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EXHIBIT 10.31
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement") is made as of
April 3, 1998 by and between The Delicious Frookie Company, Inc., a Delaware
corporation ("Buyer"), and Xxxxxxx Foods, L.L.C., a Delaware limited liability
company ("Seller").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement of even
date herewith by and between Buyer and Seller (as the same may from time to time
be amended, restated, modified or supplemented, the "Purchase Agreement"),
Seller has sold to Buyer substantially all of the assets of Seller in
consideration for, among other things, a certain Promissory Note of even date
herewith made in favor of the Seller (as the same may from time to time be
amended, restated, modified or supplemented, the "Purchase Note");
WHEREAS, Seller has required Buyer to execute and deliver a certain
Security Agreement of even date herewith (as the same may from time to time be
amended, restated, modified or supplemented, the "Security Agreement") as
security for the Purchase Note; and
WHEREAS, Seller has required Buyer to execute and deliver this
Agreement (i) in order to secure the prompt and complete payment, observance and
performance of all of the obligations under the Purchase Note and (ii) as a
condition precedent to the consummation of the transactions contemplated by the
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Buyer agrees as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, each capitalized term used
herein shall have the meaning ascribed to it in the Security Agreement unless
otherwise defined herein.
(b) The words "hereof," "herein" and "hereunder" and words of like
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section references are to
this Agreement unless otherwise specified.
(c) All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and vice versa, unless otherwise
specified.
(d) An "Event of Default" shall mean any "Event of Default" under
and as defined in the Security Agreement, including, without limitation, (i) if
any payment of principal or interest under the Purchase Note shall remain unpaid
after the same shall have become due and payable;
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(ii) Buyer admits in writing in any proceeding its inability to pay its debts
generally as they become due, or makes a general assignment for the benefit of
creditors; (iii) any proceeding is instituted by Buyer seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property; (iv) there shall be commenced against Buyer any case,
proceeding or other action of a nature referred to in clause (iii) which results
in the entry of an order for relief or any adjudication that it is bankrupt or
insolvent or which remains undismissed, undischarged, unstayed or unbounded for
period of at least 60 days, or (v) Buyer takes any corporate action to authorize
any of the actions set forth in this paragraph.
2. Incorporation of the Security Agreement. The Security Agreement
is hereby incorporated herein in its entirety by this reference thereto.
3. Security Interest in Trademarks. To secure the complete and
timely payment, performance and satisfaction of all of the obligations under the
Purchase Note and secured under the Security Agreement, including the principal,
interest, and indebtedness evidenced by the Purchase Note plus all fees, costs
and expenses (including, without limitation, all court costs and reasonable
attorneys' fees, costs and expenses) paid or incurred by Seller in endeavoring
to collect all or any part of the obligations evidenced by the Purchase Note and
taking any action with respect to the collateral securing the Purchase Note (the
"Obligations"), Buyer hereby grants to Seller a security interest in the
following property and interests in property of Buyer, now owned or existing and
hereafter acquired or arising:
(i) trademarks, registered trademarks, trademark applications,
service marks, registered service marks and service xxxx applications,
including, without limitation, the trademarks, registered trademarks,
trademark applications, service marks, registered service marks and
service xxxx applications listed on Schedule A attached hereto and made a
part hereof, and (a) all renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable under and with
respect thereto, including, without limitation, payments under all
licenses entered into in connection therewith and damages and payments for
past or future infringements or dilutions thereof, (c) the right to xxx
for past, present and future infringements and dilutions thereof, (d) the
goodwill of Buyer's business symbolized by the foregoing and connected
therewith, and (e) all of Buyer's rights corresponding thereto throughout
the world (all of the foregoing trademarks, registered trademarks and
trademark registration applications, and service marks, registered service
marks and service xxxx registration applications, together with the items
described in clauses (a)-(e) in this paragraph 4(i), are sometimes
hereinafter individually and/or collectively referred to as the
"Trademarks")); and
(ii) rights under or interest in any trademark license agreements or
service
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xxxx license agreements with any other party, whether Buyer is a licensee
or licensor under any such license agreement, together with any goodwill
connected with and symbolized by any such trademark license agreements or
service xxxx license agreements (all of the foregoing are hereinafter
referred to collectively as the "Licenses").
