EXHIBIT 10.7
TRADEMARK COLLATERAL AGREEMENT dated as of April 30, 1997,
among LANCO, INC., a Delaware corporation ("Lanco"), LERNCO,
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INC., a Delaware corporation ("Lernco"), LIMITED STORES, INC., a
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Delaware corporation ("Limited Stores"), XXXXXX STORES, INC., a
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Delaware corporation ("Xxxxxx Stores"), LANE XXXXXX, INC., a
Delaware corporation ("Lane Xxxxxx" and, together with Lanco,
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Lernco, Limited Stores and Xxxxxx Stores, the "Licensors"), M&P
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DISTRIBUTING CO., a Nevada corporation, and XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as security agent (in such capacity, the
"Security Agent") for the lenders (the "Lenders") party to the
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Credit Agreement dated as of April 30, 1997 (as the same may be
amended from time to time, the "Credit Agreement"), among
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BRYLANE, L.P., a Delaware limited partnership (the "Borrower"),
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the Lenders, XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as
administrative agent (the "Agent") and XXXXXXX XXXXX CAPITAL
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CORPORATION, as documentation agent (the "Documentation Agent").
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The Security Agent, the Lenders, the Agent, the Documentation
Agent and the Issuing Banks (as defined in the Credit Agreement)
are hereinafter called the "Secured Parties".
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Preliminary Statement
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The Licensors and M&P Distributing Co., which is the successor by
merger to Lane Xxxxxx Direct Holding, Inc., a Delaware corporation, which, in
turn, is the successor by merger to Lane Xxxxxx Direct, Inc. and Xxxxxx Direct
Holding, Inc., which, in turn, is the successor by merger to Xxxxxx Direct, Inc.
("M&P" or the "Licensee"), are parties to a Trademark License Agreement dated as
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of August 20, 1993 (as amended from time to time, and as specifically amended by
Amendment No. 1 to the Trademark License Agreement, dated as of December 9,
1996, the "License Agreement"). The rights of the Licensee under the License
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Agreement were assigned to the Borrower pursuant to the Transaction Agreement
dated as of July 13, 1993 (as amended from time to time, the "Transaction
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Agreement") pursuant to the execution by Borrower of an Agreement To Be Bound
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substantially in the form of Appendix II to the License Agreement. The Secured
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Parties have made and/or may make, pursuant to the Credit Agreement or
otherwise, one or more loans, advances and/or other financial accommodations to
the Borrower (the "Obligations"), to be guaranteed by subsidiaries of the
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Borrower and secured in whole or in part pursuant to one or more agreements,
instruments and other documents (as the same may be amended from time to time,
the "Security Documents") granting security interests in and liens on certain
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assets of the Borrower and its subsidiaries. The assets of the Borrower to be
assigned and pledged under the Security Documents will include the rights of the
Borrower under the License Agreement (the "Trademark Collateral"). The
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obligations of the Lenders to extend credit under the Credit Agreement are
conditioned upon, among other things, the execution and delivery by the parties
hereto of an agreement in the form hereof.
Accordingly, the parties hereto agree as follows:
1. Acknowledgment. (a) The Licensors and The Limited, Inc. ("The
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Limited") hereby acknowledge and consent to the assignment, pledge, transfer and
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grant to the Security Agent of a continuing security interest in, and a lien
upon, the Trademark Collateral in the manner and for the purposes provided in
the Security Documents. The Licensors and The Limited also acknowledge receipt
of copies of the Security Documents and, subject to the terms of this Agreement,
hereby consent to all of the terms and provisions of the Security Documents
relating to the Trademark Collateral and to the exercise by the Security Agent
of the rights, remedies, powers and privileges granted to the Security Agent
under the Security Documents relating to the Trademark Collateral in accordance
with the terms thereof as now or at any time hereafter in effect.
(b) The Licensors and The Limited agree that, in the event of a
foreclosure by the Security Agent of its security interest in the Trademark
Collateral (or an outright assignment by the Borrower in lieu of foreclosure)
(any of the foregoing events, a "Foreclosure Event"), the Security Agent or any
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third party that acquires rights in the Trademark Collateral shall become, and
shall have all the rights and interests of, the Licensee under the License
Agreement (a "Successor Licensee"), without any requirement for any consent or
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other action by any Licensor or The Limited; provided that the Security Agent or
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such third party shall execute an Agreement To Be Bound substantially in the
form of Appendix II to the License Agreement; and provided further that such
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Agreement To Be Bound shall not require the Security Agent or such third party
to assume,
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and the Security Agent or such third party shall not be bound by, any liability
or obligation in respect of events occurring prior to the Security Agent or such
third party becoming a Successor Licensee, including, without limitation, any
liability for a breach of the License Agreement by the Borrower occurring while
the Borrower was the Licensee.
2. Termination Provisions. (a) Except as otherwise provided in this
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Section 2, (i) the provisions of Section 6.1(a) of the License Agreement shall
not be affected by the granting by the Borrower to the Security Agent of a
security interest in the Trademark Collateral and (ii) the exercise by the
Security Agent of any right, remedy, power or privilege under the Security
Documents shall be subject to the provisions of Section 6.1(a) of the License
Agreement.
(b) Notwithstanding anything to the contrary set forth in the License
Agreement (and except as provided in Section 2(c) hereof), the original 20-year
term of the License Agreement and each License granted thereunder, as specified
in clause (i) of Section 6.1(a) of the License Agreement, shall not be affected
by any event specified in clause (ii), (iii) or (iv) of Section 6.1(a) of the
License Agreement, unless such event occurs prior to the occurrence of a
Foreclosure Event and without causing any Default or Event of Default (each as
defined in the Credit Agreement) under the Credit Agreement as such Credit
Agreement is now in effect.
(c) Notwithstanding paragraph (b) above, upon and after the
occurrence of a Foreclosure Event, the early termination provisions set forth in
clause (iii) of Section 6.1(a) of the License Agreement shall apply if the
Successor Licensee is or (by virtue of an acquisition, merger, consolidation or
other business combination or otherwise) becomes a person or entity which
competes with any retail or catalogue business conducted by The Limited or any
of its affiliates on the date hereof, determined as provided in the Trademark
Agreement.
(d) Notwithstanding anything to the contrary set forth in the License
Agreement (and except as otherwise provided in Section 2(e) hereof), The Limited
shall not exercise its right to terminate the License Agreement or any License
granted thereunder pursuant to clause (3) of Section 6.1(b) of the License
Agreement, unless the Obligations have been finally and indefeasibly paid in
full and a Foreclosure Event shall not have occurred.
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(e) Following the occurrence of a Foreclosure Event, the License
Agreement or any License granted thereunder may be terminated by The Limited in
the event of the occurrence with respect to any Successor Licensee of an event
of the type specified in clause (3) of Section 6.1(b) of the License Agreement.
(f) The Limited agrees that (i) it shall deliver to the Security
Agent a copy of any notice or other communication to the Borrower regarding any
breach or alleged breach by the Borrower of its obligations under the License
Agreement promptly after delivery of such notice to the Borrower, (ii) if after
the expiration of the 30-day period referred to in clause (2) of Section 6.1(b)
of the License Agreement, any breach by the Borrower remains uncured, The
Limited shall not exercise its right under clause (2) of Section 6.1(b) of the
License Agreement to terminate the License Agreement or any License granted
thereunder without (A) giving written notice to the Security Agent (a "Breach
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Notice") after the expiration of such 30-day period of the Borrower's failure
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to cure the breach within such period and The Limited's desire to terminate the
License Agreement if such breach is not cured and (B) giving the Security Agent
and the Lenders at least 60 days after the delivery of such Breach Notice to
effect a cure of the breach or to initiate a Foreclosure Event, (iii) if the
Security Agent or the Lenders initiate foreclosure proceedings in respect of a
Foreclosure Event within the 60-day period referred to in clause (ii) above and
give the Licensors notice of such proceedings, The Limited shall not exercise
its right under clause (2) of Section 6.1(b) of the License Agreement to
terminate the License Agreement or any License granted thereunder so long as
proceedings in respect of such Foreclosure Event are being diligently pursued to
the extent allowed by law and (iv) from and after the occurrence of any
Foreclosure Event, The Limited shall not exercise its right under clause (2) of
Section 6.1(b) of the License Agreement to terminate the License Agreement or
any License granted thereunder based on any breach arising prior to the
occurrence of such Foreclosure Event or as a result of such Foreclosure Event.
(g) Notwithstanding the provisions of Section 2(f) hereof, The
Limited shall be entitled to terminate the License Agreement or any License
granted thereunder pursuant to clause (2) of Section 6.1(b) of the License
Agreement in the event of a breach by any Successor Licensee of any of its
material obligations under the License Agreement arising after the occurrence of
a Foreclosure Event, if any such breach remains uncured 30
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days after written notice thereof to the Successor Licensee by The Limited.
3. Enforceability of Rights of the Licensee. By reason of the
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Security Documents, all of the rights of the Licensee to enforce the obligations
of the Licensors and The Limited under the License Agreement may be exercised by
the Security Agent directly against the Licensors or The Limited, as the case
may be, if an Event of Default (as defined in the Credit Agreement as such
Credit Agreement is now in effect) shall occur and be continuing.
4. Successors and Assigns. This Agreement shall be binding upon the
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successors and assigns of the Licensors and The Limited and shall inure to the
benefit of and be enforceable by the Secured Parties, the Security Agent and its
successors and assigns, including any Successor Licensee. This Agreement is for
the sole benefit of the parties hereto, their permitted assigns and the Secured
Parties, and nothing herein expressed or implied shall give or be construed to
give to the Borrower any legal or equitable rights hereunder.
5. Amendments; Modifications; Notices. So long as any Security
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Document remains in effect, neither The Limited nor any Licensor shall enter
into any amendment, modification or waiver in respect of the License Agreement
(other than such amendments, modifications and waivers that do not adversely
affect the interests of the Borrower or the Secured Parties) without the prior
written consent of the Security Agent. No amendment, modification or waiver of
any provision of this Agreement, nor consent to any departure by The Limited or
any Licensor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Security Agent, The Limited and the Licensors and
then such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
6. No Waiver; Cumulative Remedies. No failure on the part of the
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Security Agent to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy by the Security Agent
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All rights, powers and remedies of the Security Agent
hereunder are cumulative and are not exclusive of any other rights, powers and
remedies of the Security Agent provided by law.
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7. Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto on separate counterparts, each of which
when executed and delivered shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument.
8. Notices. All notices or other communications required or
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permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by telecopy or sent, postage prepaid, by registered, certified or
express mail or reputable overnight courier service and shall be deemed given
when so delivered by hand or telecopied, or if mailed, three days after mailing
(one business day in the case of express mail or overnight courier service), as
follows:
(i) if to any Licensor or The Limited,
The Limited, Inc.
Three Limited Parkway
Xxxxxxxx, Xxxx 00000
Attention: General Counsel
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Esq.; and
(ii) if to the Security Agent,
Xxxxxx Guaranty Trust Company of New York
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, III.
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9. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
10. Survival. The provisions hereof shall be irrevocable and remain
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in full force and effect until the Obligations have been finally and
indefeasibly paid in full and the Borrower has fully performed all of its
obligations to the Secured Parties under and in accordance with the terms of all
present and future agreements, instruments and documents evidencing the
Obligations and all present and future Security Documents (in each case
including any extensions, modifications and renewals thereof or substitutions
therefor at any time made), and until all obligations, if any, of the Secured
Parties to extend loans, advances, or financial accommodations to the Borrower
shall have been terminated; provided that if, prior to termination of this
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Agreement as provided above, a Foreclosure Event occurs, the provisions hereof
shall remain in full force and effect for the term of the License Agreement.
11. Miscellaneous. The Limited and the Licensors agree to make this
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Agreement known to any transferee of any Xxxx (as defined in the License
Agreement) and any person or entity which may have an interest or right in any
Xxxx. In the event of a transfer of any Xxxx, The Limited will cause the
transferee to agree to be bound by the terms of this Agreement and will notify
the Security Agent of such transfer. The Limited and the Licensors acknowledge
and agree that the provisions set forth in this Agreement are, and are intended
to be, an inducement and consideration to each Secured Party to make, or to
permit to remain outstanding, loans, advances and/or financial accommodations to
the Borrower, and each Secured Party shall be deemed conclusively to have relied
upon such provisions in making, or permitting to remain outstanding, such loans,
advances and/or financial accommodations, and each Secured Party is made an
obligee hereunder and may enforce directly the provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Trademark Collateral
Agreement to be executed and delivered by their respective officers thereunto
duly authorized as of the day and year first above written.
LANCO, INC.,
by
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Name:
Title:
LERNCO, INC.,
by
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Name:
Title:
LIMITED STORES, INC.,
by
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Name:
Title:
XXXXXX STORES, INC.,
by
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Name:
Title:
LANE XXXXXX, INC.,
by
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Name:
Title:
M&P DISTRIBUTING CO.,
by
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Name:
Title:
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XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Security
Agent,
by
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Name:
Title:
Acknowledged and agreed to as of April 30, 1997, as to those portions of this
Agreement granting rights to, or imposing obligations on, The Limited, Inc.:
THE LIMITED, INC.,
by
_____________________
Name:
Title:
