EXHIBIT 10.25
INTELLECTUAL PROPERTY SECURITY AGREEMENT
Dated as of May 3, 1999
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (this "Agreement"), is made
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as of May 3, 1999, by and between ENGAGE TECHNOLOGIES, INC. a Delaware
corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Pledgor"), in favor of CMGI, INC., having
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an office at One Hundred ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Lender").
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RECITALS
A. The Lender has agreed to make certain advances (the "Loans") to the
Pledgor, which advances are evidenced by a Secured Convertible Demand Note dated
as of February 1, 1999 (the "Note").
B. Pledgor is the owner of the Pledged Collateral (as defined herein).
C. It is a condition precedent to the Lender's willingness to make the
Loans that Pledgor shall execute and deliver, among other agreements, this
Agreement.
D. This Agreement is given by Pledgor in favor of the Lender to secure
the payment and performance of all of the Secured Obligations (as defined in
Section 2).
E. This Agreement, the Note, the Security Agreement between the Lender
and the Pledgor of even date herewith, and all documents executed in connection
with any of the foregoing are collectively referred to herein as the "Loan
Documents."
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and the Lender hereby agree as follows:
Section 1. Pledge. Pledgor hereby pledges and grants to the Lender a
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continuing first priority security interest in all of Pledgor's right, title and
interest, whether now existing or hereafter acquired, in and to the following
property (collectively, the "Pledged Collateral") to secure all of the Secured
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Obligations:
(a) Patents issued or assigned to and all patent applications made by
Pledgor and all exclusive licenses to Pledgor from third parties or rights
to use patents owned by such third parties, including, without limitation,
the patents, patent applications and exclusive licenses listed on Schedule
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A hereto, along with any and all (1) inventions and improvements described
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and claimed therein, (2) reissues, divisions, continuations, extensions and
continuations-in-part thereof, (3) income, royalties, damages, claims and
payments now and hereafter due and/or
payable under and with respect thereto, including, without limitation,
damages and payments for past or future infringements thereof, (4) rights
to ▇▇▇ for past, present and future infringements thereof, and (5) any
other rights corresponding thereto throughout the world (collectively,
"Patents");
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(b) Trademarks (including service marks), federal and state trademark
registrations and applications made by Pledgor (excluding Federal Intent To
Use Applications), common law trademarks and trade names owned by or
assigned to Pledgor, all registrations and applications for the foregoing
and all exclusive licenses from third parties of the right to use
trademarks of such third parties, including, without limitation, the
registrations, applications, unregistered trademarks, service marks and
exclusive licenses listed on Schedule B hereto, along with any and all (1)
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renewals thereof, (2) income, royalties, damages and payments now and
hereafter due and/or payable with respect thereto, including, without
limitation, damages, claims and payments for past or future infringements
thereof, (3) rights to ▇▇▇ for past, present and future infringements
thereof, and (4) trademarks, trademark registrations, and trade name
applications for any thereof and any other rights corresponding thereto
throughout the world (collectively, "Trademarks");
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(c) Copyrights, whether statutory or common law, owned by or assigned
to Pledgor, and all exclusive licenses to Pledgor from third parties to use
copyrights owned by such third parties, including, without limitation, the
registrations, applications and exclusive licenses listed on Schedule C
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hereto, along with any and all (1) renewals and extensions thereof, (2)
income, royalties, damages, claims and payments now and hereafter due
and/or payable with respect thereto, including, without limitation, damages
and payments for past, present or future infringements thereof, (3) rights
to ▇▇▇ for past, present and future infringements thereof, and (4)
copyrights and any other rights corresponding thereto throughout the world
(collectively, "Copyrights");
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(d) The entire goodwill of Pledgor's business and other general
intangibles (including know-how, trade secrets, customer lists, proprietary
information, inventions, methods, procedures and formulae) connected with
the use of and symbolized by Trademarks of Pledgor; and
(e) All Proceeds (as defined under the Uniform Commercial Code as in
effect in any relevant jurisdiction (the "UCC") or other relevant law) of
any of the foregoing, and in any event including, without limitation, any
and all (1) proceeds of any insurance, indemnity, warranty or guaranty
payable to the Lender or to Pledgor from time to time with respect to any
of the Pledged Collateral, (2) payments (in any form whatsoever) made or
due and payable to Pledgor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Pledged Collateral by any
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governmental authority (or any person acting on behalf of a governmental
authority), (3) instruments representing amounts receivable in respect of
any Patents, Trademarks or Copyrights, (4) products of the Pledged
Collateral and (5) other amounts from time to time paid or payable under or
in connection with any of the Pledged Collateral;
Section 2. Secured Obligations. The security interest hereby granted
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shall secure the due and punctual payment and performance of the following
liabilities and obligations of the Pledgor (herein called the "Secured
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Obligations"):
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(1) Principal of and premium, if any, and interest on the Loans;
(2) Any and all obligations of the Pledgor under the Note; and
(3) Any and all other obligations of the Pledgor to the Lender,
whether direct or indirect, absolute or contingent, due or to become due or
now existing or hereafter arising, including, without limitation, any and
all other fees, premiums, penalties or other indebtedness of the Pledgor to
the Lender.
Section 3. No Release. Nothing set forth in this Agreement shall relieve
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Pledgor from the performance of any term, covenant, condition or agreement on
Pledgor's part to be performed or observed under or in respect of any of the
Pledged Collateral or from any liability to any person or entity (each a
"Person") under or in respect of any of the Pledged Collateral or impose any
obligation on the Lender to perform or observe any such term, covenant,
condition or agreement on Pledgor's part to be so performed or observed or
impose any liability on the Lender for any act or omission on the part of
Pledgor relating thereto or for any breach of any representation or warranty on
the part of Pledgor contained in this Agreement or any other Loan Document or
under or in respect of the Pledged Collateral or made in connecti6n herewith or
therewith. The obligations of Pledgor contained in this Section 3 shall survive
the termination of this Agreement and the discharge of Pledgor's other
obligations hereunder and under the other Loan Documents.
Section 4. Supplements; Further Assurances. Pledgor (1) agrees that it
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will join with the Lender in executing and, at its own expense, will file and
refile, or permit the Lender to file and refile, such financing statements,
continuation statements and other documents (including, without limitation, this
Agreement and exclusive licenses to use software and other property protected by
copyright), in such offices (including, without limitation, the United States
Patent and Trademark Office, appropriate state trademark offices and the United
States Copyright Office), as the Lender may reasonably deem necessary or
appropriate, wherever required or permitted by law in order to perfect and
preserve the rights and interests granted to the Lender hereunder, and (2)
hereby authorizes the Lender to file financing statements and amendments,
relative to all or any part thereof, without the signature of Pledgor where
permitted by law and agrees to do
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such further acts and things, and to execute and deliver to the Lender such
additional assignments, agreements, powers and instruments, as the Lender may
reasonably require to carry into effect the purposes of this Agreement or better
to assure and confirm unto the Lender its respective rights, powers and remedies
hereunder. Pledgor shall, upon the reasonable request of the Lender, and hereby
authorizes the Lender take any and all such actions as may be deemed advisable
by the Lender to perfect and preserve the rights and interests granted to the
Lender with respect to the Pledged Collateral wherever located. All of the
foregoing shall be at the sole cost and expense of Pledgor.
Section 5. Representations and Warranties of Pledgor. Pledgor hereby
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represents and warrants to the Secured Parties as follows:
(a) Pledgor is, and, as to Pledged Collateral acquired by it from time
to time after the date hereof, Pledgor will be, the sole and exclusive
owner or, as applicable, licensee of all Pledged Collateral. The pledge
and security interest created by this Agreement shall not at any time be
subject to any prior lien, pledge, security interest, encumbrance, license,
assignment, collateral assignment or charge of any kind, including, without
limitation, any filing or agreement to file a financing statement as debtor
under the UCC or any similar statute or any subordination arrangement in
favor of any party other than Pledgor (collectively, "Liens"). Pledgor
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further represents and warrants to the Lender that Schedules A, B and C
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hereto, respectively, are true, correct and complete lists as of the date
hereof of all Patents, Trademarks and Copyrights owned by Pledgor and that
Schedules D, E and F hereto are true and correct with respect to the
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matters set forth therein as of the date hereof.
(b) Pledgor has full corporate power, authority and legal right to
pledge and grant a security interest in the Pledged Collateral in
accordance with the terms of this Agreement and this Agreement has been
duly and validly executed and delivered by Pledgor, constitutes the legal,
valid and binding obligation of Pledgor, enforceable against Pledgor in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(c) Except as set forth on Schedule E hereto and except for filings
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with the Patent and Trademark Office, under the UCC and under applicable
foreign law, no authorization, consent, approval, license, qualification or
formal exemption from, nor any filing, declaration or registration with,
any court (other than in connection with the exercise of judicial
remedies), governmental agency or regulatory authority, or with any
securities exchange or any other Person is required in connection with (1)
the pledge by Pledgor of the Pledged Collateral pursuant to this Agreement,
or the execution, delivery or performance by Pledgor of this Agreement, (2)
the grant of a security interest (including the priority
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thereof when the appropriate filings have been made and accepted) in, the
Pledged Collateral by Pledgor in the manner and for the purpose
contemplated by this Agreement or (3) the exercise of the rights and
remedies of the Lender created hereby.
(d) Pledgor has made and will continue to make all necessary filings
and recordations from time to time and use appropriate statutory notice to
protect its interests in the Pledged Collateral, including without
limitation, appropriate recordations of its interests in the Patents and
Trademarks in the United States Patent and Trademark Office and in
corresponding offices wherever it does business using such Patents and
Trademarks throughout the world and its claims to Copyrights in the United
States Copyright Office, in each case including exclusive licenses and as
otherwise requested from time to time by the Lender, but in any event all
in a manner consistent with prudent and commercially reasonable business
practices.
(e) Pledgor owns or has rights to use all the Pledged Collateral and
all rights with respect to any of the foregoing used in, necessary for or
material to Pledgor's business as currently conducted and as contemplated
to be conducted pursuant to the Loan Documents. To Pledgor's best
knowledge, the use of such Pledged Collateral and all rights with respect
to the foregoing by Pledgor does not infringe on the rights of any Person
and, except as set forth on Schedule F attached hereto, no material claim
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has been made and remains outstanding that Pledgor's use of the Pledged
Collateral does or may violate the rights of any third person.
(f) Upon filings and the acceptance thereof in the appropriate offices
under the UCC and in the United States Patent and Trademark Office and the
United States Copyright Office, this Agreement will create a valid and duly
perfected first priority lien and security interest in the United States in
the Pledged Collateral, subject to no Liens.
Section 6. Covenants.
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(a) On a continuing basis, Pledgor will, at the expense of Pledgor,
subject to any prior licenses, Liens and restrictions, make, execute,
acknowledge and deliver, and file and record in the proper filing and
recording offices, all such instruments or documents, including, without
limitation, appropriate financing and continuation statements, exclusive
licenses and collateral agreements, and take all such action (limited, as
aforesaid, if applicable) as may reasonably be deemed necessary or
appropriate by the Lender (i) to carry out the intent and purposes of this
Agreement, (ii) to assure and confirm to the Lender the grant or perfection
of a security interest in the Pledged Collateral for the benefit of the
Secured Parties, and (iii) during the continuation of an Event of Default,
to enable
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the Secured Parties to exercise and enforce their rights and remedies
hereunder with respect to any Pledged Collateral. Without limiting the
generality of the foregoing, Pledgor:
(A) will not enter into any agreement that would impair or conflict
with Pledgor's obligations hereunder;
(B) will, from time to time, upon the Lender's request, cause its
books and records to be marked with such legends or segregated in such
manner as the Lender may specify and take or cause to be taken such other
action and adopt such procedures as the Lender may specify to give notice
or to perfect the security interest in the Pledged Collateral intended to
be conveyed hereby;
(C) will, promptly following its becoming aware thereof, notify the
Lender of
(i) any materially adverse determination in any proceeding in
the United States Patent and Trademark Office or United States
Copyright Office with respect to any Patent, Trademark or Copyright
material to Pledgor's business; or
(ii) any written claim received, the institution of any
proceeding or any materially adverse determination in any federal,
state, local or foreign court or administrative bodies regarding
Pledgor's claim of ownership in or right to use any of the Pledged
Collateral, its right to register the Pledged Collateral, or its right
to keep and maintain such registration in full force and effect;
(D) will properly maintain and protect the Pledged Collateral to the
extent necessary or appropriate for the conduct of Pledgor's business (as
presently conducted and as contemplated by the Loan Documents) and
consistent with Pledgor's current practice in accordance with applicable
statutory requirements;
(E) will not grant or permit to exist any Lien upon or with respect to
the Pledged Collateral or any portion thereof except Liens in favor of the
Lender for itself and the Secured Parties or as permitted under this
Agreement and Liens permitted by Section 7 hereof, and will not execute any
security agreement or financing statement covering any of the Pledged
Collateral except in the name of the Lender for itself and the Secured
Parties or as permitted under this Agreement;
(F) except in accordance with prudent and commercially reasonable
business practices, will not permit to lapse or become abandoned, settle or
compromise any pending or future litigation or administrative proceeding
with
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respect to the Pledged Collateral without the consent of the Secured
Parties, or contract for sale or otherwise dispose of the Pledged
Collateral or any portion thereof except pursuant to Section 7 hereof;
(G) upon Pledgor obtaining knowledge thereof, will promptly notify the
Lender in writing of any event which may reasonably be expected to
materially adversely affect the value or utility of the Pledged Collateral
