EX-10.6 20 dex106.htm GRANT OF SECURITY INTEREST IN TRADEMARK RIGHTS, DATED AS OF JULY 13, 2010 GRANT OF SECURITY INTEREST IN TRADEMARK RIGHTS, dated as of July 13, 2010

Exhibit 10.6

EXECUTION VERSION

GRANT OF

SECURITY INTEREST IN TRADEMARKS RIGHTS

This GRANT OF SECURITY INTEREST IN TRADEMARKS RIGHTS (“Agreement”), effective as of July 13, 2010 is made by (i) Postmedia Network Inc., a Canadian corporation, located at 1450 Don Mills Road, Suite 300, Toronto, Ontario, M3B 2X7 (each, a “Grantor” and collectively, the “Grantors”), in favour of Morgan Stanley Senior Funding, Inc., located at Global Banking Operations, 1 Pierrepoint Plaza, 7th Floor, Brooklyn, NY 11201, Attention: Stephen Giacolone, as Collateral Agent (the “Agent”) for the banks and other financial institutions or entities (the “Lenders”) parties to the Revolving Credit Agreement, dated as of July 13, 2010 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Postmedia Network Inc., a Canada corporation (the “Borrower”), Postmedia Network Canada Corp., a Canada corporation (“Holdings”), each of the direct and indirect Subsidiaries signatory thereto, the Lenders, Morgan Stanley Senior Funding, Inc. as Administrative Agent and Collateral Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein; and

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered a Pledge and Security Agreement, dated as of July 13, 2010, in favour of the Agent (together with all amendments and modifications, if any, from time to time thereafter made thereto, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantor granted, pledged, mortgaged, charged, assigned and transferred to the Agent, on behalf of and for the ratable benefit of the Secured Parties a first priority, continuing, specific and fixed security interest in all of its Intellectual Property, including the Trademarks of such Grantor; and

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Security Agreement;

NOW THEREFORE, for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to induce the Lenders to make extensions of credit to the Borrower pursuant to the Credit Agreement, the Grantor agrees, for the benefit of the Secured Parties, as follows:

Trademarks” means (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, brands, trade dress, uniform resource locators, domain names, tag lines, designs, graphics, trade styles, service marks, logos and other source or business identifiers, and all goodwill connected with the use of and symbolized thereby, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office,


with the Canadian Intellectual Property Office or in any similar office or agency of the United States, any State thereof, in Canada or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to in Schedule 1, and (ii) the right to obtain all renewals thereof.

SECTION 1. Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals have the meanings provided or provided by reference in the Credit Agreement and the Security Agreement, as applicable. In addition, the following term shall have the following meaning:

SECTION 2. Grant of Security Interest. The Grantor hereby grants, pledges, mortgages, charges, assigns and transfers to the Agent, for the ratable benefit of the Secured Parties, a security interest in all of the Grantor’s right, title and interest in the Trademarks of such Grantor (including, without limitation, those items listed on Schedule A hereto) (collectively, the “Trademark Collateral”); provided, however, that notwithstanding any of the other provisions set forth in this Section 2, this Agreement shall not constitute a grant of a security interest in any property to the extent that such grant of a security interest is prohibited by any requirements of law of a Governmental Authority, requires a consent not obtained of any Governmental Authority pursuant to such requirement of law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except to the extent that such requirement of law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law; provided, further, that notwithstanding anything herein to the contrary, in no event shall the Trademark Collateral include or the security interest granted under this Section 2 attach to (i) any rights or property acquired under or in connection with a lease, license, contract, property right or agreement (or any of its rights or interests thereunder) solely if and to the extent that the grant of the security interest shall, after giving effect to the PPSA or any other applicable law, constitute or result in (A) the abandonment, invalidation or unenforceability of any right, title or interest of such Grantor therein or (B) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, property right or agreement, provided that, immediately upon the ineffectiveness, lapse or termination of any such provision, the Trademark Collateral shall include, and the Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect; provided further that the proceeds therefrom shall not be excluded from the definition of Trademark Collateral to the extent that the assignment of such proceeds is not prohibited, and (ii) any applications for Trademarks filed in the United States Patent and Trademark Office on the basis of any Grantor’s intent to use such mark and for which a form evidencing use of the mark has not yet been filed with the United States Patent and Trademark Office, to the extent that granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application.

SECTION 3. Purpose. This Agreement has been executed and delivered by each Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office and the Canadian Intellectual Property Office. The security interest granted hereby has been granted to the Agent for the benefit of the Secured Parties in connection


with the Security Agreement and is expressly subject to the terms and conditions thereof. The Security Agreement (and all rights and remedies of the Secured Parties thereunder) shall remain in full force and effect in accordance with its terms.

SECTION 4. Acknowledgment. The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Secured Parties with respect to the security interest in the Collateral granted hereby are more fully set forth in the Credit Agreement and the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein, and that the rights and remedies of the Collateral Agent in respect of the Collateral may be restricted, as against the parties thereto, by the terms of the Intercreditor Agreements. In the event of any conflict between the terms of this Agreement and the terms of the Security Agreement, the terms of the Security Agreement shall govern.

SECTION 5. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

SECTION 6. Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.

SECTION 7. The Intercreditor Agreement. Notwithstanding anything herein to the contrary, the liens and security interests granted to the Collateral Agent for the ratable benefit of the Secured Parties pursuant to this Security Agreement or any other Loan Document and the exercise of any right or remedy by the Collateral Agent or any Secured Party hereunder are subject to the provisions of the Intercreditor Agreements. In the event of any conflict between the terms of the Intercreditor Agreements and this Security Agreement with respect to any right or remedy of the Secured Parties relating to the Collateral, the terms of the Intercreditor Agreements shall govern and control.

Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Collateral Agent (and the Secured Parties) shall be subject to the terms of the ABL Intercreditor Agreement, and until the Discharge of Term Obligations (as defined in the ABL Intercreditor Agreement), (i) no Grantor shall be required hereunder to take any action with respect to Term Priority Collateral that is inconsistent with such Grantor’s obligations under the Term Loan Documents and (ii) any obligation of any Grantor hereunder with respect to the delivery or control of any Term Priority Collateral, the notation of any lien on any certificate of title, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person, in each case, with respect to Term Priority Collateral, shall be deemed to be satisfied if the Grantor complies with the requirements of the similar provision of the Term Loan Credit Agreement. Until the Discharge of Term Obligations, the Collateral Agent may not require any Grantor to take any action with respect to the creation, perfection or priority of its security interest in any Term Priority Collateral, whether pursuant to the express terms hereof or


pursuant to the further assurances provisions hereof, unless the Term Loan Collateral Agent shall have required such Grantor to take similar action pursuant to the terms of the ABL Intercreditor Agreement, and delivery of any Term Priority Collateral to the Term Loan Collateral Agent pursuant to the Term Loan Documents and the ABL Intercreditor Agreement shall satisfy any delivery requirement hereunder. The Collateral Agent agrees that no amendment to the ABL Intercreditor Agreement that directly affects the rights, interests, liabilities or privileges of any Grantor hereunder shall be effective, solely as against such Grantor, unless consented to in writing by the Borrower.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

POSTMEDIA NETWORK INC.
By:   /s/ Steven Pasternak
Name:   Steven Pasternak
Title:   Senior Vice President and General Counsel


MORGAN STANLEY SENIOR FUNDING, INC.,

as Collateral Agent and Administrative Agent

By:   /s/ Lisa M. Hanson
Name:   Lisa M. Hanson
Title:   Authorized Signatory


Schedule 1

Canadian Trademark Registrations and Applications

 

Country

   Trademark    Application
Date
   Application
Number
   Registration
Date
   Registration
Number
   Owner

Canada

   BURNABY SUN    March 20, 2008    1388315    n/a    n/a    Postmedia Network Inc.

Canada

   CALGARY HERALD    June 22, 2001    1107134    October 9, 2003    592075    Postmedia Network Inc.

Canada

   CALGARY
RUSHHOUR DESIGN
   February 28, 2007    1337245    March 19, 2010    762027    Postmedia Network Inc.

Canada

   D & DESIGN    December 20, 2004    1241380    March 10, 2009    736039    Postmedia Network Inc.

Canada

   DOSE    December 20, 2004    1241384    March 10, 2009    736040    Postmedia Network Inc.

Canada

   DOSE & DESIGN    December 20, 2004    1241379    March 10, 2009    736038    Postmedia Network Inc.

Canada

   DRIVING    June 5, 2002    1142930    November 16,
2006
   677148    Postmedia Network Inc.

Canada

   DRIVING    September 27, 2002    1154138    October 17, 2006    675053    Postmedia Network Inc.

Canada

   DRIVING.CA    February 17, 2006    1290374    November 9, 2009    752522    Postmedia Network Inc.

Canada

   DRIVING.CA & CAR
DESIGN
   February 17, 2006    1290372    May 5, 2009    739484    Postmedia Network Inc.

Canada

   EDMONTON
JOURNAL
   May 17, 2000    1059218    July 9, 2003    584829    Postmedia Network Inc.

Canada

   EDMONTON
RUSHHOUR &
DESIGN
   February 28, 2007    1337246    March 19, 2010    762029    Postmedia Network Inc.

Canada

   FRASER VALLEY SUN    March 20, 2008    1388321    n/a    n/a    Postmedia Network Inc.

Canada

   HARBOUR CITY STAR    November 15, 1996    0828725    November 18,
1997
   485684    Postmedia Network Inc.

Canada

   HOUSEHUNTING. CA
& DESIGN
   August 30, 2007    1361838    March 9, 2009    735941    Postmedia Network Inc.

Canada

   INFOMART    March 9, 1976    0395445    December 2, 1977    224484    Postmedia Network Inc.

Canada

   INFOMART ONLINE    July 31, 1989    0637548    February 15, 1991    380026    Postmedia Network Inc.

Canada

   INFOMART ONLINE &
DESIGN
   June 12, 1989    0634064    February 15, 1991    379991    Postmedia Network Inc.

Canada

   MONTREAL
RUSHHOUR
   February 28, 2007    1337264    March 22, 2010    762135    Postmedia Network Inc.


Country

   Trademark   Application
Date
   Application
Number
   Registration
Date
   Registration
Number
   Owner

Canada

   NORTH SHORE SUN   March 20, 2008    1388316    n/a    n/a    Postmedia Network Inc.

Canada

   OTTAWA CITIZEN &
DESIGN
  July 31, 1997    0852493    February 26, 2002    558482    Postmedia Network Inc.

Canada

   OTTAWACITIZEN &
DESIGN (1)
  July 31, 1997    0852492    February 26, 2002    558481    Postmedia Network Inc.

Canada

   OTTAWA CITIZEN (ON
SCREEN DESIGN) &
DESIGN
  July 31, 1997    0852491    February 24, 2000    523809    Postmedia Network Inc.

Canada

   OTTAWA CITIZEN
ONLINE & DESIGN
  November 5, 1998    0895609    November 7, 2000    536871    Postmedia Network Inc.

Canada

   OTTAWA CITIZEN
ONLINE & DESIGN
  July 31, 1997    852490    October 18, 1999    518073    Postmedia Network Inc.

Canada

   OTTAWA CITIZEN
ONLINE & MAPLE
LEAF DESIGN
  November 5, 1998    0895610    October 5, 2000    534098    Postmedia Network Inc.

Canada

   OTTAWA RUSHHOUR
& DESIGN
  November 17, 2006    1324620    June 4, 2010    768823    Postmedia Network Inc.

Canada

   POSTMEDIA
NETWORK
  June 25, 2010    1486433    n/a    n/a    Postmedia Network Inc.

Canada

   RAISE A READER &
DESIGN
  April 1, 2003    1173213    July 2, 2004    613992    Postmedia Network Inc.

Canada

   RAISE A READER-
LIRE C’EST GRANDIR
& DESIGN
  April 1, 2003    1173214    June 30, 2004    613948    Postmedia Network Inc.

Canada

   RAISE-A-READER   February 1, 2002    1129819    November 12, 2003    594491    Postmedia Network Inc.

Canada

   RAISE-A-READER DAY   February 1, 2002    1129820    December 10, 2003    597055    Postmedia Network Inc.

Canada

   RAISE-A-READER
KIDS CLUB
  February 1, 2002    1129821    February 22, 05    633455    Postmedia Network Inc.

Canada

   REACHCANADA   March 17, 1999    1008866    February 1, 2001    540673    Postmedia Network Inc.

Canada

   REACHCANADA &
DESIGN
  August 8, 2006    1312082    March 19, 2008    709896    Postmedia Network Inc.


Country

   Trademark    Application
Date
   Application
Number
   Registration
Date
   Registration
Number
   Owner

Canada

   REGINA RUSHHOUR    February 28, 2007    1337257    March 22, 2010    762160    Postmedia Network Inc.

Canada

   RICHMOND SUN    March 20, 2008    1388314    n/a    n/a    Postmedia Network Inc.

Canada

   RUSH HOUR    February 21, 2005    1247997    April 2, 2009    737455    Postmedia Network Inc.

Canada

   SASKATOON
RUSHHOUR
   February 28, 2007    1337262    March 15, 2010    761678    Postmedia Network Inc.

Canada

   SURREY SUN    March 20, 2008    1388322    n/a    n/a    Postmedia Network Inc.

Canada

   THE DAILY COLONIST    August 7, 1979    442918    August 29, 1980    249881    Postmedia Network Inc.

Canada

   THE FLYER FORCE    May 18, 1984    0522228    January 3, 1986    310010    Postmedia Network Inc.

Canada

   THE NORTH ISLANDER    September 30, 2004    1232214    May 24, 2006    664934    Postmedia Network Inc.

Canada

   THE OTTAWA CITIZEN    April 2, 1991    6788978    June 19, 1992    399443    Postmedia Network Inc.

Canada

   THE PROVINCE    March 6, 1992    0700427    February 12, 1993    408219    Postmedia Network Inc.

Canada

   THE PROVINCE
DESIGN
   November 28, 1997    0862788    September 25, 1998    501236    Postmedia Network Inc.

Canada

   THE VANCOUVER SUN    March 6, 1992    700430    March 8, 1996    454949    Postmedia Network Inc.

Canada

   THE VANCOUVER SUN
& DESIGN
   August 22, 1997    854297    October 27, 1998    503006    Postmedia Network Inc.

Canada

   THE WINDSOR STAR &
DESIGN
   April 3, 1995    779381    November 22, 1996    466196    Postmedia Network Inc.

Canada

   TIMES COLONIST    March 11,1998    872040    February 5, 2002    557462    Postmedia Network Inc.

Canada

   VANCOUVER SUN    March 6, 1992    0700431    March 8, 1996    454950    Postmedia Network Inc.

Canada

   VICTORIA TIMES    August 7, 1979    0442919    November 14, 1980    252486    Postmedia Network Inc.

Canada

   WINDSOR RUSHHOUR    February 28, 2007    1337263    March 24, 2010    762543    Postmedia Network Inc.

Canada

   WORKING    February 9, 2009    1427244    April 19, 2010    764420    Postmedia Network Inc.

Canada

   WORKING    January 6, 2006    1285187    September 22, 2009    748293    Postmedia Network Inc.

Canada

   WORKING.COM    February 9, 2009    1427245    April 21, 2010    764669    Postmedia Network Inc.

Canada

   WORKING.COM    January 6, 2006    1285192    October 26, 2009    751166    Postmedia Network Inc.