Exhibit 10.7
INTELLECTUAL PROPERTY SECURITY AGREEMENT
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This INTELLECTUAL PROPERTY SECURITY AGREEMENT (together with
all amendments, if any, from time to time, this "Agreement"), dated as of July
15, 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 11
HEREOF (collectively, "Grantors" and each, a "Grantor"), in favor of GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as
administrative agent (in such capacity, the "Administrative Agent") for itself
and the lenders from time to time party to the Credit Agreement described below
(collectively, the "Lenders").
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Credit Agreement, dated as
of July 15, 2002 (as amended, restated, supplemented or otherwise modified and
in effect from time to time, the "Credit Agreement"), among the Grantors, the
Administrative Agent and the Lenders, the Lenders have agreed to make certain
loans and other financial accommodations to the Grantors from time to time;
WHEREAS, in order to secure the prompt and complete payment,
observance and performance of (i) all the Obligations and (ii) all the Grantors'
obligations and liabilities hereunder and in connection herewith (all the
Obligations and such obligations and liabilities hereunder being hereinafter
referred to collectively as the "Liabilities"), the Administrative Agent and the
Lenders have required as a condition, among others, to entering into the Credit
Agreement that the Grantors execute and deliver this Agreement; and
WHEREAS, in order to induce the Administrative Agent and the
Lenders to enter into the Credit Agreement and other Loan Documents and to
induce the Lenders to make loans and other financial accommodations to the
Grantors as provided for in the Credit Agreement, each of the Grantors desires
to grant a continuing Lien on the Intellectual Property Collateral to the
Administrative Agent, for the benefit of the Administrative Agent and the
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 to the Credit Agreement, and
the following shall have (unless otherwise provided elsewhere in this Agreement)
the following respective meanings (such meanings being equally applicable to
both the singular and plural form of the terms defined):
"Copyright License" means any and all rights now owned or
hereafter acquired by any Grantor under any written agreement granting
any right to use any Copyright or Copyright registration.
"Copyrights" means all of the following: (a) all copyrights
and General Intangibles (as defined in Article 9 of the Uniform
Commercial Code as in effect on the date hereof in the State of New
York) of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and
applications in the United States Copyright Office or in any similar
office or agency of the United States, any state or territory thereof,
or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Patent License" means rights now owned or hereafter acquired
under any written agreement by any Grantor granting any right with
respect to any Patent in existence.
"Patents" means all of the following: (a) all letters patent
of the United States or of any other country, all registrations and
recordings thereof, and all applications for letters patent of the
United States or of any other country, including registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
State, or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"Trademark License" means rights under any written agreement
now owned or hereafter acquired by any Grantor granting any right to
use any Trademark.
"Trademarks" means all of the following: (a) all trademarks,
trade names, corporate names, business names, trade styles, service
marks, logos, other source or business identifiers, prints and labels
on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
state or territory thereof, or any other country or any political
subdivision thereof; (b) all reissues, extensions or renewals thereof;
and (c) all goodwill associated with or symbolized by any of the
foregoing.
2. GRANT OF SECURITY INTEREST IN INTELLECTUAL PROPERTY COLLATERAL. (a)
To secure the prompt and complete payment, performance and observance of all the
Obligations, each of the Grantors hereby grants, assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Administrative Agent, for itself and
the benefit of the Lenders, a continuing first priority security interest in and
Lien upon all of its right, title and interest in, to and under the following,
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;
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(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 Trademark and each Trademark
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 of any Patent or Patent licensed under any Patent
License, (B) infringement or dilution of any Trademark or any
Trademark licensed under any Trademark License, (C) injury to
the goodwill associated with any Trademark or Trademark
licensed under any Trademark License, and (D) infringement of
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
the Administrative Agent and the Lenders as aforesaid, each Grantor
hereby grants to the Administrative Agent, for itself and the benefit
of the Lenders, a right of setoff, against the property of such Grantor
held by the Administrative 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 the Administrative 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:
(a) 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.
(b) This Agreement is effective to create a valid and
continuing Lien on and, upon filing of this Agreement with the United
States Patent and Trademark Office and the United States Copyright
Office and the filing of appropriate financing statements in such
Grantor's jurisdiction of incorporation or organization, all action
necessary or otherwise requested by the Administrative Agent to protect
and perfect the Administrative Agent's Lien on such Grantor's Patents,
Trademarks and Copyrights shall have been duly taken, and the
Administrative Agent's Lien is enforceable as such against all
creditors or and purchasers from such Grantor.
(c) No security agreement, financing statement or other public
notice with respect to all or any part of the Intellectual Property
Collateral is on file or of record in any public office, except such as
have been filed in favor of the Administrative Agent for the benefit of
the Administrative Agent, the Lenders and the other Holders pursuant to
this Agreement.
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4. COVENANTS. Each Grantor jointly and severally covenants and
agrees with the Administrative Agent, for the benefit of the Administrative
Agent and the Lenders, that from and after the date hereof and until the
Commitment Termination Date:
(a) Such Grantor shall cooperate fully with the Administrative
Agent and the Lenders to ensure the prompt filing and recordation of
this Agreement with the United States Patent and Trademark Office and
the United States Copyright Office and in the states of such Grantor's
incorporation or organization.
(b) Such Grantor shall notify the Administrative Agent
immediately if it knows that any application or registration relating
to any material 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 material
Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(c) In no event shall such 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 the Administrative Agent
written notice thereof within at least within thirty (30) Business Days
after such filing, and, upon request of the Administrative Agent, such
Grantor shall execute and deliver a supplement hereto (in form and
substance satisfactory to the Administrative Agent) to evidence the
Administrative Agent's, Lien on such Patent, Trademark or Copyright,
and the General Intangibles (as defined in Article 9 of the Uniform
Commercial Code as in effect on the date hereof in the State of New
York) of such Grantor relating thereto or represented thereby.
(d) Such Grantor shall take all actions necessary or requested
by the Administrative 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 and prompt payment of maintenance or renewal
fees.
(e) In the event that any of the Intellectual Property
Collateral is materially infringed upon, or misappropriated or diluted
by any Person, such Grantor shall notify the Administrative Agent
promptly after such Grantor learns thereof. Such 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 such Grantor shall deem necessary or
appropriate under the circumstances in its reasonable business judgment
or as the Administrative Agent may otherwise request.
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(f) Such Grantor agrees that it will not take any action, and
will use best efforts not to permit any action to be taken by its
employees, agents, designees or licensees, or fail to take any action,
which could reasonably be expected to have a material adverse effect on
the validity or enforcement of the rights collaterally assigned to the
Administrative Agent under this Agreement or the rights associated with
any Intellectual Property Collateral.
(g) Such Grantor will keep and maintain at its own cost and
expense satisfactory and complete records of the Intellectual Property
Collateral. The Grantors will ▇▇▇▇ their books and records pertaining
to the Intellectual Property Collateral to evidence this Agreement and
the security interests granted hereby.
(h) Such Grantor will not create, incur or permit to exist,
will defend the Administrative Agent, Lenders or the other Holders
against, and will take such other action as is necessary to remove any
Lien or claim on or to the Intellectual Property Collateral other than
the Liens created hereby. Such Grantor will advise the Administrative
Agent promptly of any Lien on any of the Intellectual Property
Collateral.
(i) Such Grantor will pay and discharge or otherwise satisfy
at or before maturity, or before they become delinquent, as the case
may be, all taxes, assessments and governmental charges or levies
imposed upon the Intellectual Property Collateral or in respect of
income or profits therefrom, as well as all claims of any kind
(including, without limitation, claims for labor, materials and
supplies) against or with respect to the Intellectual Property
Collateral.
(j) The Grantors hereby agree that when an Event of Default
has occurred and is continuing, the use by the Administrative Agent of
the Intellectual Property Collateral as authorized hereunder in
connection with the Administrative Agent's exercise of its rights and
remedies under Section 10 hereof or pursuant to Section 7 of the
Security Agreement shall be coextensive with such Grantor's rights
thereunder and with respect thereto and without any liability for
royalties or other related charges from the Administrative Agent, the
Lenders or the other Holders to such Grantor.
(k) Such Grantor agrees, except as provided in Section 9.02 of
the Credit Agreement, not to directly or indirectly sell, assign,
transfer or otherwise dispose of their respective interests in the
Intellectual Property Collateral without the prior and express written
consent of the Administrative Agent. From and after the occurrence and
during the continuance of an Event of Default, such Grantor agrees that
the Administrative Agent, or a conservator appointed by the
Administrative Agent, shall have the right to establish such reasonable
quality controls as the Administrative Agent or such conservator, in
its sole and absolute judgment, may deem necessary to assure
maintenance of the quality of inventory marketed by such Grantor under
the Intellectual Property Collateral or in connection with which such
the Intellectual Property Collateral is used.
5. SECURITY AGREEMENT. The security interests granted pursuant
to this Agreement are granted in conjunction with the security interests granted
to the Administrative Agent pursuant to the Security Agreement. Each Grantor
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hereby acknowledges and affirms that the rights and remedies of the
Administrative 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 Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Grantor for liquidation or reorganization, should any Grantor 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 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 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, and given in the
manner required by, Section 13.08 of the Credit Agreement.
8. Administrative Agent's Right to ▇▇▇. From and after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right, but shall not be obligated, to bring suit in its own
name to enforce Intellectual Property Collateral and, if the Administrative
Agent shall commence any such suit, the Grantors shall, at the request of the
Administrative Agent, do any and all lawful acts and execute any and all proper
documents required by the Administrative Agent in aid of such enforcement. The
Grantors shall, upon demand, promptly reimburse the Administrative Agent for all
costs and expenses incurred by the Administrative Agent in the exercise of its
rights under this Section 8 (including, without limitation, reasonable fees and
expenses of attorneys and paralegals for the Administrative Agent).
9. Power of Attorney. Each of the Grantors agrees, upon the
request of the Administrative Agent and promptly following such request, to take
any action and execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement. Each of the
Grantors hereby irrevocably designates, constitutes and appoints the
Administrative Agent (and all Persons designated by the Administrative Agent in
its sole and absolute discretion) with full power of substitution, as such
Grantor's true and lawful attorney-in-fact, with full power and authority in the
name of such Grantor, or in its own name, from time to time in the
Administrative Agent's discretion upon the occurrence and during the continuance
of an Event of Default, for the purpose of carrying out the terms of this
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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 hereof and, without limiting the generality of the foregoing, hereby
give the Administrative Agent the power and right on behalf of such Grantor,
without notice or assent by such Grantor, to the extent permitted by applicable
law, to (i) endorse such Grantor's name on all applications, documents, papers
and instruments necessary or desirable for the Administrative Agent in the use,
prosecution or protection of the Intellectual Property Collateral, (ii) assign,
pledge, convey or otherwise transfer title in or dispose of the Intellectual
Property Collateral to anyone on commercially reasonable terms (but subject to
the terms thereof), (iii) grant or issue any exclusive or nonexclusive license
under the Intellectual Property Collateral (not to conflict with any existing
license) or under the licenses, to anyone on commercially reasonable terms (but
only, in the case of licenses, to the extent permitted under such licenses), and
(iv) take any other actions with respect to the Intellectual Property Collateral
or, to the extent permitted, the licenses as the Administrative Agent deems in
its own best interest or in the best interest of the Lenders. Each of the
Grantors hereby ratifies all that such attorney shall lawfully do or, to the
extent permitted, cause to be done by virtue hereof. This power of attorney is
coupled with an interest and shall be irrevocable until all of the Obligations
shall have been paid in full in cash and the Credit Agreement shall have been
terminated. Each of the Grantors acknowledges and agrees that this Agreement is
not intended to limit or restrict in any way the rights and remedies of the
Administrative Agent, the Lenders under the Loan Documents, but rather is
intended to facilitate the exercise of such rights and remedies.
10. Event of Default; Cumulative Remedies. The Administrative Agent
shall have, in addition to all other rights and remedies given it by the terms
of this Agreement, all rights and remedies allowed by law and the rights and
remedies of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Intellectual Property Collateral may be located or
deemed located. Upon the occurrence and during the continuance of an Event of
Default, each of the Grantors agrees to assign, convey and otherwise transfer
title in and to the Intellectual Property Collateral to the Administrative Agent
or any transferee of the Administrative Agent and to execute and deliver to the
Administrative Agent or any such transferee all such agreements, documents and
instruments as may be necessary, in the Administrative Agent's sole discretion
exercised in a commercially reasonable manner, to effect such assignment,
conveyance and transfer. All of the Administrative Agent's rights and remedies
with respect to the Intellectual Property Collateral, whether established
hereby, by the Security Agreement, by any other agreements or by law, shall be
cumulative and may be exercised separately or concurrently. Notwithstanding
anything set forth herein to the contrary, it is hereby expressly agreed that
upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent may exercise any of the rights and remedies provided in
this Agreement, the Security Agreement and any of the other Loan Documents,
including, but not limited to, the right to sell, transfer or otherwise dispose
of any and all finished goods inventory bearing the Trademarks, Patents or
Copyrights in any manner determined solely by the Administrative Agent. Each of
the Grantors agree that any notification of intended disposition of any of the
Intellectual Property Collateral required by law shall be deemed reasonably and
properly given if given at least ten (10) Business Days before such disposition.
Each of the Grantors hereby agree that they shall have no right to satisfy the
Administrative Agent's rights to equitable remedies by the payment of money
damages, and nothing contained in this Agreement will restrict the
Administrative Agent's rights to obtain equitable remedies for breaches of this
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Agreement. To the extent permitted by applicable law, each of the Grantors
waives all claims, damages, and demands it may acquire against the
Administrative Agent arising out of the lawful exercise by it of its rights
hereunder.
11. ADDITIONAL GRANTORS. The initial Grantors hereunder shall
be the signatories hereto on the date hereof. From time to time subsequent to
the date hereof, additional Grantors may become parties hereto as additional
Grantors (each, an "Additional Grantor"), by executing a counterpart of this
Agreement substantially in the form of Exhibit A attached hereto. Upon delivery
of any such counterpart to the Administrative Agent, notice of which is hereby
waived by each of 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 the Administrative Agent not to
cause any Grantor 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.
12. TERMINATION. The security interest granted by each of the
Grantors under this Agreement shall terminate against all the Intellectual
Property Collateral upon final payment in full in cash of the Obligations and
termination of the Commitments. Upon such termination and at the written request
of each of the Grantors or its successors or assigns, and at the cost and
expense of each of the Grantors or its successors or assigns, the Administrative
Agent shall execute in a timely manner a satisfaction of this Agreement and such
instruments, documents or agreements as are necessary or desirable to terminate
and remove of record any documents constituting public notice of this Agreement
and the security interests and assignments granted hereunder.
13. NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
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 Agreement.
14. ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Agreement with its counsel.
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IN WITNESS WHEREOF, each of the Grantors has caused Agreement
to be executed and delivered by its duly authorized officer as of the date first
set forth above.
BARNEY'S, INC.
BARNEYS AMERICA, INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
▇▇▇▇▇ ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE CORP.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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ACKNOWLEDGMENT OF GRANTORS
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STATE OF CONNECTICUT)
) ss. Stamford
COUNTY OF FAIRFIELD )
On this 15th day of July, 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 Barney's, Inc., Barneys America,
Inc., Barneys (CA) Lease Corp., Barneys (NY) Lease Corp., ▇▇▇▇▇ All-American
Sportswear Corp., BNY Licensing Corp., and Barneys America (Chicago) Lease
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 Board of Directors and that he acknowledged
said instrument to be the free act and deed of said corporation.
/s/ ▇. ▇▇▇▇▇▇▇▇▇▇
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Notary Public
{seal}
