EXHIBIT 99.2
GUARANTEE AND SECURITY AGREEMENT
dated as of
September 9, 2002
among
ENGAGE, INC. ,
THE GUARANTORS PARTY HERETO
and
CMGI, INC.
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SCHEDULES:
---------
SCHEDULE 1 Certain Excluded Assets
SCHEDULE 2 Equity Interests in Subsidiaries and Affiliates Owned by
Original Lien Grantors
EXHIBITS:
--------
EXHIBIT A Security Agreement Supplement
EXHIBIT B Perfection Certificate
EXHIBIT C Intellectual Property
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GUARANTEE AND SECURITY AGREEMENT
AGREEMENT dated as of September 9, 2002 (the "Effective Date") among
ENGAGE, INC., the GUARANTORS party hereto and CMGI, INC.
WHEREAS, the Company is entering into the Transaction Agreement (as
this and other capitalized terms are defined in Section 1 hereof), pursuant to
which the Company intends to issue the Note to the Purchaser;
WHEREAS, the Company is willing to secure its obligations under the
Note and the Transaction Agreement by granting Liens on its assets to the
Secured Party as provided in the Security Documents;
WHEREAS, the Company is willing to cause certain of its Subsidiaries to
guarantee the foregoing obligations of the Company and to secure its guarantee
thereof by granting Liens on its assets to the Secured Party as provided in the
Security Documents;
WHEREAS, the Purchaser is not willing to purchase the Note unless (i)
the foregoing obligations of the Company are secured and guaranteed as described
above and (ii) each guarantee thereof is secured by Liens on assets of the
relevant Guarantor as provided in the Security Documents;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
(a) Terms Defined in Transaction Agreement. Terms defined in the
Transaction Agreement and not otherwise defined in subsection (b) or (c) of this
Section have, as used herein, the respective meanings provided for therein.
(b) Terms Defined in UCC. As used herein, each of the following terms
has the meaning specified in the UCC:
TERM UCC
---- ---
Account 9-102
Authenticate 9-102
Certificated Security 8-102
Chattel Paper 9-102
Document 9-102
Equipment 9-102
Financial Asset 8-102 & 103
General Intangibles 9-102
Instrument ▇-▇▇▇
▇▇▇▇▇▇▇▇▇ 9-102
Investment Property 9-102
Payment Intangible 9-102
Record 9-102
Securities Intermediary 8-102
Security 8-102 & 103
Supporting Obligations 9-102
Uncertificated Security 8-102
(c) Additional Definitions. The following additional terms, as used
herein, have the following meanings:
"COLLATERAL" means all property, whether now owned or hereafter
acquired, on which a Lien is granted or purports to be granted to the Secured
Party pursuant to the Security Documents. When used with respect to a specific
Lien Grantor, the term "Collateral" means all its property on which such a Lien
is granted or purports to
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be granted.
"COMPANY" means Engage, Inc., a Delaware corporation.
"COPYRIGHT LICENSE" means any written agreement, in which Company now
holds or hereafter acquires any interest, granting any right in or to any
Copyright or Copyright registration (whether Company is the licensee or the
licensor thereunder) including, without limitation, licenses pursuant to which
Company has obtained the exclusive right to use a copyright owned by a third
party (other than licenses where the Company is the licensee or licensor and the
terms of such license restrict the ability of the Company to grant the
Transaction Liens or to permit the Secured Party to exercise the rights and
remedies contemplated hereby without the licensor's consent).
"COPYRIGHTS" means all of the following in which Company now holds or
hereafter acquires any interest (other than licenses where the Company is the
licensee or licensor and the terms of such license restrict the ability of the
Company to grant the Transaction Liens or to permit the Secured Party to
exercise the rights and remedies contemplated hereby without the licensor's
consent): (a) all copyrights, whether registered or unregistered, held pursuant
to the laws of the United States, any State thereof or any other country; (b)
registrations, applications and recordings in the United States Copyright Office
or in any similar office or agency of the United States, any State thereof or
any other country; (c) any continuations, renewals or extensions thereof; (d)
any registrations to be issued in any pending applications; (e) prior versions
of works covered by copyright and all works based upon, derived from or
incorporating such works; (f) income, royalties, damages, claims and payments
now and hereafter due and/or payable with respect to copyrights, including,
without limitation, damages, claims and recoveries for past, present or future
infringement; (g) rights to ▇▇▇ for past, present and future infringements of
any copyright; and (h) any other rights corresponding to any of the foregoing
rights throughout the world.
"EQUITY INTEREST" means (i) in the case of a corporation, any shares of
its capital stock, (ii) in the case of a limited liability company, any LLC
Interest therein, (iii) in the case of a partnership, any Partnership Interest
therein, (iv) in the case of any other business entity, any participation or
other interest in the equity or profits thereof or (v) any warrant, option or
other right to acquire any Equity Interest described in this definition.
"GUARANTORS" means each Subsidiary listed on the signature pages hereof
under the caption "Guarantors" and each Subsidiary that shall, at any time after
the date hereof, become a "Guarantor" pursuant to Section 15.
"LICENSE" means any Copyright License, Patent License, Trademark
License or other license of intellectual property rights or interests now held
or hereafter acquired by Company (other than licenses where the Company is the
licensee and the terms of such license restrict the ability of the Company to
grant the Transaction Liens or to permit the Secured Party to exercise the
rights and remedies contemplated hereby without the licensor's consent).
"LIEN GRANTORS" means the Company and the Guarantors.
"LLC INTEREST" means a membership interest or similar interest in a
limited liability company.
"NOTE" has the meaning specified in the Transaction Agreement.
"NOTE DOCUMENTS" means the Transaction Agreement, the Note and the
Security Documents and any documents or agreements contemplated therein.
"OPINION OF COUNSEL" means a written opinion of legal counsel (who may
be counsel to a Lien Grantor or other counsel, in either case reasonably
acceptable to the Secured Party) addressed and delivered to the Secured Party.
"ORIGINAL LIEN GRANTOR" means any Lien Grantor that grants a Lien on
any of its assets hereunder on the Effective Date.
"OWN" refers to the possession of sufficient rights in property to
grant a security interest therein as
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contemplated by UCC Section 9-203, and "ACQUIRE" refers to the acquisition of
any such rights.
"PARTNERSHIP INTEREST" means a partnership interest, whether general or
limited.
