EXHIBIT 10.7
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as
of September 23, 2002 is made by IRON AGE CORPORATION, a Delaware corporation,
and FALCON SHOE MFG. CO., a Maine corporation (each a "Debtor" and collectively,
jointly and severally, the "Debtors"), in favor of FOOTHILL CAPITAL CORPORATION,
a California corporation, as the arranger and administrative agent for the
Lenders ("Secured Party").
RECITALS
A. Iron Age Holdings Corporation, a Delaware corporation, the
Debtors and the Lender Group have entered into that certain Loan and Security
Agreement, of even date herewith (as amended, restated, modified, renewed or
extended from time to time, the "Loan Agreement"), pursuant to which the Lender
Group has agreed to make certain financial accommodations to the Debtors, and
pursuant to which the Debtors have granted to Secured Party for the benefit of
the Lender Group security interests in (among other things) all or substantially
all of the general intangibles of the Debtors.
B. Pursuant to the Loan Agreement and as one of the conditions
precedent to the obligations of the Secured Party and the Lenders under the Loan
Agreement, each of the Debtors have agreed to execute and deliver this Agreement
to the Secured Party for filing with the PTO and with any other relevant
recording systems in any domestic jurisdiction, and as further evidence of and
to effectuate the Secured Party's existing security interests in the trademarks
and other general intangibles described herein.
ASSIGNMENT
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Debtor hereby agrees in favor of
the Secured Party as follows:
1. Definitions; Interpretation.
(a) Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Debtor" and "Debtors" shall have the meaning ascribed to such
terms in the introductory paragraph of this Agreement.
"Event of Default" means any Event of Default under the Loan
Agreement.
"Lender Group" means, individually and collectively, each of
the Lenders and Secured Party.
"Lenders" means, individually and collectively, each of the
financial institutions identified on the signature pages of the Loan Agreement,
and any other Person made a party thereto in accordance with the provisions of
Section 14 thereof (together with their respective successors and assigns).
"Proceeds" means whatever is receivable or received from or
upon the sale, lease, license, collection, use, exchange or other disposition,
whether voluntary or involuntary, of any Trademark Collateral, including
"proceeds" as defined in UCC Section 9-102(a)(64), all insurance proceeds, and
all proceeds of Proceeds. Proceeds shall include (i) any and all accounts,
chattel paper, instruments, general intangibles, cash and other proceeds,
payable to or for the account of any Debtor, from time to time in respect of any
of the Trademark Collateral, (ii) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to or for the account of any Debtor from
time to time with respect to any of the Trademark Collateral, (iii) any and all
claims and payments (in any form whatsoever) made or due and payable to any
Debtor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Trademark
Collateral by any Person acting under color of governmental authority, and (iv)
any and all other amounts from time to time paid or payable under or in
connection with any of the Trademark Collateral or for or on account of any
damage or injury to or conversion of any Trademark Collateral by any Person.
"PTO" means the United States Patent and Trademark Office and
any successor thereto.
"Secured Obligations" shall mean, with respect to each Debtor,
all liabilities, obligations, or undertakings owing by such Debtor to the Lender
Group of any kind or description arising out of or outstanding under, advanced
or issued pursuant to, or evidenced by the Loan Agreement, any of the other Loan
Documents, or this Agreement, irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due,
voluntary or involuntary, whether now existing or hereafter arising, and
including all interest (including interest that accrues after the filing of a
case under the Bankruptcy Code) and any and all costs, fees (including attorneys
fees), and expenses which such Debtor is required to pay pursuant to any of the
foregoing, by law, or otherwise.
"Secured Party" shall have the meaning ascribed to such term
in the introductory paragraph of this Agreement.
"Trademark Collateral" has the meaning set forth in Section 2.
"Trademarks" has the meaning set forth in Section 2.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of New York.
"United States" and "U.S." each mean the United States of
America.
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(b) Terms Defined in UCC. Where applicable and except
as otherwise defined herein, terms used in this Agreement shall have the
meanings ascribed to them in the UCC.
(c) Interpretation. In this Agreement, except to the
extent the context otherwise requires:
(i) Any reference to a Section or a Schedule
is a reference to a section hereof, or a schedule hereto, respectively,
and to a subsection or a clause is, unless otherwise stated, a
reference to a subsection or a clause of the Section or subsection in
which the reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as a whole
and not merely to the specific Section, subsection, paragraph or clause
in which the respective word appears.
(iii) The meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms
defined.
