Exhibit 10.32
THE OBLIGATIONS UNDER THIS AGREEMENT ARE SUBORDINATED TO THE CLAIMS OF UNION
BANK OF CALIFORNIA, N.A. ("UBOC") PURSUANT TO AND IN ACCORDANCE WITH THE TERMS
OF THAT CERTAIN AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT
DATED OF EVEN DATE HEREWITH BETWEEN SECURED PARTY (AS DEFINED BELOW) AND UBOC,
AS AMENDED (THE "INTERCREDITOR AGREEMENT").
AMENDED AND RESTATED
PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT
THIS AMENDED AND RESTATED PATENT, TRADEMARK AND COPYRIGHT SECURITY
AGREEMENT dated as of __________, 2002 (this "Agreement") is made by OVERHILL
FARMS, INC., a Nevada corporation (the "Company"), and OVERHILL L.C. VENTURES,
INC., a California corporation ("Overhill Ventures"), (each of Company, Overhill
Ventures and any direct or indirect Subsidiary of the Company or Overhill
Ventures from time to time party hereto is referred to herein as a "Grantor"
and, collectively, as the "Grantors"), in favor of XXXXXX XXXXXXXXX CAPITAL
PARTNERS II, L.P., a California limited partnership ("Secured Party").
RECITALS
A. The Company, OVERHILL CORPORATION (formerly known as Polyphase
Corporation and to be known from and after the effective date of the Spin-Off as
TreeCon Resources, Inc.), a Nevada corporation ("TreeCon"), Overhill Ventures
and the Purchaser entered into that certain Securities Purchase Agreement dated
as of November 24, 1999, as amended by that certain Consent and First Amendment
to Securities Purchase Agreement dated as of August 23, 2000, and as further
amended by that certain Second Amendment to Securities Purchase Agreement dated
as of January 11, 2002, that certain Consent and Third Amendment dated as of
January 31, 2002, that certain Fourth Amendment dated as of June 28, 2002, and
that certain Fifth Amendment to Securities Purchase Agreement dated as of
September 11, 2002 (as so amended, the "Original Securities Purchase
Agreement").
B. In connection with the execution and delivery of the Original
Securities Purchase Agreement, the Company and Overhill Ventures executed and
delivered to Secured Party a Patent, Trademark and Copyright Security Agreement
dated as of November 24, 1999, as amended by a First Amendment dated as of
August 25, 2000 (as so amended, the "Original PTC Security Agreement").
C. The Company, the entities from time to time parties thereto as
Guarantors (including Overhill Ventures) and Secured Party are concurrently
entering into that certain Amended and Restated Securities Purchase Agreement
(as the same may be amended from time to time, the "Securities Purchase
Agreement") pursuant to which, among other things, (a) the parties thereto are
amending and restating the Original Securities Purchase Agreement, the Original
Note and the Original Warrant and (b) at the request of the
Company, LLCP is consenting to the Spin-Off Related Matters, all on the terms
and subject to the conditions set forth therein.
D. The Company, Overhill Ventures, and their Subsidiaries are members of
a consolidated group of entities whose success is mutually interdependent, and
each of the Company, Overhill Ventures, and their Subsidiaries has derived, and
expects to continue to derive, substantial direct and indirect benefits from the
proceeds of the borrowings made available to the Company under the Note.
E. It is a condition precedent to Secured Party's agreement to consent to
the Spin-Off Related Matters that the Grantors amend and restate the Original
PTC Security Agreement as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises and the mutual
consents and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby amend and restate the Original PTC Security Agreement as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions of Terms Used in Securities Purchase Agreement. All
terms used but not otherwise defined herein shall have the respective meanings
herein ascribed to such terms in the Securities Purchase Agreement or the
Original PTC Security Agreement, as the case may be. The rules of construction
specified in Sections 1.2 through 1.6 of the Securities Purchase Agreement shall
likewise govern the construction of this Agreement.
Section 1.2 Definitions of Certain Terms. As used herein, the following
terms shall have the respective meanings set forth below:
"Books and Records" means, with respect to any Person, all books, records,
board minutes, contracts, licenses, insurance policies, environmental audits,
business plans, files, accounting books and records, financial statements
(actual and pro forma), and filings with Governmental Authorities.
"Collateral" shall mean all right, title and interest of the Grantors in
and to all of the following, wherever located, however evidenced, whether now
owned or hereafter acquired or arising:
(i) Copyrights, including all registered Copyrights,
registrations, recordings, supplemental registrations and pending
applications, including those listed on Schedule III;
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(ii) Licenses, including those listed on Schedule IV;
(iii) Patents, including all granted Patents, recordings and
pending applications, including those listed on Schedule I;
(iv) Trademarks, including all registered Trademarks,
registrations, recordings, and pending applications, including those
listed on Schedule II;
(v) General Intangibles;
(vi) All rights to xxx for past, present or future
infringement or unconsented use thereof, all rights arising therefrom
and pertaining thereto and all reissues, extensions and renewals, in
whole or in part, thereof;
(vii) Any indemnity, warranty or guaranty payable by reason of
loss or damage to or otherwise with respect to the foregoing
Collateral; and
(viii) All products and Proceeds (including insurance proceeds)
of, and additions, improvements and accessions to, and books and
records describing or used in connection with, any and all of the
property described above.
"Copyright Office" shall mean the United States Copyright Office.
"Copyrights" shall mean all of the following now or hereafter owned: (i)
all copyright rights in any work of authorship subject to the copyright laws of
the United States or any other country, whether as author, assignee, transferee
or otherwise, and (ii) all registrations and applications for registration of
any such copyright in the United States or any other country, including
registrations, recordings, supplemental registrations and pending applications
for registration in the Copyright Office.
"Copyright License" shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by the Grantors, or which any Grantor otherwise has the right to
license, or granting any right to any Grantor under any Copyright now or
hereafter owned by any third party, and all rights of each Grantor under any
such agreement.
"General Intangibles" means all "general intangibles," as such term is
defined in the UCC, and all of the following whether or not "general
intangibles" as defined in the UCC: all customer lists, licenses, copyrights,
trademarks, patents, and all applications therefor and reissues, extensions, or
renewals thereof, rights in Patents, including registered Patents, Trademarks,
including registered Trademarks, and Copyrights, including registered
Copyrights, mask works, Licenses, permits, trade secrets, proprietary or
confidential information, inventions (whether or not patented or patentable),
the rights to make, use, modify, advertise and sell, and all other rights with
respect to, the inventions or innovations disclosed or claimed in any of the
foregoing, technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processes,
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models, drawings, materials and records, franchises, Goodwill (including the
Goodwill associated with any Trademarks), all rights and claims in or under
insurance policies (including insurance for fire, damage, loss, and casualty,
whether covering personal property, real property, tangible rights or intangible
rights, all liability, life, key man, and business interruption insurance, and
all unearned premiums), choses in action, rights to receive tax refunds and
other payments, rights to receive dividends, distributions, cash, instruments,
and other property in respect of or exchange for pledged shares or other equity
interests, rights of indemnification, all Books and Records, correspondence,
credit files, invoices and other papers, including all tapes, cards, computer
runs, and other papers and documents in the possession or under the control of
any Person or any computer bureau or service company from time to time acting
for such Person.
"Goodwill" means all goodwill, trade secrets, proprietary or confidential
information, technical information, procedures, formulae, quality control
standards, designs, operating and training manuals, customer lists, and
distribution agreements.
"Joinder Agreement" means a joinder agreement, in substantially the form of
Exhibit A, pursuant to which each direct and indirect future Subsidiary of the
Grantors shall become a party to this Agreement.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense as to which any Grantor is a party,
whether as a licensor or a licensee, granting the right to use or otherwise
exploit in any way any Intellectual Property.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to practice any invention on which a Patent, nor or hereafter owned by
any third party, is in existence, and all rights of such Grantor under any such
agreement.
