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Exhibit 4.17
SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENT
SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENT, dated as
of June 30, 2000, made by RA BRANDS, L.L.C., a Delaware limited liability
company (the "Grantor"), in favor of THE CHASE MANHATTAN BANK, as administrative
agent (in such capacity, the "Administrative Agent") for the several banks and
other financial institutions (the "Lenders") from time to time parties to the
Amended and Restated Credit Agreement, dated as of April 28, 2000 (as the same
may be amended, supplemented, waived or otherwise modified from time to time,
the "Credit Agreement"), among Remington Arms Company, Inc. (the "Borrower"),
Chase Securities Inc. and Banc of America Securities LLC, as joint lead
arrangers, Bank of America, N.A., as syndication agent. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Partners, L.P., as documentation agent (collectively the "Other
Representatives"), the Administrative Agent, and the Lenders.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Grantor is a party to the Subsidiary Security
Agreement, dated as of June 30, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Subsidiary Security Agreement"), made by the
Grantor in favor of the Administrative Agent, for the benefit of the Lenders;
WHEREAS, the Borrower has determined it is in the best
interest of the Borrower to transfer certain Collateral (as defined in the
Borrower Security Agreement, dated as of April 28, 2000) to the Grantor (the
"Intangibles Transfer") and has executed a U.S. Patent Assignment, a U.S.
Trademark Assignment, a Master Foreign Patent Assignment and a Master Foreign
Trademark Assignment (the "Assignment Documents") of even date herewith
transferring all of its right, title and interest in and to all of the Patents
and Trademarks owned by the Borrower in its own name to the Grantor.
WHEREAS, as a result of the Intangibles Transfer the Grantor
owns certain Trademarks and Trademark Licenses listed on Schedule I hereto;
WHEREAS, as a result of the Intangibles Transfer the Grantor
owns certain Patents and Patent Licenses listed on Schedule II;
WHEREAS, pursuant to the Subsidiary Security Agreement, the
Grantor has granted to the Administrative Agent, for the benefit of the Lenders,
a security interest in all right, title and interest of the Grantor in, to and
under the Collateral (as hereinafter defined), including the property listed on
the attached Schedules I and II, together with any renewal or extension thereof,
and all Proceeds thereof, to secure the payment of the Obligations; and
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WHEREAS, it is a condition to the obligations of the Lenders
to continue to make their respective Extensions of Credit to the Borrower under
the Credit Agreement that the Grantor shall have executed and delivered this
Agreement to the Administrative Agent, for the benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Other Representatives and the Lenders to continue
to make their respective Extensions of Credit to the Borrower under the Credit
Agreement, the Grantor hereby agrees with the Administrative Agent, for the
benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, capitalized terms
defined in the Credit Agreement are used herein as defined therein. The
following terms shall have the following meanings:
"Agreement": this Subsidiary Patent and Trademark Security
Agreement, as the same may be amended, supplemented, waived or otherwise
modified from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2 of this Agreement.
"General Intangibles": as defined in Section 9-106 of the Code,
including, without limitation, all Patents and Trademarks now or
hereafter owned by the Grantor to the extent such Patents and Trademarks
would be included in General Intangibles under the Code.
"Obligations": the obligations of the Grantor under the
Subsidiary Guarantee, the Subsidiary Security Agreement and this
Agreement.
"Patent License": all United States written license agreements
with any unaffiliated Person in connection with any of the Patents or
such other Person's patents, whether the Grantor is a licensor or a
licensee under any such license agreement, including, without
limitation, the license agreements listed on Schedule II attached hereto
and made a part hereof, subject, in each case, to the terms of such
license agreements, and the right to prepare for sale, sell and
advertise for sale, all Inventory (as defined in the Subsidiary Security
Agreement) now or hereafter covered by such licenses.
"Patents": all United States patents, patent applications and
patentable inventions, including, without limitation, all patents and
patent applications identified in Schedule II attached hereto and made a
part hereof, and including without limitation (a) all inventions and
improvements described and claimed therein, and patentable inventions,
(b) the right to ▇▇▇ or otherwise recover for any and all past, present
and future infringements and
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misappropriations thereof, (c) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past or future
infringements thereof), and (d) all rights corresponding thereto in the
United States and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof,
all improvements thereon, and all other rights of any kind whatsoever of
the Grantor accruing thereunder or pertaining thereto (Patents and
Patent Licenses being, collectively, the "Patent Collateral").
"Trademark License": all United States written license
agreements with any unaffiliated Person in connection with any of the
Trademarks or such other Person's names or trademarks, whether the
Grantor is a licensor or a licensee under any such license agreement,
including, without limitation, the license agreements listed on Schedule
I attached hereto and made a part hereof, subject, in each case, to the
terms of such license agreements, and the right to prepare for sale,
sell and advertise for sale, all Inventory (as defined in the Subsidiary
Security Agreement) now or hereafter covered by such licenses.
"Trademarks": all United States trademarks, service marks, trade
names, trade dress or other indicia of trade origin, trademark and
service ▇▇▇▇ registrations, and applications for trademark or service
▇▇▇▇ registrations (except for "intent to use" applications for
trademark or service ▇▇▇▇ registrations filed pursuant to Section 1(b)
of the ▇▇▇▇▇▇ Act, unless and until an Amendment to Allege Use or a
Statement of Use under Sections 1(c) and 1(d) of said Act has been
filed), and any renewals thereof, including, without limitation, each
registration and application identified in Schedule I attached hereto
and made a part hereof, and including without limitation (a) the right
to ▇▇▇ or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (b) all income, royalties,
damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments
for past or future infringements thereof), and (c) all rights
corresponding thereto in the United States and all other rights of any
kind whatsoever of the Grantor accruing thereunder or pertaining
thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each such trademark,
service ▇▇▇▇, trade name, trade dress or other indicia of trade origin
(Trademarks and Trademark Licenses being, collectively, the "Trademark
Collateral").
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
section and paragraph references are to this Agreement unless otherwise
specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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2 Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations the Grantor hereby assigns,
pledges and grants, subject to existing licenses granted by the Grantor in the
ordinary course of business with respect to the Collateral (as hereinafter
defined), to the Administrative Agent, for the benefit of the Lenders, a
security interest in all of the following property now owned or at any time
hereafter acquired by the Grantor or in which the Grantor now has or at any time
in the future may acquire any right, title or interest (collectively, the
"Collateral"):
(i) all Trademarks;
(ii) all Trademark Licenses;
(iii) all Patents;
(iv) all Patent Licenses;
(v) all General Intangibles connected with the use of
or symbolized by the Trademarks and Patents; and
(vi) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing;
provided, that the foregoing grant of a security interest with respect to
General Intangibles, Patent Licenses and Trademark Licenses shall not include a
security interest in, and the Collateral shall not include, any Patent License
or Trademark License with or issued by Persons other than a Subsidiary of the
Grantor that would otherwise be included in the Collateral to the extent that
the grant by the Grantor of such security interest is prohibited by the terms
and provisions of the written agreement or document or instrument creating or
evidencing such license or permit or Patent License or Trademark License, or
gives the other party thereto the right to terminate such Patent License or
Trademark License in the event of the grant of a security interest with respect
thereto. The Grantor shall use its reasonable best efforts to (i) avoid entering
into agreements or contracts which would prohibit the Grantor from granting a
security interest in such Patent Licenses or Trademark Licenses pursuant to the
terms of this Agreement and (ii) cause each such Patent License or Trademark
License entered into, created or made by it after the Effective Date to be
subject to the Lien and security interest created pursuant to this Agreement.
3 Grantor Remains Liable; Limitations on Administrative Agent's and
Lenders' Obligations. Anything herein to the contrary notwithstanding, (a) the
Grantor shall remain liable under the 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 Administrative Agent of any of the rights
hereunder
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shall not release the Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) neither the
Administrative Agent, the Other Representatives, nor any Lender shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall the Administrative Agent, the
Other Representatives, or any Lender be obligated to perform any of the
obligations or duties of the Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
4 Representations and Warranties. The Grantor represents and warrants as
to itself and its Collateral as follows:
(a) Title; No Other Liens. Except for the Liens granted to the
Administrative Agent, for the benefit of the Lenders, pursuant to this
Agreement and the other Liens permitted to exist on the Collateral
pursuant to the Loan Documents (including without limitation any Lien
permitted to exist pursuant to Section 8.3 of the Credit Agreement), the
Grantor is (or, in the case of after-acquired Collateral, will be) the
sole, legal and beneficial owner of the entire right, title and interest
in and to the Trademarks set forth on Schedule I hereto and the Patents
set forth in Schedule II hereto free and clear of any and all Liens. No
security agreement, financing statement or other public notice similar
in effect with respect to all or any part of the Collateral is on file
or of record in any public office (including, without limitation, the
United States Patent and Trademark Office), except such as may have been
filed in favor of the Administrative Agent, for the benefit of the
Lenders, pursuant to this Agreement or as may be permitted pursuant to
the Loan Documents.
(b) Perfected First Priority Liens. (i) This Agreement is
effective to create, as collateral security for the Obligations, valid
and enforceable Liens on the Collateral in favor of the Administrative
Agent for the benefit of the Lenders, except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditor's rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(ii) Except with regard to Liens (if any) on Specified Assets,
and except with regard to Liens upon Patents and Trademarks and Patent
Licenses and Trademark Licenses, which Liens, to the extent not
otherwise perfected by the filing of financing statements under the Code
in accordance herewith, would in the case of Patents and Trademarks
listed in Schedule I and II hereto, or in the case of Patent Licenses
and Trademark Licenses listed in Schedule I and II hereto may, be
perfected upon the filing, acceptance and recordation thereof in the
United States Patent and Trademark Office, upon the completion of the
Filings, the Liens created pursuant to this Agreement will constitute
valid Liens on and (to the extent provided herein) perfected security
interests in the Collateral in favor of the Administrative Agent for the
benefit of the Lenders, and will be prior to all other Liens of all
other Persons other than Permitted Liens, and enforceable as such as
against all other Persons other than Ordinary Course Buyers, except
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to the extent that the recording of an assignment or other transfer of
title to the Administrative Agent or the recording of other applicable
documents in the United States Patent and Trademark Office or United
States Copyright Office may be necessary for perfection or
enforceability, and except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law) or by an implied covenant of good faith
and fair dealing. As used in this Section 4(b)(ii), the following terms
shall have the following meanings:
"Filings": the filing or recording of the Financing
Statements, any Patent and Trademark Security Agreement, and any
filings after the Closing Date in any other jurisdiction as may
be necessary under any Requirement of Law.
"Financing Statements": the financing statements
delivered to the Administrative Agent by the Borrower on the
Closing Date for filing in the jurisdictions listed in Schedule
6.1(e) to the Credit Agreement.
"Permitted Liens": Liens permitted pursuant to the Loan
Documents, including without limitation those permitted to exist
pursuant to subsection 8.3 of the Credit Agreement.
"Specified Assets": the following property and assets of
the Borrower:
(1) Patents, Patent Licenses, Trademarks and
Trademark Licenses to the extent that (a) Liens thereon
which cannot be perfected by the filing of financing
statements under the Uniform Commercial Code or by the
filing and acceptance thereof in the United States
Patent and Trademark Office or (b) such Patents, Patent
Licenses, Trademarks and Trademark Licenses are not,
individually or in the aggregate, material to the
business of Grantor and its Subsidiaries taken as a
whole;
(2) Copyrights and Copyright Licenses and
Accounts or receivables arising therefrom to the extent
that the Uniform Commercial Code as in effect from time
to time in the relevant jurisdiction is not applicable
to the creation or perfection of Liens thereon; and
(3) Collateral for which the perfection of Liens
thereon requires filings in or other actions under the
laws of jurisdictions outside the United States of
America, any State, territory or dependency thereof or
the District of Columbia;
(c) Consents. No consent of any party (other than the Grantor)
to any Patent License or Trademark License constituting Collateral is
required, or purports to be
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required, to be obtained by or on behalf of the Grantor in connection
with the execution, delivery and performance of this Agreement that has
not been obtained. Each Patent License and Trademark License
constituting Collateral is in full force and effect and constitutes a
valid and legally enforceable obligation of the Grantor and (to the
knowledge of the Grantor) each other party thereto except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditor's
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and except to
the extent the failure of any such Patent License or Trademark License
constituting Collateral to be in full force and effect or valid or
legally enforceable would not be reasonably expected, in the aggregate,
to have a material adverse effect on the value of the Collateral (as
defined in the Credit Agreement). No consent or authorization of,
filing with or other act by or in respect of any Governmental Authority is
required in connection with the execution, delivery, performance, validity or
enforceability of any of the Patent Licenses or Trademark Licenses constituting
Collateral by any party thereto other than those which have been duly obtained,
made or performed and are in full force and effect and those the failure of
which to make or obtain would not be reasonably expected, in the aggregate, to
have a material adverse effect on the value of the Collateral (as defined in the
Credit Agreement). Neither the Grantor nor (to the knowledge of the Grantor) any
other party to any Patent License or Trademark License constituting Collateral
is in default in the performance or observance of any of the terms thereof,
except for such defaults as would not reasonably be expected, in the aggregate,
to have a material adverse effect on the value of the Collateral (as defined in
the Credit Agreement). The right, title and interest of the Grantor in, to and
under each Patent License and Trademark License constituting Collateral are not
subject to any defense, offset, counterclaim or claim which would be reasonably
expected, either individually or in the aggregate, to have a material adverse
effect on the value of the Collateral (as defined in the Credit Agreement).
(d) Schedules I and II are Complete; All Filings Have Been Made.
Set forth in Schedules I and II is a complete and accurate list of the
Trademarks and Patents owned by the Grantor as of the date hereof. Upon
filing and recordation of the Assignment Documents, in the United States
Patent and Trademark Office, the Grantor will have made all necessary
filings and recordations to protect and maintain its interest in the
Trademarks and Patents set forth in Schedules I and II, including,
without limitation, all necessary filings and recordings, and payments
of all maintenance fees, in the United States Patent and Trademark
Office to the extent such Trademarks and Patents are material to the
Grantor's business. Set forth in Schedules I and II is a complete and
accurate list of all of the material Trademark Licenses and material
Patent Licenses owned by the Grantor as of the date hereof.
(e) The Trademarks and Trademark Licenses are Subsisting and Not
Adjudged Invalid. As of the date hereof, each trademark registration and
trademark application of the Grantor set forth in Schedule I is
subsisting as of the date hereof and has not been
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adjudged invalid, unregisterable or unenforceable, in whole or in part,
and, to the best of the Grantor's knowledge, is valid, registrable and
enforceable. As of the date hereof, each of the Trademark Licenses set
forth in Schedule I is validly subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, and, to the best of the
Grantor's knowledge, is valid and enforceable. As of the date hereof,
the Grantor has notified the Administrative Agent in writing of all uses
of any item of Trademark Collateral material to the Grantor's business
of which the Grantor is aware which could reasonably be expected to lead
to such item becoming invalid or unenforceable, including unauthorized
uses by third parties and uses which were not supported by the goodwill
of the business connected with such Collateral.
(f) The Patent and Patent Licenses are Subsisting and Not
Adjudged Invalid. As of the date hereof, each patent and patent
application of the Grantor set forth in Schedule II is subsisting and
has not been adjudged invalid, unpatentable or unenforceable, in whole
or in part, and, to the best of the Grantor's knowledge, is valid,
patentable and enforceable. As of the date hereof, each of the Patent
Licenses set forth in Schedule II is validly subsisting and has not been
adjudged invalid or unenforceable, in whole or in part, and, to the best
of the Grantor's knowledge, is valid and enforceable. As of the date
hereof, the Grantor has notified the Administrative Agent in writing of
all uses of any item of Patent Collateral material to the Grantor's
business of which the Grantor is aware which could reasonably be
expected to lead to such item becoming invalid or unenforceable.
(g) No Previous Assignments or Releases. As of the date hereof,
the Grantor has not made a previous assignment, sale, transfer or
agreement constituting a present or future assignment, sale, transfer or
encumbrance of any of the Collateral, except with respect to exclusive
licenses granted in the ordinary course of business or as permitted by
this Agreement or the Loan Documents. As of the date hereof, the Grantor
has not granted any license, shop right, release, covenant not to ▇▇▇,
or non-assertion assurance to any Person with respect to any part of the
Collateral except in the ordinary course of business.
(h) Proper Statutory Notice. The Grantor has marked its products
with the trademark registration symbol (R), the numbers of all
appropriate patents, the common law trademark symbol ?, or the
designation "patent pending," as the case may be, to the extent that it
is reasonably and commercially practicable.
(i) No Knowledge of Claims Likely to Arise. Except for the
Trademark Licenses and Patent Licenses listed in Schedules I and II
hereto, the Grantor has no knowledge of the existence of any right or
any claim (other than as provided by this Agreement or the Loan
Documents) that is likely to be made under or against any item of
Collateral contained on Schedules I and II which would have a Material
Adverse Effect.
(j) No Knowledge of Existing or Threatened Claims. No claim has
been made and is continuing or, to the best of the Grantor's knowledge,
threatened that the use by the
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Grantor of any item of Collateral is invalid or unenforceable or that
the use by the Grantor of any Collateral does or may violate the rights
of any Person, which would have a Material Adverse Effect. To the best
of the Grantor's knowledge, there is currently no infringement or
unauthorized use of any item of Collateral contained on Schedules I and
II which would have a Material Adverse Effect.
5 Covenants. The Grantor covenants and agrees with the Administrative
Agent, the Other Representatives and the Lenders that, from and after the date
of this Agreement until the payment in full of the Notes, the Reimbursement
Obligations and the other Obligations then due and owing, the termination of the
Commitments and the expiration, termination or return to the Issuing Lender of
the Letters of Credit:
(a) Further Documentation; Pledge of Instruments and Chattel
Paper. At any time and from time to time, upon the written request of
the Administrative Agent or the Grantor, as the case may be, and at the
sole expense of the Grantor, the Grantor or the Administrative Agent, as
the case may be, will promptly and duly execute and deliver such further
instruments and documents and take such further action as the
Administrative Agent or the Grantor may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect
to the Liens created hereby. The Grantor also hereby authorizes the
Administrative Agent to file any such financing or continuation
statement without the signature of the Grantor to the extent permitted
by applicable law. A carbon, photostatic or other reproduction of this
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction. The Administrative Agent agrees to notify the Grantor and
the Grantor agrees to notify the Administrative Agent of any financing
or continuation statement filed by it pursuant to this Section 5(a),
provided that any failure to give any such notice shall not affect the
validity or effectiveness of any such filing.
(b) Indemnification and Expenses. The Grantor agrees to pay, and
to save the Administrative Agent, the Other Representatives and the
Lenders harmless from, any and all liabilities and reasonable costs and
expenses (including, without limitation, reasonable legal fees and
expenses) (i) with respect to, or resulting from, any delay by the
Grantor in complying with any material Requirement of Law applicable to
any of the Collateral, or (ii) in connection with any of the
transactions contemplated by this Agreement, provided that such
indemnity shall not, as to the Administrative Agent, any Other
Representatives or any Lender, be available to the extent that such
liabilities, costs and expenses resulted from the gross negligence or
willful misconduct of the Administrative Agent, any Other Representative
or any Lender. In any suit, proceeding or action brought by the
Administrative Agent, any Other Representative or any Lender under any
of the Collateral for any sum owing thereunder, or to enforce any of the
Collateral, the Grantor will save, indemnify and keep the Administrative
Agent, such Other Representative and
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such Lender harmless from and against all expense, loss or damage
suffered by reason of any defense or counterclaim raised in any such
suit, proceeding or action.
(c) Maintenance of Records. (i) The Grantor will keep and
maintain at its own cost and expense reasonably satisfactory and
complete records of the Collateral, and shall ▇▇▇▇ such records to
evidence this Agreement and the Liens and the security interests created
hereby. For the Administrative Agent's and the Lenders' further
security, the Administrative Agent, for the benefit of the Lenders,
shall have a security interest in all of the Grantor's books and records
pertaining to the collateral, and the Grantor shall permit the
Administrative Agent or its representatives to review such books and
records upon reasonable advance notice during normal business hours at
the location where such books and records are kept and at the reasonable
request of the Administrative Agent.
(d) Right of Inspection. Upon reasonable advance notice to the
Grantor and at reasonable intervals, or at any time and from time to
time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent and the Lenders and their respective
representatives shall have reasonable access during normal business
hours to all the books, correspondence and records of the Grantor, and
the Administrative Agent and the Lenders and their respective
representatives may examine the same, and to the extent reasonable take
extracts therefrom and make photocopies thereof, and the Grantor agrees
to render to the Administrative Agent and the Lenders, at the Grantor's
reasonable cost and expense, such clerical and other assistance as may
be reasonable requested with regard thereto.
(e) Compliance with Laws, etc. The Grantor will comply in all
material respects with all Requirements of Law applicable to the
Collateral or any part thereof, except to the extent that the failure to
so comply would not be reasonably expected to materially adversely
affect in the aggregate the Administrative Agent's or the Lenders'
rights hereunder, the priority of their Liens on the Collateral or the
value of the Collateral (as defined in the Credit Agreement).
(f) Further Identification of Collateral. The Grantor will
furnish to the Administrative Agent and the Lenders from time to time
such statements and schedules further identifying and describing the
Collateral, and such other reports in connection with the Collateral, as
the Administrative Agent may reasonably request, all in reasonable
detail.
(g) Security Interest in Any Newly Acquired Collateral. The
Grantor agrees that, should it obtain an ownership interest in any
Trademark, Patent, Trademark License or Patent License, which is not now
a part of the Collateral, (i) the provisions of Section 2 shall
automatically apply thereto, (ii) any such Trademark, Patent, Trademark
License and Patent License shall automatically become part of the
Collateral, and (iii) with respect to any ownership interest in any
Trademark, Patent, Trademark License or Patent License that the Grantor
should obtain which the Grantor reasonably deems is material to
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its business, it shall give notice thereof to the Administrative Agent
and the Lenders in writing, in reasonable detail, at their respective
addresses set forth in the Credit Agreement within 45 days after the end
of the calendar quarter in which such ownership interest is obtained.
The Grantor authorizes the Administrative Agent to modify this Agreement
by amending Schedules I and II (and will cooperate reasonably with the
Administrative Agent in effecting any such amendment) to include on
Schedule I any Trademark and Trademark License and on Schedule II any
Patent or Patent License of which it receives notice under this Section.
(h) Maintenance of the Trademark Collateral. The Grantor agrees
to take all necessary steps, including, without limitation, in the
United States Patent and Trademark Office or in any court, to (i)
maintain each trademark registration and each Trademark License
identified on Schedule I hereto, and (ii) pursue each trademark
application now or hereafter identified in Schedule I hereto, including,
without limitation, the filing of responses to office actions issued by
the United States Patent and Trademark Office, the filing of
applications for renewal, the filing of affidavits under Sections 8 and
15 of the United States Trademark Act, and the participation in
opposition, cancellation, infringement and misappropriation proceedings,
except, in each case in which the Grantor has reasonably determined that
any of the foregoing is not of material economic value to it. The
Grantor agrees to take corresponding steps with respect to each new or
acquired trademark registration, trademark application or any rights
obtained under any Trademark License, in each case, which it is now or
later becomes entitled, except in each case in which the Grantor has
reasonably determined that any of the foregoing is not of material
economic value to it. Any expenses incurred in connection with such
activities shall be borne by the Grantor.
(i) Maintenance of the Patent Collateral. The Grantor agrees to
take all necessary steps, including, without limitation, in the United
States Patent and Trademark Office or in any court, to (i) maintain each
patent and each Patent License identified on Schedule II hereto, and
(ii) pursue each patent application, now or hereafter identified in
Schedule II hereto, including, without limitation, the filing of
divisional, continuation, continuation-in-part and substitute
applications, the filing of applications for reissue, renewal or
extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, infringement and
misappropriation proceedings, except, in each case in which the Grantor
has reasonably determined that any of the foregoing is not of material
economic value to it. The Grantor agrees to take corresponding steps
with respect to each new or acquired patent, patent application, or any
rights obtained under any Patent License, in each case, which it is now
or later becomes entitled, except in each case in which the Grantor has
reasonably determined that any of the foregoing is not of material
economic value to it. Any expenses incurred in connection with such
activities shall be borne by the Grantor.
(j) Grantor Shall Not Abandon any Collateral. The Grantor shall
not abandon any trademark registration, patent or any pending trademark
or patent application,
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without the written consent of the Administrative Agent, unless the
Grantor shall have previously determined that such use or the pursuit or
maintenance of such trademark registration, patent or pending trademark
or patent application is not of material economic value to it, in which
case, the Grantor will, at least annually, give notice of any such
abandonment to the Administrative Agent and the Lenders in writing, in
reasonable detail, at their respective addresses set forth in the Credit
Agreement.
(k) Infringement of Any Collateral. In the event that the
Grantor becomes aware that any item of the Collateral which the Grantor
has reasonably determined to be material to its business is infringed or
misappropriated by a third party, the Grantor shall promptly notify the
Administrative Agent and the Lenders promptly and in writing, in
reasonable detail, at their respective addresses set forth in the Credit
Agreement, and shall take such actions as the Grantor or the
Administrative Agent deems reasonably appropriate under the
circumstances to protect such Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against
such infringement or misappropriation. Any expense incurred in
connection with such activities shall be borne by the Grantor. The
Grantor will advise the Administrative Agent and the Lenders promptly
and in writing, in reasonable detail, at their respective addresses set
forth in the Credit Agreement, of any adverse determination or the
institution of any proceeding (including, without limitation, the
institution of any proceeding in the United States Patent and Trademark
Office or any court) regarding any item of the Collateral which has a
Material Adverse Effect.
(l) Use of Statutory Notice. The Grantor shall ▇▇▇▇ its products
with the trademark registration symbol (R), the numbers of all
appropriate patents, the common law trademark symbol ?, or the
designation "patent pending," as the case may be, to the extent that it
is reasonably and commercially practicable.
(m) Limitation on Liens on Collateral. The Grantor will not
create, incur or permit to exist, will defend the Collateral against,
and will take such other action as is reasonably necessary to remove,
any Lien or material adverse claim on or to any of the Collateral, other
than exclusive licenses granted in the ordinary course of business and
the Liens created by this Agreement and other than as permitted pursuant
to the Loan Documents, and will defend the right, title and interest of
the Administrative Agent and the Lenders in and to any of the Collateral
against the claims and demands of all Persons whomsoever.
(n) Limitations on Dispositions of Collateral. Without the prior
written consent of the Administrative Agent, the Grantor will not sell,
assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to, the Collateral, or attempt, offer or contract to do so,
except with respect to exclusive licenses in the ordinary course of
business or as permitted by this Agreement or the Loan Documents.
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(o) Notices. The Grantor will advise the Administrative Agent
and the Lenders promptly, in reasonable detail, at their respective
addresses set forth in the Credit Agreement, (i) of any Lien (other than
Liens created hereby or permitted under the Loan Documents) on, or
material adverse claim asserted against, Patents or Trademarks and (ii)
of the occurrence of any other event which would reasonably be expected
in the aggregate to have a material adverse effect on the aggregate
value of the Collateral or the Liens created hereunder.
6 Administrative Agent's Appointment as Attorney-in-Fact.
(a) Powers. The Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the
Grantor and in the name of the Grantor or in its own name, from time to
time in the Administrative Agent's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, the
Grantor hereby gives the Administrative Agent the power and right, on
behalf of the Grantor, without notice to or assent by the Grantor, to do
the following at any time when any Event of Default shall have occurred
and be continuing, and to the extent permitted by law:
(i) to execute and deliver any and all agreements,
instruments, documents, and papers as the Administrative Agent
may reasonably request to evidence the Administrative Agent's,
the Other Representatives' and the Lenders' security interest in
any of the Collateral;
(ii) in the name of the Grantor or its own name, or
otherwise, to take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any General Intangible (to the
extent that any of the foregoing constitute Collateral) or with
respect to any other Collateral and to file any claim or to take
any other action or institute any proceeding in any court of law
or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due
under any such General Intangible or with respect to any such
other Collateral whenever payable;
(iii) to pay or discharge Liens placed on the
Collateral, other than Liens permitted under this Agreement or
the Loan Documents; and
(iv) (A) to direct any party liable for any payment
under any of the Collateral to make payment of any and all
moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent
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shall direct; (B) to ask for, or demand, collect, receive
payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or
arising out of any of the Collateral; (C) to sign and indorse
any invoices, freight or express bills, bills of lading, storage
or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with
any of the Collateral; (D) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any thereof
and to enforce any other right in respect of any Collateral; (E)
to defend any suit, action or proceeding brought against the
Grantor with respect to any of the Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such
discharges or releases as the Administrative Agent may deem
appropriate; (G) subject to any pre-existing rights or licenses,
to assign any Patent or Trademark constituting Collateral (along
with the goodwill of the business to which any such Patent or
Trademark pertains), for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (H) generally, to sell, transfer,
pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option and
the Grantor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the
Administrative Agent's, the Other Representatives' and the
Lenders' Liens thereon and to effect the intent of this
Agreement, all as fully and effectively as the Grantor might do.
The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until payment in full of the Notes, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit.
(b) Other Powers. The Grantor also authorizes the Administrative
Agent, from time to time if an Event of Default shall have occurred and
be continuing, to execute, in connection with any sale provided for in
Section 9 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on the Part of Administrative Agent, Other
Representatives or Lenders. The powers conferred on the Administrative
Agent, the Other Representatives and the Lenders hereunder are solely to
protect the Administrative Agent's, the Other Representatives' and the
Lenders' interests in the Collateral and shall not impose any duty upon
the Administrative Agent, any Other Representative or any Lender to
exercise any such powers. The Administrative Agent, the Other
Representatives and the Lenders shall be accountable only for amounts
that they actually
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receive as a result of the exercise of such powers, and neither they nor
any of their officers, directors, employees or agents shall be
responsible to the Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.
7 Performance by Administrative Agent of Grantor's Obligations. If the
Grantor fails to perform or comply with any of its agreements contained herein
and the Administrative Agent, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable expenses of the Administrative Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum 2% above the rate applicable to ABR Loans,
shall be payable by the Grantor to the Administrative Agent on demand and shall
constitute Obligations secured hereby.
8 Proceeds. It is agreed that if an Event of Default shall occur and be
continuing, (a) all Proceeds of any Collateral received by the Grantor
consisting of cash, checks and other near-cash items shall be held by the
Grantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of the Grantor, and at the request of the Administrative Agent
shall, forthwith upon receipt by the Grantor, be turned over to the
Administrative Agent in the exact form received by the Grantor (duly indorsed by
the Grantor to the Administrative Agent, if required by the Administrative
Agent), and (b) any and all such Proceeds received by the Administrative Agent
(whether from the Grantor or otherwise) may, in the sole discretion of the
Administrative Agent, be held by the Administrative Agent, for the benefit of
the Lenders, as collateral security for the Obligations (whether matured or
unmatured), and/or then or at any time thereafter may be applied by the
Administrative Agent against, the Obligations then due and owing. Any balance of
such Proceeds remaining after the payment in full of the Notes, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive the same.
9 Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent, on behalf of the Lenders, may exercise all rights and
remedies of a secured party under the Code, and, to the extent permitted by law,
all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations.
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances, to the extent permitted by law, forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), but subject to any pre-existing rights or licenses, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or office of the Administrative Agent, any Other Representative or any
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Lender or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Administrative Agent, any Other
Representative or any Lender shall have the right, to the extent permitted by
law, upon any such sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Grantor,
which right or equity is hereby waived or released. The Grantor further agrees,
at the Administrative Agent's request, upon the occurrence and during the
continuance of an Event of Default, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at the Grantor's premises or elsewhere. In the
event of any sale, assignment, or other disposition of any of the Collateral,
the goodwill of the business connected with and symbolized by any Trademark
Collateral subject to such disposition shall be included, and the Grantor shall
supply to the Administrative Agent or its designee the Grantor's know-how and
expertise relating to the Collateral subject to such disposition, and the
Grantor's notebooks, studies, reports, records, documents and things embodying
the same or relating to the inventions, processes or ideas covered by, and to
the manufacture of any products under or in connection with, the Collateral
subject to such disposition, and the Grantor's customer's lists, studies and
surveys and other records and documents relating to the distribution, marketing,
advertising and sale of products relating to the Collateral subject to such
disposition. The Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent, the Other
Representatives and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations then due and owing, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Grantor. To the extent permitted by applicable law, the Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent, any
Other Representative or any Lender arising out of the repossession, retention or
sale of the Collateral, other than any such claims, damages and demands that may
arise from the gross negligence or willful misconduct of any of them. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the then outstanding Obligations, including
the reasonable fees and disbursements of any attorneys employed by the
Administrative Agent, any Other Representative or any Lender to collect such
deficiency.
10 Limitation on Duties Regarding Preservation of Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. None of
the Administrative Agent, any Other Representative, any Lender, nor any of their
respective directors, officers, employees or agents shall be liable
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for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Grantor or any other
Person.
11 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are powers coupled with an
interest and are irrevocable until payment in full of the Notes, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit.
12 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
14 No Waiver; Cumulative Remedies. None of the Administrative Agent, any
Other Representative nor any Lender shall by any act (except by a written
instrument pursuant to Section 15 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any Other Representative or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
any Other Representative or any Lender of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent, such Other Representative or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
15 Amendments in Writing; No Waiver; Cumulative Remedies; Successors and
Assigns. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Grantor and the Administrative Agent in accordance with Section
11.1 of the Credit Agreement. This Agreement shall be binding upon the
successors and assigns of the Grantor and shall inure to the benefit of the
Administrative Agent, the Other Representatives and the Lenders and their
respective successors and assigns, except that the Grantor may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent.
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16 Notices. All notices, requests and demands to or upon the respective
parties hereto shall be made in accordance with Section 11.2 of the Credit
Agreement.
17 Authority of Administrative Agent. The Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as among the Administrative Agent, the Other
Representatives and the Lenders, be governed by the Loan Documents and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting, and the Grantor shall
not be under any obligation to make any inquiry respecting such authority.
18 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
19 Release of Collateral and Termination. (a) At such time as the
payment in full of the Notes, the Reimbursement Obligations and the other
Obligations then due and owing shall have occurred, the Commitments have been
terminated and the Letters of Credit have expired, terminated or been returned
to the Issuing Lender, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and the Grantor
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Grantor. Upon request of the Grantor following any such termination, the
Administrative Agent shall deliver (at the sole cost and expense of the Grantor)
to the Grantor any Collateral held by the Administrative Agent hereunder, and
execute and deliver (at the sole cost and expense of such Grantor) to the
Grantor such documents as the Grantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by the Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent shall execute and deliver to the Grantor (at the
sole cost and expense of the Grantor) all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral.
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20 Incorporation of Provisions of Subsidiary Security Agreement. The
Grantor hereby acknowledges and affirms that the rights and remedies of the
Administrative Agent with respect to the security interest in the Collateral
made and granted hereby are more fully set forth in the Subsidiary Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. Nothing in this Agreement shall defer or
impair the attachment or perfection of any security interest in any collateral
covered by the Subsidiary Security Agreement which would attach or be perfected
pursuant to the terms thereof without action by the Grantor or any other Person.
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IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered as of the date first above written.
RA BRANDS, L.L.C.
By:/s/▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Managing Director
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