EXHIBIT 99.8
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (this "AGREEMENT") is
dated as of September 29, 2003 and entered into by and among LEVI XXXXXXX & CO.,
a Delaware corporation (the "BORROWER"), each of THE UNDERSIGNED DIRECT AND
INDIRECT SUBSIDIARIES of the Borrower (each of such undersigned Subsidiaries
being a "SUBSIDIARY GRANTOR" and collectively the "SUBSIDIARY GRANTORS") and
each ADDITIONAL GRANTOR that may become a party hereto after the date hereof in
accordance with Section 17 hereof (each of the Borrower, each Subsidiary Grantor
and each Additional Grantor being a "GRANTOR" and collectively the "GRANTORS")
and BANK OF AMERICA, N.A., as Administrative Agent for and representative of (in
such capacities herein called the "SECURED PARTY") the several financial
institutions (the "LENDERS") from time to time party to the Credit Agreement
referred to below.
PRELIMINARY STATEMENTS
A. Pursuant to that certain Credit Agreement dated as of September 29,
2003 by and among Levi Xxxxxxx & Co., a Delaware corporation, the Lenders from
time to time party thereto, and Bank of America, N.A., as Administrative Agent
("ADMINISTRATIVE AGENT") for the Lenders (said Credit Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "CREDIT Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined), the Lenders
have made certain commitments, subject to the terms and conditions set forth in
the Credit Agreement, to extend a certain term loan credit facility to the
Borrower.
B. The Subsidiary Grantors have executed and delivered that certain
Guaranty dated as of the date hereof (said Guaranty, as it may hereafter be
amended, supplemented, restated or otherwise modified from time to time, being
the "GUARANTY") in favor of the Secured Party for the benefit of the Lenders and
Administrative Agent, pursuant to which each Subsidiary Grantor has guarantied
the prompt payment and performance when due of all Obligations of the Borrower
under the Credit Agreement.
C. It is a condition precedent to the initial extensions of credit by
the Lenders under the Credit Agreement that the Grantors listed on the signature
pages hereof shall have granted the security interests and undertaken the
obligations contemplated by this Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce the Lenders and the Secured Party to enter into the Credit
Agreement, each Grantor hereby agrees with the Secured Party as follows:
Section 1. GRANT OF SECURITY. Each Grantor hereby grants to the Secured Party,
for the benefit of the Lenders and the Secured Party, a security interest in all
of such Grantor's right, title and interest in and to the following, in each
case whether now or hereafter existing, whether
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tangible or intangible, or in which such Grantor now has or hereafter acquires
an interest and wherever the same may be located (the "COLLATERAL"):
(a) all rights, title and interest (including rights acquired pursuant to a
license or otherwise) in and to all trademarks, service marks, designs, logos,
indicia, tradenames, trade dress, corporate names, company names, business
names, fictitious business names, trade styles and/or other source and/or
business identifiers and applications pertaining thereto, owned by such Grantor,
or hereafter adopted and used, in its business (including the trademarks set
forth on Schedule B attached hereto, as the same may be amended pursuant hereto
from time to time) (provided that no security interest shall be granted in
United States intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law) (collectively, the "TRADEMARKS"), all
registrations that have been or may hereafter be issued or applied for thereon
in the United States and any state thereof and in foreign countries (including
the registrations and applications specifically set forth on Schedule B attached
hereto, as the same may be amended pursuant hereto from time to time) (provided
that no security interest shall be granted in United States intent-to-use
trademark applications to the extent that, and solely during the period in
which, the grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark applications under applicable
federal law) (the "TRADEMARK REGISTRATIONS"), all common law and other rights in
and to the Trademarks in the United States and any state thereof and in foreign
countries (the "TRADEMARK RIGHTS"), and all goodwill of such Grantor's business
symbolized by the Trademarks and associated therewith (the "ASSOCIATED GOODWILL"
and, together with the Trademarks, Trademark Registrations and Trademark Rights,
the "TRADEMARK COLLATERAL"), it being understood that the rights and interests
included in the Trademark Collateral hereby shall include, without limitation,
all rights and interests pursuant to licensing or other contracts in favor of
such Grantor pertaining to Trademark applications and Trademarks presently or in
the future owned or used by third parties but, in the case of third parties
which are not Affiliates of such Grantor, only to the extent permitted by such
licensing or other contracts and, if not so permitted, only with the consent of
such third parties;
(b) all rights, title and interest (including rights acquired pursuant to a
license or otherwise) under copyright in various published and unpublished works
of authorship including computer programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs, writings and formulas owned
by such Grantor (including the works set forth on Schedule C attached hereto, as
the same may be amended pursuant hereto from time to time) (collectively, the
"COPYRIGHTS"), all copyright registrations issued to such Grantor and
applications for copyright registration that have been or may hereafter be
issued or applied for thereon by such Grantor in the United States and any state
thereof and in foreign countries (including the registrations set forth on
Schedule C attached hereto, as the same may be amended pursuant hereto from time
to time) (collectively, the "COPYRIGHT REGISTRATIONS"), all common law and other
rights in and to the Copyrights in the United States and any state thereof and
in foreign countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing arrangements)
(the "COPYRIGHT RIGHTS" and, together with the Copyrights and the Copyright
Registrations, the "COPYRIGHT COLLATERAL" and collectively, together with the
Trademark Collateral, the "IP COLLATERAL"), including each of the Copyrights,
rights, titles and interests in and to the Copyrights, all derivative works and
other
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works protectable by copyright, which are presently, or in the future may be,
owned, created (as a work for hire or for the benefit of such Grantor), authored
(as a work for hire or for the benefit of such Grantor) or acquired by such
Grantor, in whole or in part, and all Copyright Rights with respect thereto and
all Copyright Registrations therefor, heretofore or hereafter granted or applied
for, and all renewals and extensions thereof, throughout the world, including
the right to renew and extend such Copyright Registrations and Copyright Rights
and to register works protectable by copyright and the right, exercisable only
upon the occurrence and during the continuation of an Event of Default, to xxx
for past, present and future infringements of the Copyrights and Copyright
Rights in the name of such Grantor or in the name of the Secured Party or the
Lenders, it being understood that the rights and interests included in the
Copyright Collateral hereby shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of such Grantor
pertaining to Copyright applications and Copyrights presently or in the future
owned or used by third parties but, in the case of third parties which are not
Affiliates of such Grantor, only to the extent permitted by such licensing or
other contracts and, if not so permitted, only with the consent of such third
parties; and
(c) all proceeds, products, rents, profits and royalties of or from any and
all of the foregoing IP Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not the Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing IP Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when IP Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary,
including all proceeds from the use or licensing of the IP Collateral, provided
that such proceeds shall not include inventory (regardless whether such
inventory bears any of the IP Collateral) or accounts receivable (regardless
whether such accounts receivable arise from the sale of inventory that bears any
of the IP Collateral, but in any case accounts receivable shall not include any
royalties from the licensing of IP Collateral) or inventory sold pursuant to any
trademark license granted to the ABL Agent (as defined in the Credit Agreement).