"Patents" shall mean all of the following: (i) all letters patent of the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or any other
country, including registrations, recordings and pending applications in the PTO
or any other country, and (ii) all reissues, continuation, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Proceeds" means "proceeds," as such term is defined in the UCC, and all of
the following, whether or not "proceeds" as defined in the UCC: (a) any and all
proceeds of any insurance, indemnity, warranty, or guaranty payable to any
Grantor from time to time with respect to any Collateral; (b) any and all
payments or distributions (in any form whatsoever) made or due and payable to
any Grantor from time to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of any Collateral by any Governmental
Authority (or any Person acting under color of Governmental Authority); (c) any
claim of any Grantor against third parties for (and the right to xxx and recover
for and
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the right to damages or profits due or accrued arising out of or in connection
with) (i) past, present or future infringement of any Patent now or hereafter
owned by the Grantors or licensed under a Patent License, (ii) past, present or
future infringement or dilution of any Trademark now or hereafter owned by any
Grantor or licensed under a Trademark License or injury to the goodwill
associated with or symbolized by any Trademark now or hereafter owned by the
Grantors, (iii) past, present or future breach of any License, (iv) past,
present or future infringement of any Copyright now or hereafter owned by any
Grantor or licensed under a Copyright License; (d) any amounts recovered by any
Grantor (net of legal fees and expenses incurred) against third parties with
respect to any litigation or dispute concerning any Collateral; and (e) any and
all other amounts or other assets or rights from time to time paid or payable
under or in connection with, or collected on, distributed on account of, or
arising from, any Collateral, upon sale, lease, license, exchange or other
disposition or otherwise.
"PTO" shall mean the United States Patent and Trademark Office.
"Secured Obligations" mean any and all Obligations to Purchaser, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, contingent or liquidated, whether or not evidenced by any note,
agreement or other instrument, the payment or performance of which is provided
for or arises now or hereafter under or in connection with the Securities
Purchase Agreement or any other Investment Document.
"Senior Liens" shall mean the Liens granted to the Senior Lender pursuant
to the Senior Collateral Documents.
"Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor, or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now or hereafter owned: (i)
all trademarks, service marks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source of business identifiers, designs and general intangibles of like
nature, (but excluding each application to register any trademark, service xxxx
or other xxxx xxxxx to the filing under applicable law of a verified statement
of use (or the equivalent) for such trademark or service xxxx), now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the PTO, any State of the United
States or any other country or any political subdivision thereof, and all
extensions or renewals thereof, (ii) all goodwill associated therewith or
symbolized thereby, and (iii) all other assets, rights and interests that
uniquely reflect or embody such goodwill.
ARTICLE II
SECURITY INTEREST
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Section 2.1 Security Interest. As security for the prompt payment and
performance in full of the Secured Obligations, each Grantor hereby grants,
assigns and pledges to Secured Party and further affirms, ratifies and
acknowledges the continuing validity, enforceability, and perfection of, the
assignments, pledges and grants to Secured Party of, the continuing security
interest in, all of such Grantor's rights, title and interest in, to and under
the Collateral (the "Security Interest").
Each Grantor agrees at all times to keep accurate and complete accounting
records with respect to the Collateral, including, but not limited to, a record
of all payments and Proceeds received.
Section 2.2 Further Assurances.
(a) Each Grantor agrees, at its expense, to promptly execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as Secured Party may from time to time
reasonably request to better assure, preserve and perfect, the Security Interest
and the rights and remedies hereunder, including the payment of any fees and
taxes required in connection with the execution and delivery of this Agreement,
the granting of the Security Interest created hereby, the filing or recording of
any UCC financing statements or other documents (including filings with the PTO
and the Copyright Office) in connection herewith, and the execution and delivery
of any document required to supplement this Agreement with respect to each
Patent, Trademark and Copyright applied for, acquired, registered (or for which
registration applications are filed) or issued after the date hereof. Subject to
the rights of the Senior Lender under the Intercreditor Agreement, if any amount
greater than $10,000, in the aggregate, payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and delivered
to Secured Party, duly endorsed in a manner satisfactory to Secured Party. Each
Grantor agrees promptly to notify Secured Party of any change (i) in its
corporate name or structure, (ii) in its jurisdiction of organization, and (iii)
in its chief place of business. Each Grantor agrees promptly to notify Secured
Party if any material portion of the Collateral is canceled or overturned,
opposed, misappropriated, injured, infringed, lost (other than due to expiration
of any issued Patent), or, if applicable, diluted.
(b) Secured Party is hereby authorized to file one or more
UCC financing statements, continuation statements, filings and recordings with
the PTO or Copyright Office, or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
such Grantor hereunder, without the signature of such Grantor, where permitted
by Applicable Law, naming such Grantor as debtor and Secured Party as secured
party.
(c) Each Grantor agrees that, if at any time after the date
hereof, such Grantor acquires, creates or otherwise obtains, directly or
indirectly, Stock of a new Subsidiary, such Subsidiary shall immediately execute
and deliver a Joinder Agreement, together with any other documents, instruments
or agreements necessary to join such Subsidiary as a party to this Agreement and
to cause such Subsidiary to assign, pledge and grant security interests in all
of its assets pursuant hereto. The Grantors agree to cause any
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such Subsidiary to take any actions that may be necessary or desirable to
perfect and ensure the continuing perfection and priority of such security
interests.
Section 2.3 Inspection and Verification. Without limiting the scope of
Section 8.7 of the Securities Purchase Agreement, Secured Party and such
representatives as Secured Party may reasonably designate shall have the right
to inspect, at any reasonable time or times during the Grantors' usual business
hours, the records related to the Collateral owned by them (and to make extracts
and copies from such records); to discuss the Grantors' affairs with the
officers of the Grantors and their independent accountants; and to verify under
reasonable procedures the validity, amount, quality, quantity, value and status
of or any other matter relating to, such Collateral.
Section 2.4 Taxes; Encumbrances. At its option, Secured Party, upon one
business day's notice to the Grantors, may discharge past due taxes,
assessments, charges, fees, liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted under the
Securities Purchase Agreement, the Security Agreement or this Agreement, and may
pay for the maintenance and preservation of the Collateral to the extent the
Grantors fail to do so as required by the Securities Purchase Agreement, the
Security Agreement or this Agreement, and the Grantors agree to reimburse
Secured Party on demand for any payment made or any expense incurred by Secured
Party pursuant to the foregoing authorization; provided, however, that nothing
in this Section 2.4 shall be interpreted as excusing the Grantors from the
performance of, or requiring Secured Party to cure or perform, any covenants or
other promises of the Grantors with respect to taxes, assessments, charges,
fees, liens, security interests or other encumbrances and maintenance as set
forth herein or in any other Investment Document.
Section 2.5 Amendment of Schedules. Each Grantor hereby authorizes
Secured Party, with prompt notice thereof to the Grantors, to modify this
Agreement by amending Schedules I, II, III or IV or to add additional schedules
hereto to include any asset or item that may be Copyrights, Patents, Trademarks,
or any other type of Collateral, as the case may be, under this Agreement,
provided, however, that the Grantors shall have the right, exercisable within 10
days after it has been notified by Secured Party of the addition of such
Collateral to the applicable Schedule, to advise Secured Party in writing of
such Collateral's deviation from or failure to meet the representations and
warranties made by the Grantors hereunder. Each Grantor covenants and agrees
with Secured Party that such Grantor will use its best efforts to make such
representations and warranties true and correct with respect to such Collateral
within three (3) days after the date it has been notified by Secured Party of
the addition of such Collateral to a Schedule.
Section 2.6 Security Agreement. Each Grantor and Secured Party
acknowledge and agree that, contemporaneously with the execution and delivery of
this Agreement, they are executing and delivering the Security Agreement,
pursuant to which such Grantor unconditionally grants to Secured Party, a
continuing security interest in substantially all property, assets, rights and
interests of the Grantors (including the Collateral). This Agreement is
supplemental to the Security Agreement, and all rights and interests of Secured
Party in and to the Collateral thereunder, are hereby ratified, confirmed and
approved.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor hereby represents and warrants to Secured Party that:
Section 3.1 Validity of Patents, Trademarks and Copyrights. Each of the
Patents, Trademarks and Copyrights is subsisting (other than those Patents and
Trademarks indicated as "abandoned" on Schedules I and II, respectively, as of
the date hereof) and has not been adjudged invalid or unenforceable, in whole or
in part.
Section 3.2 Title and Authority. Such Grantor has rights in and good
title to the Collateral shown on the schedules hereto as being owned by it and
has full power and authority to grant to Secured Party the Security Interest in
such Collateral pursuant hereto and to execute, deliver and perform its Secured
Obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person, other than any consent or approval which has
been obtained.
Section 3.3 Filings.
(a) UCC financing statements containing a description of
the Collateral have been filed of record in every governmental, municipal or
other office in every jurisdiction located within the United States and its
respective territories and possessions necessary to publish notice of and
protect the validity of and to establish a valid and perfected security interest
in favor of Secured Party in respect of the Collateral in which a security
interest in favor of Secured Party in respect of the Collateral in which a
security interest may be perfected by filing a financing statement in the United
States and its political subdivisions, territories and possessions pursuant to
the UCC or other applicable law in such jurisdictions, and no further or
subsequent filing, re-filing, recording, re-recording, registration or
re-registration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.
(b) The Grantors shall ensure and hereby warrant that fully
executed security agreements in the form hereof and containing a description of
the Collateral shall have been received and recorded within three months after
the execution of this Agreement with respect to PTO registered Trademarks (and
Trademarks for which United States registration applications are pending) and
within one month after the execution of this Agreement with respect to United
States registered Copyrights by the PTO and the Copyright Office pursuant to 35
U.S.C. (S) 261, 15 U.S.C. (S) 1060 or 17 U.S.C. (S) 205 and the regulations
thereunder, as applicable, to protect the validity of and to perfect a valid
security interest in favor of Secured Party in respect of the Collateral in
which a security interest may be perfected by filing in the United States and
its political subdivisions, territories and possessions pursuant to applicable
federal law, and no further or subsequent filing, re-filing, recording,
re-recording, registration or re-registration is necessary (other than such
actions as are necessary to perfect Secured Party's security interest with
respect to any Collateral or registrations or application for registration
thereof).
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Section 3.4 Validity of Security Interests. The Security Interest
constitutes (i) a valid and perfected security interest in all the Collateral in
which a security interest may be perfected by filing a financing statement in
the United States and its political subdivisions, territories and possessions
pursuant to the UCC or other applicable law in such jurisdictions, and (ii) a
valid security interest that shall be perfected upon the receipt and recording
of this Agreement with the PTO and the Copyright Office, as applicable, within
the three month period (commencing as of the date hereof) pursuant to 35 U.S.C.
(S) 261 or 15 U.S.C. (S) 1060 or the one month period (commencing as of the date
hereof) pursuant to 17 U.S.C. (S) 205, in each case subject in priority only to
the Senior Liens and to Permitted Liens to the extent entitled to priority by
Applicable Law.
Section 3.5 Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien of any nature, other than the Senior Liens
and other Permitted Liens. Except for the Senior Liens and other Permitted
Liens, no Grantor has filed (i) any financing statement or other document under
the UCC or other applicable state law covering any Collateral, (ii) any
assignment in which it assigns the Collateral, or any security agreement or
similar instrument covering any Collateral, with the PTO or the Copyright
Office, and (iii) any assignment in which it assigns the Collateral, or any
security agreement or similar instrument covering any Collateral, with any
foreign governmental, municipal or other office.
ARTICLE IV
COVENANTS
Section 4.1 Covenants Regarding Patent, Trademark and Copyright
Collateral.
(a) Each Grantor (either itself or through licensees) will,
for each Patent, not do any act, or omit to do any act, whereby any Patent which
is material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and shall continue to xxxx any products covered by a
Patent with the relevant patent number as necessary and sufficient to establish
and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or
its sub-licensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such Trademark
with notice of federal or foreign registration to the extent necessary and
sufficient to establish and preserve its maximum rights under applicable law and
(iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will,
for each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws.
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(d) Each Grantor shall notify Secured Party immediately if
it knows or has reason to know that any Patent, Trademark or Copyright material
to the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the PTO, Copyright Office or any court) regarding such Grantor's ownership of
any Patent, Trademark or Copyright, its rights to register the same, or to keep
and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or the registration of any Trademark or Copyright) with
the PTO, Copyright Office or any office or agency in any political subdivision
of the United States or in any other country or any political subdivision
thereof, unless it promptly informs Secured Party, and, upon request of Secured
Party, executes and delivers any and all agreements, instruments, documents and
papers as Secured Party may request to evidence Secured Party's security
interest in such Patent, Trademark or Copyright of such Grantor relating thereto
or represented thereby, and each Grantor hereby appoints Secured Party its
attorney-in-fact to execute and file such writings for the foregoing purposes,
all acts of such attorney in furtherance thereof being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable until the
Secured Obligations are paid in full.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the PTO, Copyright Office
or any office or agency in any political subdivision thereof, to maintain and
pursue each material application relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights which
is material to the conduct of such Grantor's business, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with good business judgment,
to initiate opposition, interference and cancellation proceedings against third
parties.
(g) In the event that any Collateral consisting of a
Patent, Trademark or Copyright material to the conduct of any Grantor's business
is believed infringed, misappropriated or diluted by a third party, the Grantors
promptly shall notify Secured Party after they learn thereof and shall, if
consistent with good business judgement, promptly xxx for infringement,
misappropriation, or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Collateral.
Section 4.2 Protection of Collateral. Each Grantor shall, at its own
cost and expense, take any and all reasonable actions necessary to defend title
to the Collateral against all persons, to properly maintain, protect and
preserve the Collateral and enforce the Grantor's rights therein, and to defend
the Security Interest of Secured Party in the Collateral against any Lien.
Section 4.3 Continuing Secured Obligations of the Grantors. Each Grantor
shall observe and perform all the conditions and obligations to be observed and
performed by it
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under each License, and under each contract, agreement, interest or obligation
relating to the Collateral, all in accordance with the terms and conditions
thereof, material to the conduct of its business or where the failure to comply
could reasonably be expected to have a Material Adverse Effect on the business,
operations, financial condition or prospects of the Grantors, and shall
indemnify and hold harmless Secured Party, from any and all liabilities arising
from the failure of the Grantors to observe and perform all the conditions and
obligations to be observed and performed by it under each License and under each
contract, agreement, interest or obligation relating to the Collateral. Without
limiting the foregoing, Secured Party shall have no obligation or liability
under any License by reason of or arising out of this Agreement or the granting
or the assignment to Secured Party of the Security Interest or the receipt by
Secured Party of any payment related to any License pursuant hereto, nor shall
Secured Party be required or obligated in any manner to perform or fulfill any
of the obligations of the Grantors under or pursuant to any License, or to make
any payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any License, or to present or file any claim, or to take any action to collect
or enforce any performance of the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
Section 4.4 Use and Disposition of Collateral. No Grantor shall make or
permit to be made any assignment for security, pledge or hypothecation of the
Collateral owned by it, or grant any other security interest in such Collateral.
No Grantor shall make or permit to be made any transfer of the Collateral owned
by it, and the Grantors shall remain at all times in possession thereof other
than transfers to Secured Party pursuant to the provisions thereof or of the
Security Agreement, except that so long as no Event of Default shall have
occurred and be continuing, the Grantors may use or license the Collateral owned
by them in any lawful manner that is in the ordinary course of its business and
is not inconsistent with the provisions of this Agreement, the Security
Agreement, and of the Securities Purchase Agreement.
Section 4.5 Locations of Collateral; Place of Business.
(a) Each Grantor agrees, at such time or times as Secured
Party may reasonably request, promptly to prepare and deliver to Secured Party a
duly certified schedule or schedules in form satisfactory to Secured Party,
showing the identity, amount and location (to the extent practicable) of any and
all Collateral.
(b) Each Grantor agrees not to change, or permit to be
changed, the location of its chief executive office, the name or names used to
identify it in its business or in the ownership of its properties, its
organization structure, or its jurisdiction of organization unless all filings
under the UCC which are required to be made with respect to the Collateral have
been made in order to give Secured Party a valid and perfected first priority
security interest in the Collateral and prior notice thereof has been given to
Secured Party along with copies of all such filings to be made.
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Section 4.6 Future Rights.
(a) If, before all Secured Obligations shall have been paid
in full, any Grantor shall obtain rights to any asset which may be considered
Collateral, or any new Subsidiary of Company or Overhill Ventures becomes a
party hereto as required by the Securities Purchase Agreement, and such new
Subsidiary has or acquires assets which may be considered Collateral, the
provisions of Section 2.1 shall automatically apply thereto and the Grantors
shall give to Secured Party prompt notice thereof in writing.
(b) With respect to any such material asset which may be
considered Collateral as set forth in paragraph (a) above, the Grantors shall
follow the procedