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Exhibit 10.4
EXHIBIT I TO THE
CREDIT AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT
Dated as of February 4, 1998
From
THE PERSONS LISTED ON THE SIGNATURE PAGES HEREOF,
as Grantors
to
NATIONSCREDIT COMMERCIAL CORPORATION,
as Collateral Agent
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TABLE OF CONTENTS
Section Page
------- ----
1. Grant of Security..................................................... 1
2. Security for Obligations............................................. 3
3. Grantors Remain Liable................................................ 3
4. Representations and Warranties........................................ 4
5. Further Assurances.....................................................6
6. Transfers and Other Liens..............................................8
7. Collateral Agent Appointed Attorney-in-Fact............................8
8. Collateral Agent May Perform...........................................9
9. The Collateral Agent's Duties......................................... 9
10. Remedies.............................................................. 9
11. Indemnity and Expenses............................................... 11
12. Amendments; Waivers; Etc............................................. 11
13. Addresses for Notices................................................ 12
14. Continuing Security Interest; Assignments............................ 12
15. Release and Termination.............................................. 13
16. Security Interest Absolute............................................13
17. Execution in Counterparts.............................................14
18. Governing Law........................................................ 14
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SCHEDULES
Schedule I - Patents and Patent Applications
Schedule II - Trademark Registrations and Applications
Schedule III - Copyright Registrations and Applications
Schedule IV - Licenses
Schedule V - Third Party Claims/Pending Litigation/Unauthorized Uses
EXHIBITS
Exhibit A - Form of Intellectual Property Security Agreement Supplement
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INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT dated as of February 4,
1998, made by the Persons listed on the signature pages hereof and the
Additional Grantors (as defined in Section 12(b)) (such Persons so listed and
the Additional Grantors being, collectively, the "Grantors") to NationsCredit
Commercial Corporation ("NationsCredit"), as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined in the Credit Agreement referred to
below).
PRELIMINARY STATEMENTS.
(1) APC Holding, Inc., a Delaware corporation (the "Borrower"), has
entered into a Credit Agreement dated as of February 4, 1998 (said Agreement,
as it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "Credit Agreement") with certain Lender Parties party thereto,
the Collateral Agent and NationsBridge, L.L.C. ("NationsBridge"), as
administrative agent. Capitalized terms used herein and not otherwise defined
are used herein as defined in the Credit Agreement.
(2) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry by the Hedge Banks into the Bank Hedge Agreements, if any, with
the Borrower from time to time that each Grantor shall have assigned and granted
the security interest contemplated by this Agreement.
(3) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Credit Agreement.
(4) Unless otherwise defined in this Agreement or in the Credit
Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. Uniform Commercial Code") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters of Credit under
the Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements, if any, with the Borrower from time to time, each Grantor hereby
agrees with the Collateral Agent for the ratable benefit of the Secured Parties
as follows:
SECTION 1. Grant of Security. Each Grantor hereby assigns and grants
to the Collateral Agent for the ratable benefit of the Secured Parties a
security interest in all of such Grantor's right, title and interest in and to
the following, whether now owned or hereafter acquired by such Grantor and
whether now or hereafter existing (collectively, the "Intellectual Property
Collateral"):
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(a) all patents, patent applications and patentable inventions,
including, without limitation, each patent and patent application
identified in Schedule I attached hereto and made a part hereof, and
including without limitation (i) all inventions and improvements described
and claimed therein, (ii) the right to ▇▇▇ or otherwise recover for any
and all past, present and future infringements and misappropriations
thereof, (iii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past and future infringements
thereof), and (iv) all rights corresponding thereto throughout the world
and all reissues, divisions, continuations, continuations-in-part,
provisionals, substitutes, renewals, and extensions thereof, all
improvements thereon and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto (the "Patents");
(b) all trademarks, service marks, trade names, trade dress or other
indicia of trade origin, trademark and service ▇▇▇▇ registrations, and
applications for trademark or service ▇▇▇▇ registrations and any renewals
thereof, including, without limitation, each registration and application
identified in Schedule II attached hereto and made a part hereof, and
including without limitation (i) the right to ▇▇▇ or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (ii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past or future infringements
thereof), and (iii) all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto, together in each case with the goodwill