"PATENT LICENSE" means any written agreement, in which Company now
holds or hereafter acquires any interest, granting any right with respect to any
Patent, whether Company is the licensee or the licensor thereunder (other than
licenses where the Company is the licensee or licensor and the terms of such
license restrict the ability of the Company to grant the Transaction Liens or to
permit the Secured Party to exercise the rights and remedies contemplated hereby
without the licensor's consent).
"PATENTS" means all of the following in which Company now holds or
hereafter acquires any interest (other than licenses where the Company is the
licensee or licensor and the terms of such license restrict the ability of the
Company to grant the Transaction Liens or to permit the Secured Party to
exercise the rights and remedies contemplated hereby without the licensor's
consent): (a) all letters patent of the United States or any other country, all
registrations and recordings thereof and all applications for letters patent of
the United States or any other country, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country; (b) all reissues, divisions, continuations,
renewals, continuations in part or extensions thereof; (c) all ▇▇▇▇▇ patents,
divisionals and patents of addition; (d) all patents to issue in any such
applications; (e) income, royalties, damages, claims and payments now and
hereafter due and/or payable with respect to patents, including, without
limitation, damages, claims and recoveries for past, present or future
infringement; and (f) rights to ▇▇▇ for past, present and future infringements
of any patent.
"PERFECTION CERTIFICATE" means, with respect to any Lien Grantor, a
certificate substantially in the form of Exhibit B, completed and supplemented
with the schedules contemplated thereby to the satisfaction of the Secured
Party, and signed by an officer of such Lien Grantor.
"PERMITTED LIENS" means (i) the Transaction Liens and (ii) any other
Liens on the Collateral permitted to be created or assumed or to exist pursuant
to the Transaction Agreement.
"PLEDGED", when used in conjunction with any type of asset, means at
any time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, "Pledged Equity Interest"
means an Equity Interest that is included in the Collateral at such time.
"PROCEEDS" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, any Collateral, including all claims of the relevant Lien Grantor against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral, and any condemnation or requisition payments with respect to
any Collateral.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and its Affiliates.
"RELEASE CONDITIONS" means the following condition for releasing all
the Secured Guarantees and terminating all the Transaction Liens: all Secured
Obligations shall have been paid in full.
"SECURED AGREEMENT", when used with respect to any Secured Obligation,
refers collectively to each instrument, agreement or other document that sets
forth obligations of the Company, obligations of a Guarantor and/or rights of
the holder with respect to such Secured Obligation.
"SECURED GUARANTEE" means, with respect to each Guarantor, its
guarantee of the Secured Obligations under Section 2 hereof or Section 1 of a
Security Agreement Supplement.
"SECURED OBLIGATIONS" means all principal of the Note and all other
amounts now or hereafter payable by the Company pursuant to the Note Documents.
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"SECURED PARTY" means the holders from time to time of the Secured
Obligations.
"SECURITY AGREEMENT SUPPLEMENT" means a Security Agreement Supplement,
substantially in the form of Exhibit A, signed and delivered to the Secured
Party for the purpose of adding a Subsidiary as a party hereto pursuant to
Section 15 and/or adding additional property to the Collateral.
"SECURITY DOCUMENTS" means this Agreement, the Security Agreement
Supplements and all other supplemental or additional security agreements,
control agreements, or similar instruments delivered pursuant to the Note
Documents.
"TRADEMARK LICENSE" means any written agreement, in which Company now
holds or hereafter acquires any interest, granting any right in and to any
Trademark or Trademark registration, whether Company is the licensee or the
licensor thereunder (other than licenses where the Company is the licensee or
licensor and the terms of such license restrict the ability of the Company to
grant the Transaction Liens or to permit the Secured Party to exercise the
rights and remedies contemplated hereby without the licensor's consent).
"TRADEMARKS" means any of the following in which Company now holds or
hereafter acquires any interest (other than licenses where the Company is the
licensee or licensor and the terms of such license restrict the ability of the
Company to grant the Transaction Liens or to permit the Secured Party to
exercise the rights and remedies contemplated hereby without the licensor's
consent): (a) any trademarks, tradenames, corporate names, company names,
business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof and any
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country (collectively, the "Marks"); (b) any
reissues, extensions or renewals thereof, (c) the goodwill of the business
symbolized by or associated with the Marks, (d) income, royalties, damages,
claims and payments now and hereafter due and/or payable with respect to the
Marks, including, without limitation, damages, claims and recoveries for past,
present or future infringement and (e) rights to ▇▇▇ for past, present and
future infringements of the Marks.
"TRANSACTION AGREEMENT" means the Transaction Agreement of even date
herewith among the Company and the Purchaser.
"TRANSACTION LIENS" means the Liens granted by the Lien Grantors under
the Security Documents.
"UCC" means the Uniform Commercial Code as in effect from time to time
in The Commonwealth of Massachusetts; provided that, if perfection or the effect
of perfection or non-perfection or the priority of any Transaction Lien on any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than Massachusetts, "UCC" means the Uniform Commercial Code
as in effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
(a) Terms Generally. The definitions of terms herein (including those
incorporated by reference to the UCC or to another document) apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. The words "INCLUDE", "INCLUDES" and "INCLUDING" shall be deemed to be
followed by the phrase "WITHOUT LIMITATION". The word "WILL" shall be construed
to have the same meaning and effect as the word "SHALL". Unless the context
requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "HEREIN", "HEREOF" and "HEREUNDER", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Sections, Exhibits
and Schedules shall be construed to refer to Sections of, and Exhibits and
Schedules to, this Agreement and (e) the word "PROPERTY" shall be construed to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
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SECTION 2. Guarantees by Guarantors.
(a) Secured Guarantees. Each Guarantor unconditionally guarantees the
full and punctual payment of each Secured Obligation when due (whether at stated
maturity, upon acceleration or otherwise). If the Company fails to pay any
Secured Obligation punctually when due, each Guarantor agrees that it will
forthwith on demand pay the amount not so paid at the place and in the manner
specified in the relevant Secured Agreement.
(b) Secured Guarantees Unconditional. The obligations of each Guarantor
under its Secured Guarantee shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Company, any other Guarantor or any
other Person under any Secured Agreement, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any
Secured Agreement (except any modification or amendment of or supplement to any
ecured Agreement to which such Guarantor is a party, as provided therein);
(iii) any release, impairment, non-perfection or invalidity of
any direct or indirect security for any obligation of the Company, any other
Guarantor or any other Person under any Secured Agreement;
(iv) any change in the corporate existence, structure or
ownership of the Company, any other Guarantor or any other Person or any of
their respective subsidiaries, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Company, any other Guarantor or any other
Person or any of their assets or any resulting release or discharge of any
obligation of the Company, any other Guarantor or any other Person under any
Secured Agreement;
(v) the existence of any claim, set-off or other right that
such Guarantor may have at any time against the Company, any other Guarantor,
the Secured Party or any other Person, whether in connection with the Note or
any unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against
the Company, any other Guarantor or any other Person for any reason of any
Secured Agreement, or any provision of applicable law or regulation purporting
to prohibit the payment of any Secured Obligation by the Company, any other
Guarantor or any other Person; or
(vii) any other act or omission to act or delay of any kind by
the Company, any other Guarantor, any other party to any Secured Agreement, the
Secured Party or any other Person, or any other circumstance whatsoever that
might, but for the provisions of this clause (vii), constitute a legal or
equitable discharge of or defense to any obligation of any Guarantor hereunder.
(c) Release of Secured Guarantees. All the Secured Guarantees will be
released when all the Release Conditions are satisfied. If at any time any
payment of a Secured Obligation is rescinded or must be otherwise restored or
returned upon the insolvency or receivership of the Company or otherwise, the
Secured Guarantees shall be reinstated with respect thereto as though such
payment had been due but not made at such time.
(d) Waiver by Guarantors. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any Person
against the Company, any other Guarantor or any other Person.
(e) Subrogation. A Guarantor that makes a payment with respect to a
Secured Obligation hereunder shall be subrogated to the rights of the payee
against the Company with respect to such payment; provided that no Guarantor
shall enforce any payment by way of subrogation against the Company, or by
reason of contribution against any
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other guarantor of such Secured Obligation, until all the Release Conditions
have been satisfied.
(f) Stay of Acceleration. If acceleration of the time for payment of
any Secured Obligation by the Company is stayed by reason of the insolvency or
receivership of the Company or otherwise, all Secured Obligations otherwise
subject to acceleration under the terms of any Secured Agreement shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Secured Party.
(g) Continuing Guarantee. Each Secured Guarantee is a continuing
guarantee, shall be binding on the relevant Guarantor and its successors and
assigns, and shall be enforceable by the Secured Party. If all or part of the
Secured Party's interest in any Secured Obligation is assigned or otherwise
transferred, the transferor's rights under each Secured Guarantee, to the extent
applicable to the obligation so transferred, shall automatically be transferred
with such obligation.
(h) Limitation on Obligations of Subsidiary Guarantor. The obligations
of each Subsidiary Guarantor under its Secured Guarantee shall be limited to an
aggregate amount equal to the largest amount that would not render such Secured
Guarantee or Guarantor subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of applicable law.
SECTION 3. Grant of Transaction Liens.
(a) Except as set forth on Schedule 1 hereto, the Company, in order to
secure the Secured Obligations, and each Guarantor listed on the signature pages
hereof, in order to secure its Secured Guarantee, grants to the Secured Party a
continuing security interest in all of the personal property of the Company or
such Guarantor, as the case may be, whether now owned or existing or hereafter
acquired or arising and regardless of where located, including:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all Equipment;
(v) all General Intangibles (including any Equity Interests
in other Persons that do not constitute Investment Property);
(vi) all Copyrights, Patents, Trademarks, Licenses, drawings,
technical information, marketing plans, customer lists, trade secrets,
proprietary or confidential information, inventions (whether or not
patentable), procedures, know-how and models;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all books and records (including customer lists, credit
files, computer programs, printouts and other computer materials and
records) of such Original Lien Grantor pertaining to any of its
Collateral;
(xi) [intentionally omitted]
(xii) all other goods and personal property of Company,
wherever located, whether tangible or intangible, and whether now owned
or hereafter acquired, existing, leased or consigned by or to Company;
and
(xiii) all Proceeds of the Collateral described in the
foregoing clauses (i) through (xii).
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(b) With respect to each right to payment or performance included in
the Collateral from time to time, the Transaction Lien granted therein includes
a continuing security interest in (i) any Supporting Obligation that supports
such payment or performance and (ii) any Lien that (x) secures such right to
payment or performance or (y) secures any such Supporting Obligation.
(c) The Transaction Liens are granted as security only and shall not
subject the Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of any Lien Grantor with respect to any of the
Collateral or any transaction in connection therewith.
SECTION 4. General Representations and Warranties. Each Original Lien
Grantor represents and warrants that:
(a) Such Lien Grantor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction identified as its
jurisdiction of organization in its Perfection Certificate.
(b) Schedule 2 lists all Equity Interests in Subsidiaries and
Affiliates owned by such Lien Grantor as of the Effective Date. Such Lien
Grantor holds all such Equity Interests directly (i.e., not through a
Subsidiary, a Securities Intermediary or any other Person).
(c) Except as set forth on the Perfection Certificate of such Lien
Grantor, all Pledged Equity Interests owned by such Lien Grantor are owned by it
free and clear of any Lien other than (i) the Transaction Liens and (ii) any tax
liens, judgment liens and other Permitted Liens. All shares of capital stock
included in such Pledged Equity Interests (including shares of capital stock in
respect of which such Lien Grantor owns a Security Entitlement) have been duly
authorized and validly issued and are fully paid and non-assessable. None of
such Pledged Equity Interests is subject to any option to purchase or similar
right of any Person. Such Lien Grantor is not and will not become a party to or
otherwise bound by any agreement (except the Note Documents) which restricts in
any manner the rights of any present or future holder of any Pledged Equity
Interest with respect thereto.
(d) Except as set forth on the Perfection Certificate of such Lien
Grantor, such Lien Grantor has good and marketable title to all its Collateral
(subject to exceptions that are, in the aggregate, not material), free and clear
of any Lien other than Permitted Liens.
(e) Such Lien Grantor has not performed any acts that would prevent the
Secured Party from enforcing any of the provisions of the Security Documents or
that would limit the Secured Party in any such enforcement. No financing
statement, security agreement, mortgage or similar or equivalent document or
instrument covering all or part of the Collateral owned by such Lien Grantor is
on file or of record in any jurisdiction in which such filing or recording would
be effective to perfect or record a Lien on such Collateral, except financing
statements, mortgages or other similar or equivalent documents with respect to
Permitted Liens. After the Effective Date, no Collateral owned by such Lien
Grantor will be in the possession or under the control of any other Person
having a claim thereto or security interest therein, other than a Permitted
Lien.
(f) The Transaction Liens on all Collateral owned by such Lien Grantor
(i) have been validly created, (ii) will attach to each item of such Collateral
on the Effective Date (or, if such Lien Grantor first obtains rights thereto on
a later date, on such later date) and (iii) when so attached, will secure all
the Secured Obligations or such Lien Grantor's Secured Guarantee, as the case
may be.
(g) Such Lien Grantor has delivered a Perfection Certificate to the
Secured Party. The information set forth therein is correct and complete as of
the Effective Date. On the Effective Date, such Lien Grantor shall file the
necessary UCC financing statements and, as soon as practicable following the
Effective Date, make all necessary filings with respect to the intellectual
property rights necessary to perfect the Transaction Liens on the Collateral.
All filing fees and taxes payable in connection with such filings shall be paid
by the Lien Grantor. As soon as practical after the Effective Date, such Lien
Grantor will furnish to the Secured Party a file search report from each UCC
filing office listed in its Perfection Certificate, showing the filing made at
such filing office to perfect the Transaction Liens on its Collateral.
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(h) When UCC financing statements describing the Collateral as set
forth in Schedule 1 to such Lien Grantor's Perfection Certificate have been
properly and timely filed in the offices specified in such Perfection
Certificate, and the necessary filings are properly and timely made with respect
to intellectual property rights, the Transaction Liens will constitute perfected
security interests in the Collateral owned by such Lien Grantor to the extent
that a security interest therein may be perfected by filing pursuant to the UCC,
prior to all Liens and rights of others therein except Permitted Liens.
(i) Such Lien Grantor has taken, and will continue to take, all actions
necessary under the UCC to perfect its interest in (i) any Accounts or Chattel
Paper purchased or otherwise acquired by it, as against its assignors and
creditors of its assignors and (ii) any Payment Intangibles or promissory notes
purchased or otherwise acquired by it, as against its assignors and creditors of
its assignors.
(j) Such Lien Grantor's Collateral is insured as required by the
Transaction Agreement.
(k) All of such Lien Grantor's Inventory has or will have been produced
in compliance, in all material respects, with the applicable requirements of the
Fair Labor Standards Act, as amended.
(l) All copyright, patent and trademark registrations and applications
owned by Company on the date hereof are listed on Exhibit C attached hereto.
SECTION 5. Further Assurances; General Covenants. Each Lien Grantor
covenants as follows:
(a) Such Lien Grantor will, from time to time, at the Company's
expense, execute, deliver, file and record any statement, assignment,
instrument, document, agreement or other paper and take any other action
(including any intellectual property filing and any filing of financing or
continuation statements under the UCC) that from time to time may be necessary
or desirable, or that the Secured Party may reasonably request, in order to:
(i) create, preserve, perfect, confirm or validate the
Transaction Liens on such Lien Grantor's Collateral;
(ii) enable the Secured Party to obtain the full benefits of
the Security Documents; or
(iii) enable the Secured Party to exercise and enforce any of
its rights, powers and remedies with respect to any of such Lien
Grantor's Collateral.
To the extent permitted by applicable law, such Lien Grantor authorizes the
Secured Party to execute and file such financing statements or continuation
statements without such Lien Grantor's signature appearing thereon. Such Lien
Grantor agrees that a carbon, photographic, photostatic or other reproduction of
this Agreement or of a financing statement is sufficient as a financing
statement. Such Lien Grantor constitutes the Secured Party its attorney-in-fact
to execute and file all intellectual property filings and other filings required
or so requested for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; and such power, being coupled with an interest,
shall be irrevocable until all the Transaction Liens granted by such Lien
Grantor terminate pursuant to Section 14. The Company will pay the costs of, or
incidental to, any intellectual property filings and any recording or filing of
any financing or continuation statements or other documents recorded or filed
pursuant hereto.
(b) Such Lien Grantor will not (i) change its name or corporate
structure, (ii) change its location (determined as provided in UCC Section
9-307) or (iii) except in the case of Permitted Liens, become bound, as provided
in UCC Section 9-203(d) or otherwise, by a security agreement entered into by
another Person, unless it shall have given the Secured Party prior notice
thereof.
(c) Except in connection with a change in the Company's principal
address on or before December 31, 2002 to a location within the Commonwealth of
Massachusetts, at least 30 days before it takes any action contemplated by
Section 5(b), such Lien Grantor will, at the Company's expense and at the
request of the Purchaser, cause to be delivered to the Secured Party an Opinion
of Counsel, in form and substance satisfactory to the Secured Party, to the
effect that (i) all financing statements and amendments or supplements thereto,
continuation statements and other documents required to be filed or recorded in
order to perfect and protect the Transaction Liens against all
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creditors of and purchasers from such Lien Grantor after it takes such action
(except any continuation statements specified in such Opinion of Counsel that
are to be filed more than six months after the date thereof) have been filed or
recorded in each office necessary for such purpose, (ii) all fees and taxes, if
any, payable in connection with such filings or recordations have been paid in
full and (iii) except as otherwise agreed by the Secured Party, such action will
not adversely affect the perfection or priority of the Transaction Lien on any
Collateral to be owned by such Lien Grantor after it takes such action or the
accuracy of such Lien Grantor's representations and warranties herein relating
to such Collateral.
(d) If any Collateral is located on premises leased by a Lien Grantor
as lessee, such Lien Grantor shall, within 30 days of the date hereof in the
case of leases in existence on the date hereof, and substantially simultaneously
with the execution and delivery of such lease, in the case of leases hereafter
entered into, use its reasonable efforts to secure from the landlord a waiver of
contractual and statutory landlord's liens, an agreement to permit access to and
removal of Collateral and other customary matters, all pursuant to an instrument
in form and substance satisfactory to the Secured Party; provided, however, that
the Company shall have no obligation to secure such a waiver from the Company's
current landlord for the premises located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇.
(e) Such Lien Grantor will not sell, lease, exchange, assign or
otherwise dispose of, or grant any option with respect to, any of its
Collateral; provided that such Lien Grantor may do any of the foregoing unless
(i) doing so would violate a covenant in the Transaction Agreement or (ii) an
Event of Default shall have occurred and be continuing and the Secured Party
shall have notified such Lien Grantor that its right to do so is terminated,
suspended or otherwise limited. Concurrently with any sale, lease or other
disposition (except a sale, lease or disposition to another Lien Grantor)
permitted by the foregoing proviso, the Transaction Liens on the assets sold or
disposed of (but not in any Proceeds arising from such sale or disposition) will
cease immediately without any action by the Secured Party. The Secured Party
will, at the Company's expense, execute and deliver to the relevant Lien Grantor
such documents as such Lien Grantor shall reasonably request to evidence the
fact that any asset so sold or disposed of is no longer subject to a Transaction
Lien.
