EXHIBIT 99.3
EXECUTION COPY
LEVI XXXXXXX & CO.
FIRST AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
This FIRST AMENDMENT TO PLEDGE AND SECURITY AGREEMENT (this
"Amendment") is dated as of January 28, 2002 and entered into by and among LEVI
XXXXXXX & CO., a Delaware corporation (the "Borrower"), each of THE UNDERSIGNED
DIRECT AND INDIRECT SUBSIDIARIES of the Borrower (each of such undersigned
Subsidiaries being a "Subsidiary Grantor" and collectively "Subsidiary
Grantors") and BANK OF AMERICA, N.A., as Administrative Agent for and
representative of (in such capacities herein called "Secured Party") the several
financial institutions (the "Lenders") from time to time party to the Credit
Agreement referred to below and any Hedge Bank (as defined in the Credit
Agreement referred to below), and is made with reference to that certain Pledge
and Security Agreement dated as of February 1, 2001 (the "Pledge and Security
Agreement"), by and among the Borrower, the Subsidiary Grantors and each
additional grantor that may become a party thereto after the date thereof in
accordance with Section 21 thereof and Secured Party. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Pledge and Security Agreement.
R E C I T A L S
- - - - - - - -
WHEREAS, the Borrower and the Lenders have agreed to enter
into that certain Second Amendment to Credit Agreement dated as of January 28,
2002 (the "Second Amendment"), to amend that certain Credit Agreement dated as
of February 1, 2001, as amended by First Amendment to Credit Agreement dated as
of July 11, 2001 (the "Credit Agreement"), by and among the Borrower, the
Lenders, the financial institutions party thereto as Co-Lead Arrangers and Joint
Book Managers, the financial institution party thereto as Syndication Agent, the
financial institution party thereto as Documentation Agent, and Bank of America,
as Administrative Agent;
WHEREAS, pursuant to the Second Amendment all of the Grantors
may enter into Ordinary Course Hedge Agreements;
WHEREAS, in order to induce the Lenders to enter into the
Second Amendment, the Grantors have agreed that all Obligations arising from any
Hedge Bank Hedge Agreements shall be secured by the Collateral;
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to
1
induce the Lenders and Secured Party to enter into the Second Amendment, each
Grantor hereby agrees with Secured Party as follows:
Section 1. AMENDMENT TO THE PLEDGE AND SECURITY AGREEMENT
1.1 Amendment to Section 2: Security for Obligations
-------------------------------------------------
Sections 2(a) and (b) of the Pledge and Security Agreement are hereby
amended to read in their entirety as follows:
"(a) with respect to the Borrower, all Obligations and
liabilities of every nature of the Borrower now or hereafter existing
under or arising out of or in connection with the Credit Agreement and
the other Loan Documents (other than the Hedge Bank Hedge Agreements)
and, until the payment in full of all Obligations under the Credit
Agreement and the other Loan Documents (other than the Hedge Bank Hedge
Agreements), the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, all Obligations and liabilities
of every nature of the Borrower, FinServ, each Subsidiary Grantor, and
each Additional Grantor now or hereafter existing under or arising out
of or in connection with any Hedge Bank Hedge Agreement,
"(b) with respect to each Subsidiary Grantor and Additional
Grantor, all Obligations and liabilities of every nature of such
Grantors now or hereafter existing under or arising out of or in
connection with the Subsidiary Guaranty and, until the payment in full
of all Obligations under the Credit Agreement and the other Loan
Documents (other than the Hedge Bank Hedge Agreements), the
cancellation or expiration of all Letters of Credit and the termination
of the Commitments, all Obligations and liabilities of every nature of
such Grantors now or hereafter existing under or arising out of or in
connection with any Hedge Bank Hedge Agreement;"
1.2 Amendment to Section 19(c): Continuing Security Interest;
---------------------------------------------------------
Transfer of Loans; Termination and Release
------------------------------------------
Section 19(c) of the Pledge and Security Agreement is hereby amended to
read in its entirety as follows:
"(c) In addition, upon the proposed sale, transfer or other
disposition of any Collateral by a Grantor in accordance with the
Credit Agreement for which such Grantor desires to obtain a security
interest release from Secured Party, such Grantor shall deliver an
officer's certificate (x) stating that the Collateral subject to such
disposition is being sold, transferred or otherwise disposed of in
compliance with the terms of the Credit Agreement and (y) specifying
the Collateral being sold, transferred or otherwise disposed of in the
proposed transaction. Upon the receipt of such officer's certificate,
Secured Party shall, at such Grantor's expense, verify that such
security interest release is permitted under the Credit Agreement and,
so long as Secured Party has no reason to believe that the officer's
certificate delivered by such Grantor with respect to such sale is not
true and correct, execute and deliver such releases of its security
interest in such
2
Collateral which is to be so sold, transferred or disposed of, as may
be reasonably requested by such Grantor."
1.3 Amendments to Exhibits
----------------------
A. Exhibit I to the Pledge and Security Agreement is hereby
deleted and Annex A to this Amendment substituted therefor.
B. Exhibit II to the Pledge and Security Agreement is hereby
deleted and Annex B to this Amendment substituted therefor.
C. Exhibit III to the Pledge and Security Agreement is hereby
deleted and Annex C to this Amendment substituted therefor.
Section 2. REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants that the following
statements are true, correct and complete:
A. Organization and Powers. Such Grantor is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite power and
authority (including, without limitation, all Governmental Authorizations) to
enter into this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Pledge and Security Agreement as amended by
this Amendment (the "Amended Agreement").
B. No Conflict. The execution and delivery of this Amendment and
performance by such Grantor of the Amended Agreement is within such Grantor's
powers, has been duly authorized by all necessary action, and do not (i)
contravene such Grantor's Constitutive Documents, (ii) violate any Requirements
of Law, (iii) conflict with or result in the breach of, or constitute a default
or require any payment to be made under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on or
affecting such Grantor, any of its Subsidiaries or any of their properties or
(iv) except for the Liens created or permitted under the Loan Documents, result
in or require the creation or imposition of any Lien upon or with respect to any
of the properties of such Grantor or any of its Subsidiaries. Neither such
Grantor nor any of its Subsidiaries is in violation of any such Requirements of
Law or in breach of any such contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, the violation or breach of which would be
reasonably likely to have a Material Adverse Effect.
C. Governmental Consents. No Governmental Authorization, and
no other authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority or any other third party is required
for the due execution, delivery, recordation or filing of this Amendment or the
performance by such Grantor of the Amended Agreement.
3
D. Binding Obligation. This Amendment and the Amended Agreement
have been duly executed and delivered by such Grantor, and are, the legal, valid
and binding obligation of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms.
Section 3. MISCELLANEOUS
A. Reference to and Effect on the Pledge and Security Agreement
and the Other Loan Documents.
(i) On and after the date hereof, each reference in the Pledge
and Security Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Pledge and Security Agreement, and each
reference in the other Loan Documents to the "Pledge and Security Agreement",
"thereunder", "thereof" or words of like import referring to the Pledge and
Security Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Pledge and Security Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of Secured
Party or any Lender under, the Pledge and Security Agreement or any of the other
Loan Documents.
B. Headings. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
C. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.
D. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery by telecopier of an executed counterpart of a signature page to this
Amendment shall be effective as delivery of an original executed counterpart of
this Amendment. This Amendment shall become effective upon the execution of a
counterpart hereof by the Grantors and Secured Party.
4
IN WITNESS WHEREOF, the Grantors and Secured Party have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
LEVI XXXXXXX & CO.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
BATTERY STREET ENTERPRISES, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX FINANCIAL CENTER CORPORATION
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX FUNDING, LLC
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
5
LEVI XXXXXXX GLOBAL FULFILLMENT
SERVICES, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX GLOBAL
OPERATIONS, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX INTERNATIONAL
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX LATIN AMERICA, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI'S ONLY STORES, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
6
NF INDUSTRIES, INC.
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
BANK OF AMERICA, N.A.,
As Administrative Agent, as Secured Party
By:
------------------------------------------
Name: Xxxxxxxx Carry
Title: Vice President
7
ANNEX A
-------
EXHIBIT I TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("Grantor"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Trademark Collateral (as defined
below); and
WHEREAS, Levi Xxxxxxx & Co., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of February 1, 2001
(said Credit Agreement, as it may heretofore have been and as it may hereafter
be amended, amended and restated, supplemented or otherwise modified from time
to time, being the "Credit Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined) with the
financial institutions named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the "Lenders"), the financial institutions party thereto as Co-Lead
Arrangers and Joint Book Managers, the financial institution party thereto as
Syndication Agent, the financial institution party thereto as Documentation
Agent, and Bank of America, N.A., as Administrative Agent for the Lenders (in
such capacity, "Secured Party") pursuant to which the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to the Borrower; and
WHEREAS, the Borrower, each other Loan Party, and Levi Xxxxxxx
& Co. Financial Services, S.A. or any successor thereto ("FinServ") may from
time to time enter, or may from time to time have entered, into one or more
Hedge Bank Hedge Agreements; and
WHEREAS, pursuant to the terms of a Pledge and Security
Agreement dated as of February 1, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Security Agreement"),
among Grantor, Secured Party and the other grantors named therein, Grantor has
agreed to create in favor of Secured Party a secured and protected interest in,
and Secured Party has agreed to become a secured creditor with respect to, the
Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in
A-1
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "Trademark Collateral"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all trademarks, service marks,
designs, logos, indicia, tradenames, trade dress, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto, owned by
such Grantor, or hereafter adopted and used, in its business (including the
trademarks listed in Schedule A) (collectively, the "Trademarks"), all
----------
registrations that have been or may hereafter be issued or applied for thereon
in the United States and any state thereof and in foreign countries (including
the registrations and applications specifically identified in Schedule A) (the
"Trademark Registrations"), all common law and other rights in and to the
Trademarks in the United States and any state thereof and in foreign countries
(the "Trademark Rights"), and all goodwill of such Grantor's business symbolized
by the Trademarks and associated therewith (the "Associated Goodwill"); and
(ii) all proceeds, products, rents and profits of or from any
and all of the foregoing Trademark Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party 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 Trademark
Collateral. For purposes of this Grant of Trademark Security Interest, the term
"proceeds" includes whatever is receivable or received when Trademark Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event
shall the Trademark Collateral include, and Grantor shall be not deemed to have
granted a security interest in, any of Grantor's rights or interests in any
license, contract or agreement to which Grantor is a party or any of its rights
or interests thereunder or any of its rights or interests in other property to
the extent, but only to the extent, that such a grant would, under the terms of
such license, contract or agreement or otherwise, result in a breach of the
terms of, or constitute a default under, any license, contract or agreement to
which Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to the applicable Uniform Commercial Code or any
other applicable law (including the Bankruptcy Code) or principles of equity) or
any agreement permitted by Section 5.02(1) of the Credit Agreement prohibiting
or conditioning the creation or assumption of any Lien upon its property or
assets or such rights or interests; provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Trademark
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of Secured Party with respect to the security interest in
the Trademark Collateral granted hereby are more fully set forth in the Pledge
and Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the __ day of _______, _____.
[NAME OF GRANTOR]
By:________________________________
Name:___________________________
Title:__________________________
3
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
A-1
ANNEX B
-------
EXHIBIT II TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("Grantor"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Patent Collateral (as defined
below); and
WHEREAS, Levi Xxxxxxx & Co., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of February 1, 2001
(said Credit Agreement, as it may heretofore have been and as it may hereafter
be amended, amended and restated, supplemented or otherwise modified from time
to time, being the "Credit Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined) with the
financial institutions named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the "Lenders"), the financial institutions party thereto as Co-Lead
Arrangers and Joint Book Managers, the financial institution party thereto as
Syndication Agent, the financial institution party thereto as Documentation
Agent, and Bank of America, N.A., as Administrative Agent for the Lenders (in
such capacity, "Secured Party"), pursuant to which the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to the Borrower; and
WHEREAS, the Borrower, each other Loan Party, and Levi Xxxxxxx
& Co. Financial Services, S.A. or any successor thereto ("FinServ"), may from
time to time enter, or may from time to time have entered, into one or more
Hedge Agreements (collectively, the "Hedge Bank Hedge Agreements") with one or
more Hedge Banks (as defined in the Credit Agreement); and
WHEREAS, pursuant to the terms of a Pledge and Security
Agreement dated as of February 1, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Security Agreement"),
among Grantor, Secured Party and the other grantors named therein, Grantor has
agreed to create in favor of Secured Party a secured and protected interest in,
and Secured Party has agreed to become a secured creditor with respect to, the
Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in
II-1
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "Patent Collateral"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise) in and to all patents and patent
applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or
in the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and
patent applications under any domestic or foreign law that are
presently, or in the future may be, owned by such Grantor in whole or
in part (including the patents and patent applications listed in
Schedule A), all rights (but not obligations) corresponding thereto
(including the right, exercisable only upon the occurrence and during
the continuation of an Event of Default, to xxx for past, present and
future infringements in the name of such Grantor or in the name of
Secured Party or the Lenders) and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof
(all of the foregoing being collectively referred to as the "Patents");
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Patent Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party 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 Patent Collateral. For purposes of this Grant of
Patent Security Interest, the term "proceeds" includes whatever is
receivable or received when Patent Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event
shall the Patent Collateral include, and Grantor shall be not deemed to have
granted a security interest in, any of Grantor's rights or interests in any
license, contract or agreement to which Grantor is a party or any of its rights
or interests thereunder or any of its rights or interests in other property to
the extent, but only to the extent, that such a grant would, under the terms of
such license, contract or agreement or otherwise, result in a breach of the
terms of, or constitute a default under, any license, contract or agreement to
which Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to the applicable Uniform Commercial Code or any
other applicable law (including the Bankruptcy Code) or principles of equity) or
any agreement permitted by Section 5.02(l) of the Credit Agreement prohibiting
or conditioning the creation or assumption of any Lien upon its property or
assets or such rights or interests; provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of Secured Party with respect to the security interest in
the Patent Collateral granted hereby are more fully set forth in the Pledge and
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
II-2
[The remainder of this page intentionally left blank.]
II-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ____________, _____.
[NAME OF GRANTOR]
By:________________________________
Name:___________________________
Title:__________________________
II-4
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
Patents Issued:
---------------
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
Patents Pending:
----------------
Applicant's Date Application
Name Filed Number Invention Inventor
---- ----- ------ --------- --------
II-1
ANNEX C
-------
EXHIBIT III TO
PLEDGE AND SECURITY AGREEMENT
-----------------------------
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("Grantor"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Copyright Collateral (as defined
below); and
WHEREAS, Levi Xxxxxxx & Co., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of February 1, 2001
(said Credit Agreement, as it may heretofore have been and as it may hereafter
be amended, amended and restated, supplemented or otherwise modified from time
to time, being the "Credit Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined) with the
financial institutions named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the "Lenders"), the financial institutions party thereto as Co-Lead
Arrangers and Joint Book Managers, the financial institution party thereto as
Syndication Agent, the financial institution party thereto as Documentation
Agent, and Bank of America, N.A., as Administrative Agent for the Lenders (in
such capacity, "Secured Party"), pursuant to which the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to the Borrower; and
WHEREAS, the Borrower, each other Loan Party, and Levi Xxxxxxx
& Co. Financial Services, S.A. or any successor thereto ("FinServ"), may from
time to time enter, or may from time to time have entered, into one or more
Hedge Bank Hedge Agreements; and
WHEREAS, pursuant to the terms of a Pledge and Security
Agreement dated as of February 1, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Security Agreement"),
among Grantor, Secured Party and the other grantors named therein, Grantor has
agreed to create in favor of Secured Party a secured and protected interest in,
and Secured Party has agreed to become a secured creditor with respect to, the
Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Copyright Collateral"):
III-1
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise) under copyright in various published and
unpublished works of authorship including computer programs, computer
data bases, other computer software, layouts, trade dress, drawings,
designs, writings, and formulas owned by Grantor (including the works
listed on Schedule A, as the same may be amended pursuant hereto from
-----------
time to time) (collectively, the "Copyrights"), all copyright
registrations issued to Grantor and applications for copyright
registration that have been or may hereafter be issued or applied for
thereon in the United States and any state thereof and in foreign
countries (including the registrations listed on Schedule A, as the
-----------
same may be amended pursuant hereto from time to time) (collectively,
the "Copyright Registrations"), all common law and other rights in and
to the Copyrights in the United States and any state thereof and in
foreign countries including all copyright licenses (but with respect to
such copyright licenses, only to the extent permitted by such licensing
arrangements) (the "Copyright Rights"), including each of the
Copyrights, rights, titles and interests in and to the Copyrights, all
derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire
for the benefit of Grantor), authored (as a work for hire for the
benefit of Grantor), or acquired by Grantor, in whole or in part, and
all Copyright Rights with respect thereto and all Copyright
Registrations therefor, heretofore or hereafter granted or applied for,
and all renewals and extensions thereof, throughout the world,
including the right to renew and extend such Copyright Registrations
and Copyright Rights and to register works protectable by copyright and
the right, exercisable only upon the occurrence during the continuation
of an Event of Default, to xxx for past, present and future
infringements in the name of such Grantor or in the name of Secured
Party or the Lenders; and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Copyright Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party 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 Copyright Collateral. For purposes of this Grant of
Copyright Security Interest, the term "proceeds" includes whatever is
receivable or received when Copyright Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event
shall the Copyright Collateral include, and Grantor shall be not deemed to have
granted a security interest in, any of Grantor's rights or interests in any
license, contract or agreement to which Grantor is a party or any of its rights
or interests thereunder or any of its rights or interests in other property to
the extent, but only to the extent, that such a grant would, under the terms of
such license, contract or agreement or otherwise, result in a breach of the
terms of, or constitute a default under, any license, contract or agreement to
which Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to the applicable Uniform Commercial Code or any
other applicable law (including the Bankruptcy Code) or principles of equity) or
any agreement permitted by Section 5.02(1) of the Credit Agreement prohibiting
or conditioning the creation or assumption of any Lien upon its property or
assets or such rights or interests; provided, that immediately upon the
--------
ineffectiveness, lapse or termination of any such provision, the Copyright
III-2
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the
rights and remedies of Secured Party with respect to the security interest in
the Copyright Collateral granted hereby are more fully set forth in the Pledge
and Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ___________, _____.
[NAME OF GRANTOR]
By:______________________________
Name:___________________________
Title:__________________________
III-4
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. Copyrights:
----------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Pending U.S. Copyright Registrations & Applications:
----------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- --------- ---------
III-1