of the business connected with the use of, and symbolized by, each such
trademark, service ▇▇▇▇, trade name, trade dress or other indicia of trade
origin (the "Trademarks");
(c) all copyrights, whether statutory or common law, and whether or
not the underlying works of authorship have been published, and all works
of authorship and other intellectual property rights therein, all
copyrights of works based on, incorporated in, derived from or relating to
works covered by such copyrights, all right, title and interest to make
and exploit all derivative works based on or adopted from works covered by
such copyrights, and all copyright registrations and copyright
applications, and any renewals or extensions thereof, including, without
limitation, each copyright registration and copyright application, if any,
identified in Schedule III attached hereto and made a part hereof, and
including, without limitation, (i) the right to print, publish and
distribute any of the foregoing, (ii) the right to ▇▇▇ or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past or future
infringements thereof), and (iv) all rights corresponding thereto
throughout the
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world and all other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto (the "Copyrights");
(d) all license agreements with any other person in connection with
any of the Patents, Trademarks or Copyrights, or such other person's
patents, trade names, trademarks, service marks or copyrights, whether
such Grantor is a licensor or licensee under any such license agreement,
including, without limitation, the license agreements listed on Schedule
IV attached hereto and made a part hereof, subject, in each case, to the
terms of such license agreements, including, without limitation, terms
requiring consent to a grant of a security interest, and any right to
prepare for sale, sell and advertise for sale, all Inventory (as defined
in the Security Agreement) now or hereafter owned by such Grantor and now
or hereafter covered by such licenses (the "Licenses"); and
(e) all proceeds of any and all of the foregoing Intellectual
Property Collateral (including, without limitation, proceeds that
constitute property of the types described in clauses (a) - (d) of this
Section 1) and, to the extent not otherwise included, all (i) payments
under insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Intellectual Property Collateral, and (ii) cash.
SECTION 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all of the Obligations of such Grantor now
or hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, including any extensions, modifications, substitutions,
amendments or renewals thereof, whether for principal (including reimbursement
for amounts drawn under Letters of Credit), interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations secured hereby being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures, as to each
Grantor, the payment of all amounts that constitute part of the Secured
Obligations of such Grantor and that would be owed by any Loan Party to the
Secured Parties under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Loan Party.
SECTION 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in the Intellectual Property Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Intellectual Property Collateral, and (c) no Secured Party shall
have any obligation or liability under the contracts and agreements included in
the Intellectual Property Collateral by reason of this Agreement or any other
Loan Document, nor shall any Secured
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Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Representations and Warranties. Each Grantor represents
and warrants as to itself and its Intellectual Property Collateral as follows:
(a) Such Grantor is the legal and beneficial owner of the entire
right, title and interest in and to the Intellectual Property Collateral
of such Grantor free and clear of any Lien, claim, option or right of
others, except for the liens and security interests created by this
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Intellectual Property Collateral
or listing such Grantor or any of its Subsidiaries or any trade name of
such Grantor or any of its Subsidiaries as debtor is on file in any
recording office (including, without limitation, the United States Patent
and Trademark Office and the United States Copyright Office), except such
as may have been filed in favor of the Collateral Agent relating to the
Loan Documents.
(b) Set forth in Schedule I opposite the name of such Grantor is a
complete and accurate list of all patents and all patent applications
owned by such Grantor. Set forth in Schedule II opposite the name of such
Grantor is a complete and accurate list of all trademark and service ▇▇▇▇
registrations and all trademark and service ▇▇▇▇ applications owned by
such Grantor. Set forth in Schedule III opposite the name of such Grantor
is a complete and accurate list of all copyright registrations and
copyright applications owned by such Grantor. Set forth in Schedule IV
opposite the name of such Grantor is a complete and accurate list of all
Licenses owned by such Grantor in which such Grantor is (i) a licensor
with respect to any of the Patents, Trademarks or Copyrights, or (ii) a
licensee of any other person's patents, trade names, trademarks, service
marks or copyrights. Such Grantor has made all necessary filings and
recordations to protect and maintain its interest in the patents, patent
applications, trademark and service ▇▇▇▇ registrations, trademark and
service ▇▇▇▇ applications, copyright registrations, copyright applications
and Licenses set forth in Schedules I, II, III and IV.
(c) Each patent, patent application, trademark or service ▇▇▇▇
registration, trademark or service ▇▇▇▇ application, copyright
registration and copyright application of such Grantor set forth in
Schedules I, II and III is subsisting and has not been adjudged invalid,
unregistrable or unenforceable, in whole or in part, and is valid,
registrable and enforceable. Each License of such Grantor identified in
Schedule IV is validly subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and is valid and enforceable. Such
Grantor is not aware of any uses of any item of Intellectual Property
Collateral which could be expected to lead to such item becoming invalid
or unenforceable, including unauthorized uses by third parties and uses
which were not supported by the goodwill of the business connected with
such Intellectual Property Collateral.
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(d) Such Grantor has not made a previous assignment, transfer or
agreement constituting a present or future assignment, transfer or
encumbrance of any of the Intellectual Property Collateral. Such Grantor
has not granted any license (other than those listed on Schedule IV
hereto), release, covenant not to ▇▇▇, or non-assertion assurance to any
person with respect to any part of the Intellectual Property Collateral.
(e) Such Grantor has used proper statutory notice in connection with
its use of each patent, each registered trademark and service ▇▇▇▇ and
each copyright contained in Schedules I, II and III.
(f) This Agreement creates in favor of the Collateral Agent for the
benefit of the Secured Parties a valid and perfected first priority
security interest in the Intellectual Property Collateral of such Grantor,
securing the payment of the Secured Obligations of such Grantor, and all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken.
(g) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d) to the Credit Agreement, all of which have been duly obtained,
taken, given or made and are in full force and effect, is required (i) for
the assignment and grant by such Grantor of the security interest assigned
and granted hereby or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) for the perfection or maintenance of the
security interest created hereunder (including the first priority nature
of such security interest), except for the filing of financing and
continuation statements under the Uniform Commercial Code, and the filing
and recordal of the Intellectual Property Security Agreement with the
United States Patent and Trademark Office and the United States Copyright
Office, which financing statements and Intellectual Property Security
Agreement will have been duly filed within the time period specified
therefor in Section 5.01(o) of the Credit Agreement or (iii) by or on
behalf of any Loan Party for the exercise by the Collateral Agent of its
rights provided for in this Agreement or the remedies in respect of the
Intellectual Property Collateral pursuant to this Agreement.
(h) Except for the Licenses set forth in Schedule IV, there are no
claims that are likely to be made by any third party relating to any item
of Intellectual Property Collateral.
(i) No claim has been made and is continuing or threatened that any
item of Intellectual Property Collateral is invalid or unenforceable or
that the use by such Grantor of any Intellectual Property Collateral does
or may violate the rights of any Person. There is currently no
infringement or unauthorized use of any item of Intellectual Property
Collateral.
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(j) Such Grantor has taken all necessary steps to use consistent
standards of quality in the manufacture, distribution and sale of all
products sold and the provision of all services provided under or in
connection with any of the Trademarks and has taken all reasonably
necessary steps to ensure that all licensed users of any of the Trademarks
use such consistent standards of quality.
SECTION 5. Further Assurances. (a) Each Grantor agrees that from
time to time, at the expense of such Grantor, such Grantor will promptly execute
and deliver, and use its best efforts to cause to be executed and delivered, all
further instruments and documents (including, without limitation, any consents,
waivers or other action by any Subsidiary of such Grantor or any holder of
common stock in, or director or officer of, such Subsidiary), and take all
further action (including amending the Constitutive Documents of such Grantor or
any Subsidiary of such Grantor), that the Collateral Agent believes may be
necessary or desirable, or that the Collateral Agent may reasonably request, in
order to perfect and protect any security interest assigned and granted or
purported to be assigned and granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any part
of the Intellectual Property Collateral. Without limiting the generality of the
foregoing, each Grantor will execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Collateral Agent may request, in order to
perfect and preserve the security interest assigned and granted or purported to
be assigned and granted hereunder.
(b) Each Grantor hereby authorizes the Collateral Agent to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Intellectual Property Collateral without the signature
of such Grantor where permitted by law. A photocopy or other reproduction of
this Agreement or any financing statement covering the Intellectual Property
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(c) Each Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the
Intellectual Property Collateral and such other reports in connection with the
Intellectual Property Collateral as the Collateral Agent may reasonably request,
all in reasonable detail.
(d) Each Grantor agrees that, should it obtain an ownership interest
in any patent, patent application, patentable invention, trademark, service
▇▇▇▇, trade name, trade dress, other indicia of trade origin, trademark or
service ▇▇▇▇ registration, trademark or service ▇▇▇▇ application, copyright,
work of authorship, copyright registration, copyright application or license,
which is not now a part of the Intellectual Property Collateral, (i) the
provisions of Section 1 shall automatically apply thereto, (ii) any such patent,
patent application, patentable invention, trademark, service ▇▇▇▇, trade name,
trade dress, indicia of trade origin, trademark or service ▇▇▇▇ registration or
trademark or service ▇▇▇▇
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application (together with the goodwill of the business connected with the use
of same and symbolized by same), copyright, work of authorship, copyright
registration, copyright application or license shall automatically become part
of the Intellectual Property Collateral, and (iii) with respect to any ownership
interest in any patent, patent application, trademark or service ▇▇▇▇
registration, trademark or service ▇▇▇▇ application, copyright registration,
copyright application or license that such Grantor should obtain, it shall give
prompt written notice thereof to the Collateral Agent in accordance with Section
13 hereof. Each Grantor authorizes the Collateral Agent to modify this Agreement
by amending Schedules I, II, III and IV (and will cooperate with the Collateral
Agent in effecting any such amendment) to include any patent, patent
application, trademark or service ▇▇▇▇ registration, trademark or service ▇▇▇▇
application, copyright registration, copyright application or license which
becomes part of the Intellectual Property Collateral under this Section.
(e) With respect to each patent, patent application, trademark or
service ▇▇▇▇ registration, trademark or service ▇▇▇▇ application, copyright
registration, copyright application and License, such Grantor agrees to take all
necessary steps, including, without limitation, in the United States Patent and
Trademark Office, the United States Copyright Office or in any court, to (i)
maintain each such patent, trademark or service ▇▇▇▇ registration, copyright
registration and License of such Grantor, and (ii) pursue each such patent
application, trademark or service ▇▇▇▇ application, and copyright application
now or hereafter included in the Intellectual Property Collateral of such
Grantor, including, without limitation, the filing of responses to office
actions issued by the United States Patent and Trademark Office and the United
States Copyright Office, the filing of applications for renewal or extension,
the filing of affidavits under Sections 8 and 15 of the United States Trademark
Act, the filing of divisional, continuation, continuation-in-part and substitute
applications, the filing of applications for re-issue, renewal or extensions,
the payment of maintenance fees, and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation
proceedings. Each Grantor agrees to take corresponding steps with respect to
each new or acquired patent, patent application, trademark or service ▇▇▇▇
registration, trademark or service ▇▇▇▇ application, copyright registration,
copyright application or License to which it is now or later becomes entitled.
Any expenses incurred in connection with such activities shall be borne by such
Grantor. No Grantor shall, without the written consent of the Collateral Agent,
discontinue use of or otherwise abandon any patent or patentable invention,
trademark or service ▇▇▇▇, or copyright identified in Schedules I, II and III,
or abandon any right to file an application for letters patent, trademark or
service ▇▇▇▇ registration, or copyright registration, or abandon any pending
application for a letters patent, trademark or service ▇▇▇▇ registration, or
copyright registration identified in Schedules I, II and III.
(f) Each Grantor agrees to notify the Collateral Agent promptly and
in writing if it learns (i) that any item of the Intellectual Property
Collateral may be determined to have become abandoned or dedicated or (ii) of
any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the United
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States Patent and Trademark Office or any court) regarding any item of the
Intellectual Property Collateral.
(g) In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral is infringed or misappropriated by a third
party, such Grantor shall promptly notify the Collateral Agent and shall take
such actions as such Grantor or the Collateral Agent deems reasonable and
appropriate under the circumstances to protect such Intellectual Property
Collateral, including, without limitation, suing for infringement or
misappropriation and for an injunction against such infringement or
misappropriation. Any expense incurred in connection with such activities shall
be borne by such Grantor.
(h) Each Grantor shall continue to use proper statutory notice in
connection with its use of each of its patents, registered trademarks and
service marks, and copyrights contained in Schedules I, II and III.
(i) Each Grantor shall take all steps which it or the Collateral
Agent deems reasonable and appropriate under the circumstances to preserve and
protect each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.
SECTION 6. Transfers and Other Liens. Each Grantor agrees that it
shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any item of the Intellectual
Property Collateral of such Grantor (other than sales, assignments, options and
other dispositions permitted under the terms of the Credit Agreement) or (ii)
create or suffer to exist any Lien upon or with respect to any of the
Intellectual Property Collateral of such Grantor, except for the Liens created
under the Collateral Documents or permitted by the Credit Agreement.
SECTION 7. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Collateral
Agent's discretion, to take, upon the occurrence and during the continuance of
an Event of Default, any action and to execute any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:
(a) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Intellectual Property Collateral,
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(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above, and
(c) to file any claims or take any action or to institute any
proceedings that the Collateral Agent may deem necessary or desirable for
the collection of any payments relating to any of the Intellectual
Property Collateral or otherwise to enforce the rights of the Collateral
Agent with respect to any item of the Intellectual Property Collateral.
SECTION 8. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, but without
any obligation to do so and without further notice, itself perform, or cause
performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor under Section
11(b).
SECTION 9. The Collateral Agent's Duties. The powers conferred on
the Collateral Agent hereunder are solely to protect its and the other Secured
Parties' interest in the Intellectual Property Collateral and shall not impose
any duty upon it to exercise any such powers. Except for the safe custody and
reasonable care of the certificates of registration for any of the Trademarks
and Copyrights, the letters patent for any of the Patents and any License in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Intellectual Property Collateral,
whether or not the Collateral Agent or any other Secured Party has or is deemed
to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Intellectual Property Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the certificates of
registration for any of the Trademarks and Copyrights, the letters patent for
any of the Patents and any License in its possession if such certificates of
registration, letters patent and licenses are accorded treatment substantially
equal to that which it accords its own property. Anything contained herein to
the contrary notwithstanding, the Collateral Agent may from time to time, when
the Collateral Agent reasonably deems it to be necessary, appoint one or more
subagents (each a "Subagent") for the Collateral Agent hereunder with respect to
all or any part of the Intellectual Property Collateral. In the event that the
Collateral Agent so appoints any Subagent with respect to any Intellectual
Property Collateral, (1) the security interest assigned and granted in such
Intellectual Property Collateral by each Grantor hereunder shall be deemed for
purposes of this Intellectual Property Security Agreement to have been made to
such Subagent for the ratable benefit of the Lender Parties, as security for the
Secured Obligations of such Grantor, (2) such Subagent shall automatically be
vested with all rights, powers, privileges, interests and remedies of the
Collateral Agent hereunder with respect to such Intellectual Property
Collateral, and (3) the term "Collateral Agent," when used herein in relation to
any rights, powers, privileges, interests and remedies of the Collateral Agent
with respect to such Intellectual Property Collateral, shall include such
Subagent; provided, however, that no such Subagent shall be authorized to take
any action with respect to any such Intellectual Property
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Collateral unless and except to the extent expressly authorized in writing by
the Collateral Agent.
SECTION 10. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the Intellectual
Property Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party upon default under the N.Y. Uniform Commercial Code, whether
or not the N.Y. Uniform Commercial Code applies to the affected
Intellectual Property Collateral, and also may (i) require any Grantor to,
and each Grantor hereby agrees that it will at its expense and upon
request of the Collateral Agent forthwith, assemble all or part of the
documents and things embodying all or any part of the Intellectual
Property Collateral as directed by the Collateral Agent and make them
available to the Collateral Agent at a place and time to be designated by
the Collateral Agent which is reasonably convenient to both parties and
(ii) without notice, except as specified below, sell the Intellectual
Property Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as
the Collateral Agent may deem commercially reasonable. In the event of any
sale, assignment, or other disposition of any of the Intellectual Property
Collateral of any Grantor, the goodwill of the business connected with and
symbolized by any Trademarks subject to such disposition shall be
included, and such Grantor shall supply to the Collateral Agent or its
designee such Grantor's know-how and expertise, and documents and things
embodying the same, relating to the manufacture, distribution, advertising
and sale of products or the provision of services relating to any
Intellectual Property Collateral subject to such disposition, and such
Grantor's customer lists and other records and documents relating to such
Intellectual Property Collateral and to the manufacture, distribution,
advertising and sale of such products and services. Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten
days' notice to such Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to
make any sale of Intellectual Property Collateral regardless of notice of
sale having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon, all or any part
of the Intellectual Property Collateral may, in the discretion of the
Collateral Agent, be held by the Collateral Agent as collateral for,
and/or then or at any time thereafter applied (after payment of any
amounts payable to the Collateral Agent pursuant to Section 11) in whole
or in part by the Collateral Agent in accordance with clause (d) below or
as
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otherwise permitted or required by the Credit Agreement. Any surplus of
such cash or cash proceeds held by the Collateral Agent and remaining
after payment in full of all of the Secured Obligations shall be paid over
to the Grantors or to whomsoever may be lawfully entitled to receive such
surplus.
(c) All payments received by any Grantor under or in respect of the
Intellectual Property Collateral shall be received in trust for the
benefit of the Collateral Agent and the other Secured Parties, shall be
segregated from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any
necessary indorsement).
(d) Any cash or cash proceeds referred to in Section 10(b) and any
other proceeds of any Intellectual Property Collateral to be applied by
the Collateral Agent to the Secured Obligations shall be applied on the
following order of priority:
(i) first, to payment of any amounts payable to the Collateral
Agent pursuant to Section 11,
(ii) second, ratably to (A) the Term A Facility and to the
installments thereof in inverse order of maturity and (B) the
Revolving Credit Facility as set forth in Section 2.06(b)(ii) of the
Credit Agreement,
(iii) third, to the Term B Facility and to the installments
thereof in inverse order of maturity, and
(iv) fourth, ratably to all other Secured Obligations.
SECTION 11. Indemnity and Expenses. (a) Each Grantor agrees to
defend, protect, indemnify and hold harmless each Secured Party from and against
any and all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from such Secured Party's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Collateral Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Intellectual Property Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or any other Secured Party against such Grantor, or (iv) the
failure by any Grantor to perform or observe any of the provisions hereof.
- 11 -
15
SECTION 12. Amendments; Waivers; Etc. (a) No amendment or waiver of
any provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Collateral Agent to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
(b) Upon the execution and delivery by any Person of a supplement to
this Agreement in substantially the form of Exhibit A hereto (each an
"Intellectual Property Security Agreement Supplement"), (i) such Person shall be
referred to as an "Additional Grantor" and shall be and become a Grantor, and
each reference in this Agreement to a "Grantor" shall also mean and be a
reference to such Additional Grantor, (ii) the annexes attached to each
Intellectual Property Security Agreement Supplement shall be incorporated into
and become a part of and supplement the Schedules I, II, III, IV and V hereto,
and the Collateral Agent may attach such annexes as supplements to such
Schedules; and each reference to such Schedules shall mean and be a reference to
such Schedules as supplemented pursuant hereto.
SECTION 13. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and, if to any Grantor, mailed, telecopied,
telegraphed, telexed or delivered to it, addressed to it at the address listed
for such Grantor on the signature pages hereof, and if to the Collateral Agent,
mailed, telecopied, telegraphed, telexed or delivered to it, addressed to it at
the address of the Collateral Agent specified in the Credit Agreement, or as to
any party at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall, when mailed,
telecopied, telegraphed or telexed, respectively, be effective when deposited in
the mails, transmitted by telecopier, delivered to the telegraph company or
confirmed by telex answerback, respectively. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or of any Supplement or Schedule hereto shall be effective as delivery
of a manually executed counterpart thereof.
SECTION 14. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Intellectual
Property Collateral and shall (a) remain in full force and effect until the
latest of the cash payment in full of the Secured Obligations, the Termination
Date and the termination or expiration of all Bank Hedge Agreements, if any, (b)
be binding upon each Grantor, its successors and assigns and (c) inure, together
with the rights and remedies of the Collateral Agent hereunder, to the benefit
of the Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Lender Party
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement
- 12 -
16
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes held by it) to any other Person and
such other Person shall thereupon become vested with all the benefits in respect
thereof assigned and granted to such Lender Party herein or otherwise, in each
case as provided in Section 8.07 of the Credit Agreement. No Grantor shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Secured Parties.
SECTION 15. Release and Termination. (a) Upon any sale, lease,
transfer or other disposition of any item of Intellectual Property Collateral in
accordance with the terms of the Loan Documents (other than sales of Inventory
in the ordinary course of business), the Collateral Agent will, at any Grantor's
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Intellectual
Property Collateral from the security interest assigned and granted hereby;
provided, however, that (i) at the time of such request and such release no
Default shall have occurred and be continuing, (ii) such Grantor shall have
delivered to the Collateral Agent, at least ten Business Days prior to the date
of the proposed release, a written request for release describing the item of
Intellectual Property Collateral and the terms of the sale, lease, transfer or
other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a form of release for execution
by the Collateral Agent and a certification by such Grantor to the effect that
the transaction is in compliance with the Loan Documents and as to such other
matters as the Collateral Agent may request and (iii) the proceeds of any such
sale, lease, transfer or other disposition required to be applied in accordance
with Section 2.06(b) of the Credit Agreement shall be paid to, or in accordance
with the instructions of, the Collateral Agent at the closing.
(b) Upon the latest of the cash payment in full of the Secured
Obligations, the Termination Date and the termination or expiration of all
Letters of Credit and all Bank Hedge Agreements, if any, the security interest
assigned and granted hereby shall terminate and all rights to the Intellectual
Property Collateral shall revert to the appropriate Grantor. Upon any such
termination, the Collateral Agent will, at the appropriate Grantor's expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.
SECTION 16. Security Interest Absolute. The Obligations of each
Grantor hereunder are independent of the Obligations of any other Loan Party
under the Loan Documents, and a separate action or actions may be brought and
prosecuted against each Grantor to enforce this Agreement, irrespective of
whether any action is brought against any other Loan Party or whether any other
Loan Party is joined in any such action or actions. All rights of the Collateral
Agent and the security interests hereunder, and all obligations of each Grantor
hereunder, shall be absolute and unconditional, irrespective of, and each
Grantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any or all of the circumstances described in the Guaranties
or any other circumstance that might constitute a discharge available to, or a
discharge of, the Borrower or any Guarantor.
- 13 -
17
This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by any Secured Party or by any other
Person upon the insolvency, bankruptcy or reorganization of any Loan Party or
otherwise, all as though such payment had not been made.
SECTION 17. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, except to the
extent that the validity or perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular item of the Intellectual
Property Collateral are governed by the laws of a jurisdiction other than the
State of New York.
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
APC HOLDING, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
Title: Vice Chairman
Address of Chief Executive Office:
Attention: _______________
AFA HOLDINGS CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
Title: Vice Chairman
Address of Chief Executive Office:
- 14 -
18
Attention: _______________
- 15 -
19
AFA PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
Title: Vice Chairman
Address of Chief Executive Office:
Attention:
CONTINENTAL ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
Title: Vice Chairman
Address of Chief Executive Office:
Attention:
Agreed and consented to as of
the date first above written:
NATIONSCREDIT COMMERCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_____________________________
Title: Vice President
- 16 -
20
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of February, 1998, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say he
resides at
______________________________________________________________________ and that
he is the ____________ of APC HOLDING, INC., the corporation described in and
which executed the above instrument; that he has been authorized to execute said
instrument on behalf of said corporation; and that he signed said instrument on
behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of February, 1998, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say he
resides at
______________________________________________________________________ and that
he is the ____________ of AFA HOLDINGS CO., the corporation described in and
which executed the above instrument; that he has been authorized to execute said
instrument on behalf of said corporation; and that he signed said instrument on
behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
21
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of February, 1998, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say he
resides at
______________________________________________________________________ and that
he is the ____________ of AFA PRODUCTS, INC., the corporation described in and
which executed the above instrument; that he has been authorized to execute said
instrument on behalf of said corporation; and that he signed said instrument on
behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of February, 1998, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say he
resides at
______________________________________________________________________ and that
he is the ____________ of CONTINENTAL ACQUISITION CORP., the corporation
described in and which executed the above instrument; that he has been
authorized to execute said instrument on behalf of said corporation; and that he
signed said instrument on behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of February, 1998, before me personally came
___________________________________________ to me known, who, being by me duly
sworn, did depose and say he resides at
_________________________________________
____________________________________________________________ and that he is the
_______________________ of NATIONSCREDIT COMMERCIAL CORPORATION, the corporation
described in and which executed the above instrument; that he has been
authorized to execute said instrument on behalf of said corporation; and that he
signed said instrument on behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
23
SCHEDULE I
to
Intellectual Property Security Agreement
Patents and Patent Applications
24
SCHEDULE II
to
Intellectual Property Security Agreement
Trademark Registrations and Applications
25
SCHEDULE III
to
Intellectual Property Security Agreement
Copyright Registrations and Applications
26
SCHEDULE IV
to
Intellectual Property Security Agreement
Licenses
27
SCHEDULE V
to
Intellectual Property Security Agreement
Third Party Claims/Pending Litigation/Unauthorized Uses
28
EXHIBIT A
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
NationsCredit Commercial Corporation, as Collateral Agent
under the Credit Agreement
referred to below
[Address]
[Date]
Attention: _______________________
Intellectual Property Security Agreement dated as of February __, 1998
made by APC Holding, Inc. and the other Grantors
parties thereto to NationsCredit Commercial Corporation, as Collateral Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Intellectual Property
Security Agreement (such Intellectual Property Security Agreement, as in effect
on the date hereof and as it may hereafter be amended, modified or otherwise
supplemented from time to time, being the "Intellectual Property Security
Agreement"). The terms defined in the Intellectual Property Security Agreement
(or in the Credit Agreement referred to therein) and not otherwise defined
herein are used herein as therein defined.
The undersigned hereby agrees, as of the date first above written,
to become a Grantor under the Intellectual Property Security Agreement as if it
were an original party thereto and agrees that each reference in the
Intellectual Property Security Agreement to "Grantor" shall also mean and be a
reference to the undersigned.
The undersigned hereby assigns and grants to the Collateral Agent
for the ratable benefit of the Secured Parties as security for the Secured
Obligations a lien on and security interest in, all of the right, title and
interest of the undersigned, whether now owned or hereafter acquired, in and to
all of the Intellectual Property Collateral owned by the
29
undersigned, whether now or hereafter existing, including, but not limited to,
the property listed on the Annexes hereto. Schedules I, II, III, IV and V to the
Intellectual Property Security Agreement are hereby supplemented by Annexes I,
II, III, IV and V hereto, respectively. The undersigned hereby certifies that
such Annexes have been prepared by the undersigned in substantially the same
form of Schedules I, II, III, IV and V to the Intellectual Property Security
Agreement and are accurate and complete as of the date hereof.
The undersigned hereby makes each representation and warranty set
forth in Section 4 of the Intellectual Property Security Agreement (as
supplemented by the attached Annexes) to the same extent as each other Grantor
and hereby agrees to by bound as a Grantor by all of the terms and provisions of
the Intellectual Property Security Agreement to the same extent as each other
Grantor.
This Intellectual Property Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By ________________________________
Title:
Address of Chief Executive Office and for
Notices:
[Address]
