Exhibit 10.7
TRADEMARK SECURITY AGREEMENT
THIS TRADEMARK SECURITY AGREEMENT (as amended, amended and restated,
or otherwise modified from time to time, the "Security Agreement") made as of
this 27th day of April, 2004, by EASY GARDENER PRODUCTS, LTD., a Texas limited
partnership ("Borrower") in favor of LASALLE BUSINESS CREDIT, LLC, as agent for
the Lenders party to the Loan Agreement (defined below), with an office at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 ("Agent"):
W I T N E S S E T H
WHEREAS, Borrower, EYAS International, Inc., a Texas corporation, EG
Product Management, L.L.C., a Texas limited liability company, EG, L.L.C., a
Nevada limited liability company, Xxxxxxxxx Consumer Products Group, Inc., a
Delaware corporation, Xxxxxxxxx Consumer Products, Inc., a Delaware corporation,
NBU Group, LLC, a Texas limited liability company, Agent and Lenders are parties
to a certain Loan and Security Agreement of even date herewith (as amended,
amended and restated or otherwise modified from time to time, the "Loan
Agreement") and other related loan documents of even date herewith
(collectively, with the Loan Agreement, and as each may be amended or otherwise
modified from time to time, the "Financing Agreements"), which Financing
Agreements provide (i) for Lenders to, from time to time, extend credit to or
for the account of Borrower, and (ii) for the grant by Borrower to Agent, for
the benefit of Lenders, of a security interest in certain of Borrower's assets,
including, without limitation, its trademarks and trademark applications;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, Borrower agrees as follows:
1. Incorporation of Financing Agreements. The Financing Agreements
and the terms and provisions thereof are hereby incorporated herein in their
entirety by this reference thereto. All terms capitalized but not otherwise
defined herein shall have the same meanings herein as in the Loan Agreement.
2. Grant and Reaffirmation of Grant of Security Interests. To secure
the complete and timely payment and satisfaction of the Liabilities, Borrower
hereby grants to Agent, for the benefit of Agent and Lenders, and hereby
reaffirms its prior grant pursuant to the Financing Agreements of, a continuing
security interest in Borrower's entire right, title and interest in and to all
of its now owned or existing and hereafter acquired or arising trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers, prints
and labels on which any of the foregoing have appeared or appear, all
registrations and recordings thereof, and all applications (other than "intent
to use" applications until a verified statement of use is filed with respect to
such applications) in connection therewith, including, without limitation, the
trademarks and applications listed on Schedule A attached hereto and
made a part hereof and the trademarks, and renewals thereof, and all income,
royalties, damages and payments now or hereafter due and/or payable under or
with respect to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing and
the right to xxx for past, present and future infringements of any of the
foregoing (all of the foregoing are sometimes hereinafter individually and/or
collectively referred to as the "Trademarks"); all rights corresponding to any
of the foregoing throughout the world and the goodwill of the Borrower's
business connected with the use of and symbolized by the Trademarks.
3. Warranties and Representations. Borrower warrants and represents
to Agent and Lenders that:
(i) no Trademark has been adjudged invalid or unenforceable by a
court of competent jurisdiction nor has any such Trademark been cancelled, in
whole or in part and each such Trademark is presently subsisting;
(ii) Except as provided in the Loan Agreement, Borrower is the sole
and exclusive owner of the entire and unencumbered right, title and interest in
and to each Trademark, free and clear of any liens, charges and encumbrances,
including without limitation, shop rights and covenants by Borrower not to xxx
third persons;
(iii) Borrower has no notice of any suits or actions commenced or
threatened with reference to any Trademark; and
(iv) Borrower has the unqualified right to execute and deliver this
Security Agreement and perform its terms.
4. Restrictions on Future Agreements. Borrower agrees that until
Borrower's Liabilities shall have been satisfied in full and the Financing
Agreements shall have been terminated, Borrower shall not, without the prior
written consent of Agent, sell or assign its interest in any Trademark or enter
into any other agreement with respect to any Trademark which would affect the
validity or enforcement of the rights transferred to Agent under this Security
Agreement.
5. New Trademarks. Borrower represents and warrants that, based on a
diligent investigation by Borrower, the Trademarks listed on Schedule A
constitute all of the federally registered Trademarks, and federal applications
for registration of Trademarks (other than "intent to use" applications until a
verified statement of use is filed with respect to such applications) now owned
by Borrower. If, before Borrower's Liabilities shall have been satisfied in full
or before the Financing Agreements have been terminated, Borrower shall (i)
become aware of any existing Trademarks of which Borrower has not previously
informed Agent, or (ii) become entitled to the benefit of any Trademarks, which
benefit is not in existence on the date hereof, the provisions of this Security
Agreement above shall automatically apply thereto and Borrower shall give to
Agent prompt written notice thereof. Borrower hereby authorizes Agent to modify
this Security Agreement by amending Schedule A to include any such Trademarks.
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6. Term. The term of this Security Agreement shall extend until the
payment in full of Borrower's Liabilities and the termination of the Financing
Agreements. Borrower agrees that upon the occurrence of an Event of Default, the
use by Agent of all Trademarks shall be without any liability for royalties or
other related charges from Agent to Borrower.
7. Product Quality. Borrower agrees to maintain the quality of any
and all products in connection with which the Trademarks are used, consistent
with commercially reasonable business practices. Upon the occurrence of an Event
of Default, Borrower agrees that Agent, or a conservator appointed by Agent,
shall have the right to establish such additional product quality controls as
Agent, or said conservator, in its reasonable judgment, may deem necessary to
assure maintenance of the quality of products sold by Borrower under the
Trademarks.
8. Release of Security Agreement. This Security Agreement is made
for collateral purposes only. Upon payment in full of Borrower's Liabilities and
termination of the Financing Agreements, Agent shall take such actions as may be
necessary or proper to terminate the security interests created hereby and
pursuant to the Financing Agreements
9. Expenses. All expenses incurred in connection with the
performance of any of the agreements set forth herein shall be borne by
Borrower. All fees, costs and expenses, of whatever kind or nature, including
reasonable attorneys' fees and legal expenses, incurred by Agent in connection
with the filing or recording of any documents (including all taxes in connection
therewith) in public offices, the payment or discharge of any taxes, reasonable
counsel fees, maintenance fees, encumbrances or otherwise in protecting,
maintaining or preserving the Trademarks or in defending or prosecuting any
actions or proceedings arising out of or related to the Trademarks shall be
borne by and paid by Borrower and until paid shall constitute Liabilities.
10. Duties of Borrower. Borrower shall have the duty (i) to file and
prosecute diligently any trademark applications pending as of the date hereof or
hereafter until Borrower's Liabilities shall have been paid in full and the
Financing Agreements have been terminated, (ii) to preserve and maintain all
rights in the Trademarks, as commercially reasonable and (iii) to ensure that
the Trademarks are and remain enforceable, as commercially reasonable. Any
expenses incurred in connection with Borrower's Liabilities under this Section
10 shall be borne by Borrower.
11. Agent's Right to Xxx. After an Event of Default, Agent shall
have the right, but shall in no way be obligated, to bring suit in its own name
to enforce the Trademarks and, if Agent shall commence any such suit, Borrower
shall, at the request of Agent, do any and all lawful acts and execute any and
all proper documents required by Agent in aid of such enforcement and Borrower
shall promptly, upon demand, reimburse and indemnify Agent for all costs and
expenses incurred by Agent in the exercise of its rights under this Section 11.
12. Waivers. No course of dealing among Borrower, Agent and Lenders,
nor any failure to exercise, nor any delay in exercising, on the part of Agent,
any right, power or
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privilege hereunder or under the Financing Agreements shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
13. Severability. The provisions of this Security 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 thereof, 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 Security
Agreement in any jurisdiction.
14. Modification. This Security Agreement cannot be altered, amended
or modified in any way, except as specifically provided in Section 5 hereof or
by a writing signed by the parties hereto.
15. Cumulative Remedies; Power of Attorney; Effect on Financing
Agreements. All of Agent's rights and remedies with respect to the Trademarks,
whether established hereby or by the Financing Agreements, or by any other
agreements or by law shall be cumulative and may be exercised singularly or
concurrently. Borrower hereby authorizes Agent upon the occurrence of an Event
of Default, to make, constitute and appoint any officer or agent of Agent as
Agent may select, in its sole discretion, as Borrower's true and lawful
attorney-in-fact, with power to (i) endorse Borrower's name on all applications,
documents, papers and instruments necessary or desirable for Agent in the use of
the Trademarks or (ii) take any other actions with respect to the Trademarks as
Agent deems to be in the best interest of Agent, or (iii) grant or issue any
exclusive or non-exclusive license under the Trademarks to anyone, or (iv)
assign, pledge, convey or otherwise transfer title in or dispose of the
Trademarks to anyone. Borrower hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney, being
coupled with an interest, shall be irrevocable until Borrower's Liabilities
shall have been paid in full and the Financing Agreements have been terminated.
Borrower acknowledges and agrees that this Security Agreement is not intended to
limit or restrict in any way the rights and remedies of Agent under the
Financing Agreements but rather is intended to facilitate the exercise of such
rights and remedies. Agent shall have, in addition to all other rights and
remedies given it by the terms of this Security Agreement and the Financing
Agreements, all rights and remedies allowed by law and the rights and remedies
of a secured party under the Uniform Commercial Code as enacted in Illinois.
16. Binding Effect; Benefits. This Security Agreement shall be
binding upon Borrower and its respective successors and assigns, and shall inure
to the benefit of Agent, its successors, nominees and assigns.
17. Governing Law. This Security Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and applicable
federal law.
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18. Headings. Paragraph headings used herein are for convenience
only and shall not modify the provisions which they precede.
19. Further Assurances. Borrower agrees to execute and deliver such
further agreements, instruments and documents, and to perform such further acts,
as Agent shall reasonably request from time to time in order to carry out the
purpose of this Security Agreement and agreements set forth herein.
20. Survival of Representations. All representations and warranties
of Borrower contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement and shall be remade on the date of each
borrowing under the Financing Agreements.
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IN WITNESS WHEREOF, Borrower has duly executed this Security
Agreement as of the date first written above.
EASY GARDENER PRODUCTS, LTD.
By Xxxxxxx X. Xxxx
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Title CFO
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Agreed and Accepted
As of the Date First Written Above
LASALLE BUSINESS CREDIT, LLC, as Agent
By Xxxxxxx Staple
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Title First Vice President
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SCHEDULE A
TRADEMARK REGISTRATIONS
Trademark Description U.S. Serial Registration No. Date Registered
--------------------- ----------- ---------------- ---------------
Tree Gard 75-028507 2010199 10/22/96
Fabricpegs 74-696434 1981079 6/18/96
Bio Block 74-539577 1938066 11/28/95
Stops Weeds For Years 74-539576 1921278 9/19/95
Polyspun 350 74-448123 1905636 7/18/95
Deer Block 74-329925 1802112 11/2/93
It Works. You Don't 74-243947 1768337 5/4/93
Xxxx 74-215625 1741296 12/22/92
Fast Start 74-137942 1671754 1/14/92
Xxxx 74-107615 1682545 4/14/92
Xxxx 74-079932 1684947 5/5/92
Gro-Stakes 74-079964 1664643 11/19/91
Xxxx Xxxx Feeder 74-079974 1675783 2/18/92
Fabricpegs 73-763890 1557426 9/19/89
Cloud Cover 73-367655 1252606 10/4/83
'Tomato Boomers' 73-076439 1084414 2/7/78
Xxxx'x 72-452799 982195 4/16/74
Easy Gardener 75-507138 2294225 11/23/99
Tree Stakit 74-332849 1769537 5/4/93
Bird Block 74-329534 1804536 11/16/93
Gro Cover 73-655219 1475961 2/9/88
Gro-Bags 73-631381 1447569 7/14/87
Weedblock 73-576723 1408576 9/9/86
Easy Gardener 73-576724 1445222 6/30/87
TRADEMARK APPLICATIONS
Trademark Application Description U.S. Application No. Date Applied
--------------------------------- -------------------- ------------
Xxxx'x 78-282218 8/1/03
None (design only) 78-328076 11/14/03
None (design only) 78-293101 8/27/03
Gothic Border 78-286471 8/12/03
