EXHIBIT 10.26
PATENT AND TRADEMARK SECURITY AGREEMENT
THIS PATENT AND TRADEMARK SECURITY AGREEMENT, dated January 24, 2003, is
made by RA BRANDS, L.L.C., a Delaware limited liability company ("Grantor"), in
favor of WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
with an office at 000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, in its capacity as administrative and collateral agent (together with its
successors in such capacities, the "Agent") for various financial institutions
("Lenders") from time to time parties to that certain Credit Agreement dated
January 24, 2003 (as the same may be amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), among Remington Arms
Company, Inc. ("Remington"), RA Factors, Inc. ("Factors", together with
Remington, the "Borrowers"), the Agent, Fleet Capital Corporation, in its
capacity as syndication agent, National City Commercial Finance, Inc., in its
capacity as documentation agent, and the Lenders.
RECITALS:
WHEREAS, Grantor owns certain Trademarks and Trademark Licenses listed on
Schedule I hereto;
WHEREAS, Grantor owns certain Patents and Patent Licenses listed on
Schedule II;
WHEREAS, Grantor has executed and delivered a Subsidiary Guaranty dated
the date hereof in favor of Agent (as at any time amended, the "Subsidiary
Guaranty"), pursuant to which Grantor has guaranteed the payment and performance
of all of the indebtedness, liabilities and other obligations of Borrowers under
the Credit Documents to Agent and Lenders;
WHEREAS, in order to secure Grantor's obligations under the Subsidiary
Guaranty, Grantor has executed and delivered a Subsidiary Security Agreement
between Grantor and Agent (as at any time amended, the "Security Agreement"),
pursuant to which, Grantor has granted to the Agent, for its benefit and the
ratable benefit of the Lenders, a security interest in all right, title and
interest of Grantor in, to and under the Collateral (as defined in the Security
Agreement), including the property listed on the attached Schedules I and II,
together with any renewal or extension thereof, and all Proceeds thereof, to
secure the payment of the Obligations (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligations of the Lenders to
make Revolver Loans and provide other financial accommodations to the Borrowers
under the Credit Agreement that Grantor shall have executed and delivered this
Agreement to the Agent for its benefit and the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the Agent
and the Lenders to enter into the Credit Agreement and to induce the Lenders to
make Revolver Loans and
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provide other financial accommodations to the Borrowers thereunder, Grantor
hereby agrees with the Agent, for its benefit and the ratable benefit of the
Lenders, as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, capitalized terms defined in the
Credit Agreement are used herein as defined therein. The following terms shall
have the following meanings:
"Agreement": This Patent and Trademark Security Agreement, as the
same may be amended, supplemented, waived or otherwise modified from time
to time.
"Collateral": as defined in Section 2 of this Agreement.
"General Intangibles": as defined in Section 9-102 of the UCC.
"Obligations": as defined in the Security Agreement.
"Patent License": all United States written license agreements to
which Grantor is a party with any other Person in connection with any of
the Patents or such other Person's patents, whether Grantor is a licensor
or a licensee under any such license agreement, including the license
agreements listed on Schedule II attached hereto and made a part hereof,
subject, in each case, to the terms of such license agreements, and the
right to prepare for sale, sell and advertise for sale, all Inventory (as
defined in the Security Agreement) now or hereafter covered by such
licenses.
"Patents": all United States patents, patent applications and
patentable inventions, including all patents and patent applications
identified in Schedule II attached hereto and made a part hereof, and
including (a) all inventions and improvements described and claimed
therein, and patentable inventions, (b) the right to xxx or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (c) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including payments under all licenses entered into in connection
therewith, and damages and payments for past or future infringements
thereof), and (d) all rights corresponding thereto in the United States
and all reissues, divisions, continuations, continuations-in-part,
substitutes, renewals, and extensions thereof, all improvements thereon,
and all other rights of any kind whatsoever of Grantor accruing thereunder
or pertaining thereto (Patents and Patent Licenses being, collectively,
the "Patent Collateral").
"Permitted Liens": Liens permitted pursuant to Section 10.2.5 of the
Credit Agreement or as otherwise expressly permitted to exist under any of
the other Credit Documents.
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"Trademark License": all United States written license agreements to
which Grantor is a party with any other Person in connection with any of
the Trademarks or such other Person's names or trademarks, whether Grantor
is a licensor or a licensee under any such license agreement, including
the license agreements listed on Schedule I attached hereto and made a
part hereof, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory (as defined in the Security Agreement) now or
hereafter covered by such licenses.