(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words "without
limitation."
(v) References to agreements and other
contractual instruments shall be deemed to include all subsequent
amendments, restatements, supplements, refinancings, renewals,
extensions, and other modifications thereto and thereof.
(vi) References to statutes or regulations
are to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or
regulation referred to.
(vii) Any captions and headings are for
convenience of reference only and shall not affect the construction of
this Agreement.
(viii) Capitalized words not otherwise
defined herein shall have the respective meanings assigned to them in
the Loan Agreement.
(ix) In the event of a direct conflict
between the terms and provisions of this Agreement and the Loan
Agreement, it is the intention of the parties hereto that both such
documents shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of the Loan Agreement shall control and govern;
provided, however, that the inclusion herein of additional obligations
on the part of any Debtor and supplemental rights and remedies in favor
of the Secured Party for the benefit of the Lender Group (whether under
New York law or applicable federal law), in each case in respect of the
Trademark Collateral, shall not be deemed a conflict with the Loan
Agreement.
2. Security Interest.
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(a) Assignment and Grant of Security in respect of
the Secured Obligations. To secure the prompt payment and performance of the
Secured Obligations, each Debtor hereby grants, assigns, transfers and conveys
to the Secured Party for the benefit of the Lender Group a continuing, first
priority security interest in all of such Debtor's right, title and interest in
and to the following property, whether now existing or hereafter acquired or
arising and whether registered or unregistered (collectively, the "Trademark
Collateral"):
(i) all common law, state and federal
trademarks, service marks and trade names, corporate names, company
names, business names, fictitious business names, trade styles, trade
dress, logos, Internet domain names, other source or business
identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, together with and including
all licenses therefor held by such Debtor, and all registrations and
recordings thereof, and all applications filed or to be filed in
connection therewith, including registrations and applications in the
PTO, any State of the United States (but excluding each application to
register any trademark, service xxxx, or other xxxx xxxxx to the filing
under applicable law of a verified and accepted Statement of Use (or
the equivalent) for such trademark or service xxxx) and all extensions
or renewals thereof, including without limitation any of the foregoing
identified on Schedule A hereto and any and all variations thereof (as
such schedule may be amended, modified or supplemented from time to
time), and the right (but not the obligation) to register claims under
any state or federal trademark law or regulation and to apply for,
renew and extend any of the same, to xxx or bring opposition or
cancellation proceedings in the name of the applicable Debtor or in the
name of the Secured Party or in the name of the Secured Party for past,
present or future infringement or unconsented use thereof, and all
rights arising therefrom throughout the world (collectively, the
"Trademarks");
(ii) all claims, causes of action and rights
to xxx for past, present or future infringement or unconsented use of
any Trademarks and all rights arising therefrom and pertaining thereto;
(iii) all general intangibles (as defined in
the UCC) related to or arising out of any of the Trademarks and all the
goodwill of the Debtors' business symbolized by the Trademarks or
associated therewith; and
(iv) all Proceeds of any and all of the
foregoing.
(b) Continuing Security Interest. Each Debtor hereby
agrees that this Agreement shall create a continuing security interest in the
Trademark Collateral which shall remain in effect until terminated in accordance
with Section 18.
(c) Incorporation into Loan Agreement. This Agreement
shall be fully incorporated into the Loan Agreement and all understandings,
agreements and provisions contained in the Loan Agreement shall be fully
incorporated into this Agreement. Without limiting the foregoing, the Trademark
Collateral described in this Agreement shall constitute part of the Collateral
in the Loan Agreement.
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(d) Licenses. Anything in the Loan Agreement or this
Agreement to the contrary notwithstanding, each Debtor may grant non-exclusive
licenses of the Trademark Collateral (subject to the security interest of the
Secured Party therein) in the ordinary course of business consistent with past
practice.