(f) Such Lien Grantor will, promptly upon request, provide to the
Secured Party all information and evidence concerning such Lien Grantor's
Collateral that the Secured Party may reasonably request from time to time to
enable it to enforce the provisions of the Security Documents.
(g) The Company shall promptly register or cause to be registered (to
the extent not already registered and consistent with good faith business
judgment) the most recent version of any Copyright and any Copyright License and
any Patent, Patent License, Trademark or Trademark License, which, individually
or in the aggregate, is material to the conduct of Company's business, with the
United States Copyright Office or Patent and Trademark Office, as applicable,
including, without limitation, in all such cases the filing of applications for
renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings.
(h) The Company shall promptly advise the Secured Party of any
subsequent ownership right or interest of Company in or to any material
Copyright, Patent, Trademark or License not specified on Exhibit C hereto.
(i) The Company shall (i) protect, defend and maintain the validity and
enforceability of all material current and future Copyrights, Patents and
Trademarks (consistent with good faith business judgment), (ii) use its
commercially reasonable efforts to detect material infringements of such
Copyrights, Patents and Trademarks and promptly advise the Secured Party in
writing of material infringements detected and (iii) not allow any material
Copyrights, Patents or Trademarks to be abandoned, forfeited or dedicated to the
public without the written consent of the Secured Party in each case unless
reasonable business practice or judgment would determine that any such failure
to act or abandonment is appropriate.
SECTION 6. INTENTIONALLY OMITTED.
SECTION 7. INTENTIONALLY OMITTED.
SECTION 8. Remedies upon Event of Default. (a) If an Event of Default
shall have occurred and be continuing, the Secured Party may exercise (or cause
its sub-agents to exercise) any or all of the remedies available
11
to it (or to such sub-agents) under the Security Documents.
(b) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Secured Party may exercise
all the rights of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) with respect to any Collateral
and, in addition, the Secured Party may, without being required to give any
notice, except as herein provided or as may be required by mandatory provisions
of law, sell, lease, license or otherwise dispose of the Collateral or any part
thereof. Notice of any such sale or other disposition shall be given to the
relevant Lien Grantor(s) as required by Section 11.
(c) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing:
(i) the Secured Party may license or sublicense, whether
general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any Pledged intellectual property throughout the
world for such term or terms, on such conditions and in such manner as
the Secured Party shall in its sole discretion determine; provided
that such licenses or sublicenses do not conflict with any existing
license made available to the Secured Party;
(ii) the Secured Party may (without assuming any obligation or
liability thereunder), at any time and from time to time, in its sole
and reasonable discretion, enforce (and shall have the exclusive right
to enforce) against any licensee or sublicensee all rights and
remedies of any Lien Grantor in, to and under any of its Pledged
intellectual property and take or refrain from taking any action under
any thereof, and each Lien Grantor releases the Secured Party from
liability for, and agrees to hold the Secured Party free and harmless
from and against any claims and expenses arising out of, any lawful
action so taken or omitted to be taken with respect thereto, except
for claims and expenses arising from the Secured Party's gross
negligence or willful misconduct; and
(iii) upon request by the Secured Party (which shall not be
construed as implying any limitation on its rights or powers), each
Lien Grantor will execute and deliver to the Secured Party a power of
attorney, in form and substance satisfactory to the Secured Party, for
the implementation of any sale, lease, license or other disposition of
any of such Lien Grantor's Pledged intellectual property or any action
related thereto. In connection with any such disposition, but subject
to any confidentiality restrictions imposed on such Lien Grantor in
any license or similar agreement, such Lien Grantor will supply to the
Secured Party its know-how and expertise relating to the relevant
intellectual property or the products or services made or rendered in
connection with such intellectual property, and its customer lists and
other records relating to such intellectual property and to the
distribution of said products or services.
SECTION 9. Application of Proceeds. If an Event of Default shall have
occurred and be continuing, the Secured Party may apply the proceeds of any sale
or other disposition of all or any part of the Collateral, in the following
order of priorities:
first, to pay the expenses of such sale or other disposition,
including reasonable compensation to agents of and counsel for the
Secured Party, and all expenses, liabilities and advances incurred or
made by the Secured Party in connection with the Security Documents;
second, to pay the unpaid principal of the Secured Obligations
ratably until payment in full of the principal of all Secured
Obligations shall have been made;
third, to pay all other Secured Obligations ratably until
payment in full of all such other Secured Obligations shall have been
made; and
finally, to pay to the relevant Lien Grantor, or as a court of
competent jurisdiction may direct, any surplus then remaining from the
proceeds of the Collateral owned by it;
provided that Collateral owned by a Guarantor and any proceeds thereof shall be
applied pursuant to the foregoing clauses first, second and third only to the
extent permitted by the limitation in Section 2(h). The Secured Party may
12
make such distributions hereunder in cash or in kind or, on a ratable basis, in
any combination thereof.
SECTION 10. Fees and Expenses; Indemnification. (a) The Company will
forthwith upon demand pay to the Secured Party:
(i) the amount of any taxes that the Secured Party may have
been required to pay and did by reason of the Transaction Liens
or to free any Collateral from any other Lien thereon (other than a
Permitted Lien);
(ii) the amount of any and all reasonable out-of-pocket
expenses, including transfer taxes and reasonable fees and
expenses of counsel and other experts, that the Secured Party may
incur in connection with (x) the administration or enforcement of the
Security Documents, including such expenses as are incurred to
preserve the value of the Collateral or the validity, perfection, rank
or value of any Transaction Lien, (y) the collection, sale or other
disposition of any Collateral or (z) the exercise by the Secured Party
of any of its rights or powers under the Security Documents; and
(iii) the amount required to indemnify the Secured Party for,
or hold it harmless and defend it against, any loss, liability or
expense (including the reasonable fees and expenses of its counsel and
any experts or sub-agents appointed by it hereunder) incurred or
suffered by the Secured Party in connection with the Security
Documents, except to the extent that such loss, liability or expense
arises from the Secured Party's gross negligence or willful misconduct
or a breach of any duty that the Secured Party has under this
Agreement (after giving effect to Sections 12 and 13).
Any such amount not paid to the Secured Party in accordance with the Security
Documents will bear interest for each day thereafter until paid at a rate of 14%
per annum.
(b) If any transfer tax, documentary stamp tax or other tax is payable
in connection with any transfer or other transaction provided for in the
Security Documents, the Company will pay such tax and provide any required tax
stamps to the Secured Party or as otherwise required by law.
SECTION 11. Authority to Administer Collateral. Each Lien Grantor
irrevocably appoints the Secured Party its true and lawful attorney, with full
power of substitution, in the name of such Lien Grantor, or otherwise, for the
sole use and benefit of the Secured Party, but at the Company's expense, to the
extent permitted by law to exercise, at any time and from time to time while an
Event of Default shall have occurred and be continuing, all or any of the
following powers with respect to all or any of such Lien Grantor's Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, lease, license or otherwise dispose of the same or the
proceeds or avails thereof, as fully and effectually as if the Secured Party
were the absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to make any
allowance or other adjustment with reference thereto;
provided that, except in the case of Collateral that is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, the Secured Party will give the relevant Lien Grantor at least ten days'
prior written notice of the time and place of any public sale thereof or the
time after which any private sale or other intended disposition thereof will be
made. Any such notice shall (i) contain the information specified in UCC Section
9-613, (ii) be Authenticated and (iii) be sent to the parties required to be
notified pursuant to UCC Section 9-611(c); provided that, if the Secured Party
fails to comply with this sentence in any respect, its liability for such
failure shall be limited to the liability (if any) imposed on it as a matter of
law under the UCC.
SECTION 12. Limitation on Duty in Respect of Collateral. Beyond the
exercise of reasonable care in the
13
custody and preservation thereof, the Secured Party will have no duty as to any
Collateral in its possession or control or in the possession or control of any
sub-agent or bailee or any income therefrom or as to the preservation of rights
against prior parties or any other rights pertaining thereto. The Secured Party
will be deemed to have exercised reasonable care in the custody and preservation
of the Collateral in its possession or control if such Collateral is accorded
treatment substantially equal to that which it accords its own property, and
will not be liable or responsible for any loss or damage to any Collateral, or
for any diminution in the value thereof, by reason of any act or omission of any
sub-agent or bailee selected by the Secured Party in good faith, except to the
extent that such liability arises from the Secured Party's gross negligence or
willful misconduct.
SECTION 13. General Provisions Concerning the Secured Party. (a)
Authority. The Secured Party is authorized to take such actions and to exercise
such powers as are delegated to the Secured Party by the terms of the Security
Documents, together with such actions and powers as are reasonably incidental
thereto.
(b) Limited Duties and Responsibilities. The Secured Party shall not
have any duties or obligations under the Security Documents except those
expressly set forth therein. Without limiting the generality of the foregoing,
(a) the Secured Party shall not be subject to any fiduciary or other implied
duties, regardless of whether an Event of Default has occurred and is continuing
and (b) the Secured Party shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Security Documents that the Secured Party
is required to exercise. The Secured Party shall not be liable for any action
taken or not taken by it in the absence of its own gross negligence or willful
misconduct. The Secured Party shall not be responsible for the existence,
genuineness or value of any Collateral or for the validity, perfection, priority
or enforceability of any Transaction Lien, whether impaired by operation of law
or by reason of any action or omission to act on its part under the Security
Documents. The Secured Party shall be deemed not to have knowledge of any Event
of Default unless and until written notice thereof is given to the Secured
Party, and the Secured Party shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Security Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Security Document, (iv)
the validity, enforceability, effectiveness or genuineness of any Security
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in any Security Document.
(c) Authority to Rely on Certain Writings, Statements and Advice. The
Secured Party shall be entitled to rely on, and shall not incur any liability
for relying on, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Secured Party also may rely on any
statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon. The
Secured Party may consult with legal counsel (who may be counsel for the
Company), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountant or expert.
(d) Sub-Agents and Related Parties. The Secured Party may perform any
of its duties and exercise any of its rights and powers through one or more
sub-agents appointed by it. The exculpatory provisions of Section 12 and this
Section shall apply to any such sub-agent and to the Related Parties of the
Secured Party and any such sub-agent.
SECTION 14. Termination of Transaction Liens; Release of Collateral.
(a) The Transaction Liens granted by each Guarantor shall terminate when its
Secured Guarantee is released pursuant to Section 2(c).
(b) The Transaction Liens granted by the Company shall terminate when
all the Release Conditions are satisfied.
(c) At any time before the Transaction Liens granted by the Company
terminate, the Secured Party may, at the written request of the Company, release
any or all of the Collateral.
(d) Upon any termination of a Transaction Lien or release of
Collateral, the Secured Party will, at the expense of the relevant Lien Grantor,
execute and deliver to such Lien Grantor such documents as such Lien Grantor
14
shall reasonably request to evidence the termination of such Transaction Lien or
the release of such Collateral, as the case may be.
SECTION 15. Additional Guarantors and Lien Grantors. Any Subsidiary may
become a party hereto by signing and delivering to the Secured Party a Security
Agreement Supplement, whereupon such Subsidiary shall become a "Guarantor" and a
"Lien Grantor" as defined herein.
SECTION 16. Notices. Each notice, request or other communication given
to any party hereunder shall be in writing (which term includes facsimile or
other electronic transmission) and shall be effective (i) when delivered to such
party at its address specified below, (ii) when sent to such party by facsimile,
addressed to it at its facsimile number specified below, and such party sends
back an electronic confirmation of receipt or (iii) ten days after being sent to
such party by certified or registered United States mail, addressed to it at its
address specified below, with first class or airmail postage prepaid:
(a) in the case of any Lien Grantor listed on the signature pages
hereof:
Engage, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) in the case of any other Lien Grantor, its address or facsimile
number set forth in its first Security Agreement Supplement;
(c) in the case of the Secured Party:
CMGI, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Any party may change its address and/or facsimile number for purposes of this
Section by giving notice of such change to the Secured Party and the Lien
Grantors in the manner specified above.
SECTION 17. No Implied Waivers; Remedies Not Exclusive. No failure by
the Secured Party to exercise, and no delay in exercising and no course of
dealing with respect to, any right or remedy under any Security Document shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Secured Party of any right or remedy under any Note Document preclude any other
or further exercise thereof or the exercise of any other right or remedy. The
rights and remedies specified in the Note Documents are cumulative and are not
exclusive of any other rights or remedies provided by law.
SECTION 18. Successors and Assigns. This Agreement is for the benefit
of the Secured Party. If all or any part of the Secured Party's interest in any
Secured Obligation is assigned or otherwise transferred, the transferor's rights
hereunder, to the extent applicable to the obligation so transferred, shall be
automatically transferred with such obligation. This Agreement shall be binding
on the Lien Grantors and their respective successors and assigns.
SECTION 19. Amendments and Waivers. Neither this Agreement nor any
provision hereof may be waived, amended, modified or terminated except pursuant
to an agreement or agreements in writing entered into by the parties hereto.
SECTION 20. Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of The Commonwealth of Massachusetts,
except as otherwise required by mandatory provisions of law and except to the
extent that remedies provided by the laws of any jurisdiction other than The
Commonwealth of Massachusetts are governed by the laws of such jurisdiction.
15
SECTION 21. Waiver of Jury Trial. EACH PARTY HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO ANY SECURITY DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 22. Severability. If any provision of any Security Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of the Security Documents shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Secured Party in order to carry out the intentions of
the parties thereto as nearly as may be possible and (ii) the invalidity or
unenforceability of such provision in such jurisdiction shall not affect the
validity or enforceability thereof in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ENGAGE, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and CEO
CMGI, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
GUARANTOR:
MEDIABRIDGE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
16
SCHEDULE 1
CERTAIN EXCLUDED ASSETS
All assets pertaining to the AdManager software and the AdBureau
services, provided, however, that if the Company or a Guarantor listed on the
signature pages hereof owns such assets after December 31, 2002, such assets
shall no longer be deemed excluded assets and shall be deemed to be Collateral
on which a Transaction Lien is granted.
Certain miscellaneous computer, electronic and other office equipment
and office furniture to be identified by the Company and disclosed to the
Secured Party from time to time with an aggregate fair market value of less than
$100,000.
17
SCHEDULE 2
EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES
OWNED BY ORIGINAL LIEN GRANTORS
(AS OF THE EFFECTIVE DATE)
JURISDICTION NUMBER OF
OF OWNER OF PERCENTAGE SHARES OR
ISSUER ORGANIZATION EQUITY INTEREST OWNED UNITS
------ ------------ --------------- ----- -----
18
EXHIBIT A
TO SECURITY AGREEMENT
SECURITY AGREEMENT SUPPLEMENT
SECURITY AGREEMENT SUPPLEMENT dated as of _______, ____, between [NAME
OF LIEN GRANTOR] (the "LIEN GRANTOR") and CMGI, INC., as Secured Party.
WHEREAS, ENGAGE, INC., the Guarantors party thereto and CMGI, INC., as
Secured Party, are parties to a Guarantee and Security Agreement dated as of
September __, 2002 (as heretofore amended and/or supplemented, the "SECURITY
AGREEMENT") under which ENGAGE, INC. secures certain of its obligations (the
"SECURED OBLIGATIONS") and the Guarantors guarantee the Secured Obligations and
secure their respective guarantees thereof;
WHEREAS, [name of Lien Grantor] desires to become [is] a party to the
Security Agreement as a Guarantor and Lien Grantor thereunder;(1) and
WHEREAS, terms defined in the Security Agreement (or whose definitions
are incorporated by reference in Section 1 of the Security Agreement) and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Secured Guarantee.(2) The Lien Grantor unconditionally guarantees
the full and punctual payment of each Secured Obligation when due (whether at
stated maturity, upon acceleration or otherwise). The Lien Grantor acknowledges
that, by signing this Security Agreement Supplement and delivering it to the
Secured Party, the Lien Grantor becomes a "Guarantor" and "Lien Grantor" for all
purposes of the Security Agreement and that its obligations under the foregoing
Secured Guarantee are subject to all the provisions of the Security Agreement
(including those set forth in Section 2 thereof) applicable to the obligations
of a Guarantor thereunder.
2. Grant of Transaction Liens. (a) In order to secure [its Secured
Guarantee](3) [the Secured Obligations](4), the Lien Grantor grants to the
Secured Party for the benefit of the Secured Parties a continuing security
interest in all the following property of the Lien Grantor, whether now owned or
existing or hereafter acquired or arising and regardless of where located (the
"NEW COLLATERAL"):
[describe property being added to the Collateral](5)
(b) With respect to each right to payment or performance included in
the Collateral from time to time, the Transaction Lien granted therein includes
a continuing security interest in (i) any Supporting Obligation that supports
such payment or performance and (ii) any Lien that (x) secures such right to
payment or performance or (y) secures any such Supporting Obligation.
(c) The foregoing Transaction Liens are granted as security only and
shall not subject the Secured Party or any other Secured Party to, or transfer
or in any way affect or modify, any obligation or liability of the Lien Grantor
with respect to any of the New Collateral or any transaction in connection
therewith.
3. Party to Security Agreement. Upon delivering this Security Agreement
Supplement to the Secured Party, the Lien Grantor will become a party to the
Security Agreement and will thereafter have all the rights and
--------
(1) If the Lien Grantor is the Company, delete this recital and Section 1
hereof.
(2) Delete this Section if the Lien Grantor is the Company or a Guarantor that
is already a party to the Security Agreement.
(3) Delete bracketed words if the Lien Grantor is the Company.
(4) Delete bracketed words if the Lien Grantor is a Guarantor.
(5) If the Lien Grantor is not already a party to the Security Agreement,
clauses (i) through (xiii) of Section 3(a) of the Security Agreement may be
appropriate.
19
obligations of a Guarantor and a Lien Grantor thereunder and be bound by all the
provisions thereof as fully as if the Lien Grantor were one of the original
parties thereto.(6)
4. Address of Lien Grantor. The address and facsimile number of the
Lien Grantor for purposes of Section 16(b) of the Security Agreement are:
[address and facsimile number of Lien Grantor]
5. Representations and Warranties.(7) (a) The Lien Grantor is a
corporation duly organized, validly existing and in good standing under the laws
of [jurisdiction of organization].
(b) The Lien Grantor has delivered a Perfection Certificate to the
Secured Party. The information set forth therein is correct and complete as of
the date hereof. Within 60 days after the date hereof, the Lien Grantor will
furnish to the Secured Party a file search report from each UCC filing office
listed in such Perfection Certificate, showing the filing made at such filing
office to perfect the Transaction Liens on the New Collateral.
(c) The execution and delivery of this Security Agreement Supplement by
the Lien Grantor and the performance by it of its obligations under the Security
Agreement as supplemented hereby are within its corporate or other powers, have
been duly authorized by all necessary corporate or other action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of its organizational documents, or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
it or result in the creation or imposition of any Lien (except a Transaction
Lien) on any of its assets.
