Exhibit 10.8
TRADEMARK SECURITY AGREEMENT AND LICENSE
This TRADEMARK SECURITY AGREEMENT AND
LICENSE (hereinafter referred to as the “ Agreement
”) is made as of August 2, 2007 by MICROFINANCIAL
INCORPORATED, a Massachusetts corporation (the “
Obligor ”), in favor of SOVEREIGN BANK, in its
capacity as Agent (in such capacity, the “ Agent
”) for the Lenders under the Credit Agreement dated as of the
date hereof among TimePayment Corp., a Delaware corporation (the
“ Borrower ”), the Agent and the Lenders named
therein (the “ Credit Agreement ”). Unless
otherwise defined herein, the terms defined in the Credit Agreement
are used herein as defined in the Credit Agreement
WITNESSETH:
WHEREAS, the Borrower, the Agent, the
Lenders are parties to a Credit Agreement, dated as of even date
herewith (as amended, modified or supplemented from time to time,
the “ Credit Agreement ”);
WHEREAS, the Borrower is a wholly
owned subsidiary of the Obligor, and the Borrower and the Obligor
will benefit, directly or indirectly, from the extensions of credit
to be made under the Credit Agreement;
WHEREAS, the Borrower has entered
into a Security Agreement, of even date herewith, with the Agent
(as the same may be amended, modified, supplemented, or restated
from time to time, the “ Security Agreement ”),
pursuant to which the Borrower has granted to the Agent for the
benefit of the Agent and the Lenders, a security interest in
certain TM Collateral (as hereafter defined) of the Borrower and
has agreed to execute and cause to be filed further documents
required to be recorded or filed, in order to perfect and maintain
the security interests granted under the Security Agreement;
WHEREAS, in order to induce the Agent
and the Lenders to enter into the Credit Agreement, the Borrower
has also agreed to grant a security interest in and collaterally
assign the TM Collateral to secure the Borrower’s obligations
under the Loan Documents, including, without limitation, its
obligations under the Notes issued by the Borrower pursuant to the
Credit Agreement and to place in the public record of the Patent
and Trademark Office (as defined below) the security interest
granted hereunder; and
WHEREAS, the Borrower wishes to grant
the Agent for the benefit of the Lenders, a non-exclusive license
in and to all of its trademarks, including, without limitation, all
unregistered trademarks of the Borrower; provided ,
however , that, unless an Event of Default has occurred and
is continuing, the foregoing license shall not be exercised and
shall be effective only to the extent necessary to perfect the
Agent’s security interest in the TM Collateral under
applicable law.
NOW THEREFORE, for good and valuable
consideration, and to secure the payment and performance of all the
Secured Obligations (as defined below), the parties hereto agree as
follows:
Section 1. Definitions .
All capitalized terms used herein and not otherwise defined shall
have the meanings prescribed therefor in the Credit Agreement. The
following additional terms, as used herein, shall have the
following respective meanings:
“ Business Judgment
Exception ” shall have the meaning set forth in
Section 4 below.
“ Lien ” means any
mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), or preference, priority or
other security agreement of any kind or nature whatsoever
(including without limitation, any exclusive license, shop right or
covenant by the Borrower not to sue third Persons).
“ Patent and Trademark
Office ” means the United States Patent and Trademark
Office.
“ Permitted Lien ”
means any Lien that is a Permitted Encumbrance under the Credit
Agreement.
“ Secured Obligations
” means all Obligations of the Borrower under or in respect
of the Credit Agreement and all other Loan Documents, including the
prompt payment or performance in full when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand
or otherwise (including the payment of amounts that would become
due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. 362(a)), of all
obligations and liabilities of every nature of the Borrower now or
hereafter existing under or arising out of or in connection with
the Credit Agreement and all other Loan Documents and all
extensions or renewals thereof, whether for principal, interest
(including without limitation interest that, but for the filing of
a petition in bankruptcy with respect to the Borrower, would accrue
on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or
any portion of such obligations or liabilities that are paid, to
the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party or any Lender as a
preference, fraudulent transfer or otherwise (all such obligations
and liabilities being the “ Underlying Debt ”),
and all obligations of every nature of the Borrower now or
hereafter existing under this Agreement.
“ Trademark License
” means any agreement, whether written or oral, providing for
the grant by the Borrower to any Person or Persons of any right to
use any Trademark, including, without limitation, the Trademarks
described in Schedule I hereto.
“ Trademarks ”
means all of the following to the extent owned by the
Borrower:
all trademarks,
trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos,
other source or business identifiers, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and
all applications in
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connection
therewith, including, without limitation, registrations, recordings
and applications in the Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, including,
without limitation, those described Schedule I hereto,
and all reissues, extensions or renewals thereof.
