INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (together with all
amendments, if any, from time to time, this "Intellectual Property Security
Agreement"), dated as of July 2, 2002, is made by EACH OF THE GRANTORS LISTED ON
THE SIGNATURE PAGES HERETO AND EACH ADDITIONAL PARTY WHICH BECOMES A GRANTOR
HERETO PURSUANT TO SECTION 8 HEREOF (collectively, "Grantors" and each, a
"Grantor"), in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, in its capacity as Agent ("Agent") for itself and the lenders from
time to time party to the Credit Agreement described below ("Lenders").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of the
date hereof, by and among ▇▇▇▇▇ International Enterprises Corp., a New York
corporation ("▇▇▇▇▇") and Blue Ridge Textile Manufacturing Inc., a Georgia
corporation ("Blue Ridge") (▇▇▇▇▇ and Blue Ridge are sometimes collectively
referred to herein as the "Borrowers" and individually as a "Borrower"); the
other Credit Parties signatory thereto; General Electric Capital Corporation,
for itself, as a Lender, and as Agent for Lenders, and the other Lenders
signatory thereto from time to time (including all annexes, exhibits and
schedules thereto, as from time to time amended, restated, supplemented or
otherwise modified, the "Credit Agreement"), Lenders have agreed to make Loans
and to incur Letter of Credit Obligations on behalf of the Borrowers; and
WHEREAS, Grantors directly or indirectly benefit from the credit
facilities made available to Borrowers under the Credit Agreement and in order
to induce Agent and Lenders to enter into the Credit Agreement and other Loan
Documents and to induce Lenders to make the Loans and to incur Letter of Credit
Obligations as provided for in the Credit Agreement, Grantors desire to grant a
continuing Lien on the Intellectual Property Collateral to Agent, for the
benefit of Agent and Lenders, to secure all of the Obligations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein have the meanings given to them in Annex A to the Credit Agreement.
2. GRANT OF SECURITY INTEREST IN INTELLECTUAL PROPERTY COLLATERAL. (a)
To secure the prompt and complete payment, performance and observance of all the
Obligations (and with respect to each Grantor who is a Borrower, specifically
including, without limitation, such Grantor's Obligations arising under the
cross guaranty provisions of Section 12 of the Credit Agreement), each Grantor
hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers
to Agent, (i) for itself and the benefit of the holders of A Obligations, a
continuing first priority security interest in and Lien upon all of its right,
title and interest in, to and under the following and (ii) for the benefit of
the holders of B Obligations, a continuing second priority security interest in
and lien upon all its rights, title and interest in, to and under the following
in each case, whether presently existing or hereafter
created or acquired by or arising in favor of such Grantor and whether owned or
consigned by or to, or licensed from or to, such Grantor (collectively, the
"Intellectual Property Collateral"):
(i) all of its Patents and Patent Licenses to which it is a party
including those referred to on Schedule I hereto;
(ii) all of its Trademarks and Trademark Licenses to which it is a
party including those referred to on Schedule II hereto;
(iii) all of its Copyrights and Copyright Licenses to which it is a
party including those referred to on Schedule III hereto;
(iv) all reissues, continuations or extensions of the foregoing;
(v) all goodwill of the business connected with the use of, and
symbolized by, each Patent, each Patent License, each Trademark, each Trademark
License, each Copyright and each Copyright License; and
(vi) all products and proceeds of the foregoing, including, without
limitation, any claim by such Grantor against third parties for past, present or
future (A) infringement or dilution of any Patent or Patent licensed under any
Patent License, (B) injury to the goodwill associated with any Patent or any
Patent licensed under any Patent License, (C) infringement or dilution of any
Trademark or Trademark licensed under any Trademark License, (D) injury to the
goodwill associated with any Trademark or any Trademark licensed under any
Trademark License, (E) infringement or dilution of any Copyright or Copyright
licensed under any Copyright License, and (F) injury to the goodwill associated
with any Copyright or any Copyright licensed under any Copyright License.
(b) In addition, to secure the prompt and complete payment,
performance and observance of the Obligations and in order to induce Agent
and Lenders as aforesaid, each Grantor hereby grants to Agent, for itself
and the benefit of Lenders, a right of setoff, against the property of such
Grantor held by Agent or any Lender, consisting of property described above
in Section 2(a) now or hereafter in the possession or custody of or in
transit to Agent or any Lender, for any purpose, including safekeeping,
collection or pledge, for the account of such Grantor, or as to which such
Grantor may have any right or power.
