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Exhibit 10.24
SECURITY AGREEMENT - TRADEMARKS
AGREEMENT made as of this 28th day of February, 1995 between HOUBIGANT
INC., a Delaware corporation, located at 0000 Xxxxxxxx Xxxx Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Grantor"), PARFUMS PARQUET INCORPORATED, a
Delaware corporation, located at 000 Xxxxxxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 ("Licensee"), and CHEMICAL BANK NEW JERSEY, N.A.,
individually and as agent (the "Bank Agent") for CHEMICAL BANK NEW JERSEY, N.A.
and NATIONAL WESTMINSTER BANK, USA (collectively, the "Banks") located at X.X.
Xxx 0000, Xxx Xxxxx Xxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to them
in the License Agreement (as defined below).
WHEREAS, on November 18, 1993 (the "Filing Date"), Licensor, together
with certain affiliates, filed a voluntary petition for relief under chapter 11
of Title 11, United States Code (the "Bankruptcy Code"), in the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").
Grantor's chapter 11 case is being jointly administered by the Bankruptcy Court
under procedurally consolidated case no. 93 B 45767 (JLG) (the "Bankruptcy
Case");
WHEREAS, Grantor has adopted, used and is using, and is the owner of
the entire right, title and interest in and to, certain trademarks and designs;
WHEREAS, Grantor and Licensee have entered into a license agreement
dated August 10, 1994, as modified on August 16, 1994 and as further modified on
each of September 16, 1994 and September 21, 1994 (the "License Agreement"),
pursuant to which Grantor has granted Licensee certain rights to use the
Trademarks for the Products in the Territories (as defined in the License
Agreement) as listed on Schedule A thereto;
WHEREAS, pursuant to an Order of the Bankruptcy Court dated September
21, 1994, the Bankruptcy Court, inter alia, (a) authorized and approved Grantors
implementation and effectuation of the License Agreement, and (b) authorized and
empowered Grantor to execute and deliver such additional documents and
instruments as may be necessary or appropriate to consummate the transactions
contemplated by the License Agreement, including, without limitation, this
Security Agreement (the "Approval Order");
WHEREAS, both prior to and subsequent to the Filing Date, Licensor and
certain of its affiliates incurred certain indebtedness to the Banks (in the
aggregate, the "Bank Debt") under certain pre-petition and post-Filing Date loan
documents (collectively, the "Bank Loan Documents");
WHEREAS, the Banks hold valid, first priority, duly perfected liens
against and security interests in and to all or
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substantially all assets of Grantor, including, without limitation, the
Trademarks, to secure repayment of the Bank Debt; and
WHEREAS, the Banks have consented to permit Grantor to grant Licensee a
second priority lien against and security interest in and to the Trademarks for
the Products in the Territories, which lien and security interest shall be in
all respects subordinate in right and priority to the lien and security interest
of the Banks in and to the Trademarks, and subject further to the terms and
provisions of the License Agreement and this Security Agreement;
NOW, THEREFORE, IT IS AGREED that, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Grantor does hereby
grant to Licensee a security interest in all of its right, title and interest in
and to each of the Trademarks for the Products in the Territories, as set forth
below.
1. Grant of Security Interest. Subject to the terms and provisions of
this Agreement, this security interest shall secure the prompt payments,
performance and observances of all Obligations (as hereinafter defined) by
Grantor. The grant of this security interest by Grantor to Licensee shall be in
all respects subordinate in right and priority to the lien and security interest
of the Banks in and to the Trademarks.
2. Definitions.
(a) "Obligations" shall mean any and all obligations of any kind
incurred by Grantor to Licensee arising under the License
Agreement including, without limitation, the liabilities and
obligations evidenced by or issued, created or arising in
connection with this Agreement, that arise, result from, or
are connected to Grantor's rejection or disaffirmance of the
License Agreement pursuant to Section 365 of the Bankruptcy
Code in any subsequent case under chapter 11 of the Bankruptcy
Code commenced by the Grantor(a "Rejection Event").
(b) "Enforcement" means, collectively or individually, for (i)
Licensee to declare a "Rejection Event" under the License
Agreement; and/or (ii) the Banks and/or the Bank Agent to
demand payment in full of or accelerate the indebtedness of
Grantor to the Banks and to commence the judicial or
nonjudicial enforcement of any of the rights and remedies
under the Bank Loan
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Documents or any anticipated plan of reorganization of
Grantor, as the case may be.
(c) "Enforcement Notice" means a written notice delivered in
accordance with Section 11 hereof, which notice shall (i) if
delivered by Licensee, state that a "Rejection Event" under
the License Agreement has occurred, specify the nature of such
Rejection Event, and announce that an Enforcement Period (as
hereinafter defined) has commenced and (ii) if delivered by
the Banks or the Bank Agent, state that an "Event of Default"
under the Bank Loan Documents with respect to Grantor's
failure to make a payment or Grantees breach of a financial
covenant or any anticipated plan of reorganization of Grantor,
as the case may be, has occurred and that the applicable cure
period, if any, has expired and the Event of Default has not
been cured by Grantor, and shall specify the nature of such
event of default, and announce that an Enforcement Period has
commenced.
(d) "Enforcement Period" means the period of time following the
receipt by either the Bank Agent or Licensee of an Enforcement
Notice delivered by the other until the earlier of the
following: (i) Grantor shall have paid its obligations in full
to the Banks under the Bank Loan Documents; (ii) Grantor has
cured the Rejection Event which gave rise to Licensee's
Enforcement Notice; (iii) the party delivering an Enforcement
Notice agrees in writing to (a) rescind its Enforcement Notice
and (b) terminate the Enforcement Period.
3. Representations and Warranties. Grantor hereby represents, warrants,
covenants and agrees as follows:
(a) Grantor has not abandoned any of the Trademarks for the
Products in the Territories.
(b) Except as provided otherwise in the License Agreement, Grantor
will, at Licensee's expense, perform all acts and execute all
documents requested by Licensee at any time to evidence,
perfect, maintain, record and enforce this security interest
in the Trademarks for the Products in the Territories or
otherwise in furtherance of the provisions of this
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Agreement, and Grantor hereby authorizes Licensee to execute
and file one or more financing statements (and similar
documents) or copies thereof, in substantially the form
annexed as Exhibit "A" hereto and made a part hereof, or of
this Security Agreement, with respect to the Trademarks for
the Products in the Territories, signed only by Licensee;
(c) Except as provided otherwise in the License Agreement, Grantor
will not do any act, or omit to do any act, whereby the
Trademarks may become abandoned, invalidated, unenforceable,
avoided or avoidable and, to the extent required by the terms
and provisions of the License Agreement, shall notify Licensee
immediately if it knows of any reason or has reason to know
that any application, registration or recording may become
abandoned, canceled, invalidated, avoided or avoidable;
(d) Provided such action is not inconsistent with or prohibited by
the License Agreement, or this Agreement, Licensee may, at its
sole discretion and expense, pay any amount or do any act
required of Grantor hereunder or requested by Licensee to
preserve, defend, protect, maintain, record or enforce
Grantor's obligations contained herein, the Obligations, the
Trademarks for the Products in the Territories, or the right,
title and interest granted Licensee herein, and which Grantor
fails to do or pay;
(e) Subject to the provisions of the License Agreement, if Grantor
files an application(s) for the registration of a Trademark
with the United States Patent and Trademark Office or any
similar office or agency in the United States, which
Trademark, if registered, would constitute Licensee's
collateral under this Agreement, Grantor shall promptly notify
Licensee of such registration and, to the extent required by
this Agreement or the License Agreement, as the case may be,
and upon request by Licensee, and subject to receipt of the
prior written consent of the Banks thereto, execute and
deliver any and all agreements, instruments and documents
necessary or appropriate to evidence Licensee's security
interest in such Trademark upon its registration;
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(f) The Trademarks for the Products in the Territories now owned
by Grantor are valid and subsisting and in full force and
effect. Subject to the valid, duly existing and perfected
security interest of the Banks therein, Grantor has the sole,
full and clear title thereto, and, with the consent of the
Banks, the right and power to grant the security interest
herein granted. The Trademarks for the Products in the
Territories are not subject to any liens, claims, mortgages,
assignments, licenses, security interests or encumbrances of
any nature whatsoever, except as otherwise specifically set
forth herein and on Schedule B annexed hereto;
(g) Subject to the terms and provisions of the License Agreement,
so long as there are Obligations owing to Licensee, Grantor
will not assign, sell, mortgage, lease, transfer, pledge,
hypothecate, grant a security interest in or lien upon that is
prior or senior in right to the lien and security interest
herein granted to Licensee, encumber, or otherwise dispose of
any of the Trademarks for the Products in the Territories,
without the prior written consent of the Banks and Licensee,
and nothing in this Agreement shall be deemed a consent by
Licensee to any such action except as expressly permitted
herein;
(h) As of the date hereof, Grantor does not have any Trademarks
for the Products in the Territories registered in, or the
subject of pending applications in, the United States Patent
and Trademark Office or any similar office or agency that
would be subject to the terms of the License Agreement and/or
this Agreement, other than those that may be described in
Schedule D to the License Agreement and made a part hereof;
(i) Subject to the terms and provisions of the License Agreement,
Grantor will render any assistance necessary to Licensee in
any proceeding before the United States Patent and Trademark
Office or any similar office or agency to maintain each
application and registration of the Trademarks, including,
without limitation, filing of renewals, affidavits of use,
affidavits of incontestability and
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opposition, interference and cancellation proceedings.
4. Rights and Remedies. Each of the Bank Agent and Licensee agrees to
use its best efforts to give an Enforcement Notice to the other prior to
commencement of Enforcement. In the event of the issuance by Licensee of Notice
of a Rejection Event and during an Enforcement Period, Licensee shall have the
following rights and remedies (to the extent permitted by applicable law) in
addition to all other rights and remedies of Licensee, whether under law, the
Obligations, or otherwise, all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively or concurrently, without
(except as provided herein) notice to, or consent by Grantor: (a) neither
Grantor nor any affiliate or subsidiary thereof shall make any use of the
Trademarks or any xxxx similar thereto for any purpose; (b) Licensee may, at any
time and from time to time, upon ten (10) days prior notice to Grantor, license,
whether general, special or otherwise, and whether on an exclusive or
non-exclusive basis, the Collateral, throughout the Territory, for such term or
terms, on such conditions, and in such manner, as Licensee shall in its sole
discretion determine; (c) Licensee may, at any time and from time to time, upon
ten (10) days' prior notice to Grantor, assign, sell, or otherwise dispose of,
the Collateral or any of it, either with or without special or other conditions
or stipulations, with power to buy the Collateral or any part of it, and with
power also to execute assurances, and do all other acts and things for
completing the assignment, sale or disposition which Licensee shall, in its sole
discretion, deem appropriate or proper; and (d) in addition to the foregoing, in
order to implement the assignment, sale or other disposal of any of the
Collateral pursuant to subparagraph 4(c) hereof, Licensee may at any time,
pursuant to the authority granted in the Powers of Attorney described in
paragraph 5 hereof, execute and deliver on behalf of Grantor, one or more
instruments of assignment of the Trademarks (or any application, registration or
recording thereof), in form suitable for filing, recording or registration.
Grantor agrees to pay when due all costs incurred in any such transfer of the
Collateral, including any taxes, fees and attorneys' fees, and all such costs
not so paid shall be added to and deemed additional advances under the License
Agreement. Licensee may apply the proceeds actually received from any such
license, assignment, sale or other disposition to the reasonable costs and
expenses thereof, including, without limitation, reasonable attorneys' fees and
all legal, travel and other expenses which may be incurred by Licensee as a
result of Grantor's breach of Obligations, and Grantor shall remain liable and
will pay Licensee on demand any deficiency remaining to compensate Licensee for
any such breach. Nothing herein contained shall be construed as requiring
Licensee to take any such action at any time. In the event of
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any such license, assignment, sale or other disposition of the Collateral, or
any of it, after the occurrence of a Rejection Event, Grantor shall supply its
know-how and expertise relating to the manufacture and sale of the products and
services bearing the Trademarks to Licensee or its designee. Notwithstanding the
foregoing, the parties hereto agree that during an Enforcement Period:
(a) Licensee shall not take any action to foreclose or realize
upon or to enforce any rights it may have with respect to the
Trademarks for the Products in the Territories without the
Banks' or Bank Agent's prior written consent thereto, unless
the Bank Debt shall have been first paid and satisfied in
full; and
(b) Subject to any applicable restrictions in the Bank Loan
Documents, the Banks or the Bank Agent, as the case may be,
may, at their/its option and without the prior written consent
of Licensee, take any action to accelerate payment of the Bank
Debt and/or to foreclose or realize upon or enforce any of its
rights with respect to the Trademarks.
5. Power of Attorney. Concurrently with the execution and delivery
hereof, Grantor is executing and delivering to Licensee in the form of Exhibit 1
hereto, ten originals of a Power of Attorney for the implementation of the
assignment, sale or other disposal of the Collateral pursuant to paragraph 4
hereof.
6. Notices of Default. From and after the date of this Agreement,
Licensee agrees to use reasonable efforts to give the Banks, or the Bank Agent,
copies of any notice sent to Grantor with respect to the occurrence or existence
of a Rejection Event, default or other breach under the License Agreement or
this Agreement. From and after the date of this Agreement, the Banks agree to
use reasonable efforts to give Licensee, or its authorized agent or designee,
copies of any notice sent to Grantor with respect to the occurrence or existence
of a default or other breach under the Bank Loan Documents or any anticipated
plan of reorganization of Grantor, in each case simultaneously with the sending
of any such notice to Grantor.
7. Modification. No provision hereof shall be modified, altered or
limited except by a written. instrument expressly referring to this Agreement
and executed by the party to be charged. The execution and delivery of this
Agreement has been authorized by the Board of Directors of Grantor and by the
Bankruptcy Court in the Bankruptcy Case.
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8. Successors and Assigns. This Agreement shall be binding upon the
successors, assigns or other legal representatives of Grantor, and shall,
together with the rights and remedies of Licensee hereunder, inure to the
benefit of Licensee, its successors, assigns or other legal representatives.
9. Governing Law. This Agreement, the Obligations and the Trademarks
for the Products in the Territories shall be governed in all respects by the
laws of the United States and the laws of the State of New Jersey.
10. Severability. If any term of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity of all other terms hereof shall
in no way be affected thereby.
11. Counterparts. This Agreement may be executed in one or more
counterparts which when taken together shall constitute one and the same
Security Agreement.
12. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
telecommunications and communication by facsimile copy) and mailed, telexed,
transmitted or delivered, as to each party hereto, at its address set forth
above or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall be
effective upon receipt, or, in the case of notice by mail, five (5) days after
being deposited in the mails, postage prepaid, or in the case of notice by
telex, when telexed against receipt of the answer back, or in the case of notice
by facsimile copy, when verbal confirmation of receipt is obtained, in each case
addressed as aforesaid.
13. Third-Party Beneficiaries. The terms and provisions of this
Agreement shall be for the sole benefit of the Grantor, Licensee and the Banks
for their respective successors and assigns and no other Person shall have any
right, benefit, or priority by reason of this Agreement.
14. Section Titles. The article and section headings contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
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IN WITNESS WHEREOF, Grantor and Licensee have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
HOUBIGANT INC. , and
HOUBIGANT GMBH
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
(Title)
PARFUMS PARQUET INCORPORATED
By: /s/
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Group V.P. -- Finance (Title)
Consented and agreed to:
CHEMICAL BANK NEW JERSEY, NA
individually and as Agent
By: /s/
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NATWEST BANK, N.A.
By: /s/ Xxxx XxXxxxxxxx
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