**Exhibit 10.8.35**

 

TRADEMARK SECURITY AGREEMENT

 

THIS TRADEMARK SECURITY AGREEMENT (this “Agreement”),dated as of February 14, 2008, is entered into by and between WESTAFFSUPPORT, INC., a California corporation (“Debtor”), having an office at298 North Wiget Lane, Walnut Creek, California 94598, and U.S. BANK NATIONALASSOCIATION, with an office at 633 West Fifth Street, 29th Floor, Los Angeles,California 90071, as Agent for the Lenders party to the Financing Agreementreferred to below (in such capacity, “Secured Party”), with reference tothe following facts:

 

RECITALS

 

A.            Debtor has adopted, used and is using, andis the owner of the entire right, title, and interest in and to the trademarks,trade names, terms, designs and applications therefor described in Schedule Aannexed hereto and made a part hereof;

 

B.            Secured Party and the Lenders have agreedto enter into certain financing arrangements with Westaff (USA), Inc. (“Borrower”)pursuant to a Financing Agreement of even date herewith by and among Borrower,Westaff, Inc., the Lenders party thereto (collectively, the “Lenders”),and Secured Party, as Agent (the “Financing Agreement”); and

 

 C.           Debtor has guaranteedthe obligations of Borrower under the Financing Agreement pursuant to aContinuing Guaranty of even date herewith made by Debtor and MediaWorldInternational in favor of Secured Party and the Lenders (the “Guaranty”)(the Financing Agreement and the Guaranty, together with this Agreement, andall other related documents, agreements, instruments, as the same may now existor may hereafter be amended or supplemented, are referred to hereincollectively as the “Loan Documents”).

 

NOW, THEREFORE, the parties hereto agree asfollows:

 

1.             SECURITY INTEREST

 

In order to induce Secured Party and the Lendersto enter into the Loan Documents and in consideration thereof, Debtor herebygrants to Secured Party, for the benefit of the Lenders, a security interestin:

 

(a)           all of Debtor’s nowexisting or hereafter acquired right, title, and interest in and to: all ofDebtor’s trademarks, trade names, trade styles and service marks; all printsand labels on which such trademarks, trade names, trade styles and servicemarks appear, have appeared or will appear, and all designs and generalintangibles of a like nature; all applications, registrations and recordingsrelating to the foregoing in the United States Patent and Trademark Office orin any similar office or agency of the United States, any State thereof,any political subdivision thereof or in any other countries, and all reissues,extensions and renewals thereof including those trademarks, terms, design andapplications described in Schedule A hereto (the “Trademarks”);

 

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(b)           the goodwill of thebusiness symbolized by each of the Trademarks, including, without limitation,all customer lists and other records relating to the distribution of productsor services bearing the Trademarks; and

 

(c)           any and all proceeds ofany of the foregoing, including, without limitation, any claims by Debtoragainst third parties for infringement of the Trademarks or of any licenseswith respect thereto (all of the foregoing are collectively referred to hereinas the “Collateral”).

 

2.             OBLIGATIONSSECURED

 

The security interests granted to SecuredParty in this Agreement shall secure the prompt and indefeasible payment andperformance of the “Obligations” as defined in the Financing Agreement (all theforegoing hereinafter referred to as the “Obligations”).

 

3.             WARRANTIES ANDCOVENANTS

 

Debtor hereby covenants, represents andwarrants that (all of such covenants, representations and warranties beingcontinuing in nature until the Obligations are Paid in Full (as defined in theFinancing Agreement)):

 

A.            All of the existingCollateral is valid and subsisting in full force and effect to Debtor’sknowledge, and Debtor owns sole, full, and clear title thereto, and has theright and power to grant the security interests granted hereunder.  Debtor will, at Debtor’s expense, perform allacts and execute all documents reasonably necessary to maintain the existenceof the Collateral as valid, subsisting and registered trademarks includingwithout limitation the filing of any renewal affidavits and applications.  The Collateral is not subject to any lien,security interest, claim or encumbrance (“Lien”), except the securityinterests granted hereunder, the licenses, if any, which are specificallydescribed in Schedule B hereto and Permitted Liens (as defined inthe Financing Agreement).

