TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT
THIS TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT is made on the
30th day of March, 1998 between WARNER CHILCOTT (BERMUDA) LIMITED, an exempted
company incorporated under the laws of Bermuda having an address at P. O. Box HM
1022, Hamilton HMDX Bermuda ("Assignor"), and PNC BANK, NATIONAL ASSOCIATION
having an office at Two Tower Center, East Brunswick, New Jersey 08816, as Agent
for the Lenders under the Loan Agreement (as such terms are hereinafter
defined).
BACKGROUND. Assignor has executed and delivered on even date herewith its
Continuing Limited Non-Recourse and Collateralized Guaranty (the "Guaranty") to
the Lenders guarantying the Obligations of WARNER CHILCOTT, INC., a Delaware
corporation (the "Borrower"), pursuant to the terms of a certain Revolving
Credit and Security Agreement dated of even date herewith by and between the
Borrower, PNC Bank, National Association, and one or more financial institutions
named therein or which hereafter become a party thereto (together with PNC Bank,
National Association, collectively, the "Lenders") and PNC Bank, National
Association as the agent for the Lenders (PNC Bank, National Association in such
capacity, the "Agent") (as such may be amended from time to time, the "Loan
Agreement"). In order to induce the Lenders to execute and deliver the Loan
Agreement, Assignor has agreed to collaterally assign to the Lenders certain
trademark rights. This Agreement is being executed contemporaneously with the
Loan Agreement under which the Lenders are being granted a lien on and security
interest in accounts receivable, inventory, equipment and certain other assets
("Other Assets") relating to products sold under the Trademarks (as such term is
defined in paragraph 1) whereby the Lenders shall have the right to foreclose on
the Trademarks and the Other Assets in the event of the occurrence and
continuance of an Event of Default (as such terms are defined in the Loan
Agreement), in order that the Lenders or any subsequent owner of the Trademarks
may continue to use the Trademarks in substantially the same manner as used by
Assignor or Borrower.
NOW, THEREFORE, in consideration of the premises, Assignor hereby agrees
with the Lenders as follows:
1. To secure the complete and timely satisfaction of all Obligations
(as such term is defined in the Loan Agreement) and the liabilities of the
Assignor pursuant to the Guaranty, Assignor hereby grants, assigns and
conveys to the Lenders the Assignor's entire right, title and interest in
and to the trademark applications and trademarks listed in Schedule A
hereto (as the same may be amended pursuant hereto from time to time),
including without limitation all renewals thereof, all proceeds of
infringement suits, the right to sue for past, present and future
infringements and all rights corresponding thereto throughout the world
(all of the foregoing are collectively called the "Trademarks"), and the
goodwill of the business to which each of the Trademarks relates.
2. Assignor covenants and warrants that to the best of its knowledge
(actual or constructive):
(a) The Trademarks are subsisting and have not been adjudged
invalid or unenforceable;
(b) Each of the Trademarks is valid and enforceable;
(c) No claim has been made that the use of any of the Trademarks
does or may violate the rights of any third person;
(d) Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the
Trademarks, free and clear of any liens, charges and
encumbrances, including without limitation pledges,
assignments, licenses, registered user agreements and
covenants by Assignor not to sue third persons, other than the
assignment to the Lenders pursuant to this Agreement;
(e) Assignor has the unqualified right to enter into this
Agreement and perform its terms;
(f) Assignor has used, and will continue to use for the duration
of this Agreement, proper statutory notice in connection with
its use of the Trademarks;
(g) Assignor has used, and will continue to use for the duration
of this Agreement, consistent standards of quality in its
manufacture or use of products sold under the Trademarks; and
(h) Assignor (along with its predecessors in interest) does not
own any other Trademarks and/or patents, trade names, service
marks or other intangible assets which are registered with the
United States Patent and Trademark Office in Washington, D.C.
3. Assignor hereby grants to the Lenders and its employees and
agents upon reasonable notice the right to visit Assignor's facilities
which maintain or store products sold under any of the Trademarks, and to
inspect the products and quality control records relating thereto.
