
AE 1,667,874 12/10/91
Applications
for Registration Serial No. Date Filed
---------------- ---------- ----------
AE ATLANTIC EXPRESS
TRANSPORTATION GROUP 75-121,810 6/18/96
Trade Names
-----------
ATLANTIC EXPRESS
EXHIBIT 2
SPECIAL POWER OF ATTORNEY
STATE OF NEW YORK )
): ss
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, THAT ATLANTIC EXPRESS TRANSPORTATION
CORP., a New York corporation with its principal office at 0 Xxxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxx Xxxx 00000 (hereinafter called "Assignor"), hereby appoints
and constitutes CONGRESS FINANCIAL CORPORATION, a California corporation
(hereinafter called "Assignee"), its true and lawful attorney, with full power
of substitution, and with full power and authority to perform the following acts
on behalf of Assignor:
1. For the purpose of assigning, selling, licensing or otherwise disposing
of all right, title and interest of Assignor in and to any trademarks and
service marks, and all registrations, renewals, recordings and all pending
applications therefor, and all licenses therefor, and for the purpose of the
recording, registering and filing of, or accomplishing any other formality with
respect to, the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or advisable to
effect such purpose; and
2. To execute any and all documents, statements, certificates or other
papers necessary or advisable in order to obtain the purposes described above as
Assignee may in its sole discretion determine.
This power of attorney is made pursuant to a Collateral Assignment of
Trademarks (Security Agreement) dated the date hereof, between Assignor and
Assignee and takes effect solely for the purposes of Section 4 thereof and is
subject to the conditions thereof and may not be revoked until the payment in
full of all "Obligations" as defined in such Security Agreement.
Dated: February ___, 1997
ATLANTIC EXPRESS TRANSPORTATION
CORP.
By:____________________________
Name:
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the ____ day of February 1997 before me personally came _________________, to
me known, who being by me duly sworn, did depose and say that he is the
_________________ of Atlantic Express Transportation Corp., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the Board of Directors of said corporation.
______________________________
Notary Public
