Exhibit 4.20
GUARANTOR TRADEMARK SECURITY AGREEMENT
This GUARANTOR TRADEMARK SECURITY AGREEMENT (this
"Agreement"), dated as of December 6, 2001, is entered into between MAJESTIC
INVESTOR HOLDINGS, LLC, a Delaware limited liability company ("Guarantor"), and
FOOTHILL CAPITAL CORPORATION, a California corporation ("Secured Party"), with
reference to the following:
WHEREAS, Guarantor beneficially owns the Trademarks specified
on Schedule A attached hereto (or any addendum thereto);
WHEREAS, Guarantor, Borrowers, and Secured Party are entering
into that certain Loan and Security Agreement, dated as of the date hereof (as
amended, modified, renewed or extended from time to time, the "Loan Agreement")
pursuant to which Secured Party has agreed to make certain financial
accommodations to Borrowers, and pursuant to which Borrowers have granted to
Secured Party security interests in (among other things) certain of the general
intangibles of Borrowers;
WHEREAS, in order to induce Secured Party to extend financial
accommodations to Borrowers pursuant to the Loan Agreement and in consideration
thereof, and in consideration of any loans or other financial accommodations
heretofore or hereafter extended by Secured Party to Borrowers, whether pursuant
to the Loan Agreement or otherwise, Guarantor has agreed to enter into this
Agreement; and
WHEREAS, pursuant to the Loan Agreement and as one of the
conditions to the obligations of Secured Party under the Loan Agreement,
Guarantor has agreed to execute and deliver this Agreement to Secured Party for
filing with the PTO and with any other relevant recording systems in any
domestic jurisdiction, and as further evidence of and to effectuate Secured
Party's existing security interest in Guarantor's trademarks and other general
intangibles described herein.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Guarantor hereby agrees in favor of
Secured Party as follows:
1. Definitions; Interpretation.
(a) Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Agreement" shall have the meaning ascribed to such term in
the preamble of this Agreement.
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"Borrowers" shall have the meaning ascribed to such term in
the Loan Agreement.
"Guarantor" shall have the meaning ascribed to such term in
the preamble to this Agreement.
"Loan Agreement" shall have the meaning ascribed to such term
in the recitals to this Agreement.
"Proceeds" shall mean 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 defined in the Code, and all proceeds of proceeds.
Proceeds also shall include (i) any and all accounts, chattel paper,
instruments, general intangibles, cash and other proceeds, payable to or for the
account of Guarantor, 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 Guarantor 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 Guarantor 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" shall mean the United States Patent and Trademark Office
and any successor thereto.
"Secured Obligations" shall mean, with respect to Guarantor,
all liabilities, obligations, or undertakings owing by Guarantor to Secured
Party of any kind or description arising out of or outstanding under, advanced
or issued pursuant to, or evidenced by the Loan Agreement, any of the other Loan
Documents, or this Agreement, 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 (including interest that accrues after the filing of a
case under the Bankruptcy Code) and any and all costs, fees (including
attorneys' fees), and expenses which Borrowers are required to pay pursuant to
any of the foregoing, by law, or otherwise.
"Secured Party" shall have the meaning ascribed to such term
in the preamble of this Agreement.
"Trademark Collateral" shall have the meaning ascribed to such
term in Section 2.
"Trademarks" shall have the meaning ascribed to such term in
Section 2.
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"United States" and "U.S." shall each mean the United States
of America.
(b) Terms Defined in Code. Where applicable and
except as otherwise defined herein, terms used in this Agreement shall have the
meanings assigned to them in the Code.
(c) Interpretation. In this Agreement, except to the
extent the context otherwise requires:
(i) Any reference to a Section or a Schedule
is a reference to a section hereof, or a schedule hereto, respectively,
and to a subsection or a clause is, unless otherwise stated, a
reference to a subsection or a clause of the section or subsection in
which the reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as a whole
and not merely to the specific section, subsection, paragraph or clause
in which the respective word appears.
(iii) The meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms
defined.
(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words "without
limitation."
(v) References to agreements and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto.
(vi) 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.
(vii) Any captions and headings are for
convenience of reference only and shall not affect the construction of
this Agreement.
(viii) Capitalized words not otherwise
defined herein shall have the respective meanings assigned to them in
the Loan Agreement.
(ix) 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 between this Agreement and the Loan Agreement
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
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obligations on the part of Guarantor and supplemental rights and
remedies in favor of Secured Party (whether under California law or
applicable federal law), in each case in respect of the Trademark
Collateral, shall not be deemed a conflict in the Loan Agreement.
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, Guarantor hereby grants, assigns, transfers and conveys to
Secured Party a continuing security interest in all of Guarantor'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"):
(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
Guarantor, 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 mark, or other mark prior to the filing under applicable law of
a verified statement of use (or the equivalent) for such trademark or
service mark) 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 sue or bring opposition or
cancellation proceedings in the name of Guarantor or in the name of
Secured Party 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 sue 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
Guarantor's business symbolized by the Trademarks or associated
therewith; and
(iv) all Proceeds of any and all of the
foregoing.
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The foregoing notwithstanding, the "Trademark
Collateral" shall not include any General Intangibles that are now or hereafter
held by Guarantor as licensee, in the event that: (a) as a result of the grant
of a security interest therein, Guarantor's rights in or with respect to such
asset would be forfeited or would become terminable, or if Guarantor would be
deemed to have breached or defaulted under the applicable license or other
agreement; and (b) any such restriction is effective and enforceable under
applicable law; provided, however, that the term "Trademark Collateral" shall
include (1) any and all proceeds of such assets, and (2) such assets at any time
that the restrictions in the license or other agreement are no longer effective
and enforceable or at any time that the applicable licensor or other applicable
party's consent is obtained to the grant of a security interest in and to such
asset in favor of Secured Party.
(b) Continuing Security Interest. Guarantor 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. Without
limiting the foregoing, the Trademark Collateral described in this Agreement
shall constitute part of the Collateral in the Loan Agreement.
(d) Licenses. Anything in this Agreement to the
contrary notwithstanding, Guarantor may license the Trademark Collateral as
provided in the Loan Agreement subject to the security interests of Secured
Party therein.
3. Further Assurances; Appointment of Secured Party as
Attorney-in-Fact. Guarantor at its expense shall execute and deliver, or cause
to be executed and delivered, to Secured Party any and all documents and
instruments, in form and substance reasonably satisfactory to Secured Party, and
take any and all action which Secured Party may reaasonably request from time to
time, to perfect and continue the perfection or to maintain the priority of, or
provide notice of the security interest in, the Trademark Collateral held by
Secured Party and to accomplish the purposes of this Agreement. If Guarantor
refuses to execute and deliver, or fails timely to execute and deliver, any of
the documents it is requested to execute and deliver by Secured Party in
accordance with the foregoing, Secured Party shall have the right, in the name
of Guarantor, or in the name of Secured Party or otherwise, without notice to or
assent by Guarantor, and Guarantor hereby irrevocably constitutes and appoints
Secured Party (and any of Secured Party's officers or employees or agents
designated by Secured Party) as Guarantor's true and lawful attorney-in-fact
with full power and authority, (i) to sign the name of Guarantor on all or any
of such documents or instruments and perform all other acts that Secured Party
in the exercise of its Permitted Discretion deems necessary or advisable 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 Secured Party, 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 Guarantor, which Secured Party may reasonably deem necessary or
advisable to maintain, preserve and
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protect the Trademark Collateral and to accomplish the purposes of this
Agreement, including (A) after the occurrence and during the continuance of any
Event of Default, to defend, settle, adjust or institute any action, suit or
proceeding with respect to the Trademark Collateral, (B) after the occurrence
and during the continuation of any Event of Default, to assert or retain any
rights under any license agreement for any of the Trademark Collateral, and (C)
after the occurrence and during the continuance of any Event of Default, to
execute any and all applications, documents, papers and instruments for Secured
Party 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, however, that the foregoing power of
attorney shall terminate when all of the Secured Obligations have been fully and
finally repaid and performed and Secured Party's obligation to extend credit
under the Loan Agreement is terminated.
4. Representations and Warranties. Guarantor represents and
warrants to Secured Party, in each case to the best of its knowledge,
information, and belief, as follows:
(a) No Other Trademarks. Schedule A sets forth, as of
the Closing Date, a true and correct list of all of the existing Trademarks of
Guarantor 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 Guarantor.
(b) Trademarks Subsisting. Each of the Trademarks of
Guarantor listed on Schedule A is subsisting and has not been adjudged invalid
or unenforceable, in whole or in part, and, to the best of Guarantor's
knowledge, each of the Trademarks set forth on Schedule A is valid and
enforceable.
(c) Ownership of Trademark Collateral; No Violation.
(i) Guarantor has rights in and good and defensible title to the existing
Trademark Collateral, (ii) with respect to the Trademark Collateral shown on
Schedule A hereto as owned by it, Guarantor is the sole and exclusive owner
thereof, free and clear of any Liens and rights of others (other than the
security interest created hereunder and other than Permitted Liens), including
licenses, registered user agreements and covenants by Guarantor not to sue third
persons, and (iii) with respect to any Trademarks for which Guarantor is either
a licensor 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, Guarantor is not in material default of any of its obligations
thereunder and, (i) other than the parties to such licenses or licensing
agreements, or (ii) in the case of any non-exclusive license or license
agreement entered into by Guarantor or any such licensor regarding such
Trademark, the parties to any other such non-exclusive licenses or license
agreements entered into by Guarantor or any such licensor with any other Person,
no other Person has any rights in or to any of the Trademark
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Collateral. To the best of Guarantor's knowledge, the past, present and
contemplated future use of the Trademark Collateral by Guarantor 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 Guarantor'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 Guarantor
has not, does not and will not infringe upon or 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. Guarantor has the unqualified right,
power and authority to pledge and to grant to Secured Party 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 this Agreement shall be in effect,
Guarantor 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 Secured Party written notice of the occurrence of any event that
could 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 Guarantor is a licensee.
6. Future Rights. For so long as this Agreement shall be in
effect, if and when Guarantor 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 the Guarantor shall give to Secured Party
prompt notice thereof. Guarantor shall do all things reasonably deemed necessary
by Secured Party in the exercise of its Permitted Discretion to ensure the
validity, perfection, priority and enforceability of the security interests of
Secured Party in such future acquired Trademark Collateral. If Guarantor refuses
to execute and deliver, or fails timely to execute and deliver, any of the
documents it is requested to execute and deliver by Secured Party in connection
herewith, Guarantor hereby authorizes Secured Party to modify, amend or
supplement the Schedules hereto and to re-execute this Agreement from time to
time on Guarantor'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.
7. Duties of Secured Party. Notwithstanding any provision
contained in this Agreement, Secured Party shall not have any duty to exercise
any of the rights, privileges or powers afforded to it and shall not be
responsible to the Guarantor or any other Person for any failure to do so or
delay in doing so. Except for the accounting for moneys actually
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received by Secured Party hereunder or in connection herewith, Secured Party
shall not have any duty or liability to exercise or preserve any rights,
privileges or powers pertaining to the Trademark Collateral.
8. Events of Default. The occurrence of any "Event of Default"
under the Loan Agreement, or any other Loan Document, as applicable, shall
constitute an Event of Default hereunder.
9. Remedies. From and after the occurrence and during the
continuation of an Event of Default, Secured Party 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, the Collateral, or any other collateral.
Guarantor hereby agrees that such rights and remedies include the right of
Secured Party as a secured party to sell or otherwise dispose of the Trademark
Collateral, the Collateral, or any other collateral after default, pursuant to
the Code. Guarantor hereby agrees that Secured Party 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 Secured Party'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 Guarantor in which Secured Party
has a security interest, including Secured Party's rights to sell inventory,
tooling or packaging which is acquired by Guarantor (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, Secured Party shall have the right but shall in no way be obligated to
bring suit, or to take such other action as Secured Party, in the exercise of
its Permitted Discretion, deems necessary, in the name of Guarantor or Secured
Party, to enforce or protect any of the Trademark Collateral, in which event
Guarantor shall, at the request of Secured Party, do any and all lawful acts and
execute any and all documents required by Secured Party necessary to such
enforcement. To the extent that Secured Party shall elect not to bring suit to
enforce such Trademark Collateral, the Guarantor, 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.
10. Binding Effect. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by Guarantor and Secured Party 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.
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12. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the federal laws of the United States
of America and the laws of the State of California.
13. Entire Agreement; Amendment. This Agreement and the other
Loan Documents, together with the Schedules hereto and thereto, contain 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, Secured Party 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. 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.
16. Loan Agreement. Guarantor acknowledges that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Loan Agreement or the
Guarantor Security Agreement, as applicable, and all such rights and remedies
are cumulative.
17. No Inconsistent Requirements. Guarantor 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
Guarantor agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms. Guarantor agrees that, to the extent of any conflict between the
provisions of this Agreement and the Loan Agreement, the provisions of the Loan
Agreement shall govern.
18. Termination. Upon the payment and performance in full in
cash 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 Secured Party shall execute and deliver such documents and
instruments and take such further action reasonably requested by Guarantor, at
Guarantor's
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expense, as shall be necessary to evidence termination of the security interest
granted by Guarantor to Secured Party hereunder, including cancellation of this
Agreement by written notice from Secured Party to the PTO.
19. Release of Collateral. Upon any sale, license or other
disposition of assets of Guarantor constituting Trademark Collateral permitted
under the Loan Documents, the security interest and other rights granted
hereunder with respect to such Trademark Collateral shall be automatically
terminated and released, and Secured Party, at the request of Guarantor, will
execute and deliver to Guarantor the proper instruments (including Code
termination statements) acknowledging the release of Secured Party's security
interest in such Trademark Collateral and will file such instruments with the
PTO as may be necessary to evidence the release of Secured Party's security
interest in such Trademark Collateral.
[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.
MAJESTIC INVESTOR HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ Michael E. Kelly
----------------------------------
Title: EVP, COO, CFO
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Kevin M. Coyle
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Title: Sr. Vice President
S-1
SCHEDULE A
Trademarks of Guarantor
A-1