3. Further Assurances; Appointment of the Secured Party as
Attorney-in-Fact. Each Debtor at its expense shall execute and deliver, or cause
to be executed and delivered, to the Secured Party for the benefit of the Lender
Group any and all documents and instruments, in form and substance reasonably
satisfactory to the Secured Party, and take any and all action, which the
Secured Party, in the exercise of its Permitted Discretion, may request from
time to time, to perfect and continue the perfection or to maintain the priority
of, or provide notice of the security interest in, or maintain, preserve and
protect the Trademark Collateral held by the Secured Party for the benefit of
the Lender Group and to accomplish the purposes of this Agreement. Each Debtor
hereby irrevocably constitutes and appoints the Secured Party (and any of the
Secured Party's officers or employees or agents designated by the Secured Party)
as such Debtor's true and lawful attorney-in-fact with full power and authority
(i) if any Debtor refuses to execute and deliver, or fails timely to execute and
deliver, any of the documents it is requested to execute and deliver by the
Secured Party in accordance with the foregoing, the Secured Party shall have the
right, in the name of such Debtor, or in the name of the Secured Party or
otherwise, without notice to or assent by such Debtor, to sign the name of such
Debtor on all or any of such documents or instruments and perform all other acts
that the Secured Party in the exercise of its Permitted Discretion deems
necessary or advisable in order to perfect or continue the perfection of,
maintain the priority or enforceability of or provide notice of the security
interest in the Trademark Collateral held by the Secured Party for the benefit
of the Lender Group, and (ii) to execute any and all other documents and
instruments, and to perform any and all acts and things for and on behalf of
such Debtor, which the Secured Party, in the exercise of its Permitted
Discretion, may deem necessary or advisable to perfect or continue the
perfection of, maintain the priority or enforceability of, provide notice of the
security interest in the Trademark Collateral held by the Secured Party or
maintain, preserve and protect the Trademark Collateral and to accomplish the
purposes of this Agreement, including (A) after the occurrence and during the
continuance of any Event of Default, to defend, settle, adjust or institute any
action, suit or proceeding with respect to the Trademark Collateral, (B) after
the occurrence and during the continuance of any Event of Default, to assert or
retain any rights under any license agreement for any of the Trademark
Collateral, including any rights of such Debtor arising under Section 365(n) of
the Bankruptcy Code, and (C) after the occurrence and during the continuance of
any Event of Default, to execute any and all applications, documents, papers and
instruments for the Secured Party to use the Trademark Collateral, to grant or
issue any exclusive or non-exclusive license with respect to any Trademark
Collateral, and to assign, convey or otherwise transfer title in or dispose of
the Trademark Collateral. The power of attorney set forth in this Section 3,
being coupled with an interest, is irrevocable so long as this Agreement shall
not have terminated in accordance with Section 18.
4. Representations and Warranties. Each Debtor jointly and
severally represents and warrants to each member of the Lender Group, as
follows:
(a) No Other Trademarks. Schedule A sets forth a true
and correct list of all of the existing Trademarks that are registered, or for
which any application for registration
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has been filed with the PTO or any corresponding or similar trademark office of
any other U.S. jurisdiction, and that are owned or held (whether pursuant to a
license or otherwise) and used by such Debtor.
(b) Trademarks Subsisting. Each of the Trademarks
listed on Schedule A is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and, to the best of such Debtor's knowledge,
each of the Trademarks set forth on Schedule A is valid and enforceable.
(c) Ownership of Trademark Collateral; No Violation.
(i) Such Debtor has rights in and good and defensible title to its interests in
the existing Trademark Collateral, (ii) with respect to the Trademark Collateral
shown on Schedule A hereto as owned by it, such Debtor is the sole and exclusive
owner thereof, free and clear of any Liens and rights of others (other than
Permitted Liens), including licenses, registered user agreements and covenants
by such Debtor not to xxx third persons, and (iii) with respect to any
Trademarks for which such Debtor is either a licensor or a licensee pursuant to
a license or licensing agreement regarding such Trademark, each such license or
licensing agreement is in full force and effect, such Debtor is not in default
of any of its obligations thereunder and, other than (A) the parties to such
licenses or licensing agreements, or (B) in the case of any non-exclusive
license or license agreement entered into by such Debtor or any such licensor
regarding such Trademark, the parties to any other such non-exclusive licenses
or license agreements entered into by such Debtor or any such licensor with any
other Person, no other Person has any rights in or to any of the Trademark
Collateral. To the best of each Debtor's knowledge, the past, present and
contemplated future use of the Trademark Collateral by such Debtor has not, does
not and will not infringe upon or violate any right, privilege or license
agreement of or with any other Person.
(d) No Infringement. To each Debtor's knowledge, (i)
no material infringement or unauthorized use presently is being made of any of
the Trademark Collateral by any Person, and (ii) the past, present, and
contemplated future use of the Trademark Collateral by such Debtor has not, does
not and will not infringe upon or violate any right, privilege, or license
agreement of or with any other Person.
