EXHIBIT 10.10
GRANT OF SECURITY INTEREST IN AND COLLATERAL
ASSIGNMENT OF TRADEMARKS AND LICENSES
THIS GRANT OF SECURITY INTEREST IN AND COLLATERAL ASSIGNMENT OF TRADEMARKS AND
LICENSES ("Assignment") made as of this 8th day of March, 1996 by United
Merchandising Corp., an California corporation, with its principal place of
business at 0000 Xxxx Xx Xxxxxxx Xxxxxxxxx, Xxxxxxx, XX 00000 ("Assignor"), and
The CTI Group/Business Credit, Inc., as Agent, a New York corporation, with its
offices at 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000 ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor and Assignee are parties to a certain Financing Agreement of
even date herewith ("Financing Agreement"), which Financing Agreement provides
(i) for the Assignee, as Agent for the Lenders, to a) make revolving loans and
b) assist the Assignor in obtaining letters of credit, all to or for the account
of Assignor and (ii) for the grant by Assignor to Assignee of a security
interest in and collateral assignment of certain of the Collateral, all as more
fully defined in the Financing Agreement;
NOW, THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged, Assignor agrees as follows:
1. Incorporation of Financing Agreement. The Financing Agreement and the
terms and provisions thereof are hereby incorporated into this Assignment
in their entirety by this reference. Terms not otherwise defined herein
shall have the meanings assigned to them in the Financing Agreement.
2. Grant of Security Interest. To secure the payment of the Obligations,
Assignor hereby grants to Assignee, as Agent for the Lenders, a security
interest, effective immediately,
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in all of Assignor's rights, title and interests in the United States in
and to all of the following described property, whether now owned or
hereafter acquired (the "Intellectual Property Collateral"):
(i) Trademarks, trademark registrations, tradenames and trademark
applications, including, without limitation, the trademarks and
applications listed on Schedule A, attached hereto and made a part
hereof, and renewals thereof, and all income, royalties, damages and
payments now and hereafter due and/or payable under all trademarks
and trademark applications, including, without limitation, damages
and payments for past or future infringements thereof (all of the
foregoing trademarks, trademark registrations, tradenames and
applications are sometimes hereinafter individually and/or
collectively referred to as the "Trademarks");
(ii) Any license agreement in which Assignor is or becomes licensed to
use a trademark and which license agreement is transferable, either
by its terms or by operation of law (the "Licensees"); and
(ii) The goodwill of Assignor's business connected with and symbolized by
the Trademarks.
3. Assignment of Licenses. In addition to all other rights granted to
Assignee under the Financing Agreement and this Assignment, Assignor
further assigns, transfers and sets over to Assignee as collateral any
right of Assignor under any license agreement with any other party and
which license agreement is transferable, either by its terms
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or by operation of law, whether Assignor is a licensor or licensee under
any such license agreement, and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter owned by Assignor and
now or hereafter covered by such license and agrees that it will not take
any action, or permit any action to be taken by others subject to its
control, including licensees (to the extent provided in the agreements
with such licensees), or fail to take any action, which would have a
material adverse effect on the validity or enforcement of the rights
transferred to Assignee under this Assignment. Assignor hereby covenants
that it will promptly notify Assignee if any Trademark shall at any time
hereafter become subject to any license agreement and that it will
promptly provide Assignee with full identification thereof and with such
further documentation as Assignee may reasonably request to accomplish or
assure the accomplishment of the purpose of this Section 4.
4. Condition of Assignment. The condition of this Assignment is such that
unless and until there occurs an Event of Default, Assignor has the right
to continue to use the Intellectual Property Collateral in the normal
course of business and to enjoy the benefits, royalties and profits
therefrom provided, however, that from and after the occurrence of an
Event of Default, such right will, upon the written exercise by Assignee
of the rights provided by this Assignment (which written exercise may be
in the form of a private or public sale in the manner provided by the
Uniform Commercial Code), be revoked and the right of Assignor to enjoy
the uses, benefits, royalties, and profits of said Intellectual Property
Collateral will wholly cease, whereupon Assignee shall be entitled to all
of Assignor's right, title and interest in and to the Intellectual
Property Collateral hereby assigned. The term of the assignments granted
herein shall extend until a) the expiration of each of the respective
Trademarks and Licenses assigned hereunder, or b) the Obligations have
been paid in full and
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the Financing Agreement has been terminated, whichever occurs first. This
Assignment will not operate to place upon Assignee any duty or
responsibility to maintain the Intellectual Property.
5. Events of Default. Any of the following constitutes an Event of Default
under this Assignment:
(i) Assignor fails to perform or observe any agreement, covenant, or
condition required under this Assignment and such failure is not
corrected to Assignee's reasonable satisfaction within twenty (20)
Business Days of notice to Assignor;
(ii) If any warranty or representation made by Borrower in this
Assignment shall be false or misleading in any material respect; or
(iii) The occurrence of an Event of Default under the Financing Agreement.
6. Remedies. Upon the Occurrence of an Event of Default, Assignee may, at its
option, at any tine:
(i) Terminate the rights retained by the Assignor, as specified in the
preceding Section 6;
(ii) Sell, assign, use or transfer any of the Trademarks or Licenses in
connection with the exercise of the rights contained in the
Financing Agreement; or
(iii) Exercise any of the rights and remedies granted to a secured party
under the Uniform Commercial Code.
7. Power of Attorney. Assignor hereby grants Assignee, as Agent for the
Lenders, a power of attorney coupled with an interest to execute any
documentation or take any action
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required to fulfill the terms, provisions and conditions of this
Assignment.
8. Notices. Assignor covenants and agrees that it will give Assignee written
notice, in the manner provided in the Financing Agreement of any of the
foregoing, but only to the extent that any such event is reasonably likely
to have a material adverse effect on the Company:
(i) any claim by a third party that the Assignor has infringed on the
rights of a third party;
(ii) any suspected infringement by a third party on the rights of the
Assignor; or
(iii) any application made by the Assignor to register Trademarks other
than those listed on Schedule A to this Assignment on the date of
its execution.
9. Further Assurances. Assignor will take any such action as Assignee may
reasonably require to further confirm or protect Assignee's rights in the
Trademarks and Licenses hereby assigned.
IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment as of
the 8th day of March, 1996.
UNITED MERCHANDISING CORP.
By /s/ [ILLEGIBLE]
-----------------------------
Title: President
/s/ [ILLEGIBLE] (seal)
-----------------------------
Secretary
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Xxxxxx and Accepted this
8th day of March, 1996
CTI GROUP/BUSINESS CREDIT, INC.
By /s/ [ILLEGIBLE]
--------------------------------
Title: Vice President
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SCHEDULE A
Mark Name Serial No. Filing Date Registration Registration Renewal Docket
No. Date Date
--------- ---------- ----------- ------------ ------------ -------- ------
Big 5 74/590746 10/24/94 1929798 10/24/95 10/24/05 209/098
Court 74/390426 5/12/93 1861866 11/8/94 5/12/04 203037
Casuals
Golden Bear 74/655806 4/4/95
74/655760
Rugged 74/655872 4/4/95 211/175
Exposure
Hot Voltage 74/655965 4/4/95 211/177
Sport 74/655962 211/176
Essentials
Pacifica 74/655805 4/4/95 211/178
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