"Trademarks": all United States trademarks, service marks, trade
names, trade dress or other indicia of trade origin, trademark and service
xxxx registrations, and applications for trademark or service xxxx
registrations (except for "intent to use" applications for trademark or
service xxxx registrations filed pursuant to Section 1(b) of the Xxxxxx
Act, unless and until an Amendment to Allege Use or a Statement of Use
under Sections 1(c) and 1(d) of said Act has been filed), and any renewals
thereof, including each registration and application identified in
Schedule I attached hereto and made a part hereof, and including (a) the
right to xxx or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (b) all income, royalties,
damages and other payments now and hereafter due or payable with respect
thereto (including payments under all licenses entered into in connection
therewith, and damages and payments for past or future infringements
thereof), and (c) all rights corresponding thereto in the United States
and all other rights of any kind whatsoever of Grantor accruing thereunder
or pertaining thereto, together in each case with the goodwill of the
business connected with the use of, and symbolized by, each such
trademark, service xxxx, trade name, trade dress or other indicia of trade
origin (Trademarks and Trademark Licenses being, collectively, the
"Trademark Collateral").
"UCC": the Uniform Commercial Code (or any successor statute) as
adopted and in force in the State of New York or, when the laws of any
other state govern the method or manner of the perfection or enforcement
of any security interest in any of the Collateral, the Uniform Commercial
Code (or any successor statute) of such state.
(b) Certain Matters of Construction: The terms "herein," "hereof"
and "hereunder" and other words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders. All references to statutes and related
regulations shall include any amendments of same and any successor
statutes and regulations; any of the Credit Documents shall include any
and all amendment or modifications thereto and any and all restatements,
extensions or renewals thereof; to any Person shall mean and include the
successors and permitted assigns of such Person; to "including" and
"include" shall be understood to mean "including, without limitation." A
Default or an Event of Default shall be
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deemed to exist at all times during the period commencing on the date that
such Default or Event of Default occurs to the date on which such Default
or Event of Default is waived in writing pursuant to this Agreement or, in
the case of a Default, is cured within any period of cure expressly
provided in this Agreement or the applicable Credit Document; and an Event
of Default shall "continue" or be "continuing" until such Event of Default
has been waived in writing by Agent. Any Lien referred to in this
Agreement or any of the other Credit Documents as having been created in
favor of Agent, any agreement entered into by Agent pursuant to this
Agreement or any of the other Credit Documents, any payment made by or to
or funds received by Agent pursuant to or as contemplated by any of the
Credit Documents, or any other act taken or omitted to be taken by Agent
shall, unless otherwise expressly provided, be created, entered into, made
or received, or taken or omitted for its benefit and the benefit or
account of the Lenders.
2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations Grantor hereby assigns, pledges
and grants, subject to existing licenses to use Patents or Trademarks granted by
Grantor in the ordinary course of business, to the Agent, a security interest in
and Lien upon all of the following property now owned or at any time hereafter
acquired by Grantor or in which Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"):
(i) all Trademarks;
(ii) all Trademark Licenses;
(iii) all Patents;
(iv) all Patent Licenses;
(v) all General Intangibles connected with the use of or
symbolized by the Trademarks and Patents; and
(vi) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing;
Notwithstanding anything to the contrary set forth above, the types or items of
Collateral described shall not include any rights or interests in any General
Intangibles, Patent License or Trademark License, as such, if under the terms of
such General Intangibles, Patent License or Trademark License, or Applicable Law
with respect thereto, the valid grant of a security interest or Lien therein to
Agent is prohibited and such prohibition has not been or is not waived or the
consent of the other party to such Patent License or Trademark License or
General Intangible has not been or is not otherwise obtained or under Applicable
Law such prohibition cannot be waived, provided, that, the foregoing exclusion
shall in
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no way be construed (a) to apply if any such prohibition is unenforceable under
Sections 9-406 or 9-408 of the UCC or other Applicable Law or (b) so as to
limit, impair or otherwise affect Agent's unconditional continuing security
interests in and Liens upon any rights or interests of Grantor in or to monies
due or to become due under any such Patent License or Trademark License.
3. Grantor Remains Liable; Limitations on Agent's and Lenders'
Obligations. Anything herein to the contrary notwithstanding, (a) Grantor shall
remain liable under the Patent Licenses and Trademark Licenses to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Agent of any of the rights hereunder shall not release Grantor from any of its
duties or obligations under the Patent Licenses and Trademark Licenses, and (c)
neither the Agent nor any Lender shall have any obligation or liability under
the Patent Licenses and Trademark Licenses by reason of this Agreement, nor
shall the Agent or any Lender be obligated to perform any of the obligations or
duties of Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
4. Representations and Warranties. Grantor hereby represents and
warrants as to itself and the Collateral as follows:
(a) Title; No Other Liens. Except for Permitted Liens, Grantor is
(or, in the case of after-acquired Collateral, will be) the sole, legal
and beneficial owner of the entire right, title and interest in and to the
Trademarks set forth on Schedule I hereto and the Patents set forth in
Schedule II hereto free and clear of any and all Liens. No security
agreement, financing statement or other public notice similar in effect
with respect to all or any part of the Collateral that has been authorized
or executed by Grantor is on file or of record in any public office
(including the United States Patent and Trademark Office), except such as
may have been filed in favor of the Agent, pursuant to this Agreement or
any other Credit Document or which are permitted pursuant to the Credit
Documents.