(e) Powers. Each Debtor has the unqualified right,
power and authority to pledge and to grant to the Secured Party a security
interest in all of its Trademark Collateral pursuant to this Agreement, and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person except as
already obtained.
5. Covenants. Each Debtor covenants that so long as this
Agreement shall be in effect, each such Debtor shall:
(a) Compliance with Law. Comply, in all material
respects, with all applicable statutory and regulatory requirements in
connection with any and all of the Trademark Collateral and give such notice of
trademark, prosecute such material claims, and do all other acts and take all
other measures which, in such Debtor's reasonable business judgment, may be
necessary or desirable to preserve, protect and maintain such Trademark
Collateral and all of
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such Debtor's rights therein, including diligently prosecute any material
trademark application pending as of the date of this Agreement or thereafter;
(b) Compliance with Agreement. Comply with each of
the terms and provisions of this Agreement, the Loan Agreement, and the other
Loan Documents, and not enter into any agreement (for example, a license
agreement) which is inconsistent with the obligations of such Debtor under this
Agreement without the Secured Party's prior written consent; and
(c) Lien Protection. Not permit the inclusion in any
contract to which such Debtor becomes a party of any provision that could or
might impair or prevent the creation of security interests in favor of the
Secured Party, for the benefit of the Lender Group, in such Debtor's rights and
interest in the Trademark and the Trademark Collateral, and each such Debtor
will promptly give the Secured Party written notice of the occurrence of any
event that could reasonably be expected to have a material adverse effect on any
of the Trademark or the Trademark Collateral, including any petition under the
Bankruptcy Code filed by or against any licensor of any of the Trademarks for
which such Debtor is a licensee.
6. Future Rights. For so long as any of the Secured
Obligations shall remain outstanding, or, if earlier, until the Secured Party
shall have released or terminated, in whole but not in part, its interest in the
Trademark Collateral, if and when any Debtor shall obtain rights to any new
Trademarks, or any reissue, renewal or extension of any Trademarks, the
provisions of Section 2 shall automatically apply thereto and the applicable
Debtor shall give to the Secured Party prompt notice thereof. Each Debtor shall
do all things reasonably deemed necessary or advisable by the Secured Party in
the exercise of its Permitted Discretion to ensure the validity, perfection,
priority and enforceability of the security interests of the Secured Party in
such future acquired Trademark Collateral. If any Debtor refuses to execute and
deliver, or fails timely to execute and deliver, any of the documents it is
requested to execute and deliver by the Secured Party in connection herewith,
each Debtor hereby authorizes the Secured Party to modify, amend or supplement
the Schedules hereto and to re-execute this Agreement from time to time on such
Debtor's behalf and as its attorney-in-fact to include any future Trademarks
which are or become Trademark Collateral and to cause such re-executed Agreement
or such modified, amended or supplemented Schedules to be filed with the PTO.
7. Duties of the Secured Party. Notwithstanding any provision
contained in this Agreement, neither the Secured Party nor any other member of
the Lender Group shall have a duty to exercise any of the rights, privileges or
powers afforded to it, nor be responsible to the Debtors or any other Person for
any failure to do so or delay in doing so. Except for the accounting for moneys
actually received by the Secured Party or any other member of the Lender Group
hereunder or in connection herewith, neither the Secured Party nor any other
member of the Lender Group shall have a duty or liability to exercise or
preserve any rights, privileges or powers pertaining to the Trademark
Collateral.
8. Events of Default. The occurrence of any "Event of Default"
under the Loan Agreement shall constitute an Event of Default hereunder.