Section 2. Grant of Security
Interest . In furtherance and as confirmation of the security
interests granted by the Borrower under the Security Agreement and
in order to secure the prompt and complete payment and performance
of all the Secured Obligations, together with any and all
reasonable expenses which may be incurred by the Agent or the
Lenders in collecting any or all of such Secured Obligations or
enforcing any rights, obligations or liabilities under this
Agreement, the Borrower hereby grants a security interest to the
Agent, for the benefit of the Lenders, in (including, without
limitation, a collateral assignment and pledge of) all of the
Borrower’s present and future right, title and interest in
and to the following whether presently existing or hereafter
arising or acquired (collectively, the “ TM Collateral
”):
(a) all registered or unregistered
Trademarks of the Borrower and, where applicable, the federal
registrations thereof, including, without limitation, the federal
registrations listed on Schedule I attached hereto (the
“ Registered Trademarks ”);
(b) the Borrower’s rights under
any licenses that the Borrower has granted, or will in the future
grant, to any Person or Persons with respect to the Trademarks (the
“ Trademark Licenses ”);
(c) all of the goodwill of the
business connected with the use of, and symbolized by, each
Trademark and Trademark License;
(d) all products and proceeds of each
Trademark and Trademark License, including, without limitation, any
claim by the Borrower against third parties for past, present or
future infringement or dilution of any Trademark, including,
without limitation, the Registered Trademarks, and any Trademark
licensed under any Trademark License, or for injury to the goodwill
associated with any Trademark or any Trademark licensed under any
Trademark License;
(e) all causes of action, claims and
warranties now or hereafter owned or acquired by the Borrower in
respect of any of the items listed above; and
(f) all proceeds of any of the items
described in clauses (a) through (e).
Each of
the Lenders shall be deemed to hold a security interest,
proportionate to such Lender’s Commitment, in the TM
Collateral.
Notwithstanding the Security Agreement, the collateral assignment
and the pledge to the Agent, Borrower may continue to own, use and
license the TM Collateral. Furthermore, notwithstanding anything in
this Agreement, the “TM Collateral” described in this
Agreement shall not include any Trademark Licenses to the extent
that the granting of a security interest therein would constitute a
breach thereof or is prohibited thereby and such prohibition is
not
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ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of
Article 9 of the Uniform Commercial Code, as applicable and as
then in effect in any relevant jurisdiction, or any other
applicable law (including the U.S. Bankruptcy Code) or principles
of equity; provided that (x) all accounts and payment
intangibles arising under such Trademark Licenses contracts shall
be included in the TM Collateral and (y) the TM Collateral
shall include all payments and other property received or
receivable in connection with any sale or other disposition of such
Trademark Licenses; provided further that the foregoing
exclusions shall not apply if such prohibition has been waived or
such other Person has otherwise consented to the creation hereunder
of a security interest in such Trademark Licenses; and
provided further that immediately upon the ineffectiveness,
lapse or termination of any such prohibition, the Agent shall be
deemed to have granted a security interest in all its rights, title
and interests in and to Trademark Licenses, as if such prohibition
had never been in effect.
Section 3. Representations
and Warranties . As an inducement to the Agent to enter into
this Agreement, the Borrower makes the following representations
and warranties:
(a) Schedule I sets forth
a complete and correct list of all Trademarks and Trademark
Licenses in which the Borrower has any right, title or interest;
said Trademarks are valid, subsisting, unexpired and in full force
and effect, have not been adjudged invalid or unenforceable, in
whole or in part, and have not been abandoned; to the best of the
Borrower’s knowledge no holding, decision or judgment has
been rendered by any governmental authorities which would be
reasonably likely to limit, cancel or question the validity of any
Trademark.
(b) The Borrower is the sole
beneficial owner of the Registered Trademarks, and is the owner of
or duly licensed to use or license any of the Trademarks, and,
except for Permitted Liens, no Lien exists or will exist upon any
Registered Trademark at any time except for the collateral
assignment thereof in favor of the Agent provided for herein, which
collateral assignment and security interest constitutes a first
priority perfected security interest in all of the Registered
Trademarks.
(c) Except pursuant to Trademark
Licenses entered into by the Borrower in the ordinary course of
business, the Borrower owns and possesses the exclusive right to
use, and has done nothing to authorize or enable any other Person
to use, the Trademarks, including the Registered Trademarks listed
on Schedule I.
(d) Except as otherwise disclosed in
Exhibit C to the Credit Agreement, to the best of the
Borrower’s knowledge, there is no infringement by others of
any right of the Borrower with respect to any Trademark that would
reasonably be expected to have a Material Adverse Effect, the
Borrower is not infringing in any respect upon any trademark of any
other Person, and no proceedings have been instituted or are
pending against the Borrower or threatened, alleging any such
violation, which proceedings would reasonably be expected to have a
Material Adverse Effect.
(e) All applications pertaining to
the Trademarks have been duly and properly filed, and all
registrations or letters pertaining to such Trademarks have been
properly filed and issued.
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Section 4. Defense of TM
Collateral, Etc . The Borrower agrees that it will at its
expense, at the Agent’s request, defend the TM Collateral
from any and all claims and demands of any other Person;
provided, however, nothing herein shall prevent the
Borrower in the exercise of its reasonable business judgment from
determining that it is in the best interest of the Borrower to
abandon any item of TM Collateral or to refrain from defending any
item of TM Collateral against such claims or demands (the foregoing
prerogative of the Borrower being sometimes referred to herein as
the “ Business Judgment Exception” ). The
Borrower hereby agrees to pay, indemnify, and hold the Agent
harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses of disbursements or any kind or nature
whatsoev
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