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EXHIBIT 10.22
TRADEMARK SECURITY AGREEMENT
(GUARANTORS)
THIS TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
May 29, 1998 is executed and delivered by each of the undersigned Subsidiaries
of STORMEDIA INCORPORATED, a Delaware Corporation (each of the undersigned a
"Debtor" and collectively "Debtors"), and by FOOTHILL CAPITAL CORPORATION, a
California corporation, as agent for the Lenders as time to time party to the
Loan Agreement, (in such capacity "Foothill"), in light of the following:
RECITALS
A. Borrowers and Foothill are, contemporaneously herewith,
entering into that certain Loan and Security Agreement ("Loan Agreement") of
even date herewith;
B. In order to induce Foothill to extend financial
accommodations to Borrowers pursuant to the Loan Agreement, and in consideration
thereof, and in consideration of any loans or other financial accommodations at
any time extended by Foothill to Borrowers, whether pursuant to the Loan
Agreement or otherwise, each of the Guarantors has agreed, jointly and
severally, to guaranty the Guarantied Obligations; and
C. Each Debtor is a subsidiary of one or more of Borrowers
and each Guarantor derives substantial direct economic benefits from the
Borrowers by virtue of the extensions of credit by Foothill as provided in the
Loan Agreement;
D. Pursuant to the Guarantees and as one of the conditions
precedent to the obligations of Foothill under the Loan Agreement, Debtors have
agreed to execute and deliver this Agreement to Foothill for filing with the PTO
and with any other relevant recording systems in any domestic jurisdiction, and
as further evidence of and to effectuate Foothill's existing security interests
in the trademarks and other general intangibles described herein.
ASSIGNMENT
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Debtors hereby agree in favor of
Foothill as follows:
1. Definitions; Interpretation.
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(a) Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Bridge Term Loan Secured Obligations" means those obligations of
the Guarantors under the Guaranty that relate to the Bridge Term Loan
Obligations.
"Guarantied Obligations" shall have the meaning ascribed thereto
in the Guarantees.
"Debtors" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"Other Secured Obligations" means the Secured Obligations other
than the Bridge Term Loan Secured Obligations.
"Proceeds" means whatever is receivable or received from or upon
the sale, lease, license, collection, use, exchange or other disposition,
whether voluntary or involuntary, of any Trademark Collateral, including
"proceeds" as defined at UCC Section 9306, all insurance proceeds and all
proceeds of proceeds. Proceeds shall include (i) any and all accounts, chattel
paper, instruments, general intangibles, cash and other proceeds, payable to or
for the account of Debtors, from time to time in respect of any of the Trademark
Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to or for the account of Debtors from time to time with respect
to any of the Trademark Collateral, (iii) any and all claims and payments (in
any form whatsoever) made or due and payable to Debtors from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Trademark Collateral by any Person acting
under color of governmental authority, and (iv) any and all other amounts from
time to time paid or payable under or in connection with any of the Trademark
Collateral or for or on account of any damage or injury to or conversion of any
Trademark Collateral by any Person.
"PTO" means the United States Patent and Trademark Office and any
successor thereto.
"Secured Obligations" shall mean all liabilities, obligations, or
undertakings owing by Guarantors to Secured Party of any kind or description
arising out of or outstanding under, advanced or issued pursuant to, or
evidenced by the Guaranty, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees
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(including attorneys fees), and expenses which any Guarantor is required to pay
pursuant to any of the foregoing, by law, or otherwise.
"Trademark Collateral" has the meaning set forth in Section 2.
"Trademarks" has the meaning set forth in Section 2.
"United States" and "U.S." each mean the United States of
America.
(b) Terms Defined in UCC. Where applicable and except
as otherwise defined herein, terms used in this Agreement shall have the
meanings assigned to them in the UCC.
