TRADEMARK SECURITY AGREEMENT
Exhibit
10.26
This
TRADEMARK SECURITY AGREEMENT (this “Agreement”)
is
dated as of June 20, 2008, between SPORT CHALET, INC., a Delaware corporation
(“Grantor”),
and
BANK OF AMERICA, N.A., a national banking association, as administrative agent
for the Lenders (“Agent”)
in
connection with the Loan Agreement described below.
R
E C I T
A L S:
WHEREAS,
Grantor is indebted to Agent and Secured Parties pursuant to that certain Loan
and Security Agreement dated as of even date herewith (as amended, restated,
or
otherwise modified from time to time, the “Loan
Agreement”);
and
WHEREAS,
the parties wish to provide for the terms and conditions upon which the
Obligations shall be secured by the Trademark Collateral (as defined below);
and
WHEREAS,
this Agreement is made to secure the Secured Obligations (defined below) and
in
consideration of advances, credit or other financial accommodations now or
hereafter being afforded to Grantor by Agent and Secured Parties;
NOW,
THEREFORE, for valuable consideration hereby acknowledged, the parties agree
as
follows:
DEFINITIONS;
RULES OF CONSTRUCTION
1.1. Definitions.
Initially capitalized terms used but not defined herein have the respective
meanings set forth in the Loan Agreement. As used herein, the following terms
have the meanings set forth below:
Marks:
any
trademarks, trade names, corporate names, company names, business names, trade
styles, trade dress, service marks, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof and any
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or
any
other country.
Secured
Obligations:
all
“Obligations” (as defined in the Loan Agreement).
Trademark
License:
means
any written agreement, in which Grantor now holds or hereafter acquires any
right, title or interest, which agreement grants any license right in and to
any
Trademark (whether Grantor is the licensee or the licensor thereunder) including
licenses pursuant to which Grantor has obtained the exclusive right to use
a
trademark owned by a third party, a sublicense to use a trademark, a
distribution agreement relating to goods or services covered by one or more
trademarks and the right to prepare for sale, sell or advertise for sale, all
of
the inventory now or hereafter owned by Grantor and now or hereafter covered
by
such license agreements.
Trademarks:
means
any of the following in which Grantor now holds or hereafter acquires any right,
title or interest: (a) all Marks; (b) any reissues, extensions or renewals
of
any Marks, (c) the goodwill of the business symbolized by or associated with
the
Marks, (d) all domain names, (e) all means of manufacturing goods or offering
services covered by the Marks, including trade secrets, formulas, recipes,
customer lists, manufacturing processes, molds, designs, plans and prototypes,
(f) any income, royalties, damages, claims and payments now and hereafter due
and/or payable with respect to the Marks, including payments under all licenses
entered into in connection with the Marks and damages, claims, payments and
recoveries for past, present or future infringement and (g) any rights to xxx
for past, present and future infringements of the Marks.
1
1.2. Certain
Matters of Construction.
The
terms “herein”, “hereof”, “hereunder” and other words of similar import 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. The terms
“including” and “include” shall mean “including, without limitation” and, for
purposes of each Loan Document, the parties agree that the rule of ejusdem
generis
shall
not be applicable to limit any provision. Section titles appear as a matter
of
convenience only and shall not affect the interpretation hereof. All references
to (a) laws or statutes include all related rules, regulations, interpretations,
amendments and successor provisions; (b) any document, instrument or agreement
include any amendments, waivers and other modifications, extensions or renewals
(to the extent permitted hereby); (c) any section mean, unless the context
otherwise requires, a section of this Agreement; (d) any exhibits or schedules
mean, unless the context otherwise requires, exhibits and schedules attached
hereto, which are hereby incorporated by reference; (e) any Person include
successors and assigns; or (f) unless otherwise specified herein, discretion
of
Agent means the sole and absolute discretion of Agent. Grantor shall have the
burden of establishing any alleged negligence, misconduct or lack of good faith
by Agent or any other Secured Party hereunder. No provision hereof shall be
construed against any party by reason of such party having, or being deemed
to
have, drafted the provision.
SECTION
2. TRADEMARK
COLLATERAL
2.1. Grant
of Security Interest in Trademark Collateral.
Grantor
hereby grants to Agent, for the benefit of Secured Parties, a continuing first
priority security interest in all of Grantor’s right, title and interest in, to
and under the following, whether presently existing or hereafter created or
acquired (collectively, the “Trademark
Collateral”):
(a)all
of
its Trademarks and Trademark Licenses to which it is a party including those
referred to on Schedule
I
hereto;
and
(b)all
products and proceeds of the foregoing, including any claim by Grantor against
third parties for past, present or future (i) infringement or dilution of any
Trademark or Trademark licensed under any Trademark License or (ii) injury
to
the goodwill associated with any Trademark or any Trademark licensed under
any
Trademark License.
2.2. Intent-to-Use
Applications.
Notwithstanding anything to the contrary set forth in Section 2.1
above,
or in the Loan Agreement or any other Loan Document, the Trademark Collateral
shall not include any intent-to-use United States trademark application for
which an amendment to allege use or statement of use has not been filed under
15
U.S.C § 1051(c) or 15 U.S.C § 1051(d), respectively, or, if filed, has not been
deemed in conformance with 15 U.S.C § 1051(a) or examined and accepted,
respectively, by the United States Patent and Trademark Office.
2.3. Loan
and Security Agreement.
The
security interests granted pursuant to this Agreement are granted in conjunction
with the security interests granted to Agent, for the benefit of Secured
Parties, pursuant to the Loan Agreement and any security agreement delivered
in
connection therewith. Grantor hereby acknowledges and affirms that the rights,
remedies and obligations of Agent with respect to the security interest in
the
Trademark Collateral made and granted hereby are more fully set forth in the
Loan Agreement and any security agreement delivered in connection therewith,
the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
2
2.4. Authorization
to Supplement.
If
Grantor has or obtains rights to any Trademarks or Trademark Licenses not listed
on Schedule
I,
the
provisions of this Agreement shall automatically apply thereto. Grantor shall
give prompt notice in writing to Agent with respect to any such additional
Trademarks or Trademark Licenses. Without limiting Grantor’s obligations under
this Section
2.4,
Grantor
hereby authorizes Agent unilaterally to modify this Agreement by amending
Schedule
I
to
include any such additional Trademarks or Trademark Licenses. Notwithstanding
the foregoing, no failure to so modify this Agreement or amend Schedule
I
shall in
any way affect, invalidate or detract from Agent’s continuing security interest
in all Trademark Collateral, whether or not listed on Schedule
I.
SECTION
3. COVENANTS
3.1. Prosecution
of Applications; Maintenance and Renewal of Trademarks.
Except
as would not have a material adverse effect on the value or enforceability
of,
or any rights of Grantor or Agent in, any of the Trademark Collateral, Grantor
shall, until Full Payment of all the Obligations (a) use commercially reasonable
efforts to prosecute any Trademark pending as of the date hereof or thereafter,
and (b) promptly make applications for, register or cause to be registered
(to
the extent not already registered) with the United States Patent and Trademark
Office any Trademark or Trademark License set forth in Schedule
I
or
otherwise, in all such cases the filing and payment of maintenance, registration
and/or renewal fees, the filing of applications for renewal, affidavits of
use,
affidavits of noncontestability, the filing and diligent prosecution of
opposition, interference and cancellation proceedings, and promptly responding
to all requests and inquiries from the United States Patent and Trademark
Office. Except as would not have a material adverse effect on the value or
enforceability of, or any rights of Grantor or Agent in, any of the Trademark
Collateral, Grantor also agrees to preserve and maintain all rights in the
Trademark Collateral. Grantor further agrees to retain experienced trademark
attorneys for the filing and prosecution of all such applications and other
proceedings when and if applicable. Except as would not have a material adverse
effect on the value or enforceability of, or any rights of Grantor or Agent
in,
any of the Trademark Collateral, Grantor shall not, without Agent’s prior
written consent (to be given or withheld in Agent’s discretion), abandon any
rights in or fail to pay any maintenance or renewal fee for any Trademark listed
in Schedule I
or
breach, terminate, fail to renew or extend, or fail to perform any duties or
obligations for any Trademark License listed in Schedule
I.
Grantor
further agrees that it will not take any action, or permit any action to be
taken by any Person to the extent that such Person is subject to its control,
including licensees, or fail to take any action, that could reasonably be
expected to affect the validity, priority, perfection or enforcement of the
rights granted to Agent under this Agreement, and any such action if it shall
take place shall be null and void and of no effect whatsoever.
3.2. Protection
of Trademarks.
Grantor
shall (a) protect, defend and maintain the validity and enforceability of all
current and future Trademarks, (b) use its commercially reasonable efforts
to
detect material infringements of such Trademarks and promptly advise Agent
in
writing of material infringements detected and (c) not allow any Trademarks
to
be abandoned, forfeited or dedicated to the public. At any time during the
continuance of an Event of Default, Grantor shall not commence, or cause to
be
commenced, any action, proceeding, lawsuit, mediation or arbitration relating
to
the Trademark Collateral without the prior written consent of Agent, such
consent not to be unreasonably withheld or delayed, nor shall Grantor engage
in
any activity or conduct that could give rise to declaratory judgment
jurisdiction. At Grantor’s sole expense, Agent shall have the right (but shall
not be obligated) during the continuance of an Event of Default to select
counsel and/or participate in any action, proceeding, lawsuit, mediation or
arbitration that could adversely affect the rights in, validity or
enforceability of the Trademark Collateral. In addition, any proposed settlement
or compromise of any action, proceeding, lawsuit, mediation or arbitration
that
could be reasonably expected to affect value, validity or enforceability of,
or
any rights of Grantor or Agent in, the Trademark Collateral must be approved,
in
writing, by Agent, whether or not an Event of Default has occurred and is
continuing.
3
3.3. Expenses.
Any
expenses incurred in connection with prosecution, registration and maintenance
shall be borne by Grantor. If Grantor fails to comply with any of the provisions
of Section 3.1
or
3.2,
Agent
shall have the right (but shall not be obligated) to do so on behalf of Grantor
to the extent permitted by Applicable Law, but at Grantor’s sole expense, and
Grantor hereby agrees to reimburse Agent in full for all expenses, including
the
fees and disbursements of counsel incurred by Agent in procuring, protecting,
defending and maintaining the Trademark Collateral. In the event that Grantor
fails to pay when due any expenses or fees required to be paid by it hereunder,
or fails to comply with any other duty under this Agreement, Agent may, but
shall not be required to, pay, satisfy, discharge or bond the same for the
account of Grantor, and all monies so paid out shall be Secured Obligations
of
Grantor repayable on demand, together with interest at the rate applicable
to
Base Rate Revolver Loans.
SECTION
4. MISCELLANEOUS
4.1. Miscellaneous.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their heirs, executors, administrators, successors, legal
representatives, and assigns. This Agreement may be executed in any number
of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement and shall be considered to be a Loan
Document. This Agreement, together with the Loan Agreement and the other Loan
Documents, embodies the entire agreement among the parties with respect to
the
subject matter hereof and amends and supersedes all prior agreements and
understandings relating to such subject matter. This letter shall be governed
by
the laws of the State of California. To the extent not prohibited by applicable
law, each of the parties hereto waives its right to a trial by jury, if any,
in
any action to enforce, defend, interpret, or otherwise concerning this letter.
Without limiting the applicability of any other provision of the Loan Agreement,
the terms of Sections 14.13 and 14.14 of the Loan Agreement are incorporated
herein, mutatis
mutandis,
and
shall apply to and govern this Agreement.
[Remainder
of Page Intentionally Left Blank]
4
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date first written above.
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GRANTOR:
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SPORT
CHALET, INC.,
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a
Delaware corporation
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By:
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/s/
Xxxxxx Xxxxxxxx
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Name:
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Xxxxxx
Xxxxxxxx
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Title:
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Executive
Vice President and CFO
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Signature
Page
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AGENT:
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BANK
OF AMERICA, N.A, as Agent
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By:
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/s/
Xxxxxxx Xxxx
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Name:
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Xxxxxxx
X. Xxxx
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Title:
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Vice
President
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Signature
Page
SCHEDULE
I
to
TRADEMARKS
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TRADEMARK
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COUNTRY
OF
REGISTRATION
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DATE
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TRADEMARK
REGISTRATION
NUMBER
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|||
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Sport
Chalet
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USA
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December
27, 1994
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1869465
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|||
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Sport
Chalet
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USA
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December
27, 1994
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1869466
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|||
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Action
Pass
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USA
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December
27, 0000
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0000000
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Schedule
I