9. Remedies. From and after the occurrence and during the
continuation of an Event of Default, the Secured Party shall have all rights and
remedies available to it under the
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Loan Agreement, any other Loan Documents and applicable law (which rights and
remedies are cumulative) with respect to the security interests in any of the
Trademark Collateral or any other Collateral. Each Debtor hereby agrees that
such rights and remedies include the right of the Secured Party as a secured
party to sell or otherwise dispose of the Trademark Collateral after default,
pursuant to UCC Section 9-610. Each Debtor hereby agrees that the Secured Party
shall at all times have such royalty-free licenses, to the extent permitted by
law and the Loan Documents, for any Trademark Collateral that is reasonably
necessary to permit the exercise of any of the Secured Party's rights or
remedies upon or after the occurrence of (and during the continuance of) an
Event of Default with respect to (among other things) any tangible asset of such
Debtor in which the Secured Party has a security interest, including the Secured
Party's rights to sell inventory, tooling or packaging which is acquired by such
Debtor (or its successor, assignee or trustee in bankruptcy). In addition to and
without limiting any of the foregoing, upon the occurrence and during the
continuance of an Event of Default, the Secured Party shall have the right but
shall in no way be obligated to bring suit, or to take such other action as the
Secured Party deems necessary or advisable, in the name of any Debtor or the
Secured Party, to enforce or protect any of the Trademark Collateral, in which
event any such Debtor shall, at the request of the Secured Party, do any and all
lawful acts and execute any and all documents required by the Secured Party in
aid of such enforcement. To the extent that the Secured Party shall elect not to
bring suit to enforce such Trademark Collateral after the occurrence and during
the continuation of an Event of Default, the applicable Debtor agrees to use all
reasonable measures and its diligent efforts, whether by action, suit,
proceeding or otherwise, to prevent the infringement, misappropriation or
violations thereof by others and for that purpose agrees diligently to maintain
any action, suit or proceeding against any Person necessary to prevent such
infringement, misappropriation or violation.
10. Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by each of the Debtors and the
Secured Party and their respective successors and assigns.
11. Notices. All notices and other communications hereunder
shall be in writing and shall be mailed, sent or delivered in accordance with
the Loan Agreement.
12. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
except to the extent the validity or perfection of the security interests
hereunder in respect of any Trademark Collateral are governed by federal law, in
which case such choice of New York law shall not be deemed to deprive the
Secured Party of such rights and remedies as may be available under federal law.
13. Entire Agreement; Amendment. This Agreement and the Loan
Agreement, together with the Schedules hereto and thereto, contain the entire
agreement of the parties with respect to the subject matter hereof and supersede
all prior drafts and communications relating to such subject matter. Neither
this Agreement nor any provision hereof may be modified, amended or waived
except by the written agreement of the parties as provided in the Loan
Agreement. Notwithstanding the foregoing, the Secured Party may reexecute this
Agreement or modify, amend or supplement the Schedules hereto as provided in
Section 6 hereof.
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14. Severability. If one or more provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect in any
jurisdiction or with respect to any party, such invalidity, illegality or
unenforceability in such jurisdiction or with respect to such party shall, to
the fullest extent permitted by applicable law, not invalidate or render illegal
or unenforceable any such provision in any other jurisdiction or with respect to
any other party, or any other provisions of this Agreement.
15. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement.
16. Loan Agreement. Each Debtor acknowledges that the rights
and remedies of the Secured Party held for the benefit of the Lender Group with
respect to the security interest in the Trademark Collateral granted hereby are
more fully set forth in the Loan Agreement and all such rights and remedies are
cumulative.
17. No Inconsistent Requirements. Each Debtor acknowledges
that this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
each Debtor agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms.
18. Termination. Upon the payment and performance in full in
cash of the Secured Obligations, including the cash collateralization,
expiration, or cancellation of all Secured Obligations, if any, consisting of
letters of credit, and the full and final termination of any commitment to
extend any financial accommodations under the Loan Agreement, this Agreement
shall terminate, and the Secured Party shall execute and deliver such documents
and instruments and take such further action reasonably requested by the Debtors
and at the Debtors' expense, as shall be reasonably necessary to evidence
termination of the security interests granted by the Debtors to the Secured
Party for the benefit of the Lender Group.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
IRON AGE CORPORATION
a Delaware corporation
By: Xxxx X. Xxxxxx
Title: Authorized Signatory
FALCON SHOE MFG. CO.,
a Maine corporation
By: Xxxx X. Xxxxxx
Title: Authorized Signatory
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
By: Xxxx X. Xxxxxx
Title: Authorized Signatory
STATE OF Pennsylvania )
) ss
COUNTY OF Allegheny )
On September 23, 2002, before me, Rose Xxxx Xxxxxxx, Notary
Public, personally appeared Xxxx X. Xxxxxx, 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.
Rose Xxxx Xxxxxxx
-----------------
Signature
[SEAL]
STATE OF )
) ss
COUNTY OF )
On _________ __, ____, 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(ies) upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
Signature
[SEAL]
SCHEDULE A
to the Trademark Security Agreement
Trademarks of Iron Age Corporation
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Registration/ Registration/
Type Jurisdiction Xxxx Application Date Application No.
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Trademarks of Falcon Shoe Mfg. Co.
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Registration/ Registration/
Type Jurisdiction Xxxx Application Date Application No.
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