Exhibit 10.4
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as
of December ___, 1998 is made by QUANTUM NORTH AMERICA, INC., a Delaware
corporation ("Borrower"), in favor of FOOTHILL CAPITAL CORPORATION, a California
corporation, ("Lender").
RECITALS
A. Borrower and Lender have entered into that certain Loan and
Security Agreement, of even date herewith (as amended, restated, modified,
renewed or extended from time to time, the "Loan Agreement"), pursuant to which
Lender has agreed to make certain financial accommodations to Borrower, and
pursuant to which Borrower has granted to Lender a security interest in (among
other things) all of the general intangibles of Borrower.
B. Pursuant to the Loan Agreement and as one of the conditions
precedent to the obligations of Lender under the Loan Agreement, Borrower has
agreed to execute and deliver this Agreement to Lender for filing with the PTO
and with any other relevant recording systems in any domestic jurisdiction, and
as further evidence of and to effectuate Lender'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, Borrower hereby agrees in favor of
Lender as follows:
1. DEFINITIONS; INTERPRETATION.
(a) CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"EVENT OF DEFAULT" shall have the meaning ascribed thereto in
the Loan Agreement.
"LIEN" means any pledge, security interest, assignment, charge
or encumbrance, lien (statutory or other), or other preferential arrangement
(including any agreement to give any security interest).
"OBLIGATIONS" shall have the meaning ascribed thereto in the
Loan Agreement.
"BORROWER" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
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"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 Borrower, 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 Borrower 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 Borrower 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.
"TRADEMARK COLLATERAL" has the meaning set forth in SECTION 2.
"TRADEMARKS" has the meaning set forth in SECTION 2.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of California.
"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.
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(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.
(viii) Capitalized words not otherwise defined
herein shall have the respective meanings ascribed to them in
the Loan Agreement.
(ix) In the event of a direct conflict between the
terms and provisions of this Agreement and the Loan Agreement,
it is the intention of the parties hereto that both such
documents shall be read together and construed, to the fullest
extent possible, to be in concert with each other. In the
event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, 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
Borrower and supplemental rights and remedies in favor of
Lender (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 INTEREST.
(a) ASSIGNMENT AND GRANT OF SECURITY INTEREST. To secure
the Obligations, Borrower hereby grants, assigns, transfers and conveys to
Lender a continuing security interest in all of Borrower's 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"):
(i) 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 Borrower, 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 (but excluding each application to register any
trademark, service xxxx or other xxxx xxxxx to the filing
under applicable law of a verified statement of use (or the
equivalent) for such trademark or service xxxx) and
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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 Borrower or in the name of Lender for past, present or
future infringement or unconsented use thereof, and all rights
arising therefrom throughout the world (collectively, the
"Trademarks");
(ii) 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;
(iii) all general intangibles related to or arising
out of any of the Trademarks and all the goodwill of
Borrower's business symbolized by the Trademarks or associated
therewith; and
(iv) all proceeds of any and all of the foregoing
Trademark Collateral (including license royalties, rights to
payment, accounts receivable and proceeds of infringement
suits) and, to the extent not otherwise included, all payments
under insurance (whether or not Secured Party is the loss
payee thereof) or any indemnity, warranty or guaranty payable
by reason of loss or damage to or otherwise with respect to
the foregoing Trademark Collateral. For purposes of this
Agreement, the term "proceeds" includes whatever is receivable
or received when Trademark Collateral or proceeds are sold,
licensed, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and
includes, without limitation, all rights to payment, including
returned premiums, with respect to any insurance relating
thereto.
(b) CONTINUING SECURITY INTEREST. Debtor agrees 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.
(c) INCORPORATION INTO LOAN AGREEMENT. This Agreement
shall be fully incorporated into the Loan Agreement and all understandings,
agreements and provisions contained in the Loan Agreement shall be fully
incorporated into this Agreement. Without limiting the foregoing, the Trademark
Collateral described in this Agreement shall constitute part of the Collateral
in the Loan Agreement.
(d) PERMITTED LICENSES. Anything in the Loan Agreement or
this Agreement to the contrary notwithstanding, Borrower may grant non-exclusive
licenses of the Trademark Collateral (subject to the security interest (if any)
of Secured Party therein) in the ordinary course of business consistent with
past practice.
3. FURTHER ASSURANCES; APPOINTMENT OF LENDER AS
ATTORNEY-IN-FACT. Borrower at its expense shall execute and deliver, or cause to
be executed and delivered, to
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Lender any and all documents and instruments, in form and substance reasonably
satisfactory to Lender, and take any and all action, which Lender may reasonably
request from time to time, to perfect and continue perfected, maintain the
priority of or provide notice of Lender's security interest in the Trademark
Collateral and to accomplish the purposes of this Agreement. If Borrower refuses
to execute and deliver, or fails timely to execute and deliver, any of the
documents it is requested to execute and deliver by Lender in accordance with
the foregoing, Lender shall have the right, in the name of Borrower, or in the
name of Lender or otherwise, without notice to or assent by Borrower, and
Borrower hereby irrevocably constitutes and appoints Lender (and any of Lender's
officers or employees or agents designated by Lender) as Borrower's true and
lawful attorney-in-fact with full power and authority, (i) to sign the name of
Borrower on all or any of such documents or instruments and perform all other
acts that Lender reasonably deems necessary or advisable in order to perfect or
continue perfected, maintain the priority or enforceability of or provide notice
of Lender'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 Borrower, which Lender 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) after the occurrence and during the continuance of any Event of
Default, 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 Lender 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.
4. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender, 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 (whether
registered or otherwise), 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 Borrower.
(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 Borrower's knowledge, each of the
Trademarks is valid and enforceable.
(c) OWNERSHIP OF TRADEMARK COLLATERAL; NO VIOLATION. (i)
Borrower has 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, Borrower is
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the sole and exclusive owner thereof, free and clear of any Liens and rights of
others (other than the security interest created hereunder and other than
Permitted Liens), including licenses, registered user agreements and covenants
by Borrower not to xxx third persons, and (iii) with respect to any Trademarks
for which Borrower 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, Borrower is not in material default of
any of its obligations thereunder and, (i) other than the parties to such
licenses or licensing agreements, or (ii) in the case of any non-exclusive
license or license agreement entered into by Borrower or any such licensor
regarding such Trademark, the parties to any other such non-exclusive licenses
or license agreements entered into by Borrower or any such licensor with any
other Person, no other Person has any rights in or to any of the Trademark
Collateral. To the best of Borrower's knowledge, the past, present and
contemplated future use of the Trademark Collateral by Borrower 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 Borrower's knowledge,
no material infringement or unauthorized use presently is being made of any of
the Trademark Collateral by any Person.
(e) POWERS. Borrower has the unqualified right, power and
authority to pledge and to grant to Lender 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.
5. COVENANTS. Until such time as this agreement is terminated
pursuant to SECTION 17, Borrower agrees that it will comply with all of the
covenants, terms and provisions of this Agreement, the Loan Agreement and the
other Loan Documents, and Borrower will promptly give Lender 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 Borrower is a licensee.
6. FUTURE RIGHTS. For so long as any of the Obligations shall
remain outstanding, or, if earlier, until Lender shall have released or
terminated, in whole but not in part, its interest in the Trademark Collateral,
if and when Borrower 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 Borrower shall give to Lender prompt notice
thereof. Borrower shall do all things reasonably deemed necessary or advisable
by Lender to ensure the validity, perfection, priority and enforceability of the
security interests of Lender in such future acquired Trademark Collateral. If
Borrower refuses to execute and deliver, or fails timely to execute and deliver,
any of the documents it is requested to execute and deliver by Lender in
connection herewith, Borrower hereby authorizes Lender to modify, amend or
supplement the Schedules hereto and to re-execute this Agreement from time to
time on Borrower's behalf and as its attorney-in-fact to include any future
Trademarks which
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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. LENDER'S DUTIES. Notwithstanding any provision contained in
this Agreement, Lender shall have no duty to exercise any of the rights,
privileges or powers afforded to it and shall not be responsible to Borrower or
any other Person for any failure to do so or delay in doing so. Except for the
accounting for moneys actually received by Lender hereunder or in connection
herewith, Lender shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Trademark Collateral.
8. REMEDIES. Upon the occurrence and during the continuation
of an Event of Default, Lender 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. Borrower agrees that such rights and
remedies include the right of Lender as a secured party to sell or otherwise
dispose of its Collateral after default, pursuant to UCC Section 9504. Borrower
agrees that Lender 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 Lender'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 Borrower in which Lender
has a security interest, including Lender's rights to sell inventory, tooling or
packaging which is acquired by Borrower (or its successor, assignee or trustee
in bankruptcy). In addition to and without limiting any of the foregoing, upon
the occurrence and during the continuance of an Event of Default, Lender shall
have the right but shall in no way be obligated to bring suit, or to take such
other action as Lender deems necessary or advisable, in the name of Borrower or
Lender, to enforce or protect any of the Trademark Collateral, in which event
Borrower shall, at the request of Lender, do any and all lawful acts and execute
any and all documents required by Lender in aid of such enforcement. To the
extent that Lender shall elect not to bring suit to enforce such Trademark
Collateral, Borrower, in the exercise of its reasonable business judgment,
agrees 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 Borrower and Lender 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 laws of the State of California,
except to the extent that the validity or perfection of the security interests
hereunder in respect of any Trademark Collateral are governed by federal law, in
which case such choice of California law shall not
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be deemed to deprive Lender of such rights and remedies as may be available
under federal law.
12. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Loan
Agreement, together with the Schedules hereto and thereto, contains the entire
agreement of the parties with respect to the subject matter hereof and supersede
all prior drafts and communications relating to such subject matter. 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, Lender 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; TELEFACSIMILE EXECUTION. 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. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement
15. LOAN AGREEMENT. Borrower acknowledges that the rights and
remedies of Lender 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. Borrower acknowledges 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
Borrower agrees that all such covenants, terms and provisions are cumulative and
all shall be performed and satisfied in accordance with their respective terms.
17. TERMINATION. Upon the payment in full of the Obligations,
including the cash collateralization, expiration, or cancellation of all
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 Lender shall execute and
deliver such documents and instruments and take such further action reasonably
requested by Borrower, at Borrower's expense, as shall be necessary to evidence
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termination of the security interest granted by Borrower to Lender hereunder,
including cancellation of this Agreement by written notice from Lender to the
PTO.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
QUANTUM NORTH AMERICA, INC.,
a Delaware corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On , 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]
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On , 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]
S-2
SCHEDULE A
to the Trademark Security Agreement
TRADEMARKS OF BORROWER
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REGISTRATION/ REGISTRATION/
TYPE JURISDICTION XXXX APPLICATION DATE APPLICATION NO.
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