(c) Interpretation. In this Agreement, except to the
extent the context otherwise requires:
(i) Any reference to a Section or a Schedule is
a reference to a section hereof, or a schedule hereto, respectively, and
to a subsection or a clause is, unless otherwise stated, a reference to
a subsection or a clause of the Section or subsection in which the
reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as a whole and
not merely to the specific Section, subsection, paragraph or clause in
which the respective word appears.
(iii) The meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms
defined.
(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words "without
limitation."
(v) References to agreements and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto.
(vi) References to statutes or regulations are to
be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation referred
to.
(vii) Any captions and headings are for
convenience of reference only and shall not affect the construction of
this Agreement.
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(viii) Terms defined in the Loan Agreement and not
otherwise defined herein shall have the respective meanings assigned to
them in the Loan Agreement and the rules of construction set forth in
Section 1 of the Loan Agreement shall likewise govern this Agreement.
(ix) In the event of any actual, irreconcilable
conflict between the terms and provisions of this Agreement and the Loan
Agreement, the terms and provisions of the Loan Agreement shall control
and govern; provided, however, that the inclusion herein of additional
obligations on the part of Debtors and supplemental rights and remedies
in favor of Foothill (whether under federal law or applicable California
law), in each case in respect of the Trademark Collateral, shall not be
deemed a conflict in the Loan Agreement.
2. Security Interests.
(a) Assignment and Grant of Security Interests.
(i) To secure the Bridge Term Loan Secured
Obligations, Debtors hereby grant, assign, transfer and convey to
Foothill a continuing security interest in all of Debtors' right, title
and interest in and to the following property, whether now existing or
hereafter acquired or arising and whether registered or unregistered
(collectively, the "Trademark Collateral"):
(a) all state (including common law) and
federal trademarks, service marks and trade names, corporate names,
company names, business names, fictitious business names, trade styles,
trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, together with and including all licenses therefor held by
Debtors (unless otherwise prohibited by any license or related licensing
agreement under circumstances where the granting of the security
interest would have the effect under applicable law of terminating or
permitting termination of the license for breach (unless the licensor
has consented to such grant or waived such termination remedy)), and all
registrations and recordings thereof, and all applications filed or to
be filed in connection therewith, including registrations and
applications in the PTO, any State of the United States and all
extensions or renewals thereof, including without limitation any of the
foregoing identified on Schedule A hereto (as the same may be amended,
modified or supplemented from time to time), and the right (but not the
obligation) to register claims under any state or federal trademark law
or regulation and to apply for, renew and extend any of the same, to xxx
or bring opposition or cancellation proceedings in the name of Debtors
or in the name of Foothill for past, present or future infringement or
unconsented use thereof, and all rights arising therefrom throughout the
world (collectively, the "Trademarks");
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(b) all claims, causes of action and
rights to xxx for past, present or future infringement or unconsented
use of any Trademarks and all rights arising therefrom and pertaining
thereto;
(c) all general intangibles related to or
arising out of any of the Trademarks and all the goodwill of Debtors'
businesses symbolized by the Trademarks or associated therewith and
associated product lines to the extent embodying the Trademarks; and
(d) all products and Proceeds of any and
all of the foregoing.
(ii) To secure the Other Secured Obligations,
Debtors hereby grant, assign, transfer and convey to Foothill a continuing
security interest in all of Debtors' right, title and interest in and to the
following property, whether now existing or hereafter acquired or arising and
whether registered or unregistered (collectively, the "Trademark Collateral"):
(a) all state (including common law) and
federal trademarks, service marks and trade names, corporate names,
company names, business names, fictitious business names, trade styles,
trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, together with and including all licenses therefor held by
Debtors (unless otherwise prohibited by any license or related licensing
agreement under circumstances where the granting of the security
interest would have the effect under applicable law of terminating or
permitting termination of the license for breach (unless the licensor
has consented to such grant or waived such termination remedy)), and all
registrations and recordings thereof, and all applications filed or to
be filed in connection therewith, including registrations and
applications in the PTO, any State of the United States and all
extensions or renewals thereof, including without limitation any of the
foregoing identified on Schedule A hereto (as the same may be amended,
modified or supplemented from time to time), and the right (but not the
obligation) to register claims under any state or federal trademark law
or regulation and to apply for, renew and extend any of the same, to xxx
or bring opposition or cancellation proceedings in the name of Debtors
or in the name of Foothill for past, present or future infringement or
unconsented use thereof, and all rights arising therefrom throughout the
world (collectively, the "Trademarks");
(b) all claims, causes of action and
rights to xxx for past, present or future infringement or unconsented
use of any Trademarks and all rights arising therefrom and pertaining
thereto;
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(c) all general intangibles related to or
arising out of any of the Trademarks and all the goodwill of Debtors'
businesses symbolized by the Trademarks or associated therewith; and
(d) all products and Proceeds of any and
all of the foregoing.
(b) Continuing Security Interest. Debtors agree that
this Agreement shall create a continuing security interest in the Trademark
Collateral which shall remain in effect until terminated in accordance with
Section 17.
3. Further Assurances; Appointment of Foothill as
Attorney-in-Fact. Debtors at their expense shall execute and deliver, or cause
to be executed and delivered, to Foothill any and all documents and instruments,
in form and substance reasonably satisfactory to Foothill, and take any and all
action, which Foothill may reasonably request from time to time, to perfect and
continue perfected, maintain the priority of or provide notice of Foothill's
security interest in the Trademark Collateral and to accomplish the purposes of
this Agreement. Foothill shall have the right, in the name of Debtors, or in the
name of Foothill or otherwise, without notice to or assent by Debtors, and
Debtors hereby irrevocably constitutes and appoints Foothill (and any of
Foothill's officers or employees or agents designated by Foothill) as Debtors'
true and lawful attorney-in-fact with full power and authority, (i) to sign the
names of Debtors on all or any of such documents or instruments and perform all
other acts that Foothill reasonably deems necessary or advisable in order to
perfect or continue perfected, maintain the priority or enforceability of or
provide notice of Foothill's security interest in, the Trademark Collateral, and
(ii) to execute any and all other documents and instruments, and to perform any
and all acts and things for and on behalf of Debtors, which Foothill reasonably
may deem necessary or advisable to maintain, preserve and protect the Trademark
Collateral and to accomplish the purposes of this Agreement, including (A) after
the occurrence and during the continuance of any Event of Default, to defend,
settle, adjust or institute any action, suit or proceeding with respect to the
Trademark Collateral, (B) to assert or retain any rights under any license
agreement for any of the Trademark Collateral, and (C) after the occurrence and
during the continuance of any Event of Default, to execute any and all
applications, documents, papers and instruments for Foothill to use the
Trademark Collateral, to grant or issue any exclusive or non-exclusive license
with respect to any Trademark Collateral, and to assign, convey or otherwise
transfer title in or dispose of the Trademark Collateral. The power of attorney
set forth in this Section 3, being coupled with an interest, is irrevocable so
long as this Agreement shall not have terminated in accordance with Section 17.
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4. Representations and Warranties. Debtors represent and
warrant to Foothill, in each case to the best of its knowledge, information, and
belief, as follows:
(a) No Other Trademarks. Schedule A sets forth, as of
the Closing Date, a true and correct list of all of the existing Trademarks that
are registered, or for which any application for registration has been filed
with the PTO or any corresponding or similar trademark office of any other U.S.
jurisdiction, and that are owned or held (whether pursuant to a license or
otherwise) and used by Debtors.
(b) Trademarks Subsisting. Each of the Trademarks
listed in Schedule A is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and, to the best of Debtors's knowledge,
each of the Trademarks is valid and enforceable.
(c) Ownership of Trademark Collateral; No Violation.