Assignor shall do any and all acts reasonably required by the Lenders to
ensure Assignor's compliance with paragraph 2(g).
4. Assignor agrees that, until all of the Obligations shall have
been satisfied in full, it will not enter into any agreement (for example,
a license agreement) which is inconsistent with Assignor's obligations
under this Agreement, without the Lenders' prior written consent, such
consent not to be unreasonably withheld.
5. If, before the Obligations shall have been satisfied in full,
Assignor shall obtain rights to any new trademarks or trademark
applications the provisions of paragraph 1 shall automatically apply
thereto and Assignor shall give the Lenders prompt written notice thereof.
6. Assignor authorizes the Lenders to modify this Agreement by
amending Schedule A to include any future trademarks and trademark
applications covered by paragraphs 1 and 5.
7. Unless and until there shall have occurred an Event of Default,
the Lenders hereby grant to Assignor the exclusive, nontransferable right
and license to use the Trademarks on and in connection with products sold
by Assignor or Borrower, for Assignor's own benefit and account and for
none other. Assignor agrees not to sell or assign its interest in, or
grant any sublicense under, the license granted to Assignor in this
paragraph 7, without the prior written consent of the Lenders which
consent shall not be unreasonably withheld.
8. If any Event of Default shall have occurred, Assignor's license
under the Trademarks, as set forth in paragraph 7, shall terminate
forthwith, and the Lenders shall have, in addition to all other rights and
remedies given to them by this Agreement and the Loan Agreement, those
rights and remedies allowed by law and the rights and remedies of a
secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Trademarks may be located and, without limiting
the generality of the foregoing, the Lenders may immediately, without
demand of performance and without other notice (except as set forth next
below) or demand whatsoever to Assignor, all of which are hereby expressly
waived, and without advertisement, sell at public or private sale or
otherwise realize upon in a commercially reasonable manner, all
or from time to time any of the Trademarks, or any interest which the
Assignor may have therein, and after deducting from the proceeds of sale
or other disposition of the Trademarks all reasonable expenses (including
all reasonable expenses for broker's fees and legal services), may apply
the residue of such proceeds to the payment of the Obligations. Any
remainder of the proceeds after payment in full of the Obligations shall
be paid over to the Assignor. Notice of any sale or other disposition of
the Trademarks shall be given to Assignor at least five (5) Business Days
(as such term is defined in the Loan Agreement) before the time of any
intended public or private sale or other disposition of the Trademarks is
to be made, which notice Assignor hereby agrees shall be reasonable notice
of such sale or other disposition. At any such sale or other disposition,
the Lenders or the holder of any of the notes or other instruments
evidencing the Obligations may, to the extent permissible under applicable
law, purchase the whole or any part of the Trademarks sold, free from any
right or equity of redemption on the part of Assignor, which right and
equity of redemption are hereby waived and released.
9. At such time as Borrower shall completely satisfy all of the
Obligations, this Agreement shall terminate and the Lenders shall execute
and deliver to Assignor at Assignor's expense all deeds, assignments and
other instruments as may be necessary or proper to re-vest in Assignor
full title to the Trademarks, subject to any disposition thereof which may
have been made by the Lenders pursuant hereto.
10. Any and all reasonable fees, costs and expenses, of whatever
kind or nature, including reasonable attorney fees and legal expenses
incurred by the Lenders in connection with the preparation of this
Agreement and all other documents relating hereto and the consummation of
this transaction, the filing or recording of any documents (including all
taxes in connection therewith) in public offices, the payment or discharge
of any taxes, counsel fees, maintenance fees, encumbrances or otherwise
protecting, maintaining or preserving the Trademarks, in defending or
prosecuting any actions or proceedings arising out of or related to the
Trademarks, or in the enforcement by the Lenders of any of its rights or
remedies under this Agreement, the Guaranty, the Loan Agreement or any
Other Document (as such term is defined in the Loan Agreement) shall be
borne and paid by Assignor on demand by the Lenders and until so paid
shall be added to the principal amount of the Obligations and shall bear
interest at the Default Rate (as such term is defined in the Loan
Agreement).
11. Assignor shall have the duty, through counsel reasonably
acceptable to the Lenders, to prosecute diligently any trademark
applications of the Trademarks pending as of the date of this Agreement or
thereafter until the Obligations shall have been paid in full, to make
federal application on registrable but unregistered Trademarks, to file
and prosecute opposition and cancellation proceedings and to do any and
all acts which are necessary or desirable to preserve and maintain all
rights in the Trademarks. Any expenses incurred in connection with the
Trademarks shall be borne by Assignor. The Assignor shall not abandon any
Trademark without the consent of the Lenders, which consent shall not be
unreasonably withheld.
12. Assignor shall have the right to bring any opposition
proceedings, cancellation proceedings or lawsuit in its own name to
enforce or protect the Trademarks, in which event the Lenders may, if
necessary, be joined as a nominal party to such suit if Lenders shall have
been satisfied that they are not incurring any risk of liability because
of such joinder. Assignor shall promptly, upon demand, reimburse and
indemnify Lenders for all damages, costs and expenses, including attorney
fees, incurred by Lenders in the fulfillment of the provisions of this
paragraph 12. The obligations of the Assignor under this paragraph 12
shall survive the termination of this Agreement.
13. In the event of the occurrence of a Default or an Event of
Default under the Loan Agreement, Assignor hereby authorizes and empowers
the Lenders to make, constitute and appoint any officer or agent of the
Lenders as the Lenders may select, in its sole discretion, as Assignor's
true and lawful attorney-in-fact, with the power to endorse Assignor's
name on all applications, documents, papers and instruments necessary for
the Lenders to use the Trademarks, or to grant or issue any exclusive or
nonexclusive license
under the Trademarks to anyone else, or necessary for Lenders to assign,
pledge, convey or otherwise transfer title in or dispose of the Trademarks
to anyone else. Assignor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney
shall be irrevocable for the life of this Agreement.
14. If Assignor fails to comply with any of its obligations
hereunder, the Lenders may do so in Assignor's name or in the Lenders'
name, but at Assignor's expense, and Assignor hereby agrees to reimburse
the Lenders in full for all expenses, including reasonable attorney's
fees, incurred by the Lenders in protecting, defending and maintaining the
Trademarks.
15. No course of dealing between Assignor and the Lenders, nor any
failure to exercise, nor any delay in exercising, on the part of the
Lenders, any right, power or privilege hereunder or under the Loan
Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
16. All of the Lenders' rights and remedies with respect to the
Trademarks, whether established hereby or by the Guaranty or Loan
Agreement, or by any other agreement(s) or by law shall be cumulative and
may be exercised singly or concurrently.
17. The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid and unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this
Agreement in any jurisdiction.
18. This Agreement is subject to modification only by a writing
signed by the parties, except as provided in paragraph 6.
19. The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the respective successors and permitted
assigns of the parties.
20. The validity and interpretation of this Agreement and the rights
and obligations of the parties shall be governed by the laws of the State
of New Jersey.
21. THE PARTIES HERETO AGREE TO THE JURISDICTION OF THE FEDERAL AND
STATE COURTS LOCATED IN NEW JERSEY IN CONNECTION WITH ANY MATTER ARISING
HEREUNDER, INCLUDING THE COLLECTION AND ENFORCEMENT HEREOF.
THE ASSIGNOR AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVE ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS OR THE ACTIONS
OF THE LENDERS. THIS WAIVER IS MADE KNOWINGLY AND IN CONSIDERATION OF THE
ADVANCES MADE UNDER THE LOAN AGREEMENT.
22. This Agreement, the Guaranty, the Other Documents and the other
Loan Documents embody the entire agreement and understanding between the
Assignor and the Lenders and supersedes all prior agreements and
understandings relating to the subject matter hereof and thereof.
WITNESS the execution hereof under seal as of the day and year first above
written.
WARNER CHILCOTT (BERMUDA) LIMITED
/s/Kevin Insley
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KEVIN INSLEY, Vice President
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[SEAL]
PNC BANK, NATIONAL ASSOCIATION
As Agent
/s/David L. Raphaels
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DAVID L. RAPHAELS, Vice President