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EXHIBIT 10.8
AMENDED AND RESTATED
COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND SECURITY AGREEMENT
(Strates Pte. Ltd.)
THIS AMENDED AND RESTATED COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND
SECURITY AGREEMENT dated as of May 29, 1998 (this "Assignment") is entered into
by and among STRATES PTE. LTD., a Singapore corporation (the "Assignor"), and
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as agent for the Banks, as
defined below (the "Agent" or "Assignee").
RECITALS
A. Assignor, StorMedia International, Ltd., a Cayman Islands corporation
(together with Assignor, the "Borrowers"), StorMedia Incorporated, a Delaware
corporation (the "Parent Guarantor," collectively with the Subsidiary
Guarantors, as defined below, and the Borrowers, the "Loan Parties," each a
"Loan Party"), certain financial institutions named on Annex I thereof or who
become parties thereto as Banks (each a "Bank" and collectively, the "Banks"),
Agent, Banque Nationale de Paris, San Xxxxxxxxx Xxxxxx, as co-agent for the
Banks (the "Co-Agent"), and Canadian Imperial Bank of Commerce, Singapore Branch
as the Designated Issuer ("Designated Issuer") have entered into that certain
Credit Agreement dated as of August 23, 1996 (as amended, supplemented, or
otherwise modified through the date hereof, the "Existing Credit Agreement").
B. In connection with the Existing Credit Agreement, Assignor and the
Agent entered into that certain Collateral Assignment, Patent Mortgage and
Security Agreement dated as of August 23, 1996 (as amended, supplemented, or
otherwise modified through the date hereof, the "Existing Borrower Collateral
Assignment").
C. On December 31, 1997, StorMedia Foreign Sales Corporation, a U.S.
Virgin Islands corporation and wholly-owned Subsidiary of Parent Guarantor
("FSC"), acquired all of the outstanding capital stock of Akashic Memories
Corporation, a California corporation ("Akashic") through the merger of
StorMedia Acquisition Corporation, a California corporation and wholly-owned
Subsidiary of FSC with and into Akashic. In connection with such acquisition,
certain of the other Loan Parties purchased the patents and applications pending
in Akashic's parent corporation, Kubota Corporation.
D. Pursuant to a series of consents and limited waivers, the Agent, the
Co-Agent, the Banks and the Designated Issuer deferred certain principal
payments in respect of the Term Loan and waived certain Events of Default
arising out of the Loan Parties' failure to comply with certain provisions of
the Existing Credit Agreement.
E. The Parent Guarantor, the Borrowers and the other Loan Parties propose
to enter into a financial restructuring (the "Restructuring"), pursuant to
which, among other things, one or more
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of the Loan Parties will consummate (i) the financing transactions contemplated
by the Foothill Group Financing Documents, (ii) the Equity Investment and (iii)
the issuance of the Seagate Subordinated Debt;
F. In connection with the Restructuring, the Loan Parties, the Banks, the
Agent and the Co-Agent desire to amend and restate the Existing Credit Agreement
in its entirety (the Existing Credit Agreement, as so amended and restated, and
the Amended and Restated Credit Agreement, as amended, restated, supplemented or
otherwise modified from time to time, collectively, being the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined herein have
the meanings ascribed to such terms in the Credit Agreement.