(i) Debtors have rights in and good and defensible title to the existing
Trademark Collateral, (ii) with respect to the Trademark Collateral shown on
Schedule A hereto as owned by it, Debtors are the sole and exclusive owners
thereof, free and clear of any Liens and rights of others (other than the
security interest created hereunder and the interests of the Bank Group
Financing Documents as contemplated by the Intercreditor Agreement and other
than Permitted Liens), including licenses, registered user agreements and
covenants by Debtors not to xxx third persons, and (iii) with respect to any
Trademarks for which either Debtor is either a licensor or a licensee pursuant
to a license or licensee agreement regarding such Trademark, each such license
or licensing agreement is in full force and effect, Debtors are not in default
of any of its obligations thereunder and, other than the parties to such
licenses or licensing agreements, no other Person has any rights in or to any of
the Trademark Collateral. To the best of Debtors' knowledge, the past, present
and contemplated future use of the Trademark Collateral by Debtors has not, does
not and will not infringe upon or violate any right, privilege or license
agreement of or with any other Person.
(d) No Infringement. To the best of Debtors' knowledge,
no material infringement or unauthorized use presently is being made of any of
the Trademark Collateral by any Person.
(e) Powers. Debtors have the unqualified right, power
and authority to pledge and to grant to Foothill a security interest in all of
the Trademark Collateral pursuant to this Agreement, and to execute, deliver and
perform its obligations in accordance with the terms of this Agreement, without
the consent or approval of any other Person except as already obtained.
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5. Covenants. So long as any of the Secured Obligations
remain unsatisfied, Debtors agree that it will comply with all of the covenants,
terms and provisions of this Agreement, the Loan Agreement and the other Loan
Documents, and Debtors will promptly give Foothill written notice of the
occurrence of any event that could have a material adverse effect on any of the
Trademarks or the Trademark Collateral, including any petition under the
Bankruptcy Code filed by or against any licensor of any of the Trademarks for
which either Debtor is a licensee.
6. Future Rights. Except as otherwise agreed in writing by
Foothill, for so long as any of the Secured Obligations shall remain
outstanding, or, if earlier, until Foothill shall have released or terminated,
in whole but not in part, its interest in the Trademark Collateral, if and when
either Debtor shall obtain rights to any new Trademarks, or any reissue, renewal
or extension of any Trademarks, the provisions of Section 2 shall automatically
apply thereto and Debtors shall give to Foothill prompt notice thereof. Debtors
shall do all things reasonably deemed necessary or advisable by Foothill to
ensure the validity, perfection, priority and enforceability of the security
interests of Foothill in such future acquired Trademark Collateral. Debtors
hereby authorize Foothill to modify, amend or supplement the Schedules hereto
and to re-execute this Agreement from time to time on Debtors' behalf and as its
attorney-in-fact to include any future Trademarks which are or become Trademark
Collateral and to cause such re-executed Agreement or such modified, amended or
supplemented Schedules to be filed with the PTO.
7. Foothill's Duties. Notwithstanding any provision contained
in this Agreement, Foothill shall have no duty to exercise any of the rights,
privileges or powers afforded to it and shall not be responsible to Debtors or
any other Person for any failure to do so or delay in doing so. Except for the
accounting for moneys actually received by Foothill hereunder or in connection
herewith, Foothill shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Trademark Collateral.
8. Remedies. Subject to the terms of the Loan Agreement and
the Intercreditor Agreement, from and after the occurrence and during the
continuation of an Event of Default, Foothill shall have all rights and remedies
available to it under the Loan Agreement and applicable law (which rights and
remedies are cumulative) with respect to the security interests in any of the
Trademark Collateral or any other Collateral. Debtors agrees that such rights
and remedies include the right of Foothill as a secured party to sell or
otherwise dispose of its Collateral after default, pursuant to UCC Section 9504.
