TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT ("Agreement"), dated as of July 3, 1996, is
entered into between QAD, INC., a California corporation ("Grantor"), which has
a mailing address at 0000 Xxx Xxxx, Xxxxxxxxxxx, XX 00000, and GREYROCK
BUSINESS CREDIT, a Division of NationsCredit Commercial Corporation ("GBC"),
which has a mailing address at 000 Xxxxx Xxxxxxxxxxx Xxxx., Xxxxx 000, Xx
Xxxxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Grantor and GBC are, contemporaneously herewith, entering into that
certain Loan and Security Agreement ("Loan Agreement") and other instruments,
documents and agreements contemplated thereby or related thereto (collectively,
together with the Loan Agreement, the "Loan Documents"); and
B. Grantor is the owner of certain intellectual property, identified
below, in which Grantor is granting a security interest to GBC.
NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. The following terms, as used in this Agreement, have the
following meanings:
"CODE" means the California Uniform Commercial Code, as amended and
supplemented from time to time, and any successor statute.
"COLLATERAL" means all of the following, whether now owned or
hereafter acquired:
(i) Each of the trademarks and rights and interest which are
capable of being protected as trademarks (including trademarks, service
marks, designs, logos, indicia, tradenames, corporate names, company names,
business names, fictitious business names, trade styles, and other source
or business identifiers, and applications pertaining thereto), which are
presently, or in the future may be, owned, created, acquired, or used
(whether pursuant to a license or otherwise) by Grantor, in whole or in
part, and all trademark rights with respect thereto throughout the world,
including all proceeds thereof (including license royalties and proceeds of
infringement suits), and rights to renew and extend such trademarks and
trademark rights;
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(ii) All of Grantor's right to the trademarks and trademark
registrations listed on EXHIBIT A attached hereto, as the same may be
updated hereafter from time to time;
(iii) All of Grantor's right, title and interest to register
trademark claims under any state or federal trademark law or regulation of
any foreign country and to apply for, renew, and extend the trademark
registrations and trademark rights, the right (without obligation) to xxx
or bring opposition or cancellation proceedings in the name of Grantor or
in the name of GBC for past, present, and future infringements of the
trademarks, registrations, or trademark rights and all rights (but not
obligations) corresponding thereto in the United States and any foreign
country;
(iv) the entire goodwill of or associated with the businesses now
or hereafter conducted by Grantor connected with and symbolized by any of
the aforementioned properties and assets;
(v) All general intangibles relating to the foregoing and all
other intangible intellectual or other similar property of the Grantor of
any kind or nature, associated with or arising out of any of the
aforementioned properties and assets and not otherwise described above; and
(vi) All products and proceeds of any and all of the foregoing
(including, without limitation, license royalties and proceeds of
infringement suits) and, to the extent not otherwise included, all payments
under insurance, or any indemnity, warranty, or guaranty payable by reason
of loss or damage to or otherwise with respect to the Collateral.
"OBLIGATIONS" means all obligations, liabilities, and indebtedness of
Grantor to GBC, whether direct, indirect, liquidated, or contingent, and whether
arising under this Agreement, the Loan Agreement, any other of the Loan
Documents, or otherwise, including all costs and expenses described in Section
9.8 hereof.
1.2 CONSTRUCTION. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, and the term "including" is not limiting. The words
"hereof," "herein," "hereby," "hereunder," and other similar terms refer to this
Agreement as a whole and not to any particular provision of this Agreement. Any
initially capitalized terms used but not defined herein shall have the meaning
set forth in the Loan Agreement. Any reference herein to any of the Loan
Documents includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against GBC or Grantor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
Grantor, GBC, and their respective counsel, and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of GBC and Grantor.
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Headings have been set forth herein for convenience only, and shall not be used
in the construction of this Agreement.
2. GRANT OF SECURITY INTEREST.
To secure the complete and timely payment and performance of all
Obligations, and without limiting any other security interest Grantor has
granted to GBC, Grantor hereby grants, assigns, and conveys to GBC a security
interest in Grantor's entire right, title, and interest in and to the
Collateral.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Grantor hereby represents, warrants, and covenants that:
3.1 TRADEMARKS. A true and complete schedule setting forth all federal
and state trademark registrations owned or controlled by Grantor or licensed to
Grantor, together with a summary description and full information in respect of
the filing or issuance thereof and expiration dates is set forth on EXHIBIT A.
3.2 VALIDITY; ENFORCEABILITY. Each of the trademarks is valid and
enforceable, and Grantor is not presently aware of any past, present, or
prospective claim by any third party that any of the trademarks are invalid or
unenforceable, or that the use of any trademarks violates the rights of any
third person, or of any basis for any such claims.
3.3 TITLE. Grantor is the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to each of the trademarks, and
trademark registrations, free and clear of any liens, charges, and encumbrances,
including pledges, assignments, licenses, shop rights, and covenants by Grantor
not to xxx third persons.
3.4 NOTICE. Grantor has used and will continue to use proper statutory
notice in connection with its use of each of the trademarks.
3.5 QUALITY. Grantor has used and will continue to use consistent
standards of high quality (which may be consistent with Grantor's past
practices) in the manufacture, sale, and delivery of products and services sold
or delivered under or in connection with the trademarks, including, to the
extent applicable, in the operation and maintenance of its merchandising
operations, and will continue to maintain the validity of the trademarks.
3.6 PERFECTION OF SECURITY INTEREST. Except for the filing of a financing
statement with the Secretary of State of California and filings with the United
States Patent and Trademark Office necessary to perfect the security interests
created hereunder, no authorization, approval, or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required
either for the grant by Grantor of the security interest hereunder or for the
execution, delivery, or performance of this Agreement by Grantor or for the
perfection of or the exercise by GBC of its rights hereunder to the Collateral
in the United States.
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4. AFTER-ACQUIRED TRADEMARK RIGHTS.
If Grantor shall obtain rights to any new trademarks, the provisions of
this Agreement shall automatically apply thereto. Grantor shall give prompt
notice in writing to GBC with respect to any such new trademarks, or renewal or
extension of any trademark registration. Grantor shall bear any expenses
incurred in connection with future trademark registrations. Without limiting
Grantor's obligation under this Section 4, Grantor authorizes GBC to modify this
Agreement by amending EXHIBIT A to include any such new trademark rights.
Notwithstanding the foregoing, no failure to so modify this Agreement or amend
EXHIBIT A shall in any way affect, invalidate or detract from GBC's continuing
security interest in all Collateral, whether or not listed on EXHIBIT A.
5. LITIGATION AND PROCEEDINGS.
Grantor shall commence and diligently prosecute in its own name, as the
real party in interest, for its own benefit, and its own expense, such suits,
administrative proceedings, or other action for infringement or other damages as
are in its reasonable business judgment necessary to protect the Collateral.
Grantor shall provide to GBC any information with respect thereto requested by
GBC. GBC shall provide at Grantor's expense all necessary cooperation in
connection with any such suits, proceedings, or action, including, without
limitation, joining as a necessary party. Following Grantor's becoming aware
thereof, Grantor shall notify GBC of the institution of, or any adverse
determination in, any proceeding in the United States Patent and Trademark
Office, or any United States, state, or foreign court regarding Grantor's claim
of ownership in any of the trademarks, its right to apply for the same, or its
right to keep and maintain such trademark rights.
6. POWER OF ATTORNEY.
Grantor hereby appoints GBC as Grantor's true and lawful attorney, with
full power of substitution, to do any or all of the following, in the name,
place and stead of Grantor: (a) file this Agreement (or an abstract hereof) or
any other document describing GBC's interest in the Collateral with the United
States Patent and Trademark Office; (b) execute any modification of this
Agreement pursuant to Section 4 of this Agreement; (c) take any action and
execute any instrument which GBC may deem necessary or advisable to accomplish
the purposes of this Agreement; and (d) following an Event of Default (as
defined in the Loan Agreement), (i) endorse Grantor's name on all applications,
documents, papers and instruments necessary for GBC to use or maintain the
Collateral; (ii) ask, demand, collect, xxx for, recover, impound, receive, and
give acquittance and receipts for money due or to become due under or in respect
of any of the Collateral; (iii) file any claims or take any action or institute
any proceedings that GBC may deem necessary or desirable for the collection of
any of the Collateral or otherwise enforce GBC's rights with respect to any of
the Collateral, and (iv) assign, pledge, convey, or otherwise transfer title in
or dispose of the Collateral to any person.
7. RIGHT TO INSPECT.
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Grantor grants to GBC and its employees and agents the right to visit
Grantor's plants and facilities which manufacture, inspect, or store products
sold under any of the trademarks, and to inspect the products and quality
control records relating thereto at reasonable times during regular business
hours.
8. SPECIFIC REMEDIES.
Upon the occurrence of any Event of Default (as defined in the Loan
Agreement), GBC shall have, in addition to, other rights given by law or in this
Agreement, the Loan Agreement, or in any other Loan Document, all of the rights
and remedies with respect to the Collateral of a secured party under the Code,
including the following:
8.1 NOTIFICATION. GBC may notify licensees to make royalty payments on
license agreements directly to GBC;
8.2 SALE. GBC may sell or assign the Collateral and associated goodwill
at public or private sale for such amounts, and at such time or times as GBC
deems advisable. Any requirement of reasonable notice of any disposition of the
Collateral shall be satisfied if such notice is sent to Grantor * days
prior to such disposition. Grantor shall be credited with the net proceeds of
such sale only when they are actually received by GBC, and Grantor shall
continue to be liable for any deficiency remaining after the Collateral is sold
or collected. If the sale is to be a public sale, GBC shall also give notice of
the time and place by publishing a notice one time at least * days
before the date of the sale in a newspaper of general circulation in the county
in which the sale is to be held. To the maximum extent permitted by applicable
law, GBC may be the purchaser of any or all of the Collateral and associated
goodwill at any public sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any public sale, to use and apply all or any part of the
Obligations as a credit on account of the purchase price of any collateral
payable by GBC at such sale.
*TEN (10)
9. GENERAL PROVISIONS.
9.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Grantor and GBC.
9.2 NOTICES. Except to the extent otherwise provided herein, all notices,
demands, and requests that either party is required or elects to give to the
other shall be in writing and shall be governed by the notice provisions of the
Loan Agreement.
9.3 NO WAIVER. No course of dealing between Grantor and GBC, nor any
failure to exercise nor any delay in exercising, on the part of GBC, any right,
power, or privilege under this Agreement or under the Loan Agreement or any
other agreement, shall operate as a waiver. No single or partial exercise of
any right, power, or privilege under this Agreement or under the Loan
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Agreement or any other agreement by GBC shall preclude any other or further
exercise of such right, power, or privilege or the exercise of any other right,
power, or privilege by GBC.
9.4 RIGHTS ARE CUMULATIVE. All of GBC's rights and remedies with respect
to the Collateral whether established by this Agreement, the Loan Agreement, or
any other documents or agreements, or by law shall be cumulative and may be
exercised concurrently or in any order.
9.5 SUCCESSORS. The benefits and burdens of this Agreement shall inure to
the benefit of and be binding upon the respective successors and permitted
assigns of the parties; provided that Grantor may not transfer any of the
Collateral or any rights hereunder, without the prior written consent of GBC,
except as specifically permitted hereby.
9.6 SEVERABILITY. The provisions of this Agreement are severable. If any
provision of this Agreement is held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such provision or part thereof in any other jurisdiction, or any
other provision of this Agreement in any jurisdiction.
9.7 ENTIRE AGREEMENT. This Agreement is subject to modification only by a
writing signed by the parties, except as provided in Section 4 of this
Agreement. To the extent that any provision of this Agreement conflicts with
any provision of the Loan Agreement, the provision giving GBC greater rights or
remedies shall govern, it being understood that the purpose of this Agreement is
to add to, and not detract from, the rights granted to GBC under the Loan
Agreement. This Agreement, the Loan Agreement, and the documents relating
thereto comprise the entire agreement of the parties with respect to the matters
addressed in this Agreement.
9.8 FEES AND EXPENSES. Grantor shall pay to GBC on demand all costs and
expenses that the GBC pays or incurs in connection with the negotiation,
preparation, consummation, administration, enforcement, and termination of this
Agreement, including: (a) reasonable attorneys' and paralegals' fees and
disbursements of counsel to GBC; (b) costs and expenses (including reasonable
attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with this
Agreement and the transactions contemplated hereby; (c) costs and expenses of
lien and title searches; (d) taxes, fees, and other charges for filing this
Agreement at the United States Patent and Trademark Office, or for filing
financing statements, and continuations, and other actions to perfect, protect,
and continue the security interest created hereunder; (e) sums paid or incurred
to pay any amount or take any action required of Grantor under this Agreement
that Grantor fails to pay or take; (f) costs and expenses of preserving and
protecting the Collateral; and (g) costs and expenses (including reasonable
attorneys' and paralegals' fees and disbursements) paid or incurred to enforce
the security interest created hereunder, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of this Agreement, or to defend
any claims made or threatened against the GBC arising out of the transactions
contemplated hereby (including preparations for the consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of this Agreement or the Loan Documents regarding costs and expenses
to be paid by Grantor. The parties agree that reasonable attorneys' and
paralegals' fees and costs
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incurred in enforcing any judgment are recoverable as a separate item in
addition to fees and costs incurred in obtaining the judgment and that the
recovery of such attorneys' and paralegals' fees and costs is intended to
survive any judgment, and is not to be deemed merged into any judgment.
9.9 INDEMNITY. Grantor shall protect, defend, indemnify, and hold
harmless GBC and GBC's assigns from all liabilities, losses, and costs
(including without limitation reasonable attorneys' fees) incurred or imposed on
GBC relating to the matters in this Agreement.
9.10 FURTHER ASSURANCES. At GBC's request, Grantor shall execute and
deliver to GBC any further instruments or documentation, and perform any acts,
that may be reasonably necessary or appropriate to implement this Agreement, the
Loan Agreement or any other agreement, and the documents relating thereto,
including without limitation any instrument or documentation reasonably
necessary or appropriate to create, maintain, perfect, or effectuate GBC's
security interests in the Collateral.
9.11 RELEASE. At such time as Grantor shall completely satisfy all of the
Obligations and the Loan Agreement shall be terminated, GBC shall execute and
deliver to Grantor all assignments and other instruments as may be reasonably
necessary or proper to terminate GBC's security interest in the Collateral,
subject to any disposition of the Collateral which may have been made by GBC
pursuant to this Agreement. For the purpose of this Agreement, the Obligations
shall be deemed to continue if Grantor enters into any bankruptcy or similar
proceeding at a time when any amount paid to GBC could be ordered to be repaid
as a preference or pursuant to a similar theory, and shall continue until it is
finally determined that no such repayment can be ordered.
9.12 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 California, excluding its conflict of law rules to the extent such
rules would apply the law of another jurisdiction, and the United States. The
parties agree that all actions or proceedings arising in connection with this
Agreement shall be tried and litigated only in the state and federal courts
located in the County of Los Angeles, State of California or, at the sole option
of GBC, in any other court in which GBC shall initiate legal or equitable
proceedings and which has subject matter jurisdiction over the matter in
controversy. each of Grantor and GBC waives, to the extent permitted under
applicable law, any right they may have to assert the doctrine of forum non
conveniens or to object to venue to the extent any proceeding is brought in
accordance with this Section.
9.13 WAIVER OF RIGHT TO JURY TRIAL. GBC AND GRANTOR EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO: (I) THIS AGREEMENT; OR (II) ANY OTHER PRESENT OR
FUTURE INSTRUMENT OR AGREEMENT BETWEEN GBC AND GRANTOR; OR (III) ANY CONDUCT,
ACTS OR OMISSIONS OF GBC OR GRANTOR OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GBC OR
GRANTOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
GREYROCK BUSINESS CREDIT, a QAD, Inc.
Division of Greyrock Capital Group Inc.
By By
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Title Title
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42,927
8
STATE OF CALIFORNIA )
) ss.
COUNTY OF _______________ )
On _____________________, 1996, 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.
_______________________________
(Seal)
STATE OF CALIFORNIA )
) ss.
COUNTY OF _______________ )
On _____________________, 1996, 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.
_______________________________
(Seal)
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EXHIBIT "A"
REGISTERED TRADEMARKS
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Trademark Registration Date Registration No.
--------- ----------------- ----------------
MFG/PRO 12/29/92 1,742,858
PENDING TRADEMARKS
------------------
Application - Trademark & Service Xxxx
xxx.xxx. 9/2/94 Classes 9, 16, 41, 42
Amendment filed for XXX.XXX. 1/30/95
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