6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is dated as of February 4,
1999, and is entered into by and between The viaLink Company, an
Oklahoma corporation ("Debtor"), in favor of Hewlett-Packard
Company, a Delaware corporation ("Secured Party").
INTRODUCTION:
A. Debtor and Secured Party have entered into, inter alia, a
Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), and, pursuant thereto, Debtor has issued in
favor of Secured Party a Secured Subordinated Promissory Note,
dated the date hereof, in the principal amount of US$6,000,000
(the "Initial Note"), which note may be exchanged, subject to and
in accordance with the terms of the Note Purchase Agreement, for
a Convertible Secured Subordinated Note of like principal amount
convertible into shares of the Company's Common Stock (the
"Convertible Note"); and
B. In order to induce Secured Party to enter into the Note
Purchase Agreement and, pursuant thereto, to extend the credit
evidenced by the Notes, Debtor has agreed to enter into this
Security Agreement and to grant the security interest in the
Collateral described below.
AGREEMENT:
NOW, THEREFORE, in consideration of the promises
contained herein and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Debtor
hereby agrees with Secured Party as follows:
1. Definitions and Interpretation
. When used in this Security Agreement, the following
terms shall have the following respective meanings:
"Collateral" shall have the meaning given to that term
in Section 2 hereof.
"Copyright Office" shall mean the United States
Copyright Office or any successor office or agency thereto.
"Copyrights" shall have the meaning given to that term
in Attachment 1 hereto.
"Event of Default" shall have the meaning given to that
term in the Note.
"Intellectual Property Collateral" shall mean the
Copyrights, Patents, and Trademarks.
"Note" shall mean with the Initial Note or the
Convertible Note, whichever is then in effect; and "Notes" shall
mean the Initial Note and the Convertible Note, collectively.
"Note Purchase Agreement" shall have the meaning given
to that term in the Recitals to this Security Agreement.
"Obligations" shall mean and include all loans,
advances, debts, liabilities and obligations, howsoever arising,
owed by Debtor to Secured Party of every kind and description
(whether or not evidenced by any note or instrument and whether
or not for the payment of money), now existing or hereafter
arising under or pursuant to the Transaction Documents,
including, all interest, fees, charges, expenses, attorneys' fees
and costs chargeable to and payable by Debtor hereunder and
thereunder, in each case, whether direct or indirect, absolute or
contingent, due or to become due, and whether or not arising
after the commencement of a proceeding under Title 11 of the
United States Code (11 U.S.C., Section 101 et seq.), as amended
from time to time (including post-petition interest) and whether
or not allowed or allowable as a claim in any such proceeding.
"Patent and Trademark Office" shall mean the United
States Patent and Trademark Office or any successor office or
agency thereto.
"Patent Applications" means and refers to all
applications made by, or on behalf of, Debtor to the Patent and
Trademark Office or to any similar office or agency of any
foreign country or political subdivision thereof for the
registration of Patents.
"Patent Registrations" means and refers to all Patents
registered with the Patent and Trademark Office or with any
similar office or agency of any foreign country or political
subdivision thereof for the registration of Patents.
"Patents" shall have meaning given to that term in
Attachment 1 hereto.
"Permitted Liens" means the following:
(i) any liens for taxes, fees, assessments, or other
governmental charges or levies, either not delinquent or being
contested in good faith by appropriate proceedings;
(ii) liens (A) upon or in any equipment acquired or held by
Debtor to secure the purchase price of such equipment or
indebtedness incurred solely or the purpose of financing the
acquisition of such equipment, or (B) existing on such equipment
at the time of its acquisition, provided that the lien is
confined solely to the property so acquired and improvements
thereon, accessions thereto and the proceeds thereof;
(iii) liens on equipment leased by Debtor pursuant to a
capital lease in the ordinary course of business (including
proceeds thereof and accessions thereto) incurred solely for the
purpose of financing the lease of such equipment;
(iv) liens in favor of customs and revenue authorities arising as
a matter of law to secure payments of customs duties in
connections with the importation of goods;
(v) xxxxxxx'x, mechanics or similar liens arising in the
ordinary course of Debtor's business; and
(vi) liens granted to secure any Senior Indebtedness (as defined
in the Note).
(vii) liens existing as of the date hereof disclosed in
writing to, and approved by, Secured Party.
"Shareholder Agreement" shall mean the Shareholder
Agreement, dated as of the date hereof, by and between Debtor and
Secured Party.
"Secured Party" shall have the meaning given to that
term in the introductory paragraph of this Security Agreement.
"Software" shall have the meaning given to that term in
Attachment 2 hereto.
"Trademarks" shall have the meaning given to that term
in Attachment 1 hereto.
"Transaction Documents" shall mean the Note Purchase
Agreement, the Notes, the Security Agreement, and the Shareholder
Agreement.
"UCC" shall mean the Uniform Commercial Code as in
effect in the State of California, as amended from time to time.
Unless otherwise defined herein, all terms defined in the UCC
shall have the respective meanings given to those terms in the
UCC.
2. Grant of Security Interest
. To secure payment and performance of the
Obligations, Debtor hereby pledges and assigns to Secured Party
and grants to Secured Party a security interest in all right,
title, and interests of Debtor in and to the property described
in Attachment 1 hereto (collectively and severally, the
"Collateral"), which Attachment 1 is incorporated herein by this
reference.
3. Representations and Warranties
. Debtor represents and warrants to Secured Party
that:
(a) Debtor is the owner of or has a valid interest in the
Collateral (or, in the case of after-acquired Collateral, at the
time Debtor acquires rights in the Collateral, will be the owner
thereof) and that no other person has (or, in the case of after-
acquired Collateral, at the time Debtor acquires rights therein,
will have) any right, title claim or interest (by way of Lien or
otherwise) in, against or to the Collateral other than Permitted
Liens;
(b) Secured Party has (or in the case of after-acquired
Collateral, at the time Debtor acquires rights therein, will
have) a perfected security interest in the Collateral, provided
that the Secured Party performs all acts necessary to perfect
such security interest;
(c) Debtor does not own any Patents, Trademarks, Copyrights
related to the Software defined in Attachment 2 registered in, or
the subject of pending applications in, the Patent and Trademark
Office or the Copyright Office or any similar offices or agencies
in any other country or any political subdivision thereof, other
than those described in Attachment 2 hereto;
(d) As of the date hereof, the Debtor's principal place of
business and chief executive office is located at: 00000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxxx, XX 00000-0000.
4. Covenants Relating to Collateral
. Debtor hereby agrees:
to perform all acts that may be reasonably necessary to
maintain, preserve, protect and perfect the Collateral, the Lien
granted to Secured Party therein and the junior priority of such
Lien, other than Permitted Liens;
(i) not to change Debtor's name or place of business or chief
executive office or the location of any of its other Collateral
without giving Secured Party thirty (30) days prior written
notice;
(ii) to appear in and defend any action or proceeding which may
affect its title to or Secured Party's interest in the Collateral
other than with respect to Permitted Liens;
(iii) to comply with all material requirements of law
relating to the production, possession, operation, maintenance
and control of the Collateral, except to the extent that the
failure to do so could not reasonably be expected to have a
material adverse effect upon the financial or business condition
of Debtor;
(iv) perform all acts and execute all documents, including
notices of security interest for each relevant type of
intellectual property in forms suitable for filing with the
Patent and Trademark Office or the Copyright Office, as
applicable, substantially in the form of Attachment 3
(appropriately revised) annexed hereto, that may be reasonably
necessary to record, maintain, preserve, protect and perfect
Secured Party's interest in the Collateral, the Lien granted to
Secured Party in the Collateral, to the extent required by
Secured Party;
(v) Debtor shall at all times keep at least one complete set of
records concerning Collateral at its chief executive office and
shall make such records available for inspection by Secured Party
at such times as Secured Party may reasonably request. Debtor
shall not be authorized to sell, transfer, grant nonexclusive
licenses of or otherwise dispose of any item of Collateral other
than in the ordinary course of business; and
(vi) If requested by Secured Party, Debtor shall deposit into an
escrow account current and future version of the Software listed
in Attachment 2.
5. Notice of Patent, Trademark, or Copyrights
Debtor will promptly notify Secured Party upon the
filing by Debtor by (i) an application for the registration of
any Patent, Trademark, or Copyright with the Patent and Trademark
Office or the Copyright Office or any similar agency in any other
country or any political subdivision thereof; or (ii) any
assignment of any Patent, Trademark or Copyright, which Debtor
may acquire from a third party, filed with the Patent and
Trademark Office or the Copyright Office or any similar agency in
any other country or any political subdivision thereof.
6. Default and Remedies.
(A) Debtor shall be deemed in "Default" under this Security
Agreement upon the occurrence of an Event of Default as defined
in the Note which is not cured within the cure period set forth
in the Note. Upon the recurrence of any Default, Secured Party
shall have the rights of a secured creditor under the UCC and
applicable federal law. Without limiting the generality of the
foregoing, Secured Party may sell, resell, lease, use, assign,
license, sublicense, transfer or otherwise dispose of any or all
of the Collateral in its then condition or following any
commercially reasonable preparation or processing at public or
private sale, by one or more contracts, in one or more parcels,
at the same or different times, or for cash or credit, all as
Secured Party deems reasonably advisable; provided, however, that
Debtor shall be credited with the net proceeds of sale only when
such proceeds are collected by Secured Party. Secured Party
shall have the right upon any such public sale, and, to the
extent permitted by law, upon any such private sale, to purchase
the whole or any part of the Collateral so sold. Debtor hereby
agrees that the sending of notice by ordinary mail, postage
prepaid, to the address of Debtor set forth herein, of the place
and time of any public sale or of the time after which any
private sale or other intended disposition is to be made, shall
be deemed reasonable notice thereof if such notice is sent ten
days prior to the date of such sale or other disposition or the
date on or after which such sale or other disposition may occur.
(b) License. For the purpose of enabling Secured Party to
exercise its rights and remedies under this Section 6 or
otherwise in connection with this Agreement, Debtor hereby grants
to Secured Party an irrevocable, non-exclusive and assignable
license (exercisable without payment or royalty or other
compensation to Debtor) to use, license or sublicense any
intellectual property Collateral. In the event of any public or
private sale of any kind, the Secured Party shall have a right of
refusal (on terms mutually agreeable to the parties at the time)
to purchase the intellectual property Collateral from the Debtor.
7. Miscellaneous.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications
to or upon Debtor or Secured Party under this Security Agreement
shall be provided in accordance with the terms of the Note
Purchase Agreement.
(b) Nonwaiver. No failure or delay on Secured Party's part in
exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of
any such right preclude any other further exercise thereof or of
any other right.
(c) Amendments and Waivers. This Security Agreement may not be
amended or modified, nor may any of its terms be waived, except
by written instruments signed by Debtor and Secured Party. Each
waiver or consent under any provision hereof shall be effective
only in the specific instances for the purposes for which given.
(d) Expenses.
(i) Debtor shall pay on demand all fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Secured
Party in connection with custody, preservation or sale of, or
other realization on, any of the Collateral or the enforcement or
attempt to enforce any of the Obligations which are not performed
as and when required by this Security Agreement.
(ii) Secured Party shall pay on demand all fees and expenses,
including reasonable attorneys' fees and expenses, incurred by
Debtor in connection with the enforcement or attempt to enforce
any of the obligations of Secured Party under this Security
Agreement which is not performed as and when required by this
Security Agreement.
(e) Governing Law. This Security Agreement shall be governed by
and construed in accordance with the laws of the State of
California without reference to conflicts of law rules (except to
the extent governed by the UCC).
(f) Termination. This Security Agreement shall terminate and be
of no further force and effect upon payment in full by Debtor of
all principal, interest, and other amounts owed under the Note,
or upon the conversion of the Notes in accordance with the terms
thereof so that no principal, interest, or other amounts are owed
under the Note.
[Signature Page Follows]
IN WITNESS WHEREOF, each party hereto has caused this
Security Agreement to be executed by its duly authorized officer
as of the date first above written.
THE VIALINK COMPANY
By:/s/ Xxxxx X. Xxxxxxxxx
Name:Xxxxx X. Xxxxxxxxx
Title: CEO
HEWLETT-PACKARD COMPANY
By:/s/ Xxxxx X. Xxxxx
Name:Xxxxx X. Xxxxx
Title: VP & General Manager
ATTACHMENT 1
TO SECURITY AGREEMENT
All right, title and interest of Debtor now owned or
hereafter acquired in and to the following:
a) All patentable inventions, patent rights, shop rights,
letters of patent of the United States or any other country, all
right, title and interest therein and thereto, and all
registrations and recordings thereof, including all patent
registrations and recordings in the Patent and Trademark Office
or in any similar office or agency of the United States, any
state thereof or any foreign country or political subdivision
thereof, relating to the Software defined in Attachment 2 whether
now owned or hereafter acquired by Debtor, (collectively, the
"Patents");
b) The copyrights including all original works of authorship
fixed in any tangible medium of expression, all right, title, and
interest therein and thereto, and all registrations and
recordings thereof, including all applications, registrations and
recordings in the Copyright Office or in any similar office or
agency of the United States, any state thereof, or any foreign
country or political subdivision thereof, relating to the
Software defined in Attachment 2 whether now owned or hereafter
acquired by Debtor; (collectively, the "Copyrights").
c) All trademarks, trade names, trade styles and service marks,
and all prints and labels on which said trademarks, trade names,
trade styles and service marks have appeared or appear, and all
designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all right, title, and interest
therein and thereto, all registrations and recordings thereof,
including all applications, registrations, and recordings in the
Patent and Trademark Office or in any similar office or agency of
the United States, any state thereof or any foreign country or
political subdivision thereof, relating to the Software defined
in Attachment 2, whether now owned or hereafter acquired by
Debtor, (collectively, the "Trademarks").
ATTACHMENT 2
TO SECURITY AGREEMENT
SOFTWARE:
The software consists of the viaLink Services which are
a set of Internet-based software applications that provide
management of information flow between retailers, manufacturers
and suppliers of consumer packaged goods, and includes the Item
Catalog, ItemXpress, and Exchange Manager.
TRADEMARKS (including Trademark Applications)
TRADEMARK JURISDICTION REGISTRATION REGISTRATION
DATE NUMBER
viaLink US Patent & September 9, 2,094,145
Trademark 1997
Office
Chainlink US Patent & July 2, 1996 1,984,648
Trademark
Office