(b) Perfected First Priority Liens.
(i) This Agreement is effective to create, as collateral
security for the Obligations, valid and enforceable Liens on the
Collateral in favor of the Agent, except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditor's rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(ii) Except with regard to Liens (if any) on Specified
Assets, upon the completion of the Filings, the Liens created
pursuant to this Agreement will constitute valid Liens on and
perfected security interests in the Collateral in favor of the Agent
and will be prior to all other Liens of all other Persons
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(other than Permitted Liens), and enforceable as such as against all
other Persons other than Ordinary Course Buyers, and except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law)
or by an implied covenant of good faith and fair dealing. As used in
this Section 4(b)(ii), the following terms shall have the following
meanings:
"Filings": the filing or recording of the Financing
Statements, this Patent and Trademark Security Agreement with
the U.S. Patent and Trademark Office, and any filings after
the Closing Date in any jurisdiction as may be necessary under
any Applicable Law.
"Financing Statements": the financing statements
prepared by the Agent naming Grantor as debtor and the Agent
as secured party filed on or about the Closing Date in the
jurisdictions as may be necessary under Applicable Law.
"Ordinary Course Buyers": with respect to goods only,
buyers in the ordinary course of business to the extent
provided in Section 9-320 and 9-321 of the UCC as in effect
from time to time in the relevant jurisdiction, (ii) with
respect to General Intangibles only, licenses in the ordinary
course of business to the extent provided in Section 9-321 of
the UCC, and (iii) any other Person who is entitled to take
free of the Lien pursuant to the UCC or other applicable law.
"Specified Assets": Collateral for which the perfection
of Liens thereon requires filings in or other actions under
the laws of jurisdictions outside the United States of
America, any State, territory or dependency thereof or the
District of Columbia.
(c) Consents. No consent of any party (other than Grantor) to any
Patent License or Trademark License constituting Collateral is required,
or purports to be required, to be obtained by or on behalf of Grantor in
connection with the execution, delivery and performance of this Agreement
that has not been obtained. Each Patent License and Trademark License
constituting Collateral is in full force and effect and constitutes a
valid and legally enforceable obligation of Grantor and (to the knowledge
of Grantor) each other party thereto except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditor's rights
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generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law) and except to the extent the
failure of any such Patent License or Trademark License constituting
Collateral to be in full force and effect or valid or legally enforceable
could not be reasonably expected, in the aggregate, to have a Material
Adverse Effect on the value of the Collateral. Except as set forth on
Schedules I and II hereto, no consent or authorization of, filing with or
other act by or in respect of any Governmental Authority is required in
connection with the execution, delivery, performance, validity or
enforceability of any of the Patent Licenses or Trademark Licenses
constituting Collateral by any party thereto other than those which have
been duly obtained, made or performed and are in full force and effect and
those the failure of which to make or obtain could not be reasonably
expected, in the aggregate, to have a Material Adverse Effect on the value
of the Collateral. Except as set forth on Schedules I and II hereto,
neither Grantor nor (to the knowledge of Grantor) any other party to any
Patent License or Trademark License constituting Collateral is in default
in the performance or observance of any of the terms thereof, except for
such defaults as could not reasonably be expected, in the aggregate, to
have a Material Adverse Effect on the value of the Collateral. The right,
title and interest of Grantor in, to and under each Patent License and
Trademark License constituting Collateral are not subject to any defense,
offset, counterclaim or claim which could be reasonably expected, either
individually or in the aggregate, to have a Material Adverse Effect on the
value of the Collateral.
(d) Schedules I and II are Complete; All Filings Have Been Made.
Set forth in Schedules I and II is a complete and accurate list of the
Trademarks and Patents owned by Grantor as of the date hereof. Grantor has
made all necessary filings and recordations to protect and maintain its
interest in the Trademarks and Patents set forth in Schedules I and II,
including all necessary filings and recordings, and payments of all
maintenance fees, in the United States Patent and Trademark Office to the
extent such Trademarks and Patents are material to Grantor's business. Set
forth in Schedules I and II is a complete and accurate list of all of the
material Trademark Licenses and material Patent Licenses owned by Grantor
as of the date hereof.
(e) The Trademarks and Trademark Licenses are Subsisting and Not
Adjudged Invalid. As of the date hereof, each trademark registration and
trademark application of Grantor set forth in Schedule I is subsisting as
of the date hereof and has not been adjudged invalid, unregistrable or
unenforceable, in whole or in part, and, to the best of Grantor's
knowledge, is valid, registrable and enforceable. As of the date hereof,
each of the Trademark Licenses set forth in Schedule I is validly
subsisting and has not been adjudged invalid or unenforceable, in whole or
in part, and, to the best of Grantor's knowledge, is valid and
enforceable. As of the date hereof, Grantor has notified the Agent in
writing of all uses of any item of Trademark Collateral material to
Grantor's business of which Grantor is aware which could reasonably be
expected to lead to such item becoming invalid or unenforceable, including
unauthorized uses by third parties and uses which were not supported by
the goodwill of the business connected with such Collateral.
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(f) The Patent and Patent Licenses are Subsisting and Not Adjudged
Invalid. As of the date hereof, each patent and patent application of
Grantor set forth in Schedule II is subsisting and has not been adjudged
invalid, unpatentable or unenforceable, in whole or in part, and, to the
best of Grantor's knowledge, is valid, patentable and enforceable. As of
the date hereof, each of the Patent Licenses set forth in Schedule II is
validly subsisting and has not been adjudged invalid or unenforceable, in
whole or in part, and, to the best of Grantor's knowledge, is valid and
enforceable. As of the date hereof, Grantor has notified the Agent in
writing of all uses of any item of Patent Collateral material to Grantor's
business of which Grantor is aware which could reasonably be expected to
lead to such item becoming invalid or unenforceable.
(g) No Previous Assignments or Releases. As of the date hereof,
Grantor has not made a previous assignment, sale, transfer or agreement
constituting a present or future assignment, sale, transfer or encumbrance
of any of the Collateral, except with respect to exclusive licenses
granted in the ordinary course of business or as permitted by this
Agreement or the Credit Documents. As of the date hereof, Grantor has not
granted any license, shop right, release, covenant not to xxx, or
non-assertion assurance to any Person with respect to any part of the
Collateral except in the ordinary course of business.
(h) Proper Statutory Notice. Grantor has marked its products with
the trademark registration symbol (R), the numbers of all appropriate
patents, the common law trademark symbol J, or the designation "patent
pending," as the case may be, to the extent that it is reasonably and
commercially practicable.
(i) No Knowledge of Claims Likely to Arise. Except for the
Trademark Licenses and Patent Licenses listed in Schedules I and II
hereto, Grantor has no knowledge of the existence of any right or any
claim (other than as provided by this Agreement or the Credit Documents)
that is likely to be made under or against any item of Collateral
contained on Schedules I and II which would have a Material Adverse
Effect.
(j) No Knowledge of Existing or Threatened Claims. No claim has
been made and is continuing or, to the best of Grantor's knowledge,
threatened that the use by Grantor of any item of Collateral is invalid or
unenforceable or that the use by Grantor of any Collateral does or may
violate the rights of any Person, which would have a Material Adverse
Effect. To the best of Grantor's knowledge, there is currently no
infringement or unauthorized use of any item of Collateral contained on
Schedules I and II which would have a Material Adverse Effect.
5. Covenants. Grantor covenants and agrees with the Agent and the
Lenders and, with respect to Section 5(a), the Agent covenants and agrees with
Grantor that, from and after the date of this Agreement until the payment in
full of the Obligations (except for contingent obligations of any
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Obligor under indemnifications that survive termination of the Revolver
Commitments) and the termination of all the Revolver Commitments:
(a) Further Documentation; Pledge of Instruments and Chattel
Paper. At any time and from time to time, upon the written request of the
Agent or Grantor, as the case may be, and at the sole expense of Grantor,
Grantor or the Agent, as the case may be, will promptly and duly execute
and deliver such further instruments and documents and take such further
action as the Agent or Grantor may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the
rights and powers herein granted, including the filing of any financing or
continuation statements under the UCC in effect in any jurisdiction with
respect to the Liens created hereby. Grantor also hereby authorizes the
Agent to prepare and file any such financing or continuation statement
without the signature of Grantor to the extent permitted by Applicable
Law. The Agent agrees to notify Grantor and Grantor agrees to notify the
Agent of any financing or continuation statement filed by it pursuant to
this Section 5(a), provided that any failure to give any such notice shall
not affect the validity or effectiveness of any such filing.
(b) Indemnification and Expenses. Grantor agrees to pay, and to
save harmless and defend the Agent and the Lenders from, any and all
liabilities and reasonable costs and expenses (including reasonable legal
fees and expenses) (i) with respect to, or resulting from, any delay by
Grantor in complying with any requirement of Applicable Law with respect
to any of the Collateral, or (ii) in connection with any of the
transactions contemplated by this Agreement, provided that such indemnity
shall not, as to the Agent or any Lender, be available to the extent that
such liabilities, costs and expenses resulted from the gross negligence or
willful misconduct of the Agent or any Lender. In any suit, proceeding or
action brought by the Agent or any Lender under any of the Collateral for
any sum owing thereunder, or to enforce any of the Collateral, Grantor
will save, indemnify and keep harmless and defend the Agent and such
Lender from and against all expense, loss or damage suffered by reason of
any defense or counterclaim raised in any such suit, proceeding or action.
(c) Maintenance of Records. (i) Grantor will keep and maintain at
its own cost and expense reasonably satisfactory and complete records of
the Collateral, and shall xxxx such records to evidence this Agreement and
the Liens and the security interests created hereby. For the Agent's and
the Lenders' further security, the Agent shall have a security interest in
all of Grantor's books and records pertaining to the Collateral, and
Grantor shall permit the Agent or its representatives to review such books
and records upon reasonable advance notice during normal business hours at
the location where such books and records are kept and at the reasonable
request of the Agent.