or any portion thereof, the ability of Pledgor or the Lender to dispose of
the Pledged Collateral or any portion thereof or the rights and remedies of
the Lender in relation thereto including, without limitation, a levy or
threat of levy or any legal process against the Pledged Collateral or any
portion thereof;
(H) until the Lender exercises its rights to make collection, will
diligently keep adequate records respecting the Pledged Collateral;
(I) subject to the first sentence of this Section 6(a), hereby
authorizes the Lender, in its sole discretion, to file one or more
financing or continuation statements and amendments thereto, relative to
all or any part of the Pledged Collateral without the signature of Pledgor
where permitted by law;
(J) will furnish to the Lender from time to time statements and
amended schedules further identifying and describing the Pledged Collateral
and such other materials evidencing or reports pertaining to the Pledged
Collateral as the Lender may from time to time reasonably request, all in
reasonable detail;
(K) will pay when due any and all taxes, levies, maintenance fees,
charges, assessments, licenses fees and similar taxes or impositions
payable in respect of the Pledged Collateral, that, if not paid, could
result in a material adverse effect, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) Pledgor
has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a material adverse
effect;
(L) will comply in all material respects with all laws, rules and
regulations applicable to the Pledged Collateral; and
(M) will deposit with the Lender, at such times as the Lender shall
reasonably request, copies of all source code of all software owned by
Pledgor as the Lender shall request which is material to the operation of
Pledgor's business and such source code copy shall be of the most current
version of all software and shall include all modifications and
enhancements thereto and shall be
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annotated so as to be easily understood by a software technician of
reasonable proficiency.
(b) If, before the Secured Obligations shall have been paid and
satisfied in full in cash or cash equivalents, Pledgor shall, (1) obtain
any rights to any additional Pledged Collateral or (2) become entitled to
the benefit of any additional Pledged Collateral or any renewal or
extension thereof, including any reissue, division, continuation, or
continuation-in-part of any Patent, or any improvement on any Patent, the
provisions of this Agreement shall automatically apply thereto and any item
enumerated in clause 6(b)(1) or clause 6(b)(2) with respect to Pledgor
shall automatically constitute Pledged Collateral if such would have
constituted Pledged Collateral at the time of execution of this Agreement,
and be subject to the assignment, Lien and security interest created by
this Agreement without further action by any party. Pledgor shall promptly
provide to the Lender written notice of any of the foregoing. Pledgor
shall, at least once in each calendar quarter, provide written notice to
the Lender of all applications for Patents and all applications for
registration of Trademarks or Copyrights made during the preceding calendar
quarter. Pledgor agrees, promptly following the written request by the
Lender, to confirm the attachment of the lien and security interest created
by this Agreement to any rights described in clause 6(b)(1) or clause
6(b)(2) above if such would have constituted Pledged Collateral at the time
of execution of this Agreement by execution of an instrument in form
acceptable to the Lender.
(c) Pledgor authorizes the Lender to modify this Agreement by amending
Schedules A, B and/or C annexed hereto to include any future Pledged
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Collateral of Pledgor, including, without limitations any of the items
listed in Section 6(b).
(d) Pledgor shall file and prosecute diligently all applications for
Patents, Trademarks or Copyrights now or hereafter pending that would be
useful or beneficial to the businesses of Pledgor to which any such
applications pertain, and to do all acts necessary to preserve and maintain
all rights in the Pledged Collateral unless such Pledged Collateral has
become obsolete to Pledgor's business, as reasonably determined by Pledgor
consistent with prudent and commercially reasonable business practices.
Any and all costs and expenses incurred in connection with any such actions
shall be borne by Pledgor. Except in accordance with prudent and
commercially reasonable business practices, Pledgor shall not abandon any
right to file a Patent, Trademark or Copyright application or any pending
Patent, Trademark or Copyright application or any Patent, Trademark or
Copyright without the consent of the Lender.
Section 7. Transfers and Other Liens. Pledgor will not (a) sell, convey,
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assign or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral
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except for licensing in the ordinary course of business or (b) create or permit
to exist any Lien upon or with respect to any of the Pledged Collateral, except
for Liens for taxes, assessments or government charges or claims the payment of
which is not at the time required and inchoate Liens imposed by law (each of
which shall, except to the extent otherwise required by law, be subordinate to
the lien created by this Agreement) and the lien granted to the Lender under
this Agreement.
Section 8. Remedies upon Default.