 

B.            Debtor will notassign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a securityinterest in or Lien upon, encumber, grant an exclusive or non-exclusive licenserelating thereto, except to Secured Party, or otherwise dispose of, any of theCollateral without the prior written consent of Secured Party, which will notbe unreasonably withheld, except for (i) non-exclusive licenses in theordinary course of Debtor’s business and (ii) exclusive registered useragreements or licenses limited in geographic scope granted to franchisees inthe ordinary course of Debtor’s business and in accordance with Section 10.24(c) ofthe Financing Agreement.

 

C.            Debtor will, at Debtor’sexpense, perform all acts and execute all documents reasonably requested at anytime by Secured Party to evidence, perfect, maintain, record, or enforce thesecurity interest in the Collateral granted hereunder or to otherwise furtherthe provisions of this Agreement.  Debtorhereby authorizes Secured Party to execute and file one or more financingstatements (or similar documents) with respect to the Collateral.  Debtor further authorizes Secured Party tohave this or any other similar security 

 

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agreement filed with theCommissioner of Patents and Trademarks or other appropriate federal, state orgovernment office.

 

D.            Debtor will,concurrently with the execution and delivery of this Agreement, execute anddeliver to Secured Party an original of a Power of Attorney in the form of Exhibit 1annexed hereto for the implementation of the assignment, sale or otherdisposition of the Collateral pursuant to Secured Party’s exercise of therights and remedies granted to Secured Party hereunder.  Secured Party agrees it will only exercisethe Power of Attorney upon the occurrence and during the continuation of anEvent of Default under (and as defined in) the Financing Agreement.

 

E.             Secured Party may, inits sole discretion, pay any amount or do any act which Debtor fails to pay ordo as required hereunder or as requested by Secured Party to maintain andpreserve the Collateral, defend, protect, record, amend or enforce theObligations, the Collateral, or the security interest granted hereunder,including, but not limited to, all filing or recording fees, court costs,collection charges and reasonable attorneys’ fees.  Debtor will be liable to Secured Party forany such payment, which payment shall be deemed a borrowing by Debtor fromSecured Party, and shall be payable on demand together with interest at theapplicable rate set forth in the Loan Documents and shall be part of theObligations secured hereby.

 

F.             As of the datehereof, Debtor does not have any Trademarks registered, or subject to pendingapplications, in the United States Patent and Trademark Office or any similaroffice or agency in the United States other than those described in Schedule Aannexed hereto.

 

G.            Debtor shall notifySecured Party in writing of the filing of any application for the registrationof a Trademark with the United States Patent and Trademark Office or anysimilar office or agency in the United States or any state therein withinthirty (30) days of such filing. Upon request of Secured Party, Debtor shall execute and deliver toSecured Party any and all assignments, agreements, instruments, documents, andsuch other papers as may be requested by Secured Party to evidence the securityinterests of Secured Party in or Trademark.

 

H.            Debtor has notabandoned any of the Trademarks material to the conduct of the business andDebtor will not do any act, nor omit to do any act, whereby such Trademarks maybecome abandoned, canceled, invalidated, unenforceable, avoided, or avoidableexcept where Debtor, in the good faith exercise of its business judgment, hasotherwise determined that such Trademark is not material to the business oroperations of Debtor.  Debtor shallnotify Secured Party immediately if Debtor knows or has reason to know of anyreason why any application, registration, or recording may become abandoned,canceled, invalidated, unenforceable, avoided, or avoidable.

 

I.              Debtor will renderany assistance, as Secured Party may determine is reasonably necessary, toSecured Party in any proceeding before the United States Patent and TrademarkOffice, any federal or state court, or any similar office or agency in theUnited States or any state therein or any other country to maintain suchapplication and registration of 

 

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the Trademarks as Debtor’sexclusive property and to protect Secured Party’s interest therein, including,without limitation, filing of renewals, affidavits of use, affidavits ofincontestability and opposition, interference, and cancellation proceedings.

 

J.             Debtor will promptlynotify Secured Party if Debtor (or any affiliate or subsidiary thereof) learnsof any use by any person of any other process or product which infringes uponany Trademark.  If reasonably requestedby Secured Party, Debtor, at Debtor’s expense, shall join with Secured Party inan infringement action as Secured Party, in Secured Party’s reasonablediscretion, may deem advisable for the protection of Secured Party’s interestin and to the Trademarks.

 

K.            Debtor assumes allresponsibility and liability arising from the use of the Trademarks by Debtor,and Debtor hereby indemnifies and holds Secured Party harmless from and againstany claim, suit, loss, damage, or expense (including reasonable attorneys’fees) arising out of any alleged defect in any product manufactured, promoted,or sold by Debtor (or any affiliate or subsidiary thereof) in connection withany Trademark or out of the manufacture, promotion, labeling, sale oradvertisement of any such product by Debtor (or any affiliate or subsidiarythereof) except for claims, suits, losses, damages or expenses to the extentresulting from the Agent’s gross negligence or willful misconduct.

 

4.             RIGHTS ANDREMEDIES

 

Upon the occurrence and during thecontinuance of an Event of Default and at any time thereafter, in addition toall other rights and remedies of Secured Party, whether provided underapplicable law, the Agreements or otherwise, and after expiration of any graceperiod, Secured Party shall have the following rights and remedies which may beexercised without notice to, or consent by, Debtor, except as such notice orconsent is expressly provided for hereunder:

 

A.            Secured Party may makeuse of any Trademarks for the sale of goods or rendering of services inconnection with enforcing any other security interest granted by Debtor toSecured Party.

 

B.            Secured Party maygrant such license or licenses relating to the Collateral for such term orterms, on such conditions, and in such manner as Secured Party shall in itssole discretion deem appropriate.  Suchlicense or licenses may be general, special, or otherwise and may be granted onan exclusive or non-exclusive basis throughout all or any part of the UnitedStates of America, its territories and possessions, and all foreign countries.

 

C.            Secured Party mayassign, sell, or otherwise dispose of the Collateral or any part thereof,either with or without special conditions or stipulations, except that SecuredParty agrees to provide Debtor with ten (10) days prior written notice ofany proposed disposition of the Collateral. Secured Party shall have the power to buy the Collateral or any partthereof, and Secured Party shall also have the power to execute assurances andperform all other acts which Secured Party may, in Secured Party’s solediscretion, deem appropriate or proper to complete such assignment, sale or disposition.  In any such event, Debtor shall be liable forany deficiency.

 

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D.            In addition to theforegoing, in order to implement the assignment, sale, or other disposition ofany of the Collateral pursuant to subparagraph 4C hereof, Secured Partymay at any time execute and deliver on behalf of Debtor, pursuant to theauthority granted in the Powers of Attorney described in subparagraph 3Ehereof, one or more instruments of assignment of the Trademarks (or anyapplication, registration, or recording relating thereto), in form suitable forfiling, recording or registration. Debtor agrees to pay Secured Party on demand all costs incurred in anysuch transfer of the Collateral, including, but not limited to, any taxes,fees, and reasonable attorneys’ fees.

 

E.             Secured Party mayapply the proceeds actually received from any such license, assignment, sale orother disposition of Collateral first to the reasonable costs and expensesthereof, including, without limitation, reasonable attorneys’ fees and alllegal, travel, and other expenses which may be incurred by Secured Party.  Thereafter, Secured Party may apply anyremaining proceeds to such of the Obligations as Secured Party may in its solediscretion determine.  Debtor shallremain liable to Secured Party for any expenses or obligations remaining unpaidafter the application of such proceeds, and Debtor will pay Secured Party ondemand any such unpaid amount, together with interest at the default rate setforth in the Loan Agreement.

 

F.             In the event that anysuch license, assignment, sale or disposition of the Collateral (or any partthereof) is made after the occurrence of an Event of Default, Debtor shallsupply to Secured Party or Secured Party’s designee Debtor’s knowledge andexpertise relating to the manufacture and sale of the products and servicesbearing the Trademarks and Debtor’s customer lists and other records relatingto the Trademarks and the distribution thereof.

 

Nothingcontained herein shall be construed as requiring Secured Party to take any suchaction at any time.  All of Secured Party’srights and remedies, whether provided under law, the Agreements, thisAgreement, or otherwise, shall be cumulative and none is exclusive.  Such rights and remedies may be enforcedalternatively, successively, or concurrently.

 

5.             MISCELLANEOUS

 

A.            Any failure or delayby Secured Party to require strict performance by Debtor of any of theprovisions, warranties, terms and conditions contained herein or in any otheragreement, document, or instrument, shall not affect Secured Party’s right todemand strict compliance and performance therewith, and any waiver of any Eventof Default shall not waive or affect any other Event of Default, whether prioror subsequent thereto, and whether of the same or of a different type.  None of the warranties, conditions,provisions, and terms contained herein or in any other agreement, document, orinstrument shall be deemed to have been waived by any act or knowledge of SecuredParty, its agents, officers, or employees, but only by an instrument inwriting, signed by an officer of Secured Party and directed to Debtor,specifying such waiver.

 

B.            All notices, requestsand demands to or upon the respective parties hereto shall be deemed to havebeen duly given or made: if by hand, immediately upon delivery; if by facsimile(fax), telex or telegram, immediately upon sending; if by any 

 

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overnight delivery service, oneday after dispatch; and if mailed by first class or certified mail, three (3) daysafter mailing.  All notices, requests anddemands are to be given or made to the respective parties at the followingaddresses (or to such other addresses as either party may designate by noticein accordance with the provisions of this paragraph):

 
| If to Debtor:        | WESTAFF  SUPPORT, INC.                          |
|----------------------|-------------------------------------------------|
|                 | 298 North  Wiget Lane                           |
|                 | Walnut  Creek, California 94598                 |
|                 | Attn: Chief  Financial Officer                  |
|                 |                                            |
| If to Secured Party: | U.S. BANK  NATIONAL ASSOCIATION,                |
|                 | as Agent                                        |
|                 | 633 West  Fifth Street, 29th Floor              |
|                 | Los Angeles,  California 90071                  |
|                 | Attn:  Westaff (USA), Inc. Account Officer |

 

C.            In the event that anyprovision hereof shall be deemed to be invalid by any court, such invalidityshall not affect the remainder of this Agreement.

 

D.            This Agreement shallbe binding upon and for the benefit of the parties hereto and their respectivelegal representatives, successors and assigns. No provision hereof shall be modified, altered or limited except by awritten instrument expressly referring to this Agreement signed by the party tobe charged thereby.

 

E.             The security interestgranted to Secured Party shall terminate and the Collateral will be reassignedto Debtor, at Debtor’s sole expense, upon termination of the Financing Agreementand Payment in Full (as defined in the Financing Agreement) to Secured Partyand the Lenders of all Obligations thereunder.

 

F.             THE VALIDITY,INTERPRETATION AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OFTHE UNITED STATES OF AMERICA AND THE LAWS OF THE STATE OF CALIFORNIA.

 

{Signature Pages Follow}

 

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IN WITNESS WHEREOF, Debtor and Secured Partyhave executed this Agreement as of the day and year first above written.

 
|   | DEBTOR:                                           |
|--------|---------------------------------------------------|
|   |                                              |
|   | WESTAFF SUPPORT, INC., a California 

corporation |
|   |                                              |
|   |                                              |
|   | By:                                               | /s/  Dawn M. Jaffray |
|   |                                              | Dawn  M. Jaffray |
|   |                                              | Senior  Vice President and Chief Financial  Officer |
|   |                                              |   |
|   |                                              |   |
|   | SECURED PARTY:                                    |
|   |                                              |
|   | U.S.BANK NATIONAL ASSOCIATION,                    |
|   | as Agent for the Lenders                          |
|   |                                              |
|   | ** **                                        |
|   | By:                                               | /s/  Susan V. Freed |
|   |                                              | Susan  V. Freed |
|   |                                              | Vice  President |

 

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