(d) Right of Inspection. Upon reasonable advance notice to Grantor
and at reasonable intervals, or at any time and from time to time after
the occurrence and during the continuance of an Event of Default, the
Agent and the Lenders and their respective
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representatives (i) shall have the right during normal business hours to
visit Grantor's plants and facilities which manufacture, inspect or store
products sold under any of the Patents or the Trademarks and to inspect
the products and quality control records relating thereto, and (ii) shall
have reasonable access during normal business hours to all the books,
correspondence and records of Grantor, and the Agent and the Lenders and
their respective representatives may examine the same, and to the extent
reasonable take extracts therefrom and make photocopies thereof, and
Grantor agrees to render to the Agent and the Lenders, at Grantor's
reasonable cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto.
(e) Compliance with Laws, etc. Grantor will comply in all material
respects with all requirements of Applicable Law with respect to the
Collateral or any part thereof, except to the extent that the failure to
so comply could not be reasonably expected to have a Material Adverse
Effect in the aggregate on the Agent's or the Lenders' rights hereunder,
the priority of their Liens on the Collateral or the value of the
Collateral.
(f) Further Identification of Collateral. Grantor will furnish to
the Agent and the Lenders from time to time such statements and schedules
further identifying and describing the Collateral, and such other reports
in connection with the Collateral, as the Agent may reasonably request,
all in reasonable detail.
(g) Security Interest in Any Newly Acquired Collateral. Grantor
agrees that, should it obtain an ownership interest in any Trademark,
Patent, Trademark License or Patent License, which is not now a part of
the Collateral, (i) the provisions of Section 2 shall automatically apply
thereto, (ii) any such Trademark, Patent, Trademark License and Patent
License shall automatically become part of the Collateral, and (iii) with
respect to any ownership interest in any Trademark, Patent, Trademark
License or Patent License that Grantor should obtain which Grantor
reasonably deems is material to its business, it shall give notice thereof
to the Agent and the Lenders in writing, in reasonable detail, at their
respective addresses set forth in the Credit Agreement within 45 days
after the end of the calendar quarter in which such ownership interest is
obtained. Grantor authorizes the Agent to modify this Agreement by
amending Schedules I and II (and will cooperate reasonably with the Agent
in effecting any such amendment) to include on Schedule I any Trademark
and Trademark License and on Schedule II any Patent or Patent License of
which it receives notice under this Section.
(h) Maintenance of the Trademark Collateral. Grantor agrees to
take all necessary steps, including in the United States Patent and
Trademark Office or in any court, to (i) maintain each trademark
registration and each Trademark License identified on Schedule I hereto,
and (ii) pursue each trademark application now or hereafter identified in
Schedule I hereto, including the filing of responses to office actions
issued by the United States Patent and Trademark Office, the filing of
applications for renewal, the filing of affidavits under Sections 8 and 15
of the United States Trademark Act, and the participation
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in opposition, cancellation, infringement and misappropriation
proceedings, except, in each case in which Grantor has reasonably
determined that any of the foregoing is not of material economic value to
it. Grantor agrees to take corresponding steps with respect to each new or
acquired trademark registration, trademark application or any rights
obtained under any Trademark License, in each case, which it is now or
later becomes entitled, except in each case in which Grantor has
reasonably determined that any of the foregoing is not of material
economic value to it. Any expenses incurred in connection with such
activities shall be borne by Grantor. In furtherance of Grantor's
agreement to maintain the trademark registrations, Grantor agrees to
maintain the quality of the products associated with the Trademark
Collateral at a level consistent with the quality at the time of this
Agreement, and upon the request of Agent, will provide Agent with
quarterly certificates to that effect, executed by an officer of Grantor.
(i) Maintenance of the Patent Collateral. Grantor agrees to take
all necessary steps, including in the United States Patent and Trademark
Office or in any court, to (i) maintain each patent and each Patent
License identified on Schedule II hereto, and (ii) pursue each patent
application, now or hereafter identified in Schedule II hereto, including
the filing of divisional, continuation, continuation-in-part and
substitute applications, the filing of applications for reissue, renewal
or extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, infringement and misappropriation
proceedings, except, in each case in which Grantor has reasonably
determined that any of the foregoing is not of material economic value to
it. Grantor agrees to take corresponding steps with respect to each new or
acquired patent, patent application, or any rights obtained under any
Patent License, in each case, which it is now or later becomes entitled,
except in each case in which Grantor has reasonably determined that any of
the foregoing is not of material economic value to it. Any expenses
incurred in connection with such activities shall be borne by Grantor.
(j) Grantor Shall Not Abandon any Collateral. Grantor shall not
abandon any trademark registration, patent or any pending trademark or
patent application, without the written consent of the Agent, unless
Grantor shall have previously determined that such use or the pursuit or
maintenance of such trademark registration, patent or pending trademark or
patent application is not of material economic value to it, in which case,
Grantor will, at least annually, give notice of any such abandonment to
the Agent and the Lenders in writing, in reasonable detail, at their
respective addresses set forth in the Credit Agreement.
(k) Infringement of Any Collateral. In the event that Grantor
becomes aware that any item of the Collateral which Grantor has reasonably
determined to be material to its business is infringed or misappropriated
by a third party, Grantor shall promptly notify the Agent and the Lenders
promptly and in writing, in reasonable detail, at their respective
addresses set forth in the Credit Agreement, and shall take such actions
as Grantor or the Agent deems reasonably appropriate under the
circumstances to protect such Collateral, including suing for infringement
or misappropriation and for an injunction against such
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infringement or misappropriation. Any expense incurred in connection with
such activities shall be borne by Grantor. Grantor will advise the Agent
and the Lenders promptly and in writing, in reasonable detail, at their
respective addresses set forth in the Credit Agreement, of any adverse
determination or the institution of any proceeding (including the
institution of any proceeding in the United States Patent and Trademark
Office or any court) regarding any item of the Collateral which has a
Material Adverse Effect.
(l) Use of Statutory Notice. Grantor shall xxxx its products with
the trademark registration symbol (R), the numbers of all appropriate
patents, the common law trademark symbol J, or the designation "patent
pending," as the case may be, to the extent that it is reasonably and
commercially practicable.
(m) Limitation on Liens on Collateral. Grantor will not create,
incur or permit to exist, will defend the Collateral against, and will
take such other action as is reasonably necessary to remove, any Lien or
material adverse claim on or to any of the Collateral, other than
exclusive licenses granted in the Ordinary Course of Business and the
Liens created by this Agreement and other than as permitted pursuant to
the Credit Documents, and will defend the right, title and interest of the
Agent and the Lenders in and to any of the Collateral against the claims
and demands of all Persons whomsoever.
(n) Limitations on Dispositions of Collateral. Without the prior
written consent of the Agent, Grantor will not sell, assign, transfer,
exchange or otherwise dispose of, or grant any option with respect to, the
Collateral, or attempt, offer or contract to do so, except with respect to
exclusive licenses in the Ordinary Course of Business or as permitted by
this Agreement or the Credit Documents.
(o) Notices. Grantor will advise the Agent and the Lenders
promptly, in reasonable detail, at their respective addresses set forth in
the Credit Agreement, (i) of any Lien (other than Permitted Liens) on, or
material adverse claim asserted against any of the Collateral and (ii) of
the occurrence of any other event which could reasonably be expected in
the aggregate to have a Material Adverse Effect on the aggregate value of
the Collateral or the Liens created hereunder.
6. Agent's Appointment as Attorney-in-Fact.
(a) Powers. Grantor hereby irrevocably constitutes and appoints
the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in
the name of Grantor or in its own name, from time to time in the Agent's
discretion, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, Grantor hereby gives the Agent the power and
right, on behalf of Grantor,
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without notice to or assent by Grantor, to do the following at any time
when any Event of Default shall have occurred and be continuing, and to
the extent permitted by Applicable Law:
(i) to execute and deliver any and all agreements,
instruments, documents, and papers as the Agent may reasonably
request to evidence the Agent's security interest in any of the
Collateral;
(ii) in the name of Grantor or its own name, or otherwise, to
take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys
due under any General Intangible constituting Collateral or with
respect to any other Collateral and to file any claim or to take any
other action or institute any proceeding in any court of law or
equity or otherwise deemed appropriate by the Agent for the purpose
of collecting any and all such moneys due under any such General
Intangible or with respect to any such other Collateral whenever
payable;
(iii) to pay or discharge Liens placed on the Collateral,
other than Permitted Liens; and
(iv) (A) to direct any party liable for any payment with
respect to any of the Collateral to make payment of any and all
moneys due or to become due thereunder directly to the Agent or as
the Agent shall direct; (B) to ask for, or demand, collect, receive
payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising
out of any of the Collateral; (C) to sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the
Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce
any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against Grantor with respect to
any of the Collateral; (F) to settle, compromise or adjust any suit,
action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the
Agent may deem appropriate; (G) subject to any pre-existing rights
or licenses, to assign any Patent or Trademark (along with the
goodwill of the business to which any such Patent or Trademark
pertains), for such term or terms, on such conditions, and in such
manner, as the Agent shall in its sole discretion determine; and (H)
generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for
all purposes, and to do, at the Agent's option and Grantor's
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expense, at any time, or from time to time, all acts and things
which the Agent deems necessary to protect, preserve or realize upon
the Collateral and the Agent's Liens thereon and to effect the
intent of this Agreement, all as fully and effectively as Grantor
might do. Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of
attorney is a power coupled with an interest and shall be
irrevocable until payment in full of the Obligations (except for
contingent obligations of any Obligor under indemnifications that
survive termination of the Revolver Commitments) and the termination
of all the Revolver Commitments.
(b) Other Powers. Grantor also authorizes the Agent, from time to
time if an Event of Default shall have occurred and be continuing, to
execute, in connection with any sale provided for in Section 10 hereof,
any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) No Duty on the Part of Agent or Lenders. The powers conferred
on the Agent and the Lenders hereunder are solely to protect the Agent's
and the Lenders' interests in the Collateral and shall not impose any duty
upon the Agent or any Lender to exercise any such powers. The Agent and
the Lenders shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor
any of their officers, directors, employees or agents shall be responsible
to Grantor for any act or failure to act hereunder, except for their own
gross negligence or willful misconduct.
7. Performance by Agent of Grantor's Obligations. If Grantor fails to
perform or comply with any of its agreements contained herein and the Agent, as
provided for by the terms of this Agreement, shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the reasonable
expenses of the Agent incurred in connection with such performance or
compliance, together with interest thereon at the Default Rate shall be payable
by Grantor to the Agent on demand and shall constitute Obligations secured
hereby.
8. Proceeds. It is agreed that if an Event of Default shall occur and
be continuing, (a) all Proceeds of any Collateral received by Grantor consisting
of cash, checks and other near-cash items shall be held by Grantor in trust for
the Agent and the Lenders, segregated from other funds of Grantor, and at the
request of the Agent shall, forthwith upon receipt by Grantor, be turned over to
the Agent in the exact form received by Grantor (duly indorsed by Grantor to the
Agent, if required by the Agent), and (b) any and all such Proceeds received by
the Agent (whether from Grantor or otherwise) may, in the sole discretion of the
Agent, be held by the Agent, as collateral security for the Obligations (whether
matured or unmatured), and then or at any time thereafter may be applied by the
Agent against, the Obligations then due and owing. Any balance of such Proceeds
remaining after the payment in full of the Obligations (except for contingent
obligations of any Obligor under indemnifications that survive termination of
the Revolver Commitments) and the termination of the Revolver Commitments, shall
be paid over to Grantor or to whomsoever may be lawfully entitled to receive the
same.
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9. Events of Default. It is understood and agreed that an event of
default shall be deemed to have occurred under this Agreement, and Agent shall
be entitled to take such actions as are elsewhere provided herein, in the event
that an Event of Default under and (as defined in) the Credit Agreement or any
of the other Credit Documents shall have occurred.
10. Remedies. If an Event of Default shall occur and be continuing, the
Agent may (and upon written instructions to do so from the Required Lenders,
shall) exercise any and all rights and remedies of a secured party under the
UCC, together with every right and remedy available to Agent under any other
Applicable Law, and, to the extent permitted by Applicable Law, all other rights
and remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations. Without limiting
the generality of the foregoing, the Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may (and upon written instructions to do so from the Required
Lenders, shall) in such circumstances, to the extent permitted by Applicable
Law, forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), whether on Grantor's premises
or elsewhere, but subject to any pre-existing rights or licenses, in one or more
parcels at public or private sale or sales, at any exchange, broker's board or
office of the Agent or any Lender or elsewhere upon such terms and conditions as
it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The Agent
or any Lender shall have the right, to the extent permitted by Applicable Law,
upon any such sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in Grantor, which right or
equity is hereby waived or released. Grantor further agrees, at the Agent's
request, upon the occurrence and during the continuance of an Event of Default,
to assemble the Collateral and make it available to the Agent at places which
the Agent shall reasonably select, whether at Grantor's premises or elsewhere.
Alternatively, Agent may peaceably by its own means or with judicial assistance
enter Grantor's premises and take possession of the Collateral or dispose of the
Collateral on Grantor's premises without resistance or interference by Grantor.
In the event of any sale, assignment, or other disposition of any of the
Collateral, the goodwill of the business connected with and symbolized by any
Trademark Collateral subject to such disposition shall be included, and Grantor
shall supply to the Agent or its designee Grantor's know-how and expertise
relating to the Collateral subject to such disposition, and Grantor's notebooks,
studies, reports, records, documents and things embodying the same or relating
to the inventions, processes or ideas covered by, and to the manufacture of any
products under or in connection with, the Collateral subject to such
disposition, and Grantor's customer's lists, studies and surveys and other
records and documents relating to the distribution, marketing, advertising and
sale of products relating to the Collateral subject to such disposition. The
Agent shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
15
of the Agent and the Lenders hereunder, including reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations then due
and owing, and only after such application and after the payment by the Agent of
any other amount required by any provision of Applicable Law, need the Agent
account for the surplus, if any, to Grantor. To the extent permitted by
Applicable Law, Grantor waives all claims, damages and demands it may acquire
against the Agent or any Lender arising out of the repossession, retention or
sale of the Collateral, other than any such claims, damages and demands that may
arise from the gross negligence or willful misconduct of any of them. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the then outstanding Obligations, including the
reasonable fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
11. Limitation on Duties Regarding Preservation of Collateral. The
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Agent deals
with similar property for its own account. Neither the Agent nor any Lender, nor
any of their respective directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Grantor or any other
Person.
12. Waivers. In addition to the other waivers contained herein and in
any other Credit Document, Grantor hereby expressly waives, to the extent
permitted by Applicable Law: demand, protest, notice of protest, notice of
default or dishonor, notice of payments and nonpayments, or of any default,
release, compromise, settlement, extension or renewal of all commercial paper,
instruments or guaranties at any time held by Agent or any of the Lenders on
which Grantor may in any way be liable; notice or hearing in connection with,
and the requirement to post a bond as a condition to, the issuance of an
immediate writ of possession with respect to any of the Collateral; any
requirement that the Agent or any of the Lenders protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against any Obligor or any other Person or any Collateral, including any
rights any Obligor may otherwise have under the New York General Obligations
Law; and notice of any action taken by Agent unless expressly required by this
Agreement or any other Credit Document or by Applicable Law.
13. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are powers coupled with an
interest and are irrevocable until payment in full of the Obligations (except
for contingent obligations of any Obligor under indemnifications that survive
termination of the Revolver Commitments) and the termination of the Revolver
Commitments.
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14. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
16. No Waiver; Cumulative Remedies. Neither the Agent nor any Lender
shall by any act (except by a written instrument pursuant to Section 17 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Agent or any Lender of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Agent or such Lender would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
17. Amendments in Writing; No Waiver; Cumulative Remedies; Successors
and Assigns. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by Grantor and the Agent. This Agreement shall be binding upon the
successors and assigns of Grantor and shall inure to the benefit of the Agent
and the Lenders and their respective successors and assigns, except that Grantor
may not assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Agent.
18. Notices. All notices, requests and demands to or upon the respective
parties hereto shall be made in accordance with Section 15.9 of the Credit
Agreement, and if to Grantor shall be sent to:
RA Brands, L.L.C.
c/o Remington Arms Company, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Mr.Xxxx Xxxxxx, VP, Chief Financial Officer
Telecopy No.: (000) 000-0000
With a copy to:
17
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
19. Authority of Agent. Grantor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as among the Agent and the
Lenders, be governed by the Credit Documents and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and Grantor, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and Grantor shall not be under any obligation to make any inquiry
respecting such authority.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW); PROVIDED, HOWEVER, THAT IF ANY COLLATERAL SHALL BE
LOCATED IN ANY JURISDICTION OTHER THAN NEW YORK, THE LAWS OF SUCH JURISDICTION
SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN
UPON COLLATERAL AND THE ENFORCEMENT OF AGENT'S OTHER REMEDIES OF COLLATERAL TO
THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT
WITH THE LAWS OF THE STATE OF NEW YORK. NOTWITHSTANDING THE FOREGOING PROVISION
FOR THE NOTICE AND SALE OF COLLATERAL UNDER THE LAW OF THE SITUS, IT IS THE
PARTIES' INTENTION THAT NEW YORK LAW CONTROL THE OBLIGATIONS OF GRANTOR UNDER
THE CREDIT DOCUMENTS AND THE ENFORCEMENT OF THE SAME.
21. Release of Collateral and Termination.
(a) At such time as the payment in full of the Obligations (except
for contingent obligations of any Obligor under indemnifications that
survive termination of the Revolver
18
Commitments) and the termination of all the Revolver Commitments shall
have occurred, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Agent and Grantor hereunder
shall terminate, all without delivery of any instrument or performance of
any act by any party, and all rights to the Collateral shall revert to
Grantor. Upon request of Grantor following any such termination, the Agent
shall deliver (at the sole cost and expense of Grantor) to Grantor any
Collateral held by the Agent hereunder, and execute and deliver (at the
sole cost and expense of Grantor) to Grantor such documents as Grantor
shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by Grantor in a transaction permitted by the Credit
Agreement, then the Agent shall execute and deliver to Grantor (at the
sole cost and expense of Grantor) all releases or other documents
reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral.
22. Incorporation of Provisions of Security Agreement. Grantor hereby
acknowledges and affirms that the rights and remedies of the Agent with respect
to the security interest in the Collateral made and granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. Nothing in this
Agreement shall defer or impair the attachment or perfection of any security
interest in any collateral covered by the Security Agreement which would attach
or be perfected pursuant to the terms thereof without action by Grantor or any
other Person.
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IN WITNESS WHEREOF, Grantor has caused this Agreement to be duly executed
and delivered as of the date first above written.
RA BRANDS, L.L.C.
By /s/ Xxxxxx Xxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxx
--------------------
Title: President
--------------------
20
ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent
By /s/ Xxxxx X. X'Xxxxxx
-------------------------
Name: Xxxxx X. X'Xxxxxx
--------------------
Title: Director
--------------------
21