3. REPRESENTATIONS AND WARRANTIES. Each Grantor jointly and
severally represents and warrants that such Grantor does not have any interest
in, or title to, any Patent, Trademark or Copyright except as set forth in
Schedule I, Schedule II and Schedule III, respectively, hereto. This
Intellectual Property Security Agreement is effective to create a valid and
continuing Lien on and, upon the filing hereof with the United States Patent and
Trademark Office and the United States Copyright Office and the filing of
appropriate financing statements listed on Schedule I to the Security Agreement,
perfected security interests in favor of Agent in all of Grantors' Patents,
Trademarks and Copyrights and such perfected security interests are enforceable
as such as against any and all creditors of, and purchasers from, Grantors. Upon
filing of this Intellectual Property Security Agreement with the United States
Patent and
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Trademark Office and the United States Copyright Office and the filing of
appropriate financing statements listed on Schedule I to the Security Agreement,
all action necessary or otherwise requested by Agent to protect and perfect
Agent's Lien on Grantor's Patents, Trademarks and Copyrights shall have been
duly taken.
4. COVENANTS. Each Grantor jointly and severally covenants and
agrees with Agent, for the benefit of Agent and Lenders, that from and after the
date of this Intellectual Property Security Agreement and until the Termination
Date:
(a) Each Grantor shall notify Agent immediately if it knows or
has reason to know that any application or registration relating to any
Patent, Trademark or Copyright (now or hereafter existing) may become
abandoned or dedicated to the public, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court) regarding such
Grantor's ownership of any Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same unless Grantor has
elected, and Agent has consented, to abandon any application or
registration which Grantor deems to be no longer material to the conduct of
its business or operations.
(b) In no event shall any Grantor, either directly or through any
agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright with the United States
Patent and Trademark Office, the United States Copyright Office or any
similar office or agency without giving Agent prior written notice thereof,
and, upon request of Agent, such Grantor shall execute and deliver a
supplement hereto (in form and substance satisfactory to Agent) to evidence
Agent's, Lien on such Patent, Trademark or Copyright, and the General
Intangibles of such Grantor relating thereto or represented thereby.
(c) Each Grantor shall take all actions necessary or requested by
Agent to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of each of the Patents or
Trademarks (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of
noncontestability and opposition and interference and cancellation
proceedings unless Grantor has elected, and Agent has consented, to abandon
any application or registration which Grantor deems to be no longer
material to the conduct of its business or operations.
(d) In the event that any of the Intellectual Property Collateral
is infringed upon, or misappropriated or diluted by a third party, each
Grantor shall notify Agent promptly after such Grantor learns thereof. Each
Grantor shall, unless it shall reasonably determine that such Intellectual
Property Collateral is in no way material to the conduct of its business or
operations, promptly take such actions to enforce its rights and protect
such Intellectual Property Collateral, whether by action, suit, proceeding
or otherwise, as Grantor shall deem necessary or appropriate under the
circumstances in its reasonable business judgment or as Agent may otherwise
request.
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5. SECURITY AGREEMENT. The security interests granted pursuant to
this Intellectual Property Security Agreement are granted in conjunction with
the security interests granted to Agent pursuant to the Security Agreement. Each
Grantor hereby acknowledges and affirms that the rights and remedies of Agent
with respect to the security interest in the Intellectual Property Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
6. REINSTATEMENT. This Intellectual Property Security Agreement
shall remain in full force and effect and continue to be effective should any
petition be filed by or against any Grantor or Credit Party for liquidation or
reorganization, should any Grantor or Credit Party become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of any Grantor's or Credit
Party's assets, and shall continue to be effective or be reinstated, as the case
may be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
7. NOTICES. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by any other party, or whenever any
of the parties desires to give or serve upon another any such communication with
respect to this Intellectual Property Security Agreement, each such notice,
demand, request, consent, approval, declaration or other communication shall be
in writing and shall be addressed to the party to be notified at the address set
forth in Annex I to the Credit Agreement (or such other address as may be
substituted by notice given in the manner required by Section 11.10 of the
Credit Agreement), and given in the manner required by Section 11.10 of the
Credit Agreement.
8. ADDITIONAL GRANTORS. The initial Grantors hereunder shall be the
Credit Parties signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Credit Parties may become parties
hereto, as additional Grantors (each, an "Additional Grantor"), by executing a
counterpart of this Intellectual Property Security Agreement substantially in
the form of Exhibit A attached hereto. Upon delivery of any such counterpart to
Agent, notice of which is hereby waived by the Grantors, each 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 Agent
not to cause any Credit Party to become an Additional Grantor hereunder. This
Intellectual Property Security 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.
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9. TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 6
hereof, this Intellectual Property Security Agreement shall terminate upon the
Termination Date.
10. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Intellectual Property Security
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Intellectual Property Security Agreement shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Intellectual Property Security Agreement.
11. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Intellectual Property Security Agreement
with its counsel.