G. As a condition precedent to the effectiveness of the Credit Agreement,
the Banks, Agent, and Co-Agent have required that the Existing Borrower
Collateral Assignment be amended and restated in its entirety (the Existing
Borrower Collateral Assignment, as amended, restated, supplemented or otherwise
modified from time to time, collectively, being this "Assignment"); provided,
however, that as of the Effective Date, the rights and obligations of the
parties hereto shall be governed by this Assignment and no Event of Default or
Potential Event of Default under the Existing Credit Agreement shall constitute
an Event of Default or Potential Event of Default under this Assignment.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Banks, Agent, and Co-Agent to enter into the Credit Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor and Agent hereby agree as follows:
1. Assignment, Patent Mortgage and Grant of Security Interest. As
collateral security for the prompt and complete payment and performance of all
of Assignor's present or future indebtedness, obligations and liabilities to
Assignee, Assignor hereby assigns, transfers, conveys and grants a security
interest and mortgage to Assignee, as security, in and to Assignor's entire
right, title and interest in, to and under the following (all of which shall
collectively be called the "Collateral"):
(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret, now or hereafter existing, created, acquired or
held, including without limitation those set forth on Exhibit A attached hereto
(collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now or hereafter
existing, created, acquired or held;
(c) Any and all design rights which may be available to Assignor now
or hereafter existing, created, acquired or held;
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(d) All patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents");
(e) Any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Assignor connected with and symbolized by
such trademarks, including without limitation those set forth on Exhibit C
attached hereto (collectively, the "Trademarks");
(f) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right, but not
the obligation, to xxx for and collect such damages for said use or infringement
of the intellectual property rights identified above;
(g) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such licenses or rights; and
(h) All amendments, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and
(i) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE
CONSTRUED AS AN ABSOLUTE CONVEYANCE OF THE ASSIGNOR'S OWNERSHIP INTERESTS, BUT
AS A CONTINGENT ASSIGNMENT TO SECURE ASSIGNOR'S OBLIGATIONS TO ASSIGNEE UNDER
THE CREDIT AGREEMENT.
2. Authorization and Request. Assignor authorizes and requests that the
United States Copyright Office and the Commissioner of Patents and Trademarks
record this conditional assignment.
3. Covenants and Warranties. Assignor represents, warrants, covenants and
agrees as follows:
(a) Assignor is now the sole owner of the Collateral, except for
non-exclusive licenses granted by Assignor to its customers in the ordinary
course of business;
(b) Performance of this Assignment does not conflict with or result
in a breach of any agreement to which Assignor is party or by which Assignor is
bound, except to the extent that certain intellectual property agreements
prohibit the assignment of the rights thereunder to a third party without the
licensor's or other party's consent and this Assignment constitutes an
assignment;
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(c) During the term of this Assignment, Assignor will not transfer
or otherwise encumber any interest in the Collateral, except for non-exclusive
licenses granted by Assignor in the ordinary course of business or as set forth
in this Assignment or transfers constituting Permitted Liens;
(d) To its knowledge, each of the Patents is valid and enforceable,
and no part of the Collateral has been judged invalid or unenforceable, in whole
or in part, and no claim has been made that any part of the Collateral violates
the rights of any third party;
(e) Assignor shall promptly advise Assignee of any material change
in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Assignor in or to any Trademark, Patent or
Copyright not specified in this Assignment;
(f) Assignor shall (i) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents and Copyrights, (ii) use its best
efforts to detect infringements of the Trademarks, Patents and Copyrights and
promptly advise Assignee in writing of material infringements detected and (iii)
not allow any Trademarks, Patents or Copyrights to be abandoned, forfeited or
dedicated to the public without the written consent of Assignee, which shall not
be unreasonably withheld, unless Assignor determines that reasonable business
practices suggest that abandonment is appropriate.
(g) Assignor shall promptly register the most recent version of any
of Assignor's Copyrights, if not so already registered, and shall, from time to
time, execute and file such other instruments, and take such further actions as
Assignee may reasonably request from time to time to perfect or continue the
perfection of Assignee's interest in the Collateral. Assignor shall, and shall
cause its Subsidiaries to promptly Register and record all newly created or
acquired Patents and Trademarks with the United States Commission of Patents and
Trademarks;
(h) This Assignment creates, and in the case of after acquired
Collateral, this Assignment will create at the time Assignor first has rights in
such after acquired Collateral, in favor of Assignee a valid and perfected
security interest of the priority specified in the Intercreditor Agreement in
the Collateral in the United States securing the payment and performance of the
obligations under the Credit Agreement and the Loan Documents (as defined in the
Credit Agreement) upon making the filings referred to in clause (i) below;
(i) To its knowledge, except for, and upon, the filing with the
United States Patent and Trademark office with respect to the Patents and
Trademarks and the United States Copyright Office with respect to the Copyrights
necessary to perfect the security interests and assignment created hereunder,
and except as has been already made or obtained, no authorization, approval or
other action by, and no notice to or filing with, any U.S. governmental
authority or U.S. regulatory body is required either (i) for the grant by
Assignor of the security interest granted hereby or for the execution, delivery
or performance of this Assignment by Assignor in the U.S. or (ii) for the
perfection in the United States or the exercise by Assignee of its rights and
remedies hereunder;
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(j) All information heretofore, herein or hereafter supplied to
Assignee by or on behalf of Assignor with respect to the Collateral is accurate
and complete in all material respects, and with respect to such information
prepared by a third party, to the best knowledge of the Assignor for which such
information was prepared, such information is accurate and complete in all
material respects.
(k) Assignor shall not enter into any agreement that would
materially impair or conflict with Assignor's obligations hereunder without
Assignee's prior written consent, which consent shall not be unreasonably
withheld. Assignor shall not permit the inclusion in any material contract to
which it becomes a party of any provisions that could or might in any way
prevent the creation of a security interest in Assignor's rights and interests
in any property included within the definition of the Collateral acquired under
such contracts, except that certain contracts may contain anti-assignment
provisions that could in effect prohibit the creation of a security interest in
such contracts.
(l) Upon any executive officer of Assignor obtaining actual
knowledge thereof, Assignor will promptly notify Assignee in writing of any
event that materially adversely affects the value of any Collateral, the ability
of Assignor to dispose of any Collateral or the rights and remedies of Assignee
in relation thereto, including the levy of any legal process against any of the
Collateral.
4. Assignee's Rights. Assignee shall have the right, but not the
obligation, to take, at Assignor's sole expense, any actions that Assignor is
required under this Assignment to take but which Assignor fails to take, after
fifteen (15) days' notice to Assignor. Assignor shall reimburse and indemnify
Assignee for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section 4.
5. Inspection Rights. Assignor hereby grants to Assignee and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Assignor, any of Assignor's plants
and facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Collateral, and to inspect the products and quality control records relating
thereto upon reasonable written notice to Assignor in accordance with the terms
of the Credit Agreement.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Assignor will make, execute, acknowledge
and deliver, and file and record in the proper filing and recording places in
the United States, all such instruments, including appropriate financing and
continuation statements and collateral agreements and filings with the United
States Patent and Trademark Office and the United States Copyright Office, and
take all such action as may reasonably be deemed necessary or advisable, or as
requested by Assignee, to perfect Assignee's security interest in all
Copyrights, Patents and Trademarks and otherwise to carry out the intent and
purposes of this Collateral Assignment, or for assuring and confirming to
Assignee the grant or perfection of a security interest in all Collateral.
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(b) Assignor hereby irrevocably appoints Assignee as Assignor's
attorney-in-fact, with full authority in the place and stead of Assignor and in
the name of Assignor, from time to time in Assignee's discretion, to take any
action and to execute any instrument which Assignee may deem necessary or
advisable to accomplish the purposes of this Collateral Assignment, including
(i) to modify, in its sole discretion, this Collateral Assignment without first
obtaining Assignor's approval of or signature to such modification by amending
Exhibit A, Exhibit B and Exhibit C, thereof, as appropriate, to include
reference to any right, title or interest in any Copyrights, Patents or
Trademarks acquired by Assignor after the execution hereof or to delete any
reference to any right, title or interest in any Copyrights, Patents or
Trademarks in which Assignor no longer has or claims any right, title or
interest, (ii) to file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Assignor where permitted by law and (iii)
after the occurrence and during the continuance of an Event of Default, to
transfer the Collateral into the name of Assignee or a third party to the extent
permitted under the California Uniform Commercial Code.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under the Assignment:
(a) An Event of Default occurs under the Credit Agreement; or
(b) Assignor breaches any warranty or agreement made by Assignor in
this Assignment and, as to any breach that is capable of cure, Assignor fails to
cure such breach within five (5) days of the knowledge of such breach by a
responsible officer.
8. Remedies. Subject to the terms of the Credit Agreement and the
Intercreditor Agreement, upon the occurrence and continuance of an Event of
Default, Assignee shall have the right to exercise all the remedies of a secured
party under the California Uniform Commercial Code, including without limitation
the right to require Assignor to assemble the Collateral and any tangible
property in which Assignee has a security interest and to make it available to
Assignee at a place designated by Assignee. Assignee shall have a nonexclusive,
royalty free license to use the Copyrights, Patents and Trademarks to the extent
reasonably necessary to permit Assignee to exercise its rights and remedies upon
the occurrence of an Event of Default. Assignor will pay any expenses (including
reasonable attorneys' fees) incurred by Assignee in connection with the exercise
of any of Assignee's rights hereunder, including without limitation any expense
incurred in disposing of the Collateral. All of Assignee's rights and remedies
with respect to the Collateral shall be cumulative.
9. Indemnity. Assignor agrees to defend, indemnify and hold harmless
Assignee and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this Assignment, and (b) all
losses or expenses in any way suffered, incurred, or paid by Assignee as a
result of or in any way arising out of, following or consequential to
transactions between Assignee and Assignor, whether under this Assignment or
otherwise (including without limitation reasonable
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attorneys' fees and reasonable expenses), except for losses arising from or out
of Assignee's gross negligence or willful misconduct.
10. Reassignment. At such time as Assignor shall completely satisfy all of
the obligations secured hereunder, Assignee shall execute and deliver to
Assignor all deeds, assignments and other instruments as may be necessary or
proper to revest in Assignor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto.
11. Course of Dealing. No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
12. Attorneys' Fees. If any action relating to this Assignment is brought
by either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements.
13. Amendments. This Assignment may be amended only by a written
instrument signed by both parties hereto.
14. Counterparts. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
15. Confidentiality. Any information provided in connection herewith to
the Agent, Co-Agent, Designated Issuer or any Bank shall be subject to the
confidentiality provisions of Section 9.06(e) of the Credit Agreement.
16. California Law and Jurisdiction; Jury Waiver. This Assignment shall be
governed by the laws of the State of California, without regard for choice of
law provisions. Assignor and Assignee consent to the exclusive jurisdiction of
any state or federal court located in San Francisco County, California. ASSIGNOR
AND ASSIGNEE EACH WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE CREDIT AGREEMENT, THIS
ASSIGNMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment on
the day and year first above written.
STRATES PTE. LTD.
By: /s/
-------------------------------
Title:
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Notice Address:
0 Xxxx Xxxx Xxxxxx
Xxxxxxxxx 000000
Attention: Chief Financial Officer
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CANADIAN IMPERIAL BANK OF
COMMERCE, New York Agency, as
Agent for the Banks
By: /s/
-------------------------------
Title:
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Notice Address:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxx Xxxxxx
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EXHIBIT A
TO
AMENDED AND RESTATED
BORROWER COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND
SECURITY AGREEMENT
(Strates)
Copyrights
Registration/ Registration/
Application Application
Description Number Date
----------- ------------- -------------
None.
A-1
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EXHIBIT B
TO
AMENDED AND RESTATED
BORROWER COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND
SECURITY AGREEMENT
(Strates)
Patents
Registration/ Registration/
Application Application
Description Number Date
----------- ------------- -------------
None.
B-1
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EXHIBIT C
TO
AMENDED AND RESTATED
BORROWER COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND
SECURITY AGREEMENT
(Strates)
Trademarks
Registration/ Registration/
Application Application
Description Number Date
----------- ------------- -------------
None.
C-1
