EXHIBIT 10.12
EXECUTION VERSION
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "AGREEMENT"), dated as of July
7, 2003, is made by XXXXXX'X OF CHICAGO, INC., an Illinois corporation
("DEBTOR"), in favor of XXXXX FARGO FOOTHILL, INC., a California corporation
("LENDER"), with reference to the following:
WHEREAS, Xxxxxx'x Restaurant Group, Inc., a Delaware corporation
("BORROWER"), and the Lender are, contemporaneously herewith, entering into that
certain Loan and Security Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the "LOAN AGREEMENT");
WHEREAS, Debtor has executed that certain General Continuing Guaranty,
of even date herewith, in favor of Lender (the "GUARANTY"), respecting the
obligations of Borrower owing to Lender and the Bank Product Providers under the
Loan Agreement;
WHEREAS, Debtor has executed that certain Security Agreement of even
date herewith, in favor of Lender (the "SECURITY AGREEMENT"), pursuant to which
Debtor has granted to Lender security interests in (among other things) all
general intangibles of Debtor; and
WHEREAS, pursuant to the Loan Documents, and as one of the conditions
precedent to the obligations of Lender under the Loan Agreement, Debtor has
agreed to execute and deliver this Agreement to Lender for filing with the PTO
and with any other relevant recording systems in any domestic or foreign
jurisdiction, and as further evidence of and to effectuate Lender's existing
security interests in the trademarks and other general intangibles described
herein.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which is hereby acknowledged, Debtor hereby agrees in favor of Lender, for
the benefit of Lender and the Bank Product Providers, as follows:
1. DEFINITIONS; INTERPRETATION.
(a) CERTAIN DEFINED TERMS. All capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to them in the
Loan Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"AGREEMENT" has the meaning set forth in the preamble hereto.
"DEBTOR" has the meaning set forth in the preamble hereto.
"EVENT OF DEFAULT" means any Event of Default under the Loan
Agreement.
"GUARANTY" has the meaning set forth in the recitals hereto.
"LENDER" has the meaning set forth in the preamble hereto.
"LOAN AGREEMENT" has the meaning set forth in the recitals hereto.
"PROCEEDS" means whatever is receivable or received from or upon the
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Trademark Collateral, including "proceeds" as
such term is defined in the UCC, and all proceeds of proceeds. Proceeds shall
include (i) any and all accounts, chattel paper, instruments, general
intangibles, cash and other proceeds, payable to or for the account of Debtor,
from time to time in respect of any of the Trademark Collateral, (ii) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to or for
the account of Debtor from time to time with respect to any of the Trademark
Collateral, (iii) any and all claims and payments (in any form whatsoever) made
or due and payable to Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Trademark Collateral by any Person acting under color of
governmental authority, and (iv) any and all other amounts from time to time
paid or payable under or in connection with any of the Trademark Collateral or
for or on account of any damage or injury to or conversion of any Trademark
Collateral by any Person.
"PTO" means the United States Patent and Trademark Office and any
successor thereto.
"SECURED OBLIGATIONS" means, with respect to Debtor, all liabilities,
obligations, or undertakings owing by Debtor to Lender or any Bank Product
Provider of any kind or description arising out of or outstanding under,
advanced or issued pursuant to, or evidenced by the Guaranty, the Loan
Agreement, this Agreement, or any of the other Loan Documents, irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, voluntary or involuntary, whether now existing
or hereafter arising, and including all interest, costs, indemnities, fees
(including attorneys fees), and expenses (including interest, costs,
indemnities, fees, and expenses that, but for the provisions of the Bankruptcy
Code, would have accrued irrespective of whether a claim therefor is allowed)
and any and all other amounts which Debtor is required to pay pursuant to any of
the foregoing, by law, or otherwise.
"SECURITY AGREEMENT" has the meaning set forth in the recitals hereto.
"TRADEMARK COLLATERAL" has the meaning set forth in SECTION 2.
"TRADEMARKS" has the meaning set forth in SECTION 2.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"UNITED STATES" and "U.S." each mean the United States of America.
(b) TERMS DEFINED IN UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have the meanings
assigned to them in the UCC.
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(i) INTERPRETATION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Section, subsection, clause, schedule, and exhibit references
are to this Agreement unless otherwise specified. All of the exhibits or
schedules attached to this Agreement shall be deemed incorporated herein by
reference. Any reference in this Agreement or in any of the other Loan
Documents to this Agreement or any of the other Loan Documents shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto
and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth therein).
In the event of a direct conflict between the terms and provisions of this
Agreement and the Loan Agreement, it is the intention of the parties hereto
that both such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of
any actual, irreconcilable conflict that cannot be resolved as aforesaid,
the terms and provisions of the Loan Agreement shall control and govern;
PROVIDED, HOWEVER, that the inclusion herein of additional obligations on
the part of Debtor and supplemental rights and remedies in favor of Lender,
in each case in respect of the Trademark Collateral, shall not be deemed a
conflict with the Loan Agreement. Any reference herein to the payment in
full of the Secured Obligations shall mean the payment in full in cash of
all Secured Obligations other than contingent indemnification Secured
Obligations and other than any Bank Product Obligations that, at such time,
are allowed by the applicable Bank Product Provider to remain outstanding
and are not required to be repaid or cash collateralized pursuant to the
provisions of the Loan Agreement, and the termination of all Commitments of
Lender under the Loan Agreement. Any reference herein to any Person shall
be construed to include such Person's successors and assigns. Any
requirement of a writing contained herein shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein. The captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement. References to statutes or regulations are to be construed as
including all statutory and regulatory provisions consolidating, amending
or replacing the statute or regulation referred to.
2. SECURITY INTEREST.
(a) ASSIGNMENT AND GRANT OF SECURITY IN RESPECT OF THE SECURED
OBLIGATIONS. To secure the prompt payment and performance of the Secured
Obligations, Debtor hereby grants, assigns, transfers and conveys to Lender, for
the benefit of Lender and the Bank Product Providers, a continuing security
interest in all of Debtor's right, title and interest in and to the following
property, whether now existing or hereafter acquired or arising and whether
registered or unregistered (collectively, the "TRADEMARK COLLATERAL"):
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(i) all state (including common law) and federal
trademarks, service marks and trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress,
logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired,
together with and including all licenses therefor held by Debtor, and all
registrations and recordings thereof, and all applications filed or to be
filed in connection therewith, including registrations and applications in
the PTO, any State of the United States (but excluding each application to
register any trademark, service xxxx, or other xxxx xxxxx to the filing
under applicable law of a verified statement of use (or the equivalent) for
such trademark or service xxxx) and all extensions or renewals thereof,
including without limitation any of the foregoing identified on SCHEDULE A
hereto (as the same may be amended, modified or supplemented from time to
time), and the right (but not the obligation) to register claims under any
state or federal trademark law or regulation and to apply for, renew and
extend any of the same, to xxx or bring opposition or cancellation
proceedings in Debtor's name or in the name of Lender for past, present or
future infringement or unconsented use thereof, and all rights arising
therefrom throughout the world (collectively, the "TRADEMARKS");
(ii) all claims, causes of action and rights to xxx for
past, present or future infringement or unconsented use of any Trademarks
and all rights arising therefrom and pertaining thereto;
(iii) all general intangibles related to or arising out
of any of the Trademarks and all the goodwill of Debtor's business
symbolized by the Trademarks or associated therewith; and
(iv) all Proceeds of any and all of the foregoing.
(b) CONTINUING SECURITY INTEREST. Debtor hereby agrees that this
Agreement shall create a continuing security interest in the Trademark
Collateral which shall remain in effect until terminated in accordance with
SECTION 18.
(c) INCORPORATION INTO LOAN AGREEMENT. This Agreement shall be
fully incorporated into the Loan Agreement and all understandings, agreements
and provisions contained in the Loan Agreement shall be fully incorporated into
this Agreement. Without limiting the foregoing, the Trademark Collateral
described in this Agreement shall constitute part of the Collateral in the Loan
Agreement.
(d) LICENSES. Debtor may grant licenses of the Trademark
Collateral in accordance with the terms of the Loan Agreement or otherwise as
agreed to by Lender in writing.
3. FURTHER ASSURANCES; APPOINTMENT OF LENDER AS ATTORNEY-IN-FACT.
Debtor at its expense shall execute and deliver, or cause to be executed and
delivered, to Lender any and all documents and instruments, in form and
substance reasonably satisfactory to Lender, and take any and all action, which
Lender, in the exercise of its Permitted Discretion, may request from time to
time, to perfect and continue the perfection or to maintain the priority of, or
provide
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notice of the security interest in the Trademark Collateral held by Lender for
the benefit of Lender and the Bank Product Providers and to accomplish the
purposes of this Agreement. If Debtor refuses to execute and deliver, or fails
timely to execute and deliver, any of the documents it is requested to execute
and deliver by Lender in accordance with the foregoing, Lender shall have the
right, in the name of Debtor, or in the name of Lender or otherwise, without
notice to or assent by Debtor, and Debtor hereby irrevocably constitutes and
appoints Lender (and any of Lender's officers or employees or agents designated
by Lender) as Debtor's true and lawful attorney-in-fact with full power and
authority, (i) to sign the name of Debtor on all or any of such documents or
instruments and perform all other acts that Lender in the exercise of its
Permitted Discretion deems necessary in order to perfect or continue the
perfection of, maintain the priority or enforceability of or provide notice of
the security interest in the Trademark Collateral held by Lender for the benefit
of Lender and the Bank Product Providers, and (ii) to execute any and all other
documents and instruments, and to perform any and all acts and things for and on
behalf of Debtor, which Lender, in the exercise of its discretion, may deem
necessary or advisable to maintain, preserve and protect the Trademark
Collateral and to accomplish the purposes of this Agreement, including (A) to
defend, settle, adjust or institute any action, suit or proceeding with respect
to the Trademark Collateral, (B) to assert or retain any rights under any
license agreement for any of the Trademark Collateral, and (C) to execute any
and all applications, documents, papers and instruments for Lender to use the
Trademark Collateral, to grant or issue any exclusive or non-exclusive license
with respect to any Trademark Collateral, and to assign, convey or otherwise
transfer title in or dispose of the Trademark Collateral. The power of attorney
set forth in this SECTION 3, being coupled with an interest, is irrevocable so
long as this Agreement shall not have terminated in accordance with SECTION 18;
PROVIDED that the foregoing power of attorney shall terminate when all of the
Secured Obligations have been fully and finally paid and performed in full and
Lender's obligation to extend credit under the Loan Agreement is terminated.
4. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Lender, in each case to the best of its knowledge, information, and belief, as
follows:
(a) NO OTHER TRADEMARKS. SCHEDULE A sets forth a true and
correct list of all of Debtor's existing Trademarks (other than abandoned
Trademarks) that are registered, or for which any application for registration
has been filed with the PTO or any corresponding or similar trademark office of
any other U.S. jurisdiction, and that are owned or held (whether pursuant to a
license or otherwise) and used by Debtor.
(b) TRADEMARKS SUBSISTING. Each of Debtor's Trademarks listed in
SCHEDULE A is subsisting and has not been adjudged invalid or unenforceable, in
whole or in part, and, to the best of Debtor's knowledge, each of the Trademarks
set forth on SCHEDULE A is valid and enforceable.
(c) OWNERSHIP OF TRADEMARK COLLATERAL; NO VIOLATION. To the best
of Debtor's knowledge, (i) Debtor has rights in and/or good and defensible title
to the Trademark Collateral listed on Schedule A, (ii) Debtor is the sole and
exclusive owner of the Trademark Collateral listed on Schedule A, free and clear
of any Liens and rights of others (other than Permitted Liens), including
licenses, registered user agreements and covenants by Debtor not to xxx third
persons, and (iii) with respect to any Trademarks for which Debtor is either a
licensor
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or a licensee pursuant to a license or licensing agreement regarding such
Trademark, each such license or licensing agreement is in full force and effect,
Debtor is not in material default of any of its obligations thereunder and, (A)
other than the parties to such licenses or licensing agreements, or (B) in the
case of any non-exclusive license or license agreement entered into by Debtor or
any such licensor regarding such Trademark, the parties to any other such
non-exclusive licenses or license agreements entered into by Debtor or any such
licensor with any other Person, no other Person has any rights in or to any of
the Trademark Collateral. To the best of Debtor's knowledge, the past, present
and contemplated future use of the Trademark Collateral by Debtor has not, does
not and will not infringe upon or violate any right, privilege or license
agreement of or with any other Person or give any such Person the right to
terminate any such right, privilege or license agreement.
(d) NO INFRINGEMENT. To the best of Debtor's knowledge, (i) no
material infringement or unauthorized use presently is being made of any of the
Trademark Collateral by any Person, and (ii) the past, present, and contemplated
future use of the Trademark Collateral by Debtor has not, does not and will not
materially infringe upon or materially violate any right, privilege, or license
arrangement of or with any other Person or give such Person the right to
terminate any such license arrangement.
(e) POWERS. Debtor has the unqualified right, power and
authority to pledge and to grant to Lender, for the benefit of Lender and the
Bank Product Providers, security interests in the Trademark Collateral pursuant
to this Agreement, and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other Person except as already obtained.
5. COVENANTS. So long as any of the Secured Obligations remain
unsatisfied, Debtor agrees: (i) that it will comply in all material respects
with all of the covenants, terms and provisions of this Agreement, and (ii) that
it will promptly give Lender written notice of the occurrence of any event that
could reasonably be expected to have a material adverse effect on any of the
Trademarks and the Trademark Collateral, including any petition under the
Bankruptcy Code filed by or against any licensor of any of the Trademarks for
which Debtor is a licensee.
6. FUTURE RIGHTS. For so long as any of the Secured Obligations shall
remain outstanding, or, if earlier, until Lender shall have released or
terminated, in whole but not in part, its interest in the Trademark Collateral,
if and when Debtor shall obtain rights to any new Trademarks, or any reissue,
renewal or extension of any Trademarks, the provisions of SECTION 2 shall
automatically apply thereto and Debtor shall give to Lender prompt notice
thereof. Debtor shall do all things reasonably deemed necessary by Lender in the
exercise of its discretion to ensure the validity, perfection, priority and
enforceability of the security interests of Lender in such future acquired
Trademark Collateral. If Debtor refuses to execute and deliver, or fails timely
to execute and deliver, any of the documents it is requested to execute and
deliver by Lender in connection herewith, Debtor hereby authorizes Lender to
modify, amend or supplement the Schedules hereto and to re-execute this
Agreement from time to time on Debtor's behalf and as its attorney-in-fact to
include any future Trademarks which are or become Trademark Collateral and to
cause such re-executed Agreement or such modified, amended or supplemented
Schedules to be filed with the PTO.
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7. DUTIES OF LENDER. Notwithstanding any provision contained in this
Agreement, none of Lender or the Bank Product Providers shall have any duty to
exercise any of the rights, privileges or powers afforded to it and shall not be
responsible to Debtor or any other Person for any failure to do so or delay in
doing so. None of Lender or the Bank Product Providers shall have any duty or
liability to exercise or preserve any rights, privileges or powers pertaining to
the Trademark Collateral other than the exercise of commercially reasonable
behavior in accordance with applicable law.
8. EVENTS OF DEFAULT. The occurrence of any "Event of Default" under
the Loan Agreement shall constitute an Event of Default hereunder.
9. REMEDIES. From and after the occurrence and during the continuation
of an Event of Default, Lender shall have all rights and remedies available to
it under the Loan Agreement and applicable law (which rights and remedies are
cumulative) with respect to the security interests in any of the Trademark
Collateral. Debtor hereby agrees that such rights and remedies include the right
of Lender as a secured party to sell or otherwise dispose of the Trademark
Collateral after default, pursuant to the UCC. Debtor hereby agrees that Lender
shall at all times have such royalty-free licenses, to the extent permitted by
law and the Loan Documents, for any Trademark Collateral that is reasonably
necessary to permit the exercise of any of Lender's rights or remedies upon or
after the occurrence of (and during the continuance of) an Event of Default with
respect to (among other things) any tangible asset of Debtor in which Lender has
a security interest, including Lender's rights to sell inventory, tooling or
packaging which is acquired by Debtor (or its successor, assignee or trustee in
bankruptcy). In addition to and without limiting any of the foregoing, upon the
occurrence and during the continuance of an Event of Default, Lender shall have
the right but shall in no way be obligated to bring suit, or to take such other
action as Lender, in the exercise of its discretion, deems necessary, in the
name of Debtor or Lender, to enforce or protect any of the Trademark Collateral,
in which event Debtor shall, at the request of Lender, do any and all lawful
acts and execute any and all documents required by Lender necessary to such
enforcement. To the extent that Lender shall elect not to bring suit to enforce
such Trademark Collateral, Debtor, in the exercise of its reasonable business
judgment, agrees to use all reasonable measures and its diligent efforts,
whether by action, suit, proceeding or otherwise, to prevent the infringement,
misappropriation or violation thereof by others and for that purpose agrees
diligently to maintain any action, suit or proceeding against any Person
necessary to prevent such infringement, misappropriation or violation, except to
the extent the Trademark Collateral that is the subject of such infringement,
misappropriation or violation is not material to the Debtor's business, as
determined in the good faith business judgment of the Debtor.
10. BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by Debtor and Lender for the benefit of Lender and
the Bank Product Providers and their respective successors and assigns.
11. NOTICES. All notices and other communications hereunder shall be
in writing and shall be mailed, sent or delivered in accordance with the Loan
Agreement, and all notices and other communications hereunder to Debtor shall be
in writing and shall be mailed, sent or delivered in care of Borrower in
accordance with the Loan Agreement.
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12. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, except to
the extent that the validity or perfection of the security interests hereunder
in respect of the Trademark Collateral are governed by federal law, in which
case such choice of New York law shall not be deemed to deprive Lender of such
rights and remedies as may be available under federal law.
13. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents, together with the Schedules hereto and thereto, contains the entire
agreement of the parties with respect to the subject matter hereof and supersede
all prior drafts and communications relating to such subject matter. Neither
this Agreement nor any provision hereof may be modified, amended or waived
except by the written agreement of the parties to this Agreement.
Notwithstanding the foregoing, Lender may reexecute this Agreement or modify,
amend or supplement the Schedules hereto as provided in SECTION 6 hereof.
14. SEVERABILITY. If one or more provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect in any
jurisdiction or with respect to any party, such invalidity, illegality or
unenforceability in such jurisdiction or with respect to such party shall, to
the fullest extent permitted by applicable law, not invalidate or render illegal
or unenforceable any such provision in any other jurisdiction or with respect to
any other party, or any other provisions of this Agreement.
15. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.
16. LOAN AGREEMENT. Debtor acknowledges that the rights and remedies
of Lender with respect to the security interest in the Trademark Collateral
granted hereby are more fully set forth in the Loan Agreement and the other Loan
Documents and all such rights and remedies are cumulative.
17. NO INCONSISTENT REQUIREMENTS. Debtor acknowledges that this
Agreement and the other Loan Documents may contain covenants and other terms and
provisions variously stated regarding the same or similar matters, and Debtor
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.
18. TERMINATION. Upon the payment and performance in full of the
Secured Obligations, including the cash collateralization, expiration, or
cancellation of all Secured Obligations, if any, consisting of letters of
credit, and the full and final termination of any commitment to extend any
financial accommodations under the Loan Agreement, this Agreement shall
terminate, and Lender shall execute and deliver such documents and
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instruments and take such further action reasonably requested by Debtor, at
Debtor's expense, as Debtor shall reasonably request to evidence termination of
the security interest granted by Debtor to Lender for the benefit of Lender and
the Bank Product Providers hereunder, including cancellation of this Agreement
by written notice from Lender to the PTO.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
XXXXXX'X OF CHICAGO, INC.,
an Illinois corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: EVP & CFO
XXXXX FARGO FOOTHILL, INC.,
a California corporation
By: /s/ Xxxx Xxxxxx
---------------
Name: Xxxx X. Xxxxxx
Title: Vice President
