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EXHIBIT 10.14
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement") is made as of July
27, 1999, between Thomaston Xxxxx, Inc., a Georgia corporation (the "Borrower"),
and Foothill Capital Corporation, a California corporation with an office in
Atlanta, Georgia (the "Agent"), as agent for the Lender Group (as defined
below).
W I T N E S S E T H :
WHEREAS, the Borrower, the financial institutions listed on the
signature pages thereof (such financial institutions, together with their
respective successors and assigns, being hereinafter each referred to as a
"Lender" and collectively as the "Lenders"), the Co-Agents (as defined in the
Loan Agreement), and the Agent are parties to that certain Loan and Security
Agreement of even date herewith (as the same may hereafter be modified, amended,
restated or supplemented from time to time, the "Loan Agreement"), pursuant to
which the Lenders have agreed to extend credit to the Borrower from time to time
and the Borrower has granted a security interest in all of its assets to the
Agent for the benefit of the Lender Group (as defined in the Loan Agreement);
and
WHEREAS, the Lender Group has required that the Borrower execute and
deliver this Agreement (i) in order to secure, as further described below, the
payment and performance of, among other things, (a) the obligations of the
Borrower arising from this Agreement, and (b) all Obligations (as defined in the
Loan Agreement) of the Borrower under the Loan Agreement, ((a) and (b) being
hereinafter together referred to as the "Secured Obligations") and (ii) as a
condition precedent to any extension of credit to the Borrower under the Loan
Agreement;
NOW, THEREFORE, for and in consideration of the premises set forth
above and for other good and valuable consideration, the receipt, sufficiency
and adequacy of which are hereby acknowledged, the Borrower agrees as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, each capitalized term used herein
that is defined in the Loan Agreement shall have the meaning specified for such
term in the Loan Agreement.
(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 paragraph 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.
2. Incorporation of Premises. The premises set forth above are
incorporated into this Agreement by this reference thereto and are made a part
hereof.
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3. Incorporation of the Loan Agreement. The Loan Agreement and the
terms and provisions thereof are hereby incorporated herein in their entirety by
this reference thereto.
4. Security Interest in Trademarks. To secure the complete and timely
payment, performance and satisfaction of all of the Secured Obligations, the
Pledgor hereby grants to the Agent for the benefit of the Lender Group a
security interest in, as and by way of a first mortgage and security interest
having priority over all other security interests, with power of sale to the
extent permitted by applicable law, all of the Borrower's now owned or existing
and hereafter acquired or arising: (i) trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service xxxx applications, including, without limitation, the trademarks, trade
names, registered trademarks, trademark applications, service marks, registered
service marks and service xxxx applications listed on Schedule 1 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, and (d) all of the Borrower's rights
corresponding thereto throughout the world (all of the foregoing trademarks,
trade names, registered trademarks and trademark applications, service marks,
registered service marks and service xxxx applications, together with the items
described in clauses (a)-(d) in this paragraph 4(i), are sometimes hereinafter
individually and/or collectively referred to as the "Trademarks"); and (ii) the
goodwill of the Borrower's business connected with and symbolized by the
Trademarks.
5. Restrictions on Future Agreements. The Borrower agrees that it will
not, without the Agent's prior written consent, enter into any agreement,
including, without limitation, any license agreement, which is inconsistent with
this Agreement, and the Borrower further agrees that it will not take any
action, and will use its best efforts not to permit any action to be taken by
others subject to its control, including, without limitation, licensees, or fail
to take any action, which would in any material respect affect the validity or
enforcement of the rights transferred to the Agent under this Agreement or the
rights associated with the Trademarks.
6. New Trademarks. The Borrower represents and warrants that, from and
after the Agreement Date, (a) the Trademarks listed on Schedule 1 include all of
the trademarks in use by the Borrower, trade names, registered trademarks,
trademark applications, service marks in use by the Borrower, registered service
marks and service xxxx applications now owned or held by the Borrower, and (b)
no liens, claims or security interests in such Trademarks have been granted by
the Borrower to any Person other than the Agent and except as disclosed in the
Loan Agreement. If, prior to the termination of this Agreement, the Borrower
shall (i) obtain rights to any new trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks or
service xxxx applications or (ii) become entitled to the benefit of any
trademarks, trade names, 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 or license agreements whether as licensee or licensor, the
provisions of paragraph 4 above shall
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automatically apply thereto (to the extent permitted by licensors under
agreements in connection with the granting of such licenses). The Borrower shall
give to the Agent written notice of events described in clauses (i) and (ii) of
the preceding sentence promptly after the occurrence thereof. The Borrower
hereby authorizes the Agent to modify this Agreement unilaterally (i) by
amending Schedule 1 to include any future trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service xxxx applications, which are Trademarks under paragraph 4 above or under
this paragraph 6 and (ii) by filing, in addition to and not in substitution for
this Agreement, a duplicate original of this Agreement containing on Schedule 1
thereto, as the case may be, such future trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service xxxx applications.
7. Royalties. The Borrower hereby agrees that the use by the Agent of
the Trademarks as authorized hereunder in connection with the Agent's exercise
of its rights and remedies under paragraph 15 or pursuant to any Loan Document
shall be coextensive with the Borrower's rights thereunder and with respect
thereto and without any liability for royalties or other related charges from
the Agent and the Lenders to the Borrower.
8. Right to Inspect; Further Assignments and Security Interest. The
Co-Agents, or any of them, may from time to time hereafter have access to,
examine, audit, make copies (at the Borrower's expense) and extracts from and
inspect the Borrower's premises and examine the Borrower's books, records and
operations relating to the Trademarks. The Borrower agrees not to sell or assign
its interests in, or grant any license under, the Trademarks without the prior
and express written consent of the Agent.
9. Nature and Continuation of the Agent's Security Interest;
Termination of the Agent's Security Interest. This Agreement is made for
collateral security purposes only. This Agreement shall create a continuing
security interest in the Trademarks and shall terminate only when the Secured
Obligations have been paid in full and the Loan Agreement has been terminated.
When this Agreement has terminated, the Agent shall promptly execute and deliver
to the Borrower, at the Borrower's expense, all termination statements and other
instruments as may be necessary or proper to terminate the Agent's security
interest in the Trademarks, subject to any disposition thereof which may have
been made by the Agent pursuant to this Agreement or the Loan Agreement.
10. Duties of the Borrower. The Borrower shall have the duty, to the
extent desirable in the normal conduct of its business, to prosecute diligently
any trademark application or service xxxx application that is part of the
Trademarks pending as of the date hereof or hereafter until the termination of
this Agreement. The Borrower further agrees (i) not to abandon any Trademark
without the prior written consent of the Agent, and (ii) to use its best efforts
to maintain in full force and effect the Trademarks that are or shall be
necessary or economically desirable in the operation of the Borrower's business.
Any expenses incurred in connection with the foregoing shall be borne by the
Borrower. The Agent shall not have any duty with respect to the Trademarks.
Without limiting the generality of the foregoing, neither the Agent nor any of
the Lenders shall be under any obligation to take any steps necessary to
preserve rights in the Trademarks against any other parties, but the Agent may
do so at its option from and after the
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occurrence of an Event of Default, and all expenses incurred in connection
therewith shall be for the sole account of the Borrower and shall be added to
the Secured Obligations secured hereby.
11. The Agent's Right to Xxx. From and after the occurrence of an Event
of Default, the Agent shall have the right, but shall not be obligated, to bring
suit in its own name to enforce the Trademarks and, if the Agent shall commence
any such suit, the Borrower shall, at the request of the Agent, do any and all
lawful acts and execute any and all proper documents reasonably required by the
Agent in aid of such enforcement. The Borrower shall, upon demand, promptly
reimburse the Agent for all costs and expenses incurred by the Agent in the
exercise of its rights under this paragraph 11 (including, without limitation,
fees and expenses of attorneys and paralegals for the Agent).
12. Waivers. The Agent's failure, at any time or times hereafter, to
require strict performance by the Borrower of any provision of this Agreement
shall not waive, affect or diminish any right of the Agent thereafter to demand
strict compliance and performance therewith nor shall any course of dealing
between the Borrower and the Agent 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 the Borrower contained
in this Agreement shall be deemed to have been suspended or waived by the Agent
unless such suspension or waiver is in writing signed by an officer of the Agent
and directed to the Borrower specifying such suspension or waiver.
13. 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.
14. Modification. This Agreement cannot be altered, amended or modified
in any way, except as specifically provided in paragraph 6 hereof or by a
writing signed by the parties hereto.
15. Power of Attorney; Cumulative Remedies. (a) The Borrower hereby
irrevocably designates, constitutes and appoints the Agent (and all officers and
agents of the Agent designated by the Agent in its sole and absolute discretion)
as the Borrower's true and lawful attorney-in-fact, and authorizes the Agent and
any of the Agent's designees, in the Borrower's or the Agent's name, upon the
occurrence and during the continuation of an Event of Default to take any action
and execute any instrument necessary or reasonably advisable to accomplish the
purposes of this Agreement, including, without limitation, to (i) endorse the
Borrower's name on all applications, documents, papers and instruments necessary
or reasonably desirable for the Agent in the use of the Trademarks, (ii) assign,
pledge, convey or otherwise transfer title in or dispose of the Trademarks to
anyone (iii) grant or issue any exclusive or
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nonexclusive license under the Trademarks to anyone and (iv) take any other
actions with respect to the Trademarks as the Agent reasonably deems in the best
interest of the Lender Group. The Borrower 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 this
Agreement is terminated. The Borrower acknowledges and agrees that this
Agreement is not intended to limit or restrict in any way the rights and
remedies of the Agent under the Loan Agreement or any other Loan Document, but
rather is intended to facilitate the exercise of such rights and remedies.
(b) The Agent 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 may be located or deemed
located. Upon the occurrence of an Event of Default and the election by the
Agent to exercise any of its remedies under Section 9-504 or Section 9-505 of
the Uniform Commercial Code as in effect in the State of Georgia with respect to
the Trademarks, the Borrower agrees to assign, convey and otherwise transfer
title in and to the Trademarks to the Agent or any transferee of the Agent and
to execute and deliver to the Agent or any such transferee all such agreements,
documents and instruments as may be necessary, in the Agent's sole discretion,
to effect such assignment, conveyance and transfer. All of the Agent's rights
and remedies with respect to the Trademarks, whether established hereby, by the
Loan Agreement or 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, the Agent may exercise any of the rights and remedies
provided in this Agreement, the Loan Agreement or any of the other Loan
Documents. The Borrower agrees that any notification of intended disposition of
any of the Trademarks required by law shall be deemed reasonably and properly
given if given at least five (5) days, if such notice is given by facsimile or
overnight courier or eight (8) days, if such notice is given by mail, before
such disposition; provided, however, that the Agent may give any shorter notice
that is commercially reasonable under the circumstances.
16. Successors and Assigns. This Agreement shall be binding upon the
Borrower and its successors and assigns, and shall inure to the benefit of each
of the Agent and the other members of the Lender Group and their respective
nominees, successors and assigns.
17. Governing Law. This Agreement shall be construed and enforced and
the rights and duties of the parties shall be governed by in all respects in
accordance with the laws and decisions of the State of Georgia without reference
to the conflicts or choice of law principles thereof.
18. Notices. All notices or other communications hereunder shall be
given in the manner and to the addresses set forth in the Loan Agreement.
19. Paragraph Titles. The paragraph titles herein are for convenience
of reference only, and shall not affect in any way the interpretation of any of
the provisions hereof.
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20. 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.
21. Merger. This Agreement represents the final agreement of the
Borrower, the Lenders, the Co-Agents and the Agent with respect to the matters
contained herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral agreements, between the Borrower
and the Agent, any Co-Agent or any Lender.
22. Effectiveness. This Agreement shall become effective on the Closing
Date.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Sworn to and subscribed THOMASTON XXXXX, INC., a Georgia
before me this ___day of corporation
July, 1999.
By: /s/
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/s/ Its:
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NOTARY PUBLIC
My Commission Expires
Sworn to and subscribed FOOTHILL CAPITAL CORPORATION,
before me this ___day of as Agent
July, 1999.
By: /s/
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/s/ Its:
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NOTARY PUBLIC
My Commission Expires