4. New Trademarks and Licenses. Buyer represents and warrants that
(a) the Trademarks listed on Schedule A include all of the trademarks,
registered trademarks, trademark registration applications, service marks,
registered service marks and service registration xxxx applications now owned by
Buyer and (b) no liens, claims or security interests in such Trademarks and
Licenses have been granted by Buyer to any person or entity other than Seller,
Republic Acceptance Corporation, and American Pacific Financial Corporation. If,
prior to the termination of this Agreement, Buyer shall (i) obtain rights to any
new trademarks, registered trademarks, trademark applications, service marks,
registered service marks or service xxxx applications, (ii) become entitled to
the benefit of any trademarks, registered trademarks, trademark applications,
trademark licenses, trademark license renewals, service marks, registered
service marks, service xxxx applications, service xxxx licenses or service xxxx
license renewals whether as licensee or licensor, or (iii) enter into any new
trademark license agreement or service xxxx license agreement, the provisions of
paragraph 3 above shall automatically apply thereto. Buyer hereby authorizes
Seller to modify this Agreement unilaterally (i) by amending Schedule A to
include any future trademarks, registered trademarks, trademark applications,
service marks, registered service marks and service xxxx applications, which are
Trademarks under paragraph 3 above or under this paragraph, and (ii) by filing,
in addition to and not in substitution for this Agreement, a duplicate original
of this Agreement containing on Schedule A thereto such future trademarks,
registered trademarks, trademark applications, service marks, registered service
marks and service xxxx applications.
5. Royalties. Buyer hereby agrees that the use by Seller of the
Trademarks and Licenses as authorized hereunder in connection with Seller's
exercise of its rights and remedies under paragraph 13 or pursuant to the
Security Agreement shall be coextensive with Buyer's rights thereunder and with
respect thereto and without any liability for royalties or other related charges
to Buyer from Seller.
6. Further Assignments and Security Interests. Buyer shall not sell
or assign its respective interests in, or grant any exclusive license under the
Trademarks without the prior written consent of Seller.
7. Nature and Continuation of Seller's Security Interest. This
Agreement is made for collateral security purposes only. This Agreement shall
create a continuing security interest in the Trademarks and Licenses and shall
terminate only when the obligations under the Purchase Note have been paid in
full in cash.
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8. No Duties. Seller shall not have any duty with respect to the
Trademarks and Licenses. Without limiting the generality of the foregoing,
Seller shall not be under any obligation to take any steps necessary to preserve
rights in the Trademarks or Licenses against any other parties, but Seller may
do so at its option from and after the occurrence of an Event of Default, and
all expenses incurred in connection therewith shall be for the sole account of
Buyer and shall be added to the obligations under the Purchase Note secured
hereby.
9. Seller's Right to Xxx. From and after the occurrence of an Event
of Default, Seller shall have the right, but shall not be obligated, to bring
suit in its own name to enforce the Trademarks and the Licenses and, if Seller
shall commence any such suit, Buyer shall, at the request of Seller, do any and
all lawful acts and execute any and all proper documents required by Seller in
aid of such enforcement. Buyer shall, upon demand, promptly reimburse Seller for
all costs and expenses incurred by Seller in the exercise of its rights under
this paragraph (including, without limitation, reasonable fees and expenses of
attorneys and paralegals for Seller).
10. Waivers. Seller's failure, at any time or times hereafter, to
require strict performance by Buyer of any provision of this Agreement shall not
waive, affect or diminish any right of Seller thereafter to demand strict
compliance and performance therewith nor shall any course of dealing between
Buyer and Seller have such effect. No single or partial exercise of any right
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right. None of the undertakings, agreements, warranties, covenants
and representations of Buyer contained in this Agreement shall be deemed to have
been suspended or waived by Seller unless such suspension or waiver is in
writing signed by an officer of Seller and directed to Buyer specifying such
suspension or waiver.
11. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but the provisions of this Agreement are severable, and if any
clause or provision shall be held invalid and unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part hereof, in such jurisdiction, and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
12. Modification. This Agreement cannot be altered, amended or
modified in any way, except as expressly provided in paragraph 4 hereof or by a
writing signed by the parties hereto.
13. Power of Attorney. Buyer hereby irrevocably designates,
constitutes and appoints Seller (and all Persons designated by Seller in its
sole and absolute discretion) as Buyer's true and lawful attorney-in-fact, and
authorizes Seller and any of Seller's designees, in Buyer's or Seller's name, to
take any action and execute any instrument which Seller may deem necessary or
advisable to accomplish the purposes of this Agreement, from and after the
occurrence of an Event of Default and the giving by Seller of notice to Buyer of
Seller's intention to enforce its rights and claims against Buyer, to (i)
endorse Buyer's name on all applications, documents, papers and
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instruments necessary or desirable for Seller in the use of the Trademarks or
the Licenses, (ii) assign, pledge, convey or otherwise transfer title in or
dispose of the Trademarks or the Licenses to anyone on commercially reasonable
terms, (iii) grant or issue any exclusive or nonexclusive license under the
Trademarks or, to the extent permitted, under the Licenses, to anyone on
commercially reasonable terms, and (iv) take any other actions with respect to
the Trademarks or the Licenses as Seller deems in its own best interest. Buyer
hereby ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and shall be
irrevocable until all of the obligations under the Purchase Note shall have been
paid in full in cash. Buyer acknowledges and agrees that this Agreement is not
intended to limit or restrict in any way the rights and remedies of Seller under
the Purchase Agreement, the Security Agreement, or the Purchase Note, but rather
is intended to facilitate the exercise of such rights and remedies.
Seller shall have, in addition to all other rights and remedies
given it by the terms of this Agreement, all rights and remedies allowed by law
and the rights and remedies of a secured party under the Uniform Commercial Code
as enacted in any jurisdiction in which the Trademarks or the Licenses may be
located or deemed located. Upon the occurrence of an Event of Default and the
election by Seller, during the continuance of such Event of Default, to exercise
any of its remedies under Section 9-504 or Section 9-505 of the Uniform
Commercial Code with respect to the Trademarks and Licenses, Buyer agrees to
assign, convey and otherwise transfer title in and to the Trademarks and the
Licenses to Seller or any transferee of Seller and to execute and deliver to
Seller or any such transferee all such agreements, documents and instruments as
may be necessary, in Seller's sole discretion, to effect such assignment,
conveyance and transfer. All of Seller's rights and remedies with respect to the
Trademarks and the Licenses, whether established hereby, by the Security
Agreement, by any other agreements or by law, shall be cumulative and may be
exercised separately or concurrently. Notwithstanding anything set forth herein
to the contrary, it is hereby expressly agreed that upon the occurrence of an
Event of Default, Seller may exercise any of the rights and remedies provided in
this Agreement and the Security Agreement.
14. Successors and Assigns. This Agreement shall be binding upon
Buyer and its successors and assigns, and shall inure to the benefit of Seller
and its nominees, successors and assigns; provided, however, that Buyer shall
not voluntarily assign or transfer its rights or obligations hereunder without
Seller's prior written consent.
15. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) AND DECISIONS OF THE
STATE OF ILLINOIS.
16. Consent to Jurisdiction; Counterclaims; Forum Non Conveniens.
(i) EACH OF SELLER AND BUYER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY ILLINOIS STATE COURT
OR FEDERAL COURT SITTING IN CHICAGO, ILLINOIS, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF,
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CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS SECURITY AGREEMENT, WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH OF SELLER AND BUYER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. BUYER WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING
THE DISPUTE.
(ii) BUYER AGREES THAT SELLER SHALL HAVE THE RIGHT TO PROCEED
AGAINST BUYER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SELLER TO
REALIZE ON THE COLLATERAL HEREUNDER OR ANY OTHER SECURITY FOR THE OBLIGATIONS,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SELLER. BUYER
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SELLER TO REALIZE ON THE COLLATERAL HEREUNDER OR ANY OTHER SECURITY
FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
SELLER. BUYER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
IN WHICH SELLER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
17. Notices. All notices or other communications hereunder shall be
given in the manner and to the addresses set forth in the Purchase Agreement.
18. Section Titles. The section titles herein are for convenience of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.
19. Execution in 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 one and the same agreement.
20. Conflict with Security Agreement. Should any term or provision
of the Security Agreement expressly conflict with the terms or provisions of
this Agreement, such term or provision of the Security Agreement shall govern
and control.
[Signature Page Immediately Follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Trademark Security Agreement as of the day and year first above written.
THE DELICIOUS FROOKIE COMPANY, INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Title: President
Accepted and agreed to as of the day and year first
above written.
XXXXXXX FOODS, L.L.C.,
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Manager
[Signature Page to Trademark Security Agreement]
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Schedule A
to
Trademark Security Agreement
Dated as of April 3, 1998
The Delicious Frookie Company, Inc.
Registered Trademarks and Service Marks
None, except:
Trademark Registration Date Registration No.
--------- ----------------- ----------------
DELICIOUS July 8, 1986 1,400,783
and Design
FROOKIES January 10, 1989 1,520,007
THE GOOD FOR YOU July 4, 1989 1,546,643
COOKIE
FROOKIE September 12, 1989 1,555,978
R.W.FROOKIE October 17, 1989 1,561,226
and Design
DELICIOUS February 13, 1990 1,582,820
FRACKERS September 4, 1990 1,612,252
FRUITINS October 23, 1990 1,618,960
REGENCY April 9, 1991 1,640,703
FRUITONS June 18, 1991 1,648,257
UPCOUNTRY COCOA October 29, 1991 1,662,643
FRONES December 22, 1992 1,742,431
FUNKY MONKEYS December 22, 1992 1,742,432
FROOKWICH February 23, 1993 1,754,579
XXXXX WHEATS December 7, 1993 1,809,421
COOL FRUITS April 19, 1994 1,831,483
POLAR POPS April 19, 1994 1,832,367
COOL FRUITS FRUIT May 17, 1994 1,836,962
JUICE FREEZERS and Design
FROOKITAS September 6, 1994 1,853,242
FRISPS October 18, 1994 1,859,230
DREAM CREAMS December 20, 1994 1,868,948
RPB December 7, 1993 1,809,230
BANANARAMAS December 6, 1994 1,866,524
COOKIE LEGENDS December 13, 1994 1,867,742
OBIE'S October 10, 1995 1,925,672
OBIE'S COOKIE JAR October 10, 1995 1,925,673
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BRANDS YOU TRUST... October 24, 1995 1,929,849
COOKIES YOU LOVE!
FRUITABLES December 26, 1995 1,944,690
FROOKAROONS January 16, 1996 1,949,533
COOL FRUITS July 2, 1996 1,983,505
THE CHIP THAT LOVES March 18, 1997 2,046,396
TO DIP
The Delicious Frookie Company, Inc.
Trademark and Service Xxxx Registration Applications
None, except:
Trademark Application Date Serial No.
--------- ---------------- ----------
FROOTER October 5, 1992 74/320296
FROOTER October 5, 1992 74/320297
LEMON SQUEEZER December 6, 1993 74/465506
FROOTLES May 9, 1994 74/521066
FROOKIEO October 31, 1994 74/592264
JAM-A-GRAM December 12, 1994 74/609470
FRUITABLES January 17, 1995 74/621780
FROOT TWIST January 27, 1995 74/626682
FRUITICOOL February 21, 1995 74/636940
SIMPLYDELICIOUS March 7, 1995 74/643270
DELICIOUSPLUS April 24, 1995 74/666142
FROOKIEPLUS April 24, 1995 74/666163
ICICLE April 7, 1997 75/271215
DOUBLE CREMES May 1, 1997 75/284486
COOL FRUITS May 8, 1997 75/288769
FRUIT-N-FLAKE June 30, 1997 75/317366
COOL FRUITS July 28, 1997 75/331482
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Xxxxxxx Foods, L.L.C.
Registered Trademarks and Service Marks
None, except:
Trademark Registration Date Registration No.
--------- ----------------- ----------------
DEVILMINT (stylized) November 25, 1947 434,589
MAMA'S (stylized) June 8, 1948 439,154
XXXXXXX (stylized) June 14, 1955 607,363
ROYAL September 24, 1957 652,140
FUDGE TOWN May 17, 1966 808,624
XXXXX'X CHEEZ*TRAWS May 31, 1966 809,349
and Design
SLAPSTIX June 28, 1966 810,508
FIDDLE FLAKES July 5, 1966 810,843
SCOOTER PIE September 5, 1967 834,843
ORANGE PUNCH October 3, 1967 836,407
LEMON PUNCH October 3, 1967 836,408
PINK PUNCH January 2, 1968 841,713
LICKITY SPLITS March 5, 1968 845,572
SCOOTER-PUFFS October 1, 1968 858,047
LICKITY SPLITS March 4, 1969 865,885
FUDGE TOWN May 21, 1971 176,246 (Canada)
CHEEZ*TRAWS July 23, 1971 177,169 (Canada)
ANGEL CAKE October 19, 1971 922,608
SIERRA ECLAIRS September 2, 1975 1,019,530
XXXXXXX and Design November 24, 1981 1,179,423
XXXXXXX and Design February 2, 1982 1,188,855
WE'RE MORE THAN BAKERS November 30, 1982 1,218,575
WE'RE BUSINESS MAKERS
ROYALES September 28, 1993 1,795,175
SUGAR RINGS August 9, 1994 1,849,716
COCO CHIP RINGS August 9, 1994 1,849,725
LEMON RINGS August 9, 1994 1,849,727
OATMEAL RAISIN RINGS August 9, 1994 1,849,728
XXXXXXX Xxxx 17, 1997 2,071,628
TWO POUNDER July 29, 1997 2,085,100
XXXXXXX July 29, 1997 080860 (Illinois)
MAMA'S October 21, 1997 2,106,597
MAMA'S CHARACTER Design January 27, 1998 2,132,678
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Xxxxxxx Foods, L.L.C.
Trademark and Service Xxxx Registration Applications
None, except:
Trademark Application Date Serial No.
--------- ---------------- ----------
CRISPYSTIX January 9, 1997 75/223024
Miscellaneous Design September 23, 1997 75/361740
(butter cookie)
XXXXXXX and Banner Design February 18, 1997 75/243716
TASTE THE FUN February 18, 1997 75/243717
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STATE OF ILLINOIS )
) SS
COUNTY OFILLINOIS )
The foregoing Trademark Security Agreement was acknowledged before
me this 3rd day of April 1998, by Xxxxxxx X. Xxxxx, the President and Chief
Executive Officer of The Delicious Frookie Company, Inc., a Delaware
corporation, on behalf of such corporation.
/s/ Xxxxxx XxXxxxxxxx
-----------------------------
Notary Public
Xxxx County, Illinois
My commission expires: 8-30-99
--------------------------------
"OFFICIAL SEAL"
XXXXXX XxXXXXXXXX
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISION EXPIRES 8/30/99
--------------------------------
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