Debtors agrees that Foothill shall at all times have such royalty-free licenses,
to the extent permitted by law, for any Trademark Collateral that is reasonably
necessary to permit the exercise of any of Foothill's rights or remedies upon or
after the occurrence of (and during the continuance of) an Event of Default with
respect to (among other things) any tangible asset of Debtors in which Foothill
has a security interest, including Foothill's rights to sell inventory, tooling
or packaging which is
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acquired by Debtors (or its successors, assignees or trustees in bankruptcy). In
addition to and without limiting any of the foregoing, upon the occurrence and
during the continuance of an Event of Default, Foothill shall have the right but
shall in no way be obligated to bring suit, or to take such other action as
Foothill deems necessary or advisable, in the name of either Debtor or Foothill,
to enforce or protect any of the Trademark Collateral, in which event Debtors
shall, at the request of Foothill, do any and all lawful acts and execute any
and all documents required by Foothill in aid of such enforcement. To the extent
that Foothill shall elect not to bring suit to enforce such Trademark
Collateral, Debtors, in the exercise of their reasonable business judgment,
agree to use all reasonable measures and its diligent efforts, whether by
action, suit, proceeding or otherwise, to prevent the infringement,
misappropriation or violation thereof by others and for that purpose agrees
diligently to maintain any action, suit or proceeding against any Person
necessary to prevent such infringement, misappropriation or violation.
9. Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by Debtors and Foothill and their
respective successors and assigns.
10. Notices. All notices and other communications hereunder
shall be in writing and shall be mailed, sent or delivered in accordance with
the Loan Agreement.
11. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the federal laws of the United States
of America and the laws of the State of California.
12. Amendment. Neither this Agreement nor any provision hereof
may be modified, amended or waived except by the written agreement of the
parties as provided in the Loan Agreement. Notwithstanding the foregoing,
Foothill may re-execute this Agreement or modify, amend or supplement the
Schedules hereto as provided in Section 6 hereof.
13. Severability. If one or more provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect in any
jurisdiction or with respect to any party, such invalidity, illegality or
unenforceability in such jurisdiction or with respect to such party shall, to
the fullest extent permitted by applicable law, not invalidate or render illegal
or unenforceable any such provision in any other jurisdiction or with respect to
any other party, or any other provisions of this Agreement.
14. 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 but one and the same agreement.
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15. Loan Agreement. Debtors acknowledge that the rights and
remedies of Foothill with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Loan Agreement and all
such rights and remedies are cumulative.
16. No Inconsistent Requirements. Debtors acknowledge that
this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
Debtors agree that all such covenants, terms and provisions are cumulative and
all shall be performed and satisfied in accordance with their respective terms.
To the extent of any conflict between the provisions of this Agreement and the
Loan Agreement, however, the provisions of the Loan Agreement shall govern.
17. Termination. Upon the payment in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, if any, consisting of letters of credit, and the
full and final termination of any commitment to extend any financial
accommodations under the Loan Agreement, this Agreement shall terminate, and
Foothill shall execute and deliver such documents and instruments and take such
further action reasonably requested by Debtors, at Debtors' expense, as shall be
necessary to evidence termination of the security interest granted by Debtors to
Foothill hereunder, including cancellation of this Agreement by written notice
from Foothill to the PTO.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
STRATES SBN. BHD., a Malaysian corporation
By: /s/
------------------------------------
Title:
---------------------------------
STORMEDIA FOREIGN SALES CORPORATION,
a United States Virgin Islands corporation
By: /s/
------------------------------------
Title:
---------------------------------
STORMEDIA INTERNATIONAL LTD.,
a Cayman Islands corporation
By: /s/
------------------------------------
Title:
---------------------------------
STRATES PTE. LTD,
a Singapore corporation
By: /s/
------------------------------------
Title:
---------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/
------------------------------------
Title:
---------------------------------
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On May ___, 1998, before me, ____________________________, Notary
Public, personally appeared ____________________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/
----------------------
Signature
[SEAL]
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On May ___, 1998, before me, _____________________________, Notary
Public, personally appeared _____________________________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
______________________
Signature
[SEAL]
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SCHEDULE A
to the Trademark Security Agreement
Trademarks of Debtors
Registration/
Registration/ Application
Type Jurisdiction Xxxx Application Date No.
---- ------------ ---- ---------------- ---
A-1.