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(a) If any Event of Default shall have occurred and be continuing, the
Lender may to the full extent permitted by law, (1) exercise any and all
rights as beneficial and legal owner of the Pledged Collateral, including,
without limitation, perfecting assignment of any and all contractual rights
and powers with respect to the Pledged Collateral and (2) sell or assign or
grant a license to use, or cause to be sold or assigned or a license
granted to use any or all of the Pledged Collateral (in the case of
Trademarks, along with the goodwill associated therewith) or any part
thereof, in each case, free of all rights and claims of Pledgor therein and
thereto. In accordance with such rights, the Lender shall have (A) the
right to cause any or all of the Pledged Collateral to be transferred of
record into the name of the Lender or its nominee and (B) the right to
impose (i) such limitations and restrictions on the sale or assignment of
the Pledged Collateral as the Secured Parties may deem to be necessary or
appropriate to comply with any law, rule or regulation (federal, state or
local) having applicability to the sale or assignment, and (ii) any
necessary or appropriate requirements for any required governmental
approvals or consents.
(b) Except as provided in this Section 8 and other express notice
provisions of the Loan Documents, Pledgor hereby expressly waives, to the
fullest extent permitted by applicable law, any and all notices,
advertisements, hearings or process of law in connection with the exercise
by the Secured Parties of any of their rights and remedies hereunder.
(c) Pledgor agrees that, to the extent notice of sale shall be
required by law, ten (10) days' notice from the Lender of the time and
place of any public sale or of the time after which a private sale or other
intended disposition is to take place shall be commercially reasonable
notification of such matters. In addition to the rights and remedies
provided in this Agreement and in the other Loan Documents, the Secured
Parties shall have all the rights and remedies of a secured party under the
UCC.
(d) Except as otherwise provided herein, Pledgor hereby waives, to the
fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Lender's taking possession or the Lender's disposition
of any of the Pledged Collateral, including, without limitation, any and
all prior notice and
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rights to a hearing for any prejudgment remedy or remedies and any such
right which Pledgor would otherwise have under law, and Pledgor hereby
further waives to the extent permitted by applicable law: (1) all damages
occasioned by any such taking of possession; (2) all other requirements as
to the time, place and terms of sale or other requirements with respect to
the enforcement of the Secured Parties' rights hereunder; and (3) all
rights of redemption, appraisal, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law. Any sale of, or the
grant of options to purchase, or any other realization upon, any Pledged
Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of Pledgor therein and thereto, and
shall be a perpetual bar both at law and in equity against Pledgor and
against any and all Persons claiming or attempting to claim the Pledged
Collateral so sold, optioned or realized upon, or any part thereof, from,
through or under Pledgor.
Section 9. Application of Proceeds. The proceeds of any Pledged
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Collateral obtained pursuant to the exercise of any remedy set forth in Section
8 shall be applied, together with any other sums then held by the Lender
pursuant to this Agreement, promptly by the Lender:
First, to the payment of all costs and expenses, fees, commissions and
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taxes of such sale, collection or other realization, including, without
limitation, reasonable reimbursement to the Lender, and its agents and
counsel for all expenses, fees, liabilities and advances made or incurred
by them in connection therewith and all expenses, liabilities and advances
made or incurred by the Lender in connection therewith, together with
interest on each such amount at the rate then in effect under the Note;
Second, to the payment of all other costs and expenses of such sale,
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collection or other realization, including, without limitation, reasonable
reimbursement to the Lender and its agents and counsel for all expenses,
fees, liabilities and advances made or incurred by them in connection
therewith and all costs, liabilities and indebtedness made or incurred by
the Lender in connection therewith together with interest on each such
amount at the highest rate then in effect under the Note;
Third, to the indefeasible payment in full in cash of the Secured
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Obligations, ratably according to the unpaid amounts thereof, without
preference or priority of any kind among amounts so due and payable; and
Fourth, to Pledgor, or its successors or assigns, or to whomsoever may
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be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such Proceeds.
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Section 10. Expenses. Pledgor will pay on demand all expenses of the
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Lender and the Secured Parties in connection with the preparation, waiver or
amendment of this Agreement or other Loan Documents executed in connection
therewith, or the administration, default or collection of the Loans or
administration, default, collection in connection with the Lender's exercise,
preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, reasonable fees and disbursements of
outside legal counsel or accounting, consulting, brokerage or other similar
professional fees or expenses, and any fees or expenses associated with any
travel or other costs relating to any appraisals or examinations conducted in
connection with the Secure Obligations or any Collateral therefor, and the
amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
Section 11. No Waiver; Cumulative Remedies.
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(a) No failure on the part of the Lender or the Secured Parties to
exercise, no course of dealing with respect to, and no delay on the part of
the Lender in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
(b) In the event the Lender shall have instituted any proceeding to
enforce any right, power or remedy under this instrument by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued
or abandoned for any reason or shall have been determined adversely to the
Lender, then and in every such case, Pledgor and the Lender shall, to the
extent permitted by applicable law, be restored to their respective former
positions and rights hereunder with respect to the Pledged Collateral, and
all rights, remedies and powers of the Lender shall continue as if no such
proceeding had been instituted.
Section 12. The Lender May Perform, the Lender Appointed Attorney-in-Fact.
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If Pledgor shall fail to do any act or thing that it has covenanted to do
hereunder or any warranty on the part of Pledgor contained herein shall be
breached, the Lender may (but shall not be obligated to) do the same or cause it
to be done or remedy any such breach, and may expend funds for such purpose.
Any and all amounts so expended by the Lender shall be paid by Pledgor promptly
upon demand therefor, with interest at the highest rate then in effect under the
Note during the period from and including the date on which such funds were so
expended to the date of repayment. Pledgor's obligations under this Section 12
shall survive the termination of this Agreement and the discharge of Pledgor's
other obligations hereunder. Pledgor hereby appoints the Lender its attorney-
in-fact with an interest, with full authority in the place and stead of Pledgor
and in the name of Pledgor, or otherwise, from time to time in the Lender's
reasonable
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discretion to take any action and to execute any instruments consistent with the
terms of this Agreement and the other Loan Documents which the Lender may deem
necessary or advisable to accomplish the purposes of this Agreement. The
foregoing grant of authority is a power of attorney coupled with an interest and
such appointment shall be irrevocable for the term of this Agreement. Pledgor
hereby ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof.
Section 13. Indemnity.
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(a) Indemnity. Pledgor agrees to indemnify, reimburse and hold the
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Lender and its successors, assigns, employees, agents and servants
(collectively, "Indemnitees") harmless from and against any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs and expenses (including,
without limitation, attorneys' fees and expenses and the allocated costs of
internal counsel) of whatsoever kind and nature imposed on, asserted
against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement or the other Loan Documents or in any other
way connected with the administration of the transactions contemplated
hereby or the enforcement of any of the terms hereof, or the preservation
of any rights hereunder, or in any way relating to or arising out of the
manufacture, processing, ownership, ordering, purchase, delivery, control,
acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Pledged Collateral (including,
without limitation, latent or other defects, whether or not discoverable,
any claim for patent, trademark, trade secret or copyright infringement),
the violation of the laws of any country, state or other governmental body
or unit, any tort (including, without limitation, claims arising or imposed
under the doctrine of strict liability, or for or on account of injury to
or the death of any Person (including any Indemnitee)), or property damage,
or contract claim; provided that Pledgor shall have no obligation to an
Indemnitee hereunder to the extent it is finally judicially determined that
such indemnified liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee. Upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage,
injury, penalty, claim, demand, action, judgment or suit, Pledgor shall
assume full responsibility for the defense thereof. If any action, suit or
proceeding arising from any of the foregoing is brought against any
Indemnitee, Pledgor shall, if requested by such Indemnitee, resist and
defend such action, suit or proceeding or cause the same to be resisted and
defended by counsel reasonably satisfactory to such Indemnitee. Each
Indemnitee shall, unless any other Indemnitee has made the request
described in the preceding sentence and such request has been complied
with, have the right to employ its own counsel (or internal counsel) to
investigate and control the defense of any matter covered by the indemnity
set forth in this Section 13 and the fees and expenses of such counsel
shall be paid by Pledgor; provided that, only to the extent that no
conflict exists between or among the
12
Indemnitees as reasonably determined by the Indemnitees, Pledgor shall not
be obligated to pay the fees and expenses of more than one counsel for all
Indemnitees as a group with respect to any such matter, action, suit or
proceeding.
(b) Misrepresentations. Without limiting the application of
------------------
subsection 13(a), Pledgor agrees to pay, indemnify and hold each Indemnitee
harmless from and against any loss, costs, damages and expenses which such
Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by Pledgor in this Agreement or any of the other Loan
Documents or in any statement or writing contemplated by or made dr
delivered pursuant to or in connection with this Agreement or any of the
other Loan Documents.
(c) Contributions. If and to the extent that the obligations of
-------------
Pledgor under this Section 13 are unenforceable for any reason, Pledgor
hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations that is permissible under applicable law.
(d) Survival. The obligations of Pledgor contained in this Section 13
--------
shall survive the termination of this Agreement and the discharge of
Pledgor's other obligations hereunder and under the other Loan Documents.
(e) Reimbursement. Any amounts paid by any Indemnitee as to which
-------------
such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Pledged Collateral.
Section 14. Litigation.
----------
(a) Pledgor shall have the right to commence and prosecute in its own
name, as real party in interest, for its own benefit and at its own
expense, such applications for protection of Pledged Collateral, suits,
proceedings or other actions for infringement, counterfeiting, unfair
competition, dilution or other damage as are in its reasonable business
judgment necessary to protect the Pledged Collateral. Pledgor shall
promptly notify the Lender in writing as to the commencement and
prosecution of any such actions, or threat thereof relating to the Pledged
Collateral and shall provide to the Lender such information with respect
thereto as may be reasonably requested. The Lender shall provide all
reasonable and necessary cooperation in connection with any such suit,
proceeding or action, including, without limitation, joining as a necessary
party.
(b) Upon the occurrence and during the continuation of an Event of
Default, the Lender shall have the right but shall in no way be obligated
to file applications for protection of the Pledged Collateral and/or bring
suit in the name
13
of Pledgor, the Lender or the Lender to enforce the Pledged Collateral and
any license thereunder; in the event of such suit, Pledgor shall, at the
request of the Lender, do any and all lawful acts and execute any and all
documents required by the Lender in aid of such enforcement and Pledgor
shall promptly, upon demand, reimburse and indemnify the Lender, as the
case may be, for all costs and expenses incurred by the Lender in the
exercise of its rights under this Section 14. In the event that the Lender
shall elect not to bring suit to enforce the Pledged Collateral, Pledgor
agrees to use all measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement, counterfeiting or other diminution
in value of any of the Pledged Collateral by others and for that purpose
agrees to diligently maintain any action, suit or proceeding against any
person so infringing necessary to prevent such infringement as is in the
reasonable business judgment of Pledgor necessary to protect the Pledged
Collateral and the Lender shall provide, at Pledgor's expense, all
necessary and reasonable assistance to Pledgor to maintain such action.
Section 15. Modifications in Writing. No amendment, modification,
------------------------
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by Pledgor therefrom, shall be effective unless the
same shall be in writing and signed by the Lender and, except in the case of any
such termination, waiver or consent, by the Pledgor. Any amendment,
modification or supplement of or to any provision of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure by Pledgor
from the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which made or given.
Except where notice is specifically required by this Agreement or any other Loan
Document, no notice to or demand on Pledgor in any case shall entitle Pledgor to
any other or further notice or demand in similar or other circumstances.
Section 16. Termination; Release. When all the Secured Obligations (other
--------------------
than Secured Obligations in the nature of continuing indemnitees or expense
reimbursement obligations not yet due and payable) have been paid in full and
have been terminated and the Lender and the Pledgor agree to terminate this
Agreement, this Agreement shall terminate. Upon termination of this Agreement
the Lender shall, upon the request and at the expense of Pledgor, forthwith
assign, transfer and deliver to Pledgor against receipt and without recourse to
or warranty by the Lender, such of the Pledged Collateral to be released (in the
case of a release) as may be in the possession of the Lender and as shall not
have been sold or otherwise applied pursuant to the terms hereof, on the order
of and at the expense of Pledgor, and proper instruments (including UCC
termination statements on Form UCC-3 and documents suitable for recordation in
the United States Patent and Trademark Office, the United States Copyright
Office or similar domestic or foreign authority) acknowledging the termination
of this Agreement or the release of such Pledged Collateral, as the case may be.
14
Section 17. Reinstatement. Notwithstanding the provisions of Section 16,
-------------
this Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any amount received by the Lender in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by the Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
Pledgor or upon the appointment of any intervenor or conservator of, or trustee
or similar official for, Pledgor or any substantial part of its properties, or
otherwise, all as though such payments had not been made.
Section 18. Note. Notwithstanding any other provision of this Agreement,
----
the rights of the parties hereunder are subject to the provisions of the Note,
including the provisions thereof pertaining to the rights and responsibilities
of the Lender.
Section 19. Notices. All notices, consents, approvals, elections and
-------
other communications hereunder shall be in writing (whether or not the other
provisions of this Agreement expressly so provide) and shall be deemed to have
been duly given if delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telephonic facsimile (fax), as follows:
(i) if to the Lender, to CMGI, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Chief Financial Officer, and (ii) if to the
Debtor, to Engage Technologies, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: President.
Section 20. Continuing Security Interest; Assignment. This Agreement
----------------------------------------
shall create a continuing security interest in the Pledged Collateral and shall
(a) remain in full force and effect until the payment in full in cash of all
Secured Obligations, (b) be binding upon Pledgor, its successors and assigns,
and (c) inure, together with the rights and remedies of the Secured Parties
hereunder, to the benefit of the Lender and its successors, transferees and
assigns; no other Persons (including, without limitation, any other creditor of
Pledgor) shall have any interest herein or any right or benefit with respect
hereto. Without limiting the generality of the foregoing clause 20(c), any the
Lender may assign or otherwise transfer any indebtedness held by it secured by
this Agreement to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to the Lender, herein or
otherwise, subject however, to the provisions of the Note.
Section 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY,
--------------------
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR
INTELLECTUAL PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
COMMONWEALTH OF MASSACHUSETTS.
15
Section 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
----------------------------------------------
PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
COMMONWEALTH OF MASSACHUSETTS AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY,
AND PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. IN THE EVENT THAT
PLEDGOR DESIGNATES AND APPOINTS ANY PERSON AS ITS AGENT AND SUCH PERSON
IRREVOCABLY AGREES IN WRITING TO SO SERVE AS PLEDGOR'S AGENT TO RECEIVE ON
PLEDGOR'S BEHALF, SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH
COURT, SUCH SERVICE IS HEREBY ACKNOWLEDGED BY PLEDGOR TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE
MAILED BY REGISTERED MAIL TO PLEDGOR AT ITS ADDRESS PROVIDED FOR IN SECTION 19
HEREOF. IF ANY AGENT APPOINTED BY PLEDGOR REFUSES TO ACCEPT SERVICE, PLEDGOR
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS
AGAINST PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION.
Section 23. Severability of Provisions. Any provision of this Agreement
--------------------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining pm visions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 24. Execution in Counterparts. This Agreement and any amendments,
-------------------------
waivers, consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same agreement.
Section 25. Headings. The Section headings used in this Agreement are for
--------
convenience of reference only and shall not affect the construction of this
Agreement.
16
Section 26. Obligations Absolute. To the extent permitted by applicable
--------------------
law, all obligations of Pledgor hereunder shall be absolute and unconditional
irrespective of:
(a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition liquidation or the like of Pledgor or any other
Subsidiary of Pledgor;
(b) any lack of validity or enforceability of the Note, any other Loan
Document, or any other agreement or instrument relating thereto;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Note, any
other Loan Document, or any other agreement or instrument relating thereto;
(d) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Secured Obligations; or
(e) any exercise or non-exercise, or any waiver of any right, remedy,
power or privilege under or in respect of this Agreement or any other Loan
Document except as specifically set forth in a waiver granted pursuant to
the provisions of Section 15 hereof.
Section 27. Waiver of Single Action. Pledgor hereby waives to the
-----------------------
greatest extent permitted under law the right to a discharge of any of the
Secured Obligations under any statute or rule of law now or hereafter in effect
which provides that the exercise of any particular right or remedy as provided
for herein (by judicial proceedings or otherwise) constitutes the exclusive
means for satisfaction of the Secured Obligations or which makes unavailable any
further judgment or any other right or remedy provided for herein because the
Lender elected to proceed with the exercise of such initial right or remedy or
because of any failure by the Lender to comply with laws that prescribe
conditions to the entitlement to such subsequent judgment or the availability of
such subsequent right or remedy. In the event that, notwithstanding the
foregoing waiver, any court shall for any reason hold that such subsequent
judgment or action is not available to the Lender, Pledgor shall not (a)
introduce in any other jurisdiction any judgment so holding as a defense to
enforcement against Pledgor of any remedy in the Note or executed in connection
with the Note or (b) seek to have such judgment recognized or entered in any
other jurisdiction, and any such judgment shall in all events be limited in
application only to the state or jurisdiction where rendered and only with
respect to the collateral referred to in such judgment.
Section 28. Future Advances. This Agreement shall secure the payment of
---------------
any amounts advanced from time to time pursuant to the Note.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ENGAGE TECHNOLOGIES, INC.
By: /s/ [signature illegible]
-----------------------------------
CMGI, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Chief Financial Officer
18
SCHEDULE A
PATENTS
(including exclusive licenses)
[To be furnished by Pledgor]
19
SCHEDULE B
TRADEMARKS & SERVICE MARKS
(including registrations and applications and exclusive licenses)
[To be furnished by Pledgor]
20
SCHEDULE C
COPYRIGHTS
(including registrations and applications and exclusive licenses)
[To be furnished by Pledgor]
21
SCHEDULE D
LIENS
[To be furnished by Pledgor]
22
SCHEDULE E
REQUIRED CONSENTS AND LICENSES
[To be furnished by Pledgor]
23
SCHEDULE F
CLAIMS, LITIGATION, ETC.
[To be furnished by Pledgor]
24