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in any of such Grantor's rights or interests in any license, contract
or agreement to which such Grantor is a party or any of its rights or interests
thereunder to the extent, but only to the extent, that such a grant would, under
the terms of such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under, any license, contract or
agreement to which such Grantor is a party (other than to the extent that any
such term would be rendered ineffective pursuant to the UCC or any other
applicable law (including the Bankruptcy Code) or principles of equity);
provided, that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Each item of Collateral listed in this Section 1 that is defined in
Articles 8 or 9 of the UCC shall have the meaning set forth in the UCC, as it
exists on the date of this Agreement or as it may hereafter be amended, it being
the intention of the Grantors that the description of the Collateral set forth
above be construed to include the broadest possible range of assets, except for
assets expressly excluded as set forth above.
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Section 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral assigned by each Grantor is collateral security for, the prompt
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code), of all Secured Obligations of
such Grantor. "SECURED OBLIGATIONS" means (i) with respect to the Borrower, all
Obligations and liabilities of every nature of the Borrower now or hereafter
existing under or arising out of or in connection with the Credit Agreement and
the other Loan Documents and (ii) with respect to each Subsidiary Grantor or
Additional Grantor, all Obligations and liabilities of every nature of such
Grantor now or hereafter existing under or arising out of or in connection with
the Guaranty.
Section 3. GRANTORS REMAIN LIABLE. Anything contained herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Secured Party of any of its rights hereunder shall not release any Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under any contracts, licenses, and agreements included in the
Collateral by reason of this Agreement, nor shall the Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
Section 4. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly permitted by the Credit
Agreement and for the security interest created by this Agreement, such Grantor
owns the Collateral owned by such Grantor free and clear of any Lien. Except as
expressly permitted by the Credit Agreement and such as may have been filed in
favor of the Secured Party relating to this Agreement, no effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any filing or recording office.
(b) OFFICE LOCATIONS; TYPE AND JURISDICTION OF ORGANIZATION. The chief
place of business, the chief executive office and the office where such Grantor
keeps its records regarding the IP Collateral are, as of the date hereof, and,
except as set forth on Schedule D attached hereto, have been for the four month
period preceding the date hereof, or, in the case of an Additional Grantor, the
date of the applicable Counterpart, located at the locations set forth on
Schedule D attached hereto, as Schedule D may be updated upon the execution of
this Agreement by such Additional Grantor; the type (i.e. corporation, limited
partnership, etc.) and jurisdiction of organization of such Grantor are set
forth on Schedule D attached hereto.
(c) NAMES. No Grantor (or predecessor by merger or otherwise of such
Grantor) has, within the four month period preceding the date hereof, or, in the
case of an Additional Grantor, the date of the applicable Counterpart, had a
different name from the name of such Grantor listed or the signature pages
hereof, except the names set forth on Schedule E attached hereto, as Schedule E
may be updated upon the execution of this Agreement by an Additional Grantor.
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(d) IP COLLATERAL.
(i) A true and complete list of all Trademark Registrations and
Trademark applications owned by such Grantor, in whole or in part, that are
material to such Grantor's business is set forth on attached hereto.
(ii) A true and complete list of all Copyright Registrations and
applications for Copyright Registrations owned by such Grantor, in whole or
in part, is set forth on Schedule C attached hereto.
(iii) Each Grantor makes the representations and warranties made in
Section 5.17 of the Credit Agreement by the Borrower as to such Grantor,
its assets, financial condition, operations and business.
(iv) After giving effect to the releases delivered on the Closing Date
in respect of the Existing Credit Agreement, no effective security interest
or other Lien covering all or any part of the IP Collateral is on file in
the United States Patent and Trademark Office or the United States
Copyright Office.
(v) Other than Permitted Rights and as set forth on Schedule
5.17(a)(v) of the Credit Agreement, each Grantor has the full right and
power to grant the license set forth in Section 7(e) and there are no
outstanding agreements, assignments or encumbrances inconsistent with the
provisions of this Agreement.
(e) PERFECTION. The security interests in the Collateral granted to the
Secured Party for the ratable benefit of the Lenders hereunder constitute valid
Liens on such Collateral, securing the payment of the Secured Obligations. Upon
(i) the filing of UCC financing statements naming each Grantor as "DEBTOR",
naming the Secured Party as "SECURED PARTY" and describing the Collateral in the
filing offices with respect to such Grantor set forth on Schedule F attached
hereto, as Schedule F may be updated upon the execution of this Agreement by an
Additional Grantor, (ii) in the case of the Trademark Collateral, in addition to
the filing of such UCC financing statements, the filing of a Grant of Trademark
Security Interest, substantially in the form of Exhibit I, with the United
States Patent and Trademark Office and (iii) in the case of Copyright Collateral
(other than Copyright Collateral that is not material to the business of any
Grantor ("IMMATERIAL COPYRIGHT COLLATERAL")), in addition to the filing of such
UCC financing statements, the filing of a Grant of Copyright Security Interest,
substantially in the form of Exhibit II, with the United States Copyright Office
(each such Grant of Trademark Security Interest and Grant of Copyright Security
Interest being referred to herein as a "GRANT"), the security interests in the
Collateral granted to the Secured Party for the ratable benefit of the Lenders
will constitute perfected security interests therein, to the extent such
security interests may be perfected by filing in the United States or by
possession, prior to all other Liens (except for Liens expressly permitted by
the Credit Agreement), and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly made or taken.
Section 5. FURTHER ASSURANCES.
(a) GENERALLY. Each Grantor agrees that from time to time, at the expense
of the Grantors, such Grantor will promptly execute and deliver all further
instruments and documents,
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and take all further action, that may be necessary or desirable, or that the
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby in any Collateral
(other than Immaterial Copyright Collateral) or to enable the Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor will:
(i) furnish to the Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Party may reasonably request, all
in reasonable detail, and (ii) at the Secured Party's request, appear in and
defend any action or proceeding that may affect such Grantor's title to or the
Secured Party's security interest in all or any part of the Collateral. Each
Grantor hereby authorizes the Secured Party to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of any Grantor. Each Grantor agrees that a
carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by such Grantor shall be sufficient as a financing statement
and may be filed as a financing statement in any and all jurisdictions.
(b) IP COLLATERAL. Without limiting the generality of the foregoing Section
5(a), if any Grantor shall hereafter obtain rights to any new IP Collateral or
become entitled to the benefit of (i) any Trademark Registration or application
for Trademark Registration or (ii) any Copyright Registration or application for
Copyright Registration, then in any such case, the provisions of this Agreement
shall automatically apply thereto. Each Grantor shall, within 45 days after the
end of each Fiscal Quarter of the Borrower, notify the Secured Party in writing
of any of the foregoing rights acquired by such Grantor after the date hereof or
the date of the last such notice, as the case may be. Within 45 days after the
end of each Fiscal Quarter of the Borrower during which any Grantor files an
application for any Trademark Registration or Copyright Registration, such
Grantor shall execute and deliver to the Secured Party an IP Supplement,
substantially in the form of Exhibit III (an "IP SUPPLEMENT"), pursuant to which
such Grantor shall grant to the Secured Party a security interest to the extent
of its interest in such IP Collateral (provided that no security interest shall
be granted in United States intent-to-use trademark applications to the extent
that, and solely during the period in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use
trademark applications under applicable federal law). In addition, such Grantor
shall, prior to the end of such 45-day period, in the case of Trademarks, record
the IP Supplement with the United States Patent and Trademark Office or, in the
case of Copyrights, record the IP Supplement with the Library of Congress
Copyright Office of the United States. Upon delivery to the Secured Party of an
IP Supplement, Schedule B and Schedule C attached hereto and Schedule A to each
Grant, as applicable, shall be deemed modified to include reference to any
right, title or interest in any existing IP Collateral or any IP Collateral set
forth on Schedule A to such IP Supplement. Each Grantor hereby authorizes the
Secured Party to modify this Agreement without the signature or consent of any
Grantor by attaching Schedule B and Schedule C, as applicable, that have been
modified to include such IP Collateral or to delete any reference to any right,
title or interest in any IP Collateral in which any Grantor no longer has or
claims any right, title or interest; PROVIDED, the failure of any Grantor to
execute an IP Supplement with respect to any additional IP Collateral pledged
pursuant to this Agreement shall not impair the security interest of the Secured
Party therein or otherwise adversely affect the rights and remedies of the
Secured Party hereunder with respect thereto. Notwithstanding the foregoing,
Grantor shall not be required to record the security interest of the Secured
Party (i) in any Immaterial Copyright Collateral or
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(ii) in any IP Collateral, if such recordation would result in
the grant of a Trademark Registration or Copyright Registration, or
any application therefor, in the name of the Secured Party.
Section 6. CERTAIN COVENANTS OF THE GRANTORS. Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral,
except where such violation would not have a Material Adverse Effect;
(b) notify the Secured Party of any change in such Grantor's name,
identity or corporate structure within 30 days of such change;
(c) give the Secured Party 30 days' prior written notice of any change
in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records that evidence
a reincorporation, reorganization or other action that results in a change
of the jurisdiction of organization of such Grantor; and
(d) if the Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes.
Section 7. SPECIAL COVENANTS WITH RESPECT TO THE IP COLLATERAL.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the IP
Collateral and at all times keep at least one complete set of its
records concerning such Collateral at its chief executive office or
principal place of business;
(ii) use commercially reasonable efforts so as not to permit the
inclusion in any contract to which it hereafter becomes a party of any
provision that could or might in any way impair or prevent the
creation of a security interest in, or the assignment of, such
Grantor's rights and interests in any property included within the IP
Collateral acquired under such contracts (other than Permitted
Rights);
(iii) use proper statutory notice in connection with its use of
any of the IP Collateral, except where the failure to give such notice
would not be material to the operations or financial condition of such
Grantor;
(iv) use a commercially appropriate standard of quality (which
may be consistent with such Grantor's past practices) in the
manufacture, sale and delivery of products and services sold or
delivered under or in connection with the Trademarks; and
(v) furnish to the Secured Party from time to time at the Secured
Party's reasonable request statements and schedules further
identifying and describing any IP Collateral and such other reports in
connection with such Collateral, all in reasonable detail.
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(b) Except as otherwise provided in this Section 7, each Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
such Grantor in respect of the IP Collateral or any portion thereof. In
connection with such collections, each Grantor may take (and, after the
occurrence and during the continuance of any Event of Default at the Secured
Party's reasonable direction, shall take) such action as such Grantor or the
Secured Party may deem reasonably necessary or advisable to enforce collection
of such amounts; PROVIDED, the Secured Party shall have the right at any time,
upon the occurrence and during the continuation of an Event of Default and upon
written notice to such Grantor of its intention to do so, to notify the obligors
with respect to any such amounts of the existence of the security interest
created hereby and to direct such obligors to make payment of all such amounts
directly to the Secured Party, and, upon such notification and at the expense of
such Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from the Secured Party referred to in the proviso to the preceding
sentence and during the continuation of any Event of Default, (i) all amounts
and proceeds (including checks and other instruments) received by each Grantor
in respect of amounts due to such Grantor in respect of the IP Collateral or any
portion thereof shall be received in trust for the benefit of the Secured Party
hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to the Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 13 hereof, and (ii) such Grantor shall not
adjust, settle or compromise the amount or payment of any such amount or release
wholly or partly any obligor with respect thereto or allow any credit or
discount thereon.
(c) Each Grantor shall have the duty diligently, through counsel reasonably
acceptable to the Secured Party, to prosecute, file and/or make, unless and
until such Grantor, in its commercially reasonable judgment, decides otherwise,
(i) any application relating to any of the IP Collateral (other than Immaterial
Copyright Collateral) owned, held or used by such Grantor and set forth on
Schedule B and Schedule C attached hereto, as applicable, that is pending as of
the date of this Agreement, (ii) any Copyright Registration on any existing or
future unregistered but copyrightable works (except for works of nominal
commercial value or with respect to which such Grantor has determined in the
exercise of its commercially reasonable judgment that it shall not seek
registration), and (iii) any Trademark opposition and cancellation proceedings,
renew Trademark Registrations and Copyright Registrations (other than Immaterial
Copyright Collateral) and do any and all acts which are necessary or desirable
to preserve and maintain all rights in all IP Collateral (other than Immaterial
Copyright Collateral). Any expenses incurred in connection therewith shall be
borne solely by the Grantors. Subject to the foregoing, each Grantor shall,
within 45 days after the end of each Fiscal Quarter of the Borrower, give the
Secured Party written notice of any abandonment of any IP Collateral registered
with a Governmental Authority.
(d) Except as provided herein, each Grantor shall have the right to
commence and prosecute and/or defend in its own name, as real party in interest,
for its own benefit and at its own expense, such suits, proceedings or other
actions for infringement, unfair competition, dilution, or other damage
proceedings as are necessary to protect the IP Collateral. The Secured Party
shall provide, at such Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including
joining as a necessary party. Each
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Grantor shall, within 45 days after the end of each Fiscal Quarter of the
Borrower, notify the Secured Party of the institution of, or of any adverse
determination that would be reasonably likely to have a Material Adverse Effect
in, any proceeding (whether in the United States Patent and Trademark Office,
the United States Copyright Office or any federal, state, local or foreign
court) or regarding such Grantor's ownership, right to use, or interest in any
IP Collateral. Each Grantor shall provide to the Secured Party any information
with respect thereto requested by the Secured Party.
(e) In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of an Event of Default, hereby
grants the Secured Party the nonexclusive, transferable, sublicensable,
royalty-free, irrevocable right and license to use all trademarks or tradenames,
copyrights (including all copyrights embodied in, associated with, or necessary
for the use of the Trademarks owned or used by such Grantor (including the right
to copy, create derivative works of or otherwise reproduce the Trademarks))
(including the IP Collateral) owned or used by such Grantor that relate to the
Collateral and any other collateral granted by such Grantor as security for the
Secured Obligations, including the Second-Lien Collateral (the Collateral and
Second-Lien Collateral together, the "COMBINED COLLATERAL") together with any
goodwill associated therewith, all to the extent necessary to enable the Secured
Party to realize on the Collateral in accordance with this Agreement and the
Second-Lien Collateral in accordance with the Second-Lien Pledge and Security
Agreement and to enable any transferee or assignee of any of the Combined
Collateral to enjoy the benefits of such collateral; PROVIDED, however, the
license granted under this Section 7(e) shall not be construed to limit such
Grantor's ability to take reasonable steps, in accordance with its then current
business practices, to protect and preserve any or all of the Combined
Collateral. This right shall inure to the benefit of all successors, assigns and
transferees of the Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor. In addition to the granting of such right
and license, effective upon the occurrence of an Event of Default, each Grantor
grants to the Secured Party and its employees, representatives and agents the
right to visit such Grantor's and any of its Affiliates' or subcontractors'
respective plants, facilities and other places of business that are utilized in
connection with the manufacture, production, inspection, storage or sale of
products and services sold or delivered under any of the IP Collateral (or which
were so utilized during the prior six month period), and to inspect the quality
control and all other records relating thereto upon reasonable advance written
notice to such Grantor and at reasonable dates and times and as often as may be
reasonably requested. If and to the extent that any Grantor is permitted to
license the IP Collateral, the Secured Party shall promptly enter into a
non-disturbance agreement or other similar arrangement, at such Grantor's
request and expense, with such Grantor and any licensee of any IP Collateral
permitted hereunder in form and substance reasonably satisfactory to the Secured
Party pursuant to which (i) the Secured Party shall agree not to disturb or
interfere with such licensee's rights under its license agreement with such
Grantor so long as such licensee is not in default thereunder, and (ii) such
licensee shall acknowledge and agree that the IP Collateral licensed to it is
subject to the security interest created in favor of the Secured Party and the
other terms of this Agreement.
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Section 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Each Grantor hereby
irrevocably appoints the Secured Party as such Grantor's attorney-in-fact, with
full authority in the place and stead of such Grantor and in the name of such
Grantor, the Secured Party or otherwise, from time to time in the Secured
Party's discretion to take any action and to execute any instrument that the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including:
(a) upon the occurrence and during the continuance of an Event of Default,
to obtain and adjust insurance required to be maintained by such Grantor or paid
to Administrative Agent pursuant to the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of Default,
to ask for, demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of Default,
to receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clauses (a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of Default,
to file any claims or take any action or institute any proceedings that the
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Secured Party with respect
to any of the Collateral;
(e) except as otherwise permitted by the Credit Agreement, to pay or
discharge taxes or Liens (other than Liens permitted under this Agreement or the
Credit Agreement) levied or placed upon or threatened against the Collateral,
the legality or validity thereof and the amounts necessary to discharge the same
to be determined by the Secured Party in its sole discretion, any such payments
made by the Secured Party to become Obligations of such Grantor to the Secured
Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of Default,
to sign and endorse any assignments, verifications, notices and other documents
in connection with the Collateral; and
(g) upon the occurrence and during the continuance of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Secured Party were the absolute owner thereof for all purposes, and to do, at
the Secured Party's option and the Grantors' expense, at any time or from time
to time, all acts and things that the Secured Party deems necessary to protect,
preserve or realize upon the Collateral and the Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as such Grantor might do.
Section 9. SECURED PARTY MAY PERFORM. If any Grantor fails to perform any
agreement contained herein, the Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of the Secured Party incurred
in connection therewith shall be payable by the Grantors under Section 14(b)
hereof.
10
Section 10. STANDARD OF CARE. The powers conferred on the Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. The Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which the Secured
Party accords its own property.
Section 11. REMEDIES. If any Event of Default shall have occurred and be
continuing, the Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the UCC (whether or not the UCC applies to the affected Collateral), and also
may (i) prepare the Collateral for disposition in any manner to the extent the
Secured Party deems appropriate, (ii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as the Secured Party may
deem commercially reasonable. The Secured Party or any Lender may be the
purchaser of any or all of the Collateral at any such sale and the Secured
Party, as agent for and representative of the Lenders (but not any Lender in its
individual capacity unless Required Lenders shall otherwise agree in writing),
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by the Secured Party at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Secured Party shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Grantor hereby
waives any claims against the Secured Party arising by reason of the fact that
the price at which any Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale, even if the
Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, the Grantors shall be jointly and severally liable for the
deficiency and the fees of any attorneys employed by the Secured Party to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 11 will cause irreparable injury to the
Secured Party, that the Secured Party has no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 11 shall be specifically enforceable against such Grantor, and each
Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a
11
defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities.
Section 12. ADDITIONAL REMEDIES FOR IP COLLATERAL.
(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, (i) the Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, the Secured Party or otherwise, to enforce any IP Collateral, in
which event each Grantor shall, at the request of the Secured Party, do any and
all lawful acts and execute any and all documents required by the Secured Party
in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify the Secured Party as provided in Sections 10.04 and
10.05 of the Credit Agreement and Section 14 hereof, as applicable, in
connection with the exercise of its rights under this Section 12, and, to the
extent that the Secured Party shall elect not to bring suit to enforce any IP
Collateral as provided in this Section 12, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the IP Collateral by others and for that
purpose agrees to use its commercially reasonable judgment in maintaining any
action, suit or proceeding against any Person so infringing reasonably necessary
to prevent such infringement; (ii) upon written demand from the Secured Party,
each Grantor shall execute and deliver to the Secured Party an assignment or
assignments of the IP Collateral and such other documents as are necessary or
appropriate to carry out the intent and purposes of this Agreement; (iii) each
Grantor agrees that such an assignment and/or recording shall be applied to
reduce the Secured Obligations outstanding only to the extent that the Secured
Party (or any Lender) receives cash proceeds in respect of the sale of, or other
realization upon, the IP Collateral; and (iv) within five Business Days after
written notice from the Secured Party, each Grantor shall make available to the
Secured Party, to the extent within such Grantor's power and authority, such
personnel in such Grantor's employ on the date of such Event of Default as the
Secured Party may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce, advertise
and sell the products and services sold or delivered by such Grantor under or in
connection with the Trademarks, Trademark Registrations and Trademark Rights,
such persons to be available to perform their prior functions on the Secured
Party's behalf and to be compensated by the Secured Party at such Grantor's
expense on a per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment to the Secured Party of any rights, title and interests in and to the
IP Collateral shall have been previously made, and (iv) the Secured Obligations
shall not have become immediately due and payable, upon the written request of
any Grantor, the Secured Party shall promptly execute and deliver to such
Grantor such assignments as may be necessary to reassign to such Grantor any
such rights, title and interests as may have been assigned to the Secured Party
as aforesaid, subject to any disposition thereof that may have been made by the
Secured Party; PROVIDED, after giving effect to such reassignment, the Secured
Party's security interest granted pursuant hereto, as well as all other rights
and remedies of the Secured Party granted hereunder, shall continue to be in
full force and effect; and PROVIDED FURTHER, the rights, title and interests so
reassigned shall be free and clear of all Liens other than
12
Liens (if any) encumbering such rights, title and interest at the time of their
assignment to the Secured Party and Liens expressly permitted by the Credit
Agreement.
Section 13. APPLICATION OF PROCEEDS. Except as expressly provided elsewhere
in this Agreement, all proceeds received by the Secured Party in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral shall be applied as provided in Section 8.03 of the Credit Agreement.
Section 14. INDEMNITY AND EXPENSES.
(a) The Grantors jointly and severally agree to indemnify the Secured Party
and each Lender from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including enforcement of this Agreement),
except to the extent such claims, losses or liabilities result solely from the
Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) The Grantors jointly and severally agree to pay to the Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of the Secured Party hereunder, or
(iv) the failure by any Grantor to perform or observe any of the provisions
hereof.
(c) The obligations of the Grantors in this Section 14 shall (i) survive
the termination of this Agreement and the discharge of the Grantors' other
Obligations under this Agreement, the Credit Agreement and the other Loan
Documents and (ii), as to any Grantor that is a party to a Guaranty, be subject
to the provisions of Section 1(b) thereof.
Section 15. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS; TERMINATION
AND RELEASE.
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Obligations (other than inchoate indemnity obligations) (ii) be
binding upon the Grantors and their respective successors and assigns, and (iii)
inure, together with the rights and remedies of the Secured Party hereunder, to
the benefit of the Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), but subject to
the provisions of Section 10.07 of the Credit Agreement, any Lender may assign
or otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to the Lenders herein or otherwise.
(b) Upon the payment in full of all Obligations (other than inchoate
indemnity obligations), the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the applicable Grantors. Upon any
such termination the Secured Party will, at the Grantors' expense, execute and
deliver to the Grantors such documents as the Grantors shall reasonably request
to evidence such termination.
13
(c) In addition, upon the proposed sale, transfer or other disposition of
any Collateral by a Grantor in accordance with the Credit Agreement for which
such Grantor desires to obtain a security interest release from the Secured
Party, a security interest release may be obtained pursuant to the provisions
set forth in this Section 15(c). In connection with any such disposition, a
Grantor shall deliver an officer's certificate (x) stating that the Collateral
subject to such disposition is being sold or otherwise disposed of and (y)
specifying the Collateral being sold or otherwise disposed of in the proposed
transaction. Upon the receipt of such officer's certificate, the Secured Party
shall, at such Grantor's expense, so long as the Secured Party (A) has no reason
to believe that the facts stated in such officer's certificate are not true and
correct and (B) if the sale or other disposition of such item of Collateral
constitutes a Disposition of IP Collateral permitted by Section 7.05(f) of the
Credit Agreement shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery of the Net Cash
Proceeds therefrom if and as required by Section 2.04 of the Credit Agreement,
execute and deliver such releases of its security interest in such Collateral or
such Guaranty, in each case as may be reasonably requested by such Grantor.
Section 16. SECURED PARTY AS AGENT.
(a) The Secured Party has been appointed to act as the Secured Party
hereunder by the Lenders. The Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including the release or substitution of Collateral), solely in accordance with
this Agreement and the Credit Agreement; PROVIDED that the Secured Party shall
exercise, or refrain from exercising, any remedies provided for in Sections 11
and 12 hereof in accordance with the instructions of Required Lenders.
(b) The Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to Section 9.09 of the Credit Agreement shall
also constitute notice of resignation as the Secured Party under this Agreement;
and appointment of a successor administrative agent pursuant to Section 9.09 of
the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under Section 9.09 of the Credit Agreement by a successor
administrative agent, that successor administrative agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Secured Party under this Agreement, and the retiring Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring Secured Party shall be discharged from its duties and obligations
under this Agreement. After any retiring administrative agent's resignation
hereunder as the Secured Party, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was the Secured Party hereunder.
14
Section 17. ADDITIONAL GRANTORS. The initial Subsidiary Grantors hereunder
shall be such of the Subsidiaries of the Borrower as are signatories hereto on
the date hereof. From time to time subsequent to the date hereof, additional
Domestic Subsidiaries of the Borrower may become parties hereto as additional
Grantors (each an "ADDITIONAL GRANTOR"), by executing a counterpart
substantially in the form of Exhibit IV annexed hereto. Upon delivery of any
such counterpart to the Secured Party, notice of which is hereby waived by the
Grantors, each such Additional Grantor shall be a Grantor and shall be as fully
a party hereto as if such Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of the Borrower to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.
Section 18. AMENDMENTS; ETC. No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
any Grantor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Secured Party and, in the case of any such
amendment or modification, by the Grantors; PROVIDED that this Agreement may be
modified by the execution of a counterpart by an Additional Grantor in
accordance with Section 17 hereof and the Grantors hereby waive any requirement
of notice of or consent to any such amendment. Any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was given.
Section 19. NOTICES. Any notice or other communication herein required or
permitted to be given shall be mailed, faxed or delivered to the applicable
address or facsimile number and shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A)
if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; and (C) if delivered by facsimile, when
sent and receipt has been confirmed by telephone; PROVIDED, HOWEVER, that
notices and other communications to the Secured Party shall not be effective
until actually received. For the purposes hereof, the address and facsimile
number of each party hereto shall be as provided in Section 10.02 of the Credit
Agreement or as set forth under such party's name on the signature pages hereof
or as set forth on Schedule A attached hereto, as Schedule A may be updated upon
the execution of this Agreement by an Additional Grantor, or such other address
or facsimile number as shall be designated by such party in a written notice
delivered to the other parties hereto.
Section 20. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of the Secured Party in the exercise of any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
Section 21. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions
15
of this Agreement shall not be affected or impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 22. HEADINGS. Section headings herein are included for convenience
of reference only and shall not affect the interpretation of this Agreement.
Section 23. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, the LAW OF THE STATE OF
NEW YORK applicable to agreements made and to be performed entirely within such
State. Unless otherwise defined herein or in the Credit Agreement, terms used in
Articles 8 and 9 of the Uniform Commercial Code in the State of New York are
used herein as therein defined. The rules of construction set forth in Sections
1.02 and 1.05 of the Credit Agreement shall be applicable to this Agreement
MUTATIS MUTANDIS.
Section 24. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN XXX XXXXXX
XX XXX XXXXX XX XXX XXXX SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE GRANTORS, THE SECURED PARTY AND EACH LENDER CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. THE GRANTORS, THE SECURED PARTY AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT. THE GRANTORS, THE SECURED PARTY, AND EACH LENDER WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
Section 25. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
16
Section 26. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. Any counterpart of this Agreement may be transmitted and/or signed by
facsimile. The effectiveness of such counterpart and signatures shall, subject
to applicable Law, have the same force and effect as manually-signed originals
and shall be binding on all parties to this Agreement. The Secured Party may
also require that any such counterpart and signatures be confirmed by a
manually-signed original thereof; PROVIDED, HOWEVER, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile
counterpart or signature.
17
IN WITNESS WHEREOF, the Grantors and the Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
LEVI XXXXXXX & CO.
By:______________________________
Name:
Title:
LEVI XXXXXXX-ARGENTINA, LLC.
By:______________________________
Name:
Title:
LEVI XXXXXXX FINANCIAL CENTER CORPORATION
By:______________________________
Name:
Title:
LEVI XXXXXXX GLOBAL FULFILLMENT SERVICES,
INC.
By:______________________________
Name:
Title:
00
XXXX XXXXXXX GLOBAL OPERATIONS, INC.
By:______________________________
Name:
Title:
LEVI XXXXXXX INTERNATIONAL
By:______________________________
Name:
Title:
19
LEVI XXXXXXX INTERNATIONAL, INC.
By:______________________________
Name:
Title:
LEVI XXXXXXX RECEIVABLES FUNDING, LLC
By:______________________________
Name:
Title:
LEVI XXXXXXX SECURITIZATION CORP.
By:______________________________
Name:
Title:
00
XXXX XXXXXXX SERVICES INC.
By:______________________________
Name:
Title:
LEVI XXXXXXX, U.S.A., LLC
By:______________________________
Name:
Title:
LEVI'S ONLY STORES, INC.
By:______________________________
Name:
Title:
00
XXXXXXX XXXXXX ENTERPRISES, INC.
By:______________________________
Name:
Title:
NF INDUSTRIES, INC.
By:______________________________
Name:
Title:
22
XXXXXXXX COMMODITIES GROUP
By:______________________________
Name:
Title:
BANK OF AMERICA, N.A., as Administrative
Agent as Secured Party
By:______________________________
Name:
Title:
23
SCHEDULE A
TO INTELLECTUAL PROPERTY SECURITY AGREEMENT
NAME NOTICE ADDRESS AND FACSIMILE NUMBER FOR
EACH SUBSIDIARY GRANTOR
Schedule A-1
SCHEDULE B
TO INTELLECTUAL PROPERTY SECURITY AGREEMENT
U.S. TRADEMARKS AND TRADEMARK APPLICATIONS:
Trademark Serial Filing
OWNER DESCRIPTION NUMBER DATE
FOREIGN TRADEMARKS AND TRADEMARK APPLICATIONS:
Trademark Serial Filing
OWNER DESCRIPTION NUMBER DATE
Schedule B-1
SCHEDULE C
TO INTELLECTUAL PROPERTY SECURITY AGREEMENT
U.S. COPYRIGHTS:
TITLE REGISTRATION NO. DATE OF ISSUE REGISTERED OWNER
FOREIGN COPYRIGHT REGISTRATIONS:
COUNTRY TITLE REGISTRATION NO. DATE OF ISSUE
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
TITLE REFERENCE NO. DATE OF APPLICATION COPYRIGHT CLAIMANT
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
COUNTRY TITLE REGISTRATION NO. DATE OF ISSUE
Schedule C-1
SCHEDULE D
TO INTELLECTUAL PROPERTY SECURITY AGREEMENT
OFFICE LOCATIONS, TYPE AND JURISDICTION OF ORGANIZATION
NAME OF GRANTOR TYPE OF ORGANIZATION OFFICE LOCATIONS JURISDICTION OF
ORGANIZATION
Schedule D-1
SCHEDULE E
TO INTELLECTUAL PROPERTY SECURITY AGREEMENT
OTHER NAMES
NAME OF GRANTOR OTHER NAMES
Schedule E-1
SCHEDULE F
TO INTELLECTUAL PROPERTY SECURITY AGREEMENT
FILING OFFICES
GRANTOR FILING OFFICES
Schedule F-1
EXHIBIT I TO
INTELLECTUAL PROPERTY SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("GRANTOR"), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and
WHEREAS, pursuant to that certain Credit Agreement dated as of
September 29, 2003 by and among Levi Xxxxxxx & Co., a Delaware corporation, the
Lenders from time to time party thereto, Banc of America Securities LLC, as Sole
Lead Arranger and Sole Book Manager, and Bank of America, N.A., as
Administrative Agent ("ADMINISTRATIVE AGENT") for the Lenders (said Credit
Agreement, as it may hereafter be amended, amended and restated, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), the Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to the Borrower; and
WHEREAS, pursuant to the terms of a Intellectual Property Security
Agreement dated as of September 29, 2003 (as amended, supplemented, restated or
otherwise modified from time to time, the "INTELLECTUAL PROPERTY SECURITY
AGREEMENT"), among Grantor, the Administrative Agent as secured party (the
"SECURED PARTY") and the other grantors named therein, Grantor has agreed to
create in favor of the Secured Party a secured and protected interest in, and
the Secured Party has agreed to become a secured creditor with respect to, the
Trademark Collateral (as defined below);
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Intellectual Property Security Agreement, Grantor hereby grants to the
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing, whether tangible or intangible, or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"TRADEMARK COLLATERAL"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise) in and to all trademarks, service marks,
designs, logos, indicia, tradenames, trade dress, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto,
owned by Grantor, or hereafter adopted and used, in its business (including
the trademarks set forth on Schedule A attached hereto) (collectively, the
"TRADEMARKS"), all registrations that have been or may hereafter be issued
or applied for thereon in the United States and any state thereof and in
foreign countries (including the registrations and applications
specifically set forth on Schedule A attached hereto) (the "TRADEMARK
REGISTRATIONS"), all common law and other rights in and to the Trademarks
in the United
Exhibit I-1
States and any state thereof and in foreign countries (the "TRADEMARK
RIGHTS"), and all goodwill of Grantor's business symbolized by the
Trademarks and associated therewith (the "ASSOCIATED GOODWILL"), it being
understood that the rights and interests included in the Trademark
Collateral hereby shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of Grantor
pertaining to Trademarks presently or in the future owned or used by third
parties but, in the case of third parties which are not Affiliates of
Grantor, only to the extent permitted by such licensing or other contracts
and, if not so permitted, only with the consent of such third parties; and
(ii) all proceeds, products, rents, profits and royalties of or from
any and all of the foregoing Trademark Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not the
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Trademark Collateral. For purposes of this Grant of
Trademark Security Interest, the term "PROCEEDS" includes whatever is
receivable or received when Trademark Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary, including all proceeds from the use or licensing
of Trademark Collateral, provided that such proceeds shall not include
inventory (regardless whether such inventory bears any of the Trademark
Collateral) or accounts receivable (regardless whether such accounts
receivable arise from the sale of inventory that bears any of the Trademark
Collateral, but in any case accounts receivable shall not include any
royalties from the licensing of Trademark Collateral) or inventory sold
pursuant to any trademark license granted to Bank of America, N.A., as
agent under that certain Credit Agreement, dated as of September 29, 2003,
among Levi Xxxxxxx & Co. and Levi Xxxxxxx Financial Center Corporation as
borrowers, the lenders party thereto and Bank of America, N.A., as agent.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of the Secured Party with respect to the security interest in the
Trademark Collateral granted hereby are more fully set forth in the Intellectual
Property Security Agreement, the terms and provisions of which are incorporated
by reference herein as if fully set forth herein.
[The remainder of this page has been intentionally left blank.]
Exhibit I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the __ day of _______, _____.
[NAME OF GRANTOR]
By:__________________________
Name:
Title:
Exhibit I-3
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
United States
Trademark Serial Filing
OWNER DESCRIPTION NUMBER DATE
Exhibit I-4
EXHIBIT II TO
INTELLECTUAL PROPERTY SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Copyright Collateral (as defined
below); and
WHEREAS, Pursuant to that certain Credit Agreement dated as of
September 29, 2003 by and among Levi Xxxxxxx & Co., a Delaware corporation, the
Lenders from time to time party thereto, Banc of America Securities LLC, as Sole
Lead Arranger and Sole Book Manager, and Bank of America, N.A., as
Administrative Agent ("ADMINISTRATIVE AGENT") for the Lenders (said Credit
Agreement, as it may hereafter be amended, amended and restated, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), the Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to the Borrower; and
WHEREAS, pursuant to the terms of a Intellectual Property
Security Agreement dated as of September 29, 2003 (as amended, supplemented,
restated or otherwise modified from time to time, the "INTELLECTUAL PROPERTY
SECURITY AGREEMENT"), among Grantor, the Administrative Agent as secured party
(the "SECURED PARTY") and the other grantors named therein, Grantor has agreed
to create in favor of the Secured Party a secured and protected interest in, and
the Secured Party has agreed to become a secured creditor with respect to, the
Copyright Collateral (as defined below); and
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Intellectual Property Security Agreement, Grantor hereby
grants to the Secured Party a security interest in all of Grantor's right, title
and interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COPYRIGHT COLLATERAL"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise) under copyright in various published and
unpublished works of authorship including computer programs, computer
data bases, other computer software, layouts, trade dress, drawings,
designs, writings and formulas owned by Grantor (including the works
set forth on Schedule A attached hereto) (collectively, the
"COPYRIGHTS"), all copyright registrations issued to Grantor and
applications for copyright registration that have been or may hereafter
be issued or applied for thereon by Grantor in the United States and
any state thereof and in foreign countries (including the registrations
set forth on Schedule A attached hereto, as the same may be amended
pursuant hereto from time to time) (collectively, the "COPYRIGHT
REGISTRATIONS"), all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign
Exhibit II-1
countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing
arrangements) (the "COPYRIGHT RIGHTS"), including each of the
Copyrights, rights, titles and interests in and to the Copyrights, all
derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire
for the benefit of Grantor), authored (as a work for hire for the
benefit of Grantor) or acquired by Grantor, in whole or in part, and
all Copyright Rights with respect thereto and all Copyright
Registrations therefor, heretofore or hereafter granted or applied for,
and all renewals and extensions thereof, throughout the world,
including the right to renew and extend such Copyright Registrations
and Copyright Rights and to register works protectable by copyright and
the right, exercisable only upon the occurrence and during the
continuation of an Event of Default, to xxx for past, present and
future infringements of the Copyrights and Copyright Rights in the name
of Grantor or in the name of the Secured Party or the Lenders, it being
understood that the rights and interests included in the Copyright
Collateral hereby shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of Grantor
pertaining to Copyright applications and Copyrights presently or in the
future owned or used by third parties but, in the case of third parties
which are not Affiliates of Grantor, only to the extent permitted by
such licensing or other contracts and, if not so permitted, only with
the consent of such third parties; and
(ii) all proceeds, products, rents, profits and royalties of or from
any and all of the foregoing Copyright Collateral and, to the extent
not otherwise included, all payments under insurance (whether or not
the Secured Party is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Copyright Collateral.
For purposes of this Grant of Copyright Security Interest, the term
"PROCEEDS" includes whatever is receivable or received when Copyright
Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary,
including all proceeds from the use or licensing of Copyright
Collateral, provided that such proceeds shall not include inventory
(regardless whether such inventory bears any of the Copyright
Collateral) or accounts receivable (regardless whether such accounts
receivable arise from the sale of inventory that bears any of the
Copyright Collateral, but in any case accounts receivable shall not
include any royalties from the licensing of Copyright Collateral) or
inventory sold pursuant to any license granted to Bank of America,
N.A., as agent under that certain Credit Agreement, dated as of
September 29, 2003, among Levi Xxxxxxx & Co. and Levi Xxxxxxx Financial
Center Corporation as borrowers, the lenders party thereto and Bank of
America, N.A., as agent.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of the Secured Party with respect to the security interest
in the Copyright Collateral granted hereby are more fully set forth in the
Intellectual Property Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
Exhibit II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the ___ day of ___________, _____.
[NAME OF GRANTOR]
By:_____________________________
Name:___________________________
Title:__________________________
Exhibit II-3
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. COPYRIGHTS:
TITLE REGISTRATION NO. DATE OF ISSUE REGISTERED OWNER
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
TITLE REFERENCE NO. DATE OF APPLICATION COPYRIGHT CLAIMANT
Exhibit II-4
EXHIBIT III TO
INTELLECTUAL PROPERTY SECURITY AGREEMENT
IP SUPPLEMENT
This IP SUPPLEMENT, dated as of _______, is delivered pursuant to and
supplements (i) the Intellectual Property Security Agreement, dated as of
September 29, 2003 (said Intellectual Property Security Agreement, as it may
hereafter be amended, supplemented, restated or otherwise modified from time to
time, being the "INTELLECTUAL PROPERTY SECURITY AGREEMENT"), among Levi Xxxxxxx
& Co., the other Grantors named therein and Bank of America, N.A., as
Administrative Agent as the Secured Party, and (ii) the [Grant of Trademark
Security Interest] [Grant of Copyright Security Interest] dated as of September
29, 2003 (said [Grant of Trademark Security Interest] [Grant of Copyright
Security Interest], as it may hereafter be amended, supplemented, restated or
otherwise modified from time to time, being the "GRANT"; the terms defined
therein and not otherwise defined herein being used herein as therein defined)
executed by Grantor.
["GRANTOR"] grants to the Secured Party a security interest in all of
Grantor's right, title and interest in and to the [Trademark Collateral]
[Copyright Collateral] set forth on Schedule A attached hereto. All such
[Trademark Collateral] [Copyright Collateral] shall be deemed to be part of the
[Trademark Collateral] [Copyright Collateral] and shall be hereafter subject to
each of the terms and conditions of the Intellectual Property Security Agreement
and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By:________________________
Name:
Title:
Exhibit III-1
SCHEDULE A
TO
IP SUPPLEMENT
Trademarks and Trademark Applications:
United States
Trademark Serial Filing
OWNER DESCRIPTION NUMBER DATE
Copyrights and Copyright Applications:
U.S. COPYRIGHTS:
TITLE REGISTRATION NO. DATE OF ISSUE REGISTERED OWNER
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
TITLE REFERENCE NO. DATE OF APPLICATION COPYRIGHT CLAIMANT
Exhibit III-2
EXHIBIT IV TO
INTELLECTUAL PROPERTY SECURITY AGREEMENT
[FORM OF COUNTERPART]
COUNTERPART (this "COUNTERPART"), dated as of _______, is delivered
pursuant to Section 17 of the Intellectual Property Security Agreement referred
to below. The undersigned hereby agrees that this Counterpart may be attached to
the Intellectual Property Security Agreement, dated as of September 29, 2003
(said Intellectual Property Security Agreement, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time, being the
"INTELLECTUAL PROPERTY SECURITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), among Levi
Xxxxxxx & Co., the other Grantors named therein and Bank of America, N.A., as
Administrative Agent as the Secured Party. The undersigned by executing and
delivering this Counterpart hereby becomes a Grantor under the Intellectual
Property Security Agreement in accordance with Section 17 thereof and agrees to
be bound by all of the terms thereof. Without limiting the generality of the
foregoing, the undersigned hereby:
(i) authorizes the Secured Party to add the information set
forth on the Schedules to this Agreement to the correlative Schedules
attached to the Intellectual Property Security Agreement1;
(ii) agrees that all Collateral of the undersigned, including
the items of property set forth on the Schedules hereto, shall become
part of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in
the Intellectual Property Security Agreement, as amended hereby, to the
extent relating to the undersigned.
[NAME OF ADDITIONAL GRANTOR]
By:___________________________
Name:
Title:
______________________________
1 The Schedules to the Counterpart should include copies of all
Schedules that identify collateral to be granted by the Additional Grantor.
Exhibit IV-1
