EXHIBIT 10.28
SUBSIDIARY TRADEMARK SECURITY AGREEMENT
This SUBSIDIARY TRADEMARK SECURITY AGREEMENT (this "AGREEMENT") is
dated as of October 23, 1997 and entered into by and among [INSERT NAME OF
GRANTOR IN CAPS], a ________________ corporation ("GRANTOR"), and FIRST UNION
NATIONAL BANK, as administrative agent for and representative of (in such
capacity herein called "SECURED PARTY") the financial institutions ("LENDERS")
party to the Credit Agreement referred to below and any Interest Rate Exchangers
(as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party, Syndication Agent and Lenders have entered into a
Credit Agreement dated as of October 23, 1997 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with The Pantry, Inc. (the
"Borrower") pursuant to which Lenders have made certain commitments, subject to
the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities to the Borrower.
B. Borrower may from time to time enter into one or more Interest
Rate Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS") with one
or more Lenders (in such capacity, collectively, "INTEREST RATE EXCHANGERS") in
accordance with the terms of the Credit Agreement.
C. Grantor owns and uses in its business, and will in the future
adopt and so use, various intangible assets, including trademarks, service
marks, designs, logos, indicia, tradenames, corporate names, company names,
business names, fictitious business names, trade styles and/or other source
and/or business identifiers and applications pertaining thereto (collectively,
the "TRADEMARKS").
D. Secured Party desires to become a secured creditor with respect to
all of the existing and future Trademarks, all registrations that have been or
may hereafter be issued or applied for thereon in the United States and any
state thereof (the "REGISTRATIONS"), all common law and other rights in and to
the Trademarks in the United States and any state thereof (the "TRADEMARK
RIGHTS"), all goodwill of Grantor's business symbolized by the Trademarks and
associated therewith, including without limitation the documents and things
described in Section 1(b) (the "ASSOCIATED GOODWILL"), and all proceeds of the
Trademarks, the Registrations, the Trademark Rights and the Associated Goodwill,
and Grantor agrees to create a secured and protected interest in the Trademarks,
the Registrations, the
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Trademark Rights, the Associated Goodwill and all the proceeds thereof as
provided herein.
E. Grantor has executed and delivered the Subsidiary Security
Agreement dated as of October 23, 1997 (the "SUBSIDIARY SECURITY AGREEMENT")
between Grantor and Secured Party for the benefit of Lenders, pursuant to which
Grantor has granted Secured Party a security interest in all of its personal
property, including, without limitation, the Collateral (as defined below),
which Subsidiary Security Agreement is to be supplemented by this Agreement, and
it is desired that all obligations of Grantor under the Guaranty be secured
hereunder.
F. Pursuant to the Subsidiary Security Agreement, Grantor has granted
to Secured Party a lien on and security interest in, among other assets, the
equipment and inventory relating to the products and services sold or delivered
under or in connection with the Trademarks such that, upon the occurrence and
during the continuation of an Event of Default, Secured Party would be able to
exercise its remedies consistent with the Subsidiary Security Agreement, this
Agreement and applicable law to foreclose upon Grantor's business and use the
Trademarks, the Registrations and the Trademark Rights in conjunction with the
continued operation of such business, maintaining substantially the same product
and service specifications and quality as maintained by Grantor, and benefit
from the Associated Goodwill.
G. Upon the occurrence and during the continuation of an Event of
Default, and to permit Secured Party to operate Grantor's business without
interruption and to use the Trademarks, Registrations, Trademark Rights and
Associated Goodwill in conjunction therewith, Grantor is willing to appoint
Secured Party as Grantor's attorney-in-law and attorney-in-fact to execute
documents and take actions consistent therewith.
I. It is a requirement under the Credit Agreement that Grantor shall
have granted the security interests and undertaken the obligations contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
as well as to induce Interest Rate Exchangers to enter into the Lender Interest
Rate Agreements to enter into the Lender Interest Rate Agreements and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Grantor hereby agrees with Secured Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to Secured Party
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a security interest in, all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "COLLATERAL"):
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(a) each of the Trademarks and rights and interests in Trademarks which
are presently, or in the future may be, owned, held (whether pursuant to a
license or otherwise) or used by Grantor, in whole or in part (including,
without limitation, the Trademarks specifically identified in Schedule A annexed
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hereto, as the same may be amended pursuant hereto from time to time), and
including all Trademark Rights with respect thereto and all federal and state
Registrations therefor heretofore or hereafter granted or applied for, the right
(but not the obligation) to register claims under any state or federal trademark
law and to apply for, renew and extend the Trademarks, Registrations and
Trademark Rights, the right (but not the obligation) to ▇▇▇ or bring opposition
or cancellation proceedings in the name of Grantor or in the name of Secured
Party or otherwise for past, present and future infringements of the Trademarks,
Registrations or Trademark Rights and all rights (but not obligations)
corresponding thereto in the United States and the Associated Goodwill; it being
understood that the rights and interests included herein shall include, without
limitation, all rights and interests pursuant to licensing or other contracts in
favor of Grantor pertaining to the Trademarks, Registrations or Trademark Rights
presently or in the future owned or used by third parties but, in the case of
third parties which are not Affiliates of Grantor, only to the extent permitted
by such licensing or other contracts and, if not so permitted, only with the
consent of such third parties;
(b) the following documents and things in Grantor's possession, or
subject to Grantor's right to possession, related to (Y) the production, sale
and delivery by Grantor, or by any Affiliate, licensee or subcontractor of
Grantor, of products or services sold or delivered by or under the authority of
Grantor in connection with the Trademarks, Registrations or Trademark Rights
(which products and services shall, for purposes of this Agreement, be deemed to
include, without limitation, products and services sold or delivered pursuant to
merchandising operations utilizing any Trademarks, Registrations or Trademark
Rights); or (Z) any retail or other merchandising operations conducted under the
name of or in connection with the Trademarks, Registrations or Trademark Rights
by Grantor or any Affiliate, licensee or subcontractor of Grantor:
(i) all lists and ancillary documents that identify and describe
any of Grantor's customers, or those of its Affiliates, licensees or
subcontractors, for products sold and services delivered under or in
connection with the Trademarks or Trademark Rights, including without
limitation any lists and ancillary documents that contain a customer's name
and address, the name and address of any of its warehouses, branches or
other places of business, the identity of the Person or Persons having the
principal responsibility on a customer's behalf for ordering products or
services of the kind supplied by Grantor, or the credit, payment, discount,
delivery or other sale terms applicable to such customer, together with
information setting forth
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the total purchases, by brand, product, service, style, size or other
criteria, and the patterns of such purchases;
(ii) all product and service specification documents and
production and quality control manuals used in the manufacture or delivery
of products and services sold or delivered under or in connection with the
Trademarks or Trademark Rights;
(iii) all documents which reveal the name and address of any
source of supply, and any terms of purchase and delivery, for any and all
materials, components and services used in the production of products and
services sold or delivered under or in connection with the Trademarks or
Trademark Rights; and
(iv) all documents constituting or concerning the then current or
proposed advertising and promotion by Grantor or its Affiliates, licensees
or subcontractors of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights including, without
limitation, all documents which reveal the media used or to be used and the
cost for all such advertising conducted within the described period or
planned for such products and services;
(c) all general intangibles relating to the Collateral;
(d) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(e) all proceeds, products, rents and profits (including without
limitation license royalties and proceeds of infringement suits) of or from any
and all of the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
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Collateral is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under
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Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S)362(a)), of all obligations
and liabilities of every nature of Grantor now or hereafter existing under or
arising out of or in connection with the Guaranty and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Company
and/or Grantor, would accrue on such obligations, whether or not a claim is
allowed against Company and/or Grantor for such interest in the related
bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Lender Interest Rate Agreements, fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured Party,
Syndication Agent, any Lender or Interest Rate Exchanger as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being the
"UNDERLYING DEBT"), and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein to the
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contrary notwithstanding, (a) Grantor shall remain liable under any contracts
and agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights hereunder shall not release Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Secured Party shall not have any obligation or liability under any contracts
and agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor represents and
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warrants as follows:
(a) Description of Collateral. A true and complete list of all
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Trademarks, Registrations and Trademark Rights owned, held (whether pursuant to
a license or otherwise) or used by Grantor, in whole or in part, as of the date
of this Agreement and which are material to the operation of the business of
Grantor is set forth in Schedule A annexed hereto.
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(b) Validity and Enforceability of Collateral. Each of the Trademarks,
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Registrations and Trademark Rights that is owned by Grantor and is material to
the financial condition or
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business of Grantor is valid, subsisting and enforceable. Grantor is not aware
of any pending or threatened claim by any third party that any such Trademarks,
Registrations or Trademark Rights is invalid or unenforceable or that the use of
any of the Trademarks, Registrations or Trademark Rights violates the rights of
any third person or of any basis for any such claim.
(c) Ownership of Collateral. Except for the security interest created
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by this Agreement or any other Collateral Document, Grantor owns the Collateral
free and clear of any Lien (other than Permitted Encumbrances). Except such as
may have been filed in favor of Secured Party relating to this Agreement, (i) no
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any filing or recording office and
(ii) no effective filing covering all or any part of the Collateral is on file
in the United States Patent and Trademark Office.
(d) Office Locations; Other Names. The chief place of business, the
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chief executive office and the office where Grantor keeps its records regarding
the Collateral is, and has been for the four month period preceding the date
hereof, located at the location identified in Schedule B attached hereto.
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Grantor has not in the past five years done, and does not now do, business under
any other name (including any trade-name or fictitious business name), except as
set forth in Schedule B attached hereto.
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(e) Governmental Authorizations. Except as contemplated by Sections
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1(a) and 4(f) hereof, no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for either (i) the grant by Grantor of the security interest hereby,
(ii) the execution, delivery or performance of this Agreement by Grantor, or
(iii) the perfection of or the exercise by Secured Party of its rights and
remedies hereunder in the United States (except as may have been taken by or at
the direction of Grantor).
(f) Perfection. This Agreement, together with the filing of financing
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statements describing the Collateral with the Secretary of State of the State of
[Delaware] [Florida], and the recording of this Agreement with the United States
Patent and Trademark Office, which have been made or will be made promptly
following the Closing Date, creates a valid, perfected and, except for Permitted
Encumbrances, First Priority security interest in the Collateral, securing the
payment of the Secured Obligations; provided that additional actions may be
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required with respect to the perfection of proceeds of the Collateral.
(g) Other Information. All information heretofore, herein or hereafter
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supplied to Secured Party by or on behalf of Grantor with respect to the
Collateral is accurate and complete in all material respects.
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SECTION 5. FURTHER ASSURANCES; NEW TRADEMARKS, REGISTRATIONS AND
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TRADEMARK RIGHTS.
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(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary in order to perfect and
protect any security interest or conditional assignment granted or purported to
be granted hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Grantor will: (i) at the request of Secured Party,
▇▇▇▇ conspicuously each of its records pertaining to the Collateral with a
legend, in form and substance satisfactory to Secured Party, indicating that
such Collateral is subject to the security interest granted hereby, (ii) execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary in order to perfect and
preserve the security interests granted or purported to be granted hereby, (iii)
at the revocable request of Secured Party, use its best efforts to obtain any
necessary consents of third parties to the grant and perfection of a security
interest and assignment to Secured Party with respect to any Collateral, (iv) at
any reasonable time, upon request by Secured Party, exhibit the Collateral to
and allow inspection of the Collateral by Secured Party, or persons designated
by Secured Party, and (v) at Secured Party's request, appear in and defend any
action or proceeding that may affect Grantor's title to or Secured Party's
security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Grantor. Grantor agrees
that a carbon, photographic or other reproduction of this Agreement or of a
financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor hereby authorizes Secured Party to modify this Agreement
without obtaining Grantor's approval of or signature to such modification by
amending Schedule A annexed hereto to include reference to any right, title or
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interest in any existing Trademark, Registration or Trademark Right or any
Trademark, Registration or Trademark Right acquired or developed by Grantor
after the execution hereof or to delete any reference to any right, title or
interest in any Trademark, Registration or Trademark Right in which Grantor no
longer has or claims any right, title or interest.
(d) Grantor will furnish to Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail.
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(e) If Grantor shall obtain rights to any new Trademarks, Registrations
or Trademark Rights, the provisions of this Agreement shall automatically apply
thereto. Grantor shall promptly notify Secured Party in writing of any rights
to any new Trademarks or Trademark Rights acquired by Grantor after the date
hereof and of any Registrations issued or applications for Registration made
after the date hereof. Concurrently with the filing of an application for
Registration for any Trademark, Grantor shall execute, deliver and record in all
places where this Agreement is recorded an appropriate Trademark Collateral
Security Agreement, substantially in the form hereof, with appropriate
insertions, or an amendment to this Agreement, in form and substance
satisfactory to Secured Party, pursuant to which Grantor shall grant a security
interest to the extent of its interest in such Registration as provided herein
to Secured Party unless so doing would, in the reasonable judgment of Grantor,
after due inquiry, result in the grant of a Registration in the name of Secured
Party, in which event Grantor shall give written notice to Secured Party as soon
as reasonably practicable and the filing shall instead be undertaken as soon as
practicable but in no case later than immediately following the grant of the
Registration.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
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(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in Grantor's name, identity or
corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change in
Grantor's chief place of business or chief executive office or the office where
Grantor keeps its records regarding the Collateral;
(d) pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Collateral, except to the extent
the validity thereof is being contested in good faith; provided that Grantor
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shall in any event pay such taxes, assessments, charges, levies or claims not
later than five days prior to the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment;
(e) not sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted herein or by the Credit
Agreement; provided that in the event Grantor makes an Asset Sale permitted by
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the Credit
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Agreement and the assets subject to such Asset Sale constitute Collateral,
Secured Party shall release the Collateral that is the subject of such Asset
Sale to Grantor free and clear of any Lien and security interest under this
Agreement or any other Collateral Documents concurrently with the consummation
of such Asset Sale; provided, further that, as a condition precedent to such
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release, Secured Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Secured Party of
that amount of Net Asset Sale Proceeds required to be delivered to Secured Party
under the Credit Agreement;
(f) except for the security interest created by this Agreement or any
other Loan Document, not create or suffer to exist any Lien upon or with respect
to any of the Collateral to secure the indebtedness or other obligations of any
Person except for Permitted Encumbrances;
(g) keep reasonable records respecting the Collateral and at all times
keep at least one complete set of its records concerning substantially all of
the Trademarks, Registrations and Trademark Rights at its chief executive office
or principal place of business;
(h) not permit the inclusion in any contract to which it becomes a
party of any provision that could impair in any material respect or prevent the
creation of a security interest in, or the assignment of, Grantor's rights and
interests in any property included within the definitions of any Trademarks,
Registrations, Trademark Rights and Associated Goodwill acquired under such
contracts;
(i) take all reasonable steps necessary to protect the secrecy of all
trade secrets relating to the products and services sold or delivered under or
in connection with the Trademarks and Trademark Rights, including without
limitation entering into confidentiality agreements with employees and labeling
and restricting access to secret information and documents;
(j) use proper statutory notice in connection with its use of each of
the Trademarks, Registrations and Trademark Rights;
(k) use consistent standards of high quality (which may be consistent
with Grantor's past practices) in the manufacture, sale and delivery of products
and services sold or delivered under or in connection with the Trademarks,
Registrations and Trademark Rights, including, to the extent applicable, in the
operation and maintenance of its retail stores and other merchandising
operations; and
(l) upon any officer of Grantor obtaining knowledge thereof, promptly
notify Secured Party in writing of any event that may materially and adversely
affect the value of the
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Collateral or any material portion thereof, the ability of Grantor or Secured
Party to dispose of the Collateral or any material portion thereof, or the
rights and remedies of Secured Party in relation thereto, including without
limitation the levy of any legal process against the Collateral or any material
portion thereof.
SECTION 7. CERTAIN INSPECTION RIGHTS. Grantor hereby grants to Secured
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Party and its employees, representatives and agents the right to visit Grantor's
and any of its Affiliate's or subcontractor's plants, facilities and other
places of business that are utilized in connection with the manufacture,
production, inspection, storage or sale of products and services sold or
delivered under any of the Trademarks, Registrations or Trademark Rights (or
which were so utilized during the prior six month period), and to inspect the
quality control and all other records relating thereto upon reasonable notice to
Grantor and as often as may be reasonably requested.
SECTION 8. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL. Except as
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otherwise provided in this Section 8, Grantor shall continue to collect, at its
own expense, all amounts due or to become due to Grantor in respect of the
Collateral or any portion thereof. In connection with such collections, Grantor
may take (and, at Secured Party's direction, shall take) such action as Grantor
or Secured Party may deem necessary or advisable to enforce collection of such
amounts; provided, however, that Secured Party shall have the right at any time,
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upon the occurrence and during the continuation of an Event of Default and upon
written notice to Grantor of its intention to do so, to notify the obligors with
respect to any such amounts of the existence of the security interest created
and to direct such obligors to make payment of all such amounts directly to
Secured Party, and, upon such notification and at the expense of Grantor, to
enforce collection of any such amounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as Grantor
might have done. After receipt by Grantor of the notice from Secured Party
referred to in the proviso to the preceding sentence, (i) all amounts and
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proceeds (including checks and other instruments) received by Grantor in respect
of amounts due to Grantor in respect of the Collateral or any portion thereof
shall be received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section
16, and (ii) Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.
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SECTION 9. TRADEMARK APPLICATIONS AND LITIGATION.
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(a) Grantor shall have the duty diligently, through counsel reasonably
acceptable to Secured Party, to prosecute any trademark application relating to
any of the Trademarks specifically identified in Schedule A annexed hereto that
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is pending as of the date of this Agreement, to make federal application on any
existing or future registerable but unregistered Trademarks, and to file and
prosecute opposition and cancellation proceedings, renew Registrations and do
any and all acts which are necessary or desirable to preserve and maintain all
rights in all Trademarks, Registrations and Trademark Rights. Any expenses
incurred in connection therewith shall be borne solely by Grantor. Grantor
shall not abandon any Trademark, Registration or Trademark Right that is
material in value or to the conduct of Grantor's business without prior written
notice to, and express consent of, Secured Party.
(b) Except as provided in Section 9(d), Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution or other damage as are in its
reasonable business judgment necessary to protect the Collateral. Secured Party
shall provide, at Grantor's expense, all reasonable and necessary cooperation in
connection with any such suit, proceeding or action including, without
limitation, joining as a necessary party.
(c) Grantor shall promptly, following its becoming aware thereof,
notify Secured Party of the institution of, or of any adverse determination in,
any proceeding (whether in the United States Patent and Trademark Office or any
federal, state, local or foreign court) described in Section 9(a) or 9(b) or
regarding Grantor's claim of ownership in or right to use any of the Trademarks,
Registrations or Trademark Rights, its right to register the same, or its right
to keep and maintain such Registration. Grantor shall provide to Secured Party
any information with respect thereto requested by Secured Party.
(d) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, Secured Party
shall have the right (but not the obligation) to bring suit, in the name of
Grantor, Secured Party or otherwise, to enforce any Trademark, Registration,
Trademark Right, Associated Goodwill and any license thereunder, in which event
Grantor shall, at the request of Secured Party, do any and all lawful acts and
execute any and all documents required by Secured Party in aid of such
enforcement and Grantor shall promptly, upon demand, reimburse and indemnify
Secured Party as provided in Section 17 in connection with the exercise of its
rights under this Section 9. To the extent that Secured Party shall elect not
to bring suit to enforce any Trademark, Registration, Trademark Right,
Associated Goodwill or any license thereunder as provided in this Section
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9(d), Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of the Trademarks,
Registrations, Trademark Rights or Associated Goodwill by others and for that
purpose agrees to diligently maintain any action, suit or proceeding against any
Person so infringing necessary to prevent such infringement.
SECTION 10. NON-DISTURBANCE AGREEMENTS, ETC. If and to the extent
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that Grantor is permitted to license the Collateral, Secured Party shall enter
into a non-disturbance agreement or other similar arrangement, at Grantor's
request and expense, with Grantor and any licensee of any Collateral permitted
hereunder in form and substance satisfactory to Secured Party pursuant to which
(a) Secured Party shall agree not to disturb or interfere with such licensee's
rights under its license agreement with Grantor so long as such licensee is not
in default thereunder and (b) such licensee shall acknowledge and agree that the
Collateral licensed to it is subject to the security interest created in favor
of Secured Party and the other terms of this Agreement.
SECTION 11. REASSIGNMENT OF COLLATERAL. If (a) an Event of Default
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shall have occurred and, by reason of cure, waiver, modification, amendment or
otherwise, no longer be continuing, (b) no other Event of Default shall have
occurred and be continuing, (c) an assignment to Secured Party of any rights,
title and interests in and to the Collateral shall have been previously made and
shall have become absolute and effective pursuant to Section 12(f) or Section
15(b), and (d) the Secured Obligations shall not have become immediately due and
payable, upon the written request of Grantor and the written consent of Secured
Party, Secured Party shall promptly execute and deliver to Grantor such
assignments as may be necessary to reassign to Grantor any such rights, title
and interests as may have been assigned to Secured Party as aforesaid, subject
to any disposition thereof that may have been properly made by Secured Party
pursuant hereto; provided that, after giving effect to such reassignment,
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Secured Party's security interest granted pursuant to Section 1, as well as all
other rights and remedies of Secured Party granted hereunder, shall continue to
be in full force and effect; and provided, further that the rights, title and
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interests so reassigned shall be free and clear of all Liens other than Liens
(if any) encumbering such rights, title and interest at the time of their
assignment to Secured Party and Permitted Encumbrances.
SECTION 12. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor hereby
----------------------------------------
irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor and in the name of Grantor, Secured
Party or otherwise, from time to time in Secured Party's discretion, upon the
occurrence and during the continuation of an Event of Default or Potential Event
of Default, to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to
12
accomplish the purposes of this Agreement, including without limitation:
(a) to endorse Grantor's name on all applications, documents, papers
and instruments necessary for Secured Party in the use or maintenance of the
Collateral;
(b) to ask for, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
(d) to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of Secured Party with respect
to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of Grantor to Secured Party, due and payable immediately without demand; and
(f) (i) to execute and deliver any of the assignments or documents
requested by Secured Party pursuant to Section 15(b), (ii) to grant or issue an
exclusive or non-exclusive license to the Collateral or any portion thereof to
any Person, and (iii) otherwise generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that are reasonably necessary to
protect, preserve or realize upon the Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.
SECTION 13. SECURED PARTY MAY PERFORM. If Grantor fails to perform
-------------------------
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Grantor under Section 17.
SECTION 14. STANDARD OF CARE. The powers conferred on Secured Party
----------------
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any
13
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.
SECTION 15. REMEDIES. If any Event of Default shall have occurred and
--------
be continuing:
(a) Secured Party may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Collateral), and also may (i) require
Grantor to, and Grantor hereby agrees that it will at its expense and upon
request of Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a place to
be designated by Secured Party that is reasonably convenient to both parties,
(ii) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process, (iii) prior to the disposition of the
Collateral, store the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Secured Party deems appropriate, (iv)
take possession of Grantor's premises or place custodians in exclusive control
thereof, remain on such premises and use the same for the purpose of taking any
actions described in the preceding clause (iii) and collecting any Secured
Obligation, (v) exercise any and all rights and remedies of Grantor under or in
connection with the contracts related to the Collateral or otherwise in respect
of the Collateral, including without limitation any and all rights of Grantor to
demand or otherwise require payment of any amount under, or performance of any
provision of, such contracts, and (vi) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or prices
and upon such other terms as Secured Party may deem commercially reasonable.
Secured Party, any Lender or Interest Rate Exchanger may be the purchaser of any
or all of the Collateral at any such public sale, and to the extent permitted by
law, private sale, and Secured Party, as agent for and representative of Lenders
and Interest Rate Exchangers (but not any Lender or Lenders, Interest Rate
Exchanger or Interest Rate Exchangers in its or their respective individual
capacities unless Requisite Lenders and Requisite Obligees (as defined in
Section 19(a)) shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or
14
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of Grantor, and Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
(b) Upon written demand from Secured Party, Grantor shall execute and
deliver to Secured Party an assignment or assignments of the Trademarks,
Registrations, Trademark Rights and the Associated Goodwill and such other
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement.
SECTION 16. APPLICATION OF PROCEEDS. Except as expressly provided
-----------------------
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral shall be applied as provided in subsection 2.4D of the Credit
Agreement.
SECTION 17. INDEMNITY AND EXPENSES.
----------------------
(a) Grantor agrees to indemnify Secured Party, Syndication Agent, each
Lender, each Interest Rate Exchanger from and against any and all claims, losses
and liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, Syndication Agent's,
such Lender's, such Interest Rate
15
Exchanger's gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Secured Party may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of Secured Party hereunder, or (iv) the failure by Grantor to
perform or observe any of the provisions hereof.
SECTION 18. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
-----------------------------------------------
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon Grantor, its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans held
by it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or otherwise.
Upon the payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantor. Upon any
such termination Secured Party will, at Grantor's expense, execute and deliver
to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 19. SECURED PARTY AS ADMINISTRATIVE AGENT.
-------------------------------------
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
--------
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 15 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the holders of a majority of the aggregate notional amount
(or, with respect to any Lender Interest Rate Agreement that has been terminated
in accordance with its terms, the amount then due and payable (exclusive of
expenses and
16
similar payments but including any early termination payments then due) under
such Lender Interest Rate Agreement) under all Lender Interest Rate Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein as
"REQUISITE OBLIGEES"). In furtherance of the foregoing provisions of this
Section 19(a), each Interest Rate Exchanger, by its acceptance of the benefits
hereof, agrees that it shall have no right individually to realize upon any of
the Collateral hereunder, it being understood and agreed by such Interest Rate
Exchanger that all rights and remedies hereunder may be exercised solely by
Secured Party for the benefit of Lenders and Interest Rate Exchangers in
accordance with the terms of this Section 19(a).
(b) Written notice of resignation by Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute notice of
resignation as Secured Party under this Agreement; removal of Administrative
Agent pursuant to subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment of a successor
Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute appointment of a successor Secured Party under this Agreement.
Upon the acceptance of any appointment as Administrative Agent under subsection
9.5 of the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 20. AMENDMENTS; ETC. No amendment, modification, termination
---------------
or waiver of any provision of this Agreement, and no consent to any departure by
Grantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by Grantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
17
SECTION 21. NOTICES. Any notice or other communication herein
-------
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or mail or courier service and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the mail with postage prepaid and properly addressed. For the purposes hereof,
the address of each party hereto shall be as set forth under such party's name
on the signature pages hereof or, as to either party, such other address as
shall be designated by such party in a written notice delivered to the other
party hereto.
SECTION 22. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
-----------------------------------------------------
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 23. SEVERABILITY. In case any provision in or obligation
------------
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 24. HEADINGS. Section and subsection headings in this
--------
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 25. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE RIGHTS AND
--------------------
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined.
SECTION 26. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
----------------------------------------------
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE
18
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. Grantor hereby agrees that service
of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to Grantor at its
address provided in Section 21, such service being hereby acknowledged by
Grantor to be sufficient for personal jurisdiction in any action against Grantor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Grantor in the courts of any other jurisdiction.
SECTION 27. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY HEREBY
--------------------
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Grantor and Secured Party each
acknowledge that this waiver is a material inducement for Grantor and Secured
Party to enter into a business relationship, that Grantor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Grantor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
SECTION 28. COUNTERPARTS. This Agreement may be executed in one or
------------
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
19
IN WITNESS WHEREOF, Grantor and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
[NAME OF GRANTOR]
By: ___________________________________
Title: _________________________________
Notice Address:
__________________________
__________________________
__________________________
FIRST UNION NATIONAL BANK,
as Secured Party
By: ___________________________________
Title:__________________________________
Notice Address:
S-1
SCHEDULE A
TO
TRADEMARK COLLATERAL
SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT
UNITED STATES
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
A-1
SCHEDULE B
TO
TRADEMARK COLLATERAL
SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT
Filing Jurisdictions:
Office Locations:
Other Names:
B-1