Exhibit 10.8
COPYRIGHT SECURITY AGREEMENT
THIS COPYRIGHT SECURITY AGREEMENT (as amended, amended and restated,
or otherwise modified from time to time, this "Security Agreement"), made as of
the 27th day of April, 2004 by and between EASY GARDENER PRODUCTS, LTD., a Texas
limited partnership (the "Borrower"), and LASALLE BUSINESS CREDIT, LLC, as agent
for the Lenders party to the Loan Agreement (defined below), with an office at
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 ("Agent"):
W I T N E S S E T H:
WHEREAS, Borrower, EYAS International, Inc., a Texas corporation, EG
Product Management, L.L.C., a Texas limited liability company, EG, L.L.C., a
Nevada limited liability company, Xxxxxxxxx Consumer Products Group, Inc., a
Delaware corporation, Xxxxxxxxx Consumer Products, Inc., a Delaware corporation,
NBU Group, LLC, a Texas limited liability company, Agent and Lenders are parties
to a certain Loan and Security Agreement of even date herewith (as amended,
amended and restated or otherwise modified from time to time, the "Loan
Agreement") and other related loan documents of even date herewith
(collectively, with the Loan Agreement, and as each may be amended or otherwise
modified from time to time, the "Financing Agreements"), which Financing
Agreements, among other things, provide (i) for Lenders to, from time to time,
extend credit to or for the account of Borrower, and (ii) for the grant by
Borrower to Agent, for the benefit of Agent and Lenders, of a security interest
in certain of Borrower's assets, including, without limitation, its copyrights
and copyright applications;
NOW, THEREFORE, in consideration of the premises set forth herein
and for other good and valuable consideration, receipt and sufficiency of which
are hereby acknowledged, Borrower agrees as follows:
1. Incorporation of Loan Agreement. The Loan Agreement and the terms
and provisions thereof are hereby incorporated herein in their entirety by this
reference thereto. All terms capitalized but not otherwise defined herein shall
have the same meanings herein as in the Loan Agreement.
2. Grant and Reaffirmation of Grant of Security Interests. To secure
the complete and timely payment and satisfaction of the Liabilities, Borrower
hereby grants to Agent, for the benefit of Agent and Lenders, and hereby
reaffirms its prior grant pursuant to the Financing Agreements of, a continuing
security interest in Borrower's entire right, title and interest in and to all
of its now owned or existing and hereafter acquired or arising copyrights,
rights and interests in copyrights, works protectable by copyrights, copyright
registrations and copyright applications, including, without limitation, the
copyrights, copyright registrations and copyright applications listed on
Schedule A attached hereto and made a part hereof, and all renewals of any of
the foregoing, all income, royalties, proceeds, damages and payments now and
hereafter due and/or payable under or with respect to any of the foregoing,
including, without limitation, damages and payments for past, present and
future infringements of any of the foregoing and the right to xxx for past,
present and future infringements of any of the foregoing (all of the foregoing
are sometimes hereinafter individually and/or collectively referred to as the
"Copyrights").
3. Warranties and Representations. Borrower warrants and represents
to Agent and Lenders that:
(i) no Copyright has been adjudged invalid or unenforceable by a
court of competent jurisdiction, in whole or in part and each such Copyright is
presently subsisting;
(ii) Except as provided in the Loan Agreement, Borrower is the sole
and exclusive owner of the entire and unencumbered right, title and interest in
and to each Copyright, free and clear of any liens, charges and encumbrances,
including without limitation, covenants by Borrower not to xxx third persons;
(iii) Borrower has no notice of any suits or actions commenced or
threatened with reference to any Copyright; and
(iv) Borrower has the unqualified right to execute and deliver this
Security Agreement and perform its terms.
4. Restrictions on Future Agreements. Borrower agrees that until
Borrower's Liabilities shall have been satisfied in full and the Financing
Agreements shall have been terminated, Borrower shall not, without the prior
written consent of Agent, sell or assign its interest in any Copyright or enter
into any other agreement with respect to any Copyright which would adversely
affect the validity or enforcement of the rights transferred to Agent under this
Security Agreement.
5. New Copyrights. If, before Borrower's Liabilities shall have been
satisfied in full or before the Financing Agreements have been terminated,
Borrower shall (i) become aware of any existing Copyrights of which Borrower has
not previously informed Agent, or (ii) become entitled to the benefit of any
Copyrights, which benefit is not in existence on the date hereof, the provisions
of this Security Agreement above shall automatically apply thereto and Borrower
shall give to Agent prompt written notice thereof. Borrower hereby authorizes
Agent to modify this Security Agreement by amending Schedule A to include any
such Copyrights.
6. Royalties; Terms. The term of this Security Agreement shall
extend until the earlier of (i) the expiration of each of the Copyrights, and
(ii) the payment in full of Borrower's Liabilities and the termination of the
Financing Agreements. Borrower agrees that upon the occurrence of an Event of
Default, the use by Agent of all Copyrights shall be without any liability for
royalties or other related charges from Agent to Borrower.
7. Release of Security Agreement. This Security Agreement is made
for collateral purposes only. Upon payment in full of Borrower's Liabilities and
termination of
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the Financing Agreements, Agent shall take such actions as may be necessary or
proper to terminate the security interests created hereby and pursuant to the
Financing Agreements
8. Expenses. All expenses incurred in connection with the
performance of any of the agreements set forth herein shall be borne by
Borrower. All fees, costs and expenses, of whatever kind or nature, including
reasonable attorneys' fees and legal expenses, incurred by Agent in connection
with the filing or recording of any documents (including all taxes in connection
therewith) in public offices, the payment or discharge of any taxes, reasonable
counsel fees, maintenance fees, encumbrances or otherwise in protecting,
maintaining or preserving the Copyrights or in defending or prosecuting any
actions or proceedings arising out of or related to the Copyrights shall be
borne by and paid by Borrower and until paid shall constitute Liabilities.
9. Duties of Borrower. Borrower shall have the duty (i) to file and
prosecute diligently any copyright applications pending as of the date hereof or
hereafter until Borrower's Liabilities shall have been paid in full and the
Financing Agreements have been terminated, (ii) to preserve and maintain all
rights in the Copyrights, as commercially reasonable and (iii) to ensure that
the Copyrights are and remain enforceable, as commercially reasonable. Any
expenses incurred in connection with Borrower's Liabilities under this Section 9
shall be borne by Borrower.
10. Agent's Right to Xxx. After an Event of Default, Agent shall
have the right, but shall in no way be obligated, to bring suit in its own name
to enforce the Copyrights and, if Agent shall commence any such suit, Borrower
shall, at the request of Agent, do any and all lawful acts and execute any and
all proper documents required by Agent in aid of such enforcement and Borrower
shall promptly, upon demand, reimburse and indemnify Agent for all costs and
expenses incurred by Agent in the exercise of its rights under this Section 10.
11. Waivers. No course of dealing between Borrower, Agent and
Lenders, nor any failure to exercise, nor any delay in exercising, on the part
of Agent, any right, power or privilege hereunder or under the Financing
Agreements shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
12. Severability. The provisions of this Security Agreement are
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Security
Agreement in any jurisdiction.
13. Modification. This Security Agreement cannot be altered, amended
or modified in any way, except as specifically provided in Section 5 hereof or
by a writing signed by the parties hereto.
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14. Cumulative Remedies; Power of Attorney; Effect on Financing
Agreements. All of Agent's rights and remedies with respect to the Copyrights,
whether established hereby or by the Financing Agreements, or by any other
agreements or by law shall be cumulative and may be exercised singularly or
concurrently. Borrower hereby authorizes Agent upon the occurrence of an Event
of Default, to make, constitute and appoint any officer or agent of Agent as
Agent may select, in its sole discretion, as Borrower's true and lawful
attorney-in-fact, with power to (i) endorse Borrower's name on all applications,
documents, papers and instruments necessary or desirable for Agent in the use of
the Copyrights or (ii) take any other actions with respect to the Copyrights as
Agent deems to be in the best interest of Agent, or (iii) grant or issue any
exclusive or non-exclusive license under the Copyrights to anyone, or (iv)
assign, pledge, convey or otherwise transfer title in or dispose of the
Copyrights to anyone. Borrower hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney, being
coupled with an interest, shall be irrevocable until Borrower's Liabilities
shall have been paid in full and the Financing Agreements have been terminated.
Borrower acknowledges and agrees that this Security Agreement is not intended to
limit or restrict in any way the rights and remedies of Agent under the
Financing Agreements but rather is intended to facilitate the exercise of such
rights and remedies. Agent shall have, in addition to all other rights and
remedies given it by the terms of this Security Agreement and the Financing
Agreements, all rights and remedies allowed by law and the rights and remedies
of a secured party under the Uniform Commercial Code as enacted in Illinois.
15. Binding Effect; Benefits. This Security Agreement shall be
binding upon Borrower and its respective successors and assigns, and shall inure
to the benefit of Agent, its successors, nominees and assigns.
16. Governing Law. This Security Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and applicable
federal law.
17. Headings. Paragraph headings used herein are for convenience
only and shall not modify the provisions which they precede.
18. Further Assurances. Borrower agrees to execute and deliver such
further agreements, instruments and documents, and to perform such further acts,
as Agent shall reasonably request from time to time in order to carry out the
purpose of this Security Agreement and agreements set forth herein.
19. Survival of Representations. All representations and warranties
of Borrower contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement and shall be remade on the date of each
borrowing under the Financing Agreements.
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IN WITNESS WHEREOF, Borrower has duly executed this Security
Agreement as of the date first written above.
EASY GARDENER PRODUCTS, LTD.
By Xxxxxxx X. Xxxx
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Title CFO
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Agreed and Accepted
As of the Date First Written Above
LASALLE BUSINESS CREDIT, LLC, as Agent
By Xxxxxxx Staple
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Title First Vice President
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SCHEDULE A
COPYRIGHTS
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Title Registration Number
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Chip PA178016
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Handful PA178017
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Nursery PA178015
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Spike PA178018
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