12. INTERCREDITOR AGREEMENTS. The Lenders have agreed, among
themselves, that the Lien created in favor of the holders of A Obligations shall
be prior and superior to any Lien or other interests created in favor of or held
by the holders of the B Obligations in respect of the Collateral, such priority
as between the holders of the A Obligations and the holders of the B
Obligations, shall give the holders of the A Obligations all the rights, powers
and privileges of a first priority secured creditor under the Code, other
applicable law and otherwise in respect of the Collateral, with the rights,
powers and privileges of holders of the B Obligations in respect of the
Collateral being subject to and subordinate to the Lien for the benefit of the
holders of the A Obligations. The application and receipt of Proceeds of
Collateral are subject to the provisions of Section 1.18 of the Credit
Agreement. The Lien priorities provided herein and in the Collateral Documents
shall not be altered or otherwise affected by any modification, renewal,
restatement, extension or refinancing of any Obligations. The Lenders
acknowledge and consent to the granting of the Liens on the Collateral as
provided for herein and shall not (and hereby waive any right to) contest in any
proceeding the validity, priority or enforceability of the Lien on the
Collateral of the holders of A Obligations. The provisions of this Section 12
and the rights and benefits hereof shall inure solely to the benefit of the
Lenders and their respective successors and permitted assigns and no other
Person (including, without limitation, the Credit Parties) shall have or be
entitled to assert rights or benefits under this Section 12.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each Grantor has caused this Intellectual Property
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
▇▇▇▇▇ INTERNATIONAL ENTERPRISES, CORP.
By:_________________________________________
Name:
Title:
BLUE RIDGE TEXTILE MANUFACTURING, INC.
By:_________________________________________
Name:
Title:
OHIO GARMENT RENTAL, INC.
By:_________________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By:_________________________________________
Name:
Its: Duly Authorized Signatory
ACKNOWLEDGMENT OF GRANTORS
STATE OF ___________ )
) ss.
COUNTY OF __________ )
On this __ day of ___________, 2002 before me personally appeared
______________________, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of ▇▇▇▇▇
INTERNATIONAL ENTERPRISES CORP., who being by me duly sworn did depose and say
that he is an authorized officer of said corporation, that the said instrument
was signed on behalf of said corporation as authorized by its Board of Directors
and that he acknowledged said instrument to be the free act and deed of said
corporation.
_________________________
Notary Public
{seal}
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
On this __ day of ____________, 2002 before me personally appeared
______________________, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of BLUE RIDGE TEXTILE
MANUFACTURING INC., who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
_______________________________
Notary Public
{seal}
STATE OF ____________ )
) ss.
COUNTY OF __________ )
On this __ day of ______________, 2002 before me personally appeared
______________________, proved to me on the basis of satisfactory evidence to be
the Person who executed the foregoing instrument on behalf of OHIO GARMENT
RENTAL, INC., who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
____________________________________
Notary Public
{seal}
SCHEDULE I
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT
I. PATENT REGISTRATIONS
Grantor Patent Reg. No. Date
------- ------ -------- ----
II. PATENT APPLICATIONS
Grantor Patent Application No. Date
------- ------ --------------- ----
III. PATENT LICENSES
Grantor Name of Agreement Date of Agreement Parties
------- ----------------- ----------------- -------
SCHEDULE II
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT
I. TRADEMARK REGISTRATIONS
Grantor ▇▇▇▇ Reg. No. Date
------- ---- -------- ----
II. TRADEMARK APPLICATIONS
Grantor ▇▇▇▇ Application No. Date
------- ---- --------------- ----
III. TRADEMARK LICENSES
Grantor Name of Agreement Date of Agreement Parties
------- ----------------- ----------------- -------
SCHEDULE III
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT
I. COPYRIGHT REGISTRATIONS
Grantor Copyright Reg. No. Date
------- --------- -------- ----
II. COPYRIGHT APPLICATIONS
Grantor Copyright Application No. Date
------- --------- --------------- ----
III. COPYRIGHT LICENSES
Grantor Name of Agreement Date of Agreement Parties
------- ----------------- ----------------- -------
EXHIBIT A
COUNTERPART TO INTELLECTUAL
PROPERTY SECURITY AGREEMENT
This counterpart, dated _________, [200__], is delivered pursuant to
Section 8 of that certain Intellectual Property Security Agreement dated as of
[__________ ___], 2002 (as from time to time amended, modified or supplemented,
the "IP Security Agreement"; the terms defined therein and not otherwise defined
herein being used as therein defined), between ▇▇▇▇▇ International Enterprises
Corp., Blue Ridge Textile Manufacturing Inc., Ohio Garment Rental, Inc., each a
Grantor and General Electric Capital Corporation, as Agent. The undersigned
hereby agrees (i) that this counterpart may be attached to the IP Security
Agreement, and (ii) that the undersigned will comply with and be subject to,
including representations and warranties, all the terms and conditions of the IP
Security Agreement as if it were an original signatory thereto.
[NAME OF ADDITIONAL GRANTOR]
By:______________________________
Name:
Title: