EXHIBIT 10.39
TRADEMARK AND TRADEMARK
APPLICATIONS SECURITY AGREEMENT XXXXX FARGO RETAIL FINANCE, LLC
765890.1
April 10, 2003
THIS AGREEMENT is made between
Xxxxx Fargo Retail Finance, LLC, (the "LENDER") a Delaware
limited liability company with offices at Xxx Xxxxxx Xxxxx - 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
and
Gadzooks, Inc. (hereinafter, the "BORROWER"), a Texas
corporation with its principal executive offices at 0000 Xxxxxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxx 00000
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,
WITNESSETH:
1. BACKGROUND: The Lender and the Borrower have entered in a
certain Loan and Security Agreement of even date (as such agreement may be
modified, supplemented, amended or restated from time to time, hereinafter, the
"LOAN AGREEMENT") pursuant to which a credit facility has been established in
favor of the Borrower and under which the Borrower's Liabilities are to be
secured by certain of the Borrower's assets, including all Marks. (Terms used
herein which are defined in the Loan Agreement are used as so defined).
2. GRANT OF SECURITY INTEREST: To secure the Liabilities, the
Borrower hereby creates a security interest in favor of the Lender, with power
of sale (which power of sale shall be exercisable only following the occurrence
of an Event of Default) in and to the following and all proceeds thereof
(collectively, the "TM COLLATERAL"):
(a) All of the Borrower's now owned or existing or
hereafter acquired or arising trademarks, trademark applications, service marks,
registered service marks and service xxxx applications including, without
limitation, those listed on EXHIBIT A annexed hereto and made a part hereof,
together with any goodwill connected with and symbolized by any such trademarks,
trademark applications, service marks, registered service marks, and service
xxxx applications.
(b) All renewals of any of the foregoing.
(c) All income, royalties, damages and payments now and
hereafter due
...April 10, 2003..
..1..
and/or payable under and with respect to any of the foregoing, including,
without limitation, payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements or dilutions
thereof.
(d) The right to xxx for past, present and future
infringements and dilutions of any of the foregoing.
(e) All of Borrower's rights corresponding to any of the
foregoing throughout the world.
3. PROTECTION OF MARKS BY BORROWER: The Borrower shall undertake
the following with respect to each items respectively described in Sections 2(a)
and 2(b) (collectively, the "MARKS"):
(a) Pay all renewal fees and other fees and costs
associated with maintaining the Marks and with the processing of the Marks.
(b) At the Borrower's sole cost, expense, and risk,
pursue the prompt, diligent, processing of each Application for Registration
which is the subject of the security interest created herein and not abandon or
delay any such efforts.
(c) At the Borrower's sole cost, expense, and risk, take
any and all action which Borrower deems desirable to protect the Marks,
including, without limitation, but subject to Borrower's discretion, the
prosecution and defense of infringement actions.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES: The Borrower
represents and warrants that:
(a) EXHIBIT A includes all of the registered trademarks,
Federal trademark applications, registered service marks and Federal service
xxxx applications now owned by the Borrower.
(b) All TM Collateral is and shall remain, free and clear
of all liens, Encumbrances, or security interests to any Person other than to
the Lender.
(c) The Borrower shall give the Lender written notice
(with reasonable detail) within Ten (10) days following the occurrence of any of
the following:
(i) The Borrower's obtaining rights to, and
filing applications for registration of, any new trademarks, or service
marks, or otherwise acquires ownership of any newly registered
trademarks, registered service marks, trademark applications, or
service xxxx applications, (other than the Borrower's right to sell
products containing the trademarks of others in the ordinary course of
Borrower's business).
(ii) The Borrower's becoming entitled to the
benefit of any registered trademarks, trademark applications, trademark
licenses, trademark license renewals, registered service marks, service
xxxx applications, service xxxx licenses or service xxxx license
renewals whether as licensee or licensor (other than Borrower's right
to sell products containing the trademarks of others in the ordinary
course of Borrower's business).
(iii) The Borrower's entering into any new
trademark license agreement or service xxxx license agreement.
5. AGREEMENT APPLIES TO FUTURE MARKS:
...April 10, 2003..
..2..
(a) The provisions of this TM Security Agreement shall
automatically apply to any such additional property or rights described in 4(c),
above, all of which shall be deemed to be and treated as "Marks" within the
meaning of this TM Security Agreement.
(b) The Borrower hereby authorizes the Lender to take all
such action to protect the Lender's interest in and concerning any future
registered trademarks, trademark applications, registered service marks and
service xxxx applications, written notice of which is so given, provided,
however, the Lender's taking of such action shall not be a condition to the
creation or perfection of the security interest created hereby.
6. BORROWER'S RIGHTS TO ENFORCE MARKS: Prior the Lender's giving
of notice to the Borrower following the occurrence of an Event of Default, the
Borrower shall have the exclusive right to xxx for past, present and future
infringement of the Marks including the right to seek injunctions and/or money
damages, in an effort by Borrower to protect the Marks against encroachment by
third parties, provided, however:
(a) The Borrower first provides the Lender with written
notice of the Borrower's intention to so xxx for enforcement of any Xxxx.
(b) Any money damages awarded or received by the Borrower
on account of such suit (or the threat of such suit) shall constitute TM
Collateral.
(c) Following the occurrence of any Event of Default, the
Lender, by notice to the Borrower may be terminate or limit the Borrower's
rights under this Section 6.
7. LENDER'S ACTIONS TO PROTECT MARKS: In the event of
(a) the Borrower's failure, within Five (5) days of
written notice from the Lender, to cure any failure by the Borrower to
perform any of the Borrower's obligations set forth in Section 3;
and/or
(b) the occurrence of any Event of Default, the Lender,
acting in its own name or in that of the Borrower, may (but shall not be
required to) act in the Borrower's place and stead and/or in the Lenders' own
right in connection therewith.
8. RIGHTS UPON DEFAULT: Upon the occurrence of any Event of
Default, the Lender may exercise all rights and remedies of a secured party upon
default under the Uniform Commercial Code as adopted in Massachusetts
(Massachusetts General Laws, Chapter 106), with respect to the Marks, in
addition to which the Lender may sell, license, assign, transfer, or otherwise
dispose of the Marks. Any person may conclusively rely upon an affidavit of an
officer of the Lender that an Event of Default has occurred and that the Lender
is authorized to exercise such rights and remedies.
9. LENDER AS ATTORNEY IN FACT:
(a) The Borrower hereby irrevocably constitutes and
designates the Lender as and for the Borrower's attorney in fact, effective
following the occurrence of any Event of Default:
(i) To exercise any of the rights and powers
referenced in Sections 3 and 5(b).
...April 10, 2003..
..3..
(ii) To execute all such instruments, documents,
and papers as the Lender determines to be appropriate in connection
with the exercise of such rights and remedies and to cause the sale,
license, assignment, transfer, or other disposition of the Marks.
(b) The within grant of a power of attorney, being
coupled with an interest, shall be irrevocable until this Agreement is
terminated by a duly authorized officer of the Lender.
(c) The Lender shall not be obligated to do any of the
acts or to exercise any of the powers authorized by Section 9(a) herein, but if
the Lender elects to do any such act or to exercise any of such powers, it shall
not be accountable for more than it actually receives as a result of such
exercise of power, and shall not be responsible to the Borrower for any act or
omission to act except for any act or omission to act as to which there is a
final determination made in a judicial proceeding (in which proceeding the
Lender has had an opportunity to be heard) which determination includes a
specific finding that the subject act or omission to act had been grossly
negligent or in actual bad faith.
10. LENDER'S RIGHTS:
(a) Any use by the Lender of the Marks, as authorized
hereunder in connection with the exercise of the Lender' rights and remedies
under this Agreement and under the Loan Agreement shall be coextensive with the
Borrower's rights thereunder and with respect thereto and without any liability
for royalties or other related charges.
(b) None of this Agreement, the Loan Agreement, or any
act, omission, or circumstance taken or arising hereunder may be construed as
directly or indirectly conveying to the Lender any rights in and to the Marks,
which rights are effective except following the occurrence of any Event of
Default.
11. INTENT: It is intended that this Agreement supplement the Loan
Agreement. All provisions of the Loan Agreement shall apply to the Marks. The
Lender shall have the same rights, remedies, powers, privileges and discretions,
with respect to the security interests created in the TM Collateral as in all
other Collateral. In the event of a conflict between this Agreement and the Loan
Agreement, the terms of this Agreement shall control with respect to the TM
Collateral and the Loan Agreement with respect to all other Collateral.
12. CHOICE OF LAWS: It is intended that this Agreement take effect
as a sealed instrument and that all rights and obligations hereunder, including
matters of construction, validity, and performance, shall be governed by the
laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Borrower and the Lender respectively have
caused this Agreement to be executed by their respective duly authorized
officers as of the date first above written.
...April 10, 2003..
..4..
GADZOOKS, INC. XXXXX FARGO RETAIL FINANCE, LLC
(The "Borrower") (The "Lender")
By_________________________ By________________________
Name_______________________ Name______________________
Title______________________ Title_____________________
THE _______ OF ____________
COUNTY OF _________, SS
Then personally appeared before me ____________ who acknowledged that
such person is the duly authorized _______________ of Gadzooks, Inc. and that
such person had executed the foregoing instrument on its behalf.
Witness my hand and seal this _____ day of _____________
_________________________________
, Notary Public
My Commission Expires:
THE _______ OF _________
COUNTY OF __________
Then personally appeared before me ____________, who acknowledged that
such person is the duly authorized _________________ of Xxxxx Fargo Retail
Finance, LLC and that such person executed the foregoing instrument on its
behalf.
Witness my hand and seal this ___ day of _______________
_________________________________
, Notary Public
My Commission Expires:
...April 10, 2003..
..5..
EXHIBIT A
Borrower's now owned or existing or hereafter acquired or arising registered
service marks and Federal service xxxx applications, registered trademarks, and
Federal trade xxxx applications:
TRADEMARK/SERVICE XXXX APPLICATIONS AND REGISTRATIONS
TRADEMARK REGISTRATION NUMBER REGISTRATION DATE
-------------------------------------------------------------------------------
Gadzooks 1983
Misdemeanor 75/929,640 Pending
Bad Kitty 76/242,269 Pending
Taunt 75/932,858 Pending
Verbal Assault 2,664,352 12-17-02
...April 10, 2003..
..6..