(d) The Security Agreement as supplemented hereby constitutes a valid
and binding agreement of the Lien Grantor, enforceable in accordance with its
terms, except as limited by (i) applicable bankruptcy, insolvency, fraudulent
conveyance or other similar laws affecting creditors' rights generally and (ii)
general principles of equity.
(e) Each of the representations and warranties set forth in the
Security Agreement is true as applied to the Lien Grantor and the New
Collateral. For purposes of the foregoing sentence, references in said Sections
to a "Lien Grantor" shall be deemed to refer to the Lien Grantor, references to
Schedules to the Security Agreement shall be deemed to refer to the
corresponding Schedules to this Security Agreement Supplement, references to
"Collateral" shall be deemed to refer to the New Collateral, and references to
the "Effective Date" shall be deemed to refer to the date on which the Lien
Grantor signs and delivers this Security Agreement Supplement.
6. Governing Law. This Security Agreement Supplement shall be construed
in accordance with and governed by the laws of The Commonwealth of
Massachusetts.
---------
(6) Delete Sections 4 and 5 if the Lien Grantor is already a party to the
Security Agreement.
(7) Modify as needed if the Lien Grantor is not a corporation.
20
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement Supplement to be duly executed by their respective authorized officers
as of the day and year first above written.
[___________], AS LIEN GRANTOR
By: ____________________________
Name:
Title:
CMGI, INC.
By: ____________________________
Name:
Title:
21
SCHEDULE 1
TO SECURITY AGREEMENT
SUPPLEMENT
EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES
OWNED BY LIEN GRANTOR
JURISDICTION NUMBER OF
OF PERCENTAGE SHARES OR
ISSUER ORGANIZATION OWNED UNITS
------ ------------ ----- -----
22
EXHIBIT B
TO SECURITY AGREEMENT
PERFECTION CERTIFICATE
The undersigned is a duly authorized officer of [NAME OF LIEN GRANTOR]
(the "LIEN GRANTOR"). With reference to the Guarantee and Security Agreement
dated as of September __, 2002 among ENGAGE, INC., the Guarantors party thereto
and CMGI, INC., as Secured Party (terms defined therein being used herein as
therein defined), the undersigned certifies to the Secured Party and each other
Secured Party as follows:
A. INFORMATION REQUIRED FOR FILINGS AND SEARCHES FOR PRIOR FILINGS.
1. Jurisdiction of Organization. The Lien Grantor is a corporation(8)
organized under the laws of ________________.
2. Name. The exact [corporate] name of the Lien Grantor as it appears
in its [certificate of incorporation] is as follows:
3. Prior Names. (a) Set forth below is each other [corporate] name that
the Lien Grantor has had since its organization, together with the date of the
relevant change:
(b) Except as set forth in Schedule __ hereto, the Lien Grantor has not
changed its corporate structure9 in any way within the past five years.
(c) None of the Lien Grantor's Collateral was acquired from another
Person within the past five years, except
(i) property sold, licensed or conveyed to the Lien Grantor by
another Person in the ordinary course of such other Person's business;
(ii) property with respect to which the Transaction Liens are
to be perfected by taking possession or control thereof;
(iii) property acquired in transactions described in
Schedule __ hereto; and
(iv) other property having an aggregate fair market value not
exceeding $_________.
4. Filing Office. In order to perfect the Transaction Liens granted by
the Lien Grantor, a financing statement on Form UCC-1, with the collateral
described as set forth on Schedule __ hereto, should be on file in the office of
____________ in _________(10) [and a financing statement on Form UCC-1
containing, with respect to any as-extracted collateral, the information
required by UCC Section 9-502 should be on file in the relevant filing office
listed under the heading "As-Extracted Collateral" in Schedule ___ hereto].(11)
B. ADDITIONAL INFORMATION REQUIRED FOR SEARCHES FOR PRIOR FILINGS UNDER
OLD ARTICLE 9.
1. Current Locations. (a) The chief executive office of the Lien
Grantor is located at the following address:
--------
(8) Modify as needed if the Lien Grantor is not a corporation.
(9) Changes in corporate structure would include mergers and consolidations, as
well as any change in the Lien Grantor's form of organization. If any such
change has occurred, include in Schedule __ the information required by
Part A of this certificate as to each constituent party to a merger or
consolidation and any other predecessor organization.
(10) Insert Lien Grantor's "location" determined as provided in UCC Section
9-307.
(11) Delete bracketed words unless a Lien Grantor owns or may own
"as-extracted collateral" (as defined in UCC Section 9-102) at a known
location.
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MAILING ADDRESS COUNTY STATE
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The Lien Grantor [does] [does not] have a place of business in another county of
the State listed above.
(b) The following are all places of business of the Lien Grantor not
identified above:
MAILING ADDRESS COUNTY STATE
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(c) The following are all locations not identified above where the Lien
Grantor maintains any Inventory:
MAILING ADDRESS COUNTY STATE
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(d) The following are the names and addresses of all Persons (other
than the Lien Grantor) that have possession of any of the Lien Grantor's
Inventory:
MAILING ADDRESS COUNTY STATE
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2. Prior Locations. (a) Set forth below is the information required by
paragraphs (a) and (b) of Part B-1 above with respect to each other location or
place of business maintained by the Lien Grantor at any time during the past
five years:
(b) Set forth below is the information required by paragraphs (c) and
(d) of Part B-1 above with respect to each other location or bailee where or
with whom any of the Lien Grantor's Inventory has been lodged at any time during
the past four months:
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
__________, ______
________________________________
Name:
Title:
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SCHEDULE 1
TO PERFECTION CERTIFICATE
DESCRIPTION OF COLLATERAL
All personal property.
25
SCHEDULE 2 TO
PERFECTION CERTIFICATE
SCHEDULE OF FILINGS
AGAINST _________________,
AS DEBTOR
FILING OFFICE FILE NUMBER DATE OF FILING(12)
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(12) Also indicate lapse date, if other than fifth anniversary.
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EXHIBIT C
TO SECURITY AGREEMENT
INTELLECTUAL PROPERTY
COPYRIGHTS
----------
Registration/ Registration/
Description Application Number Application Date
----------- ------------------ ----------------
PATENTS
-------
Registration/ Registration/
Description Application Number Application Date
TRADEMARKS
----------
Registration/ Registration/
Description Application Number Application Date
----------- ------------------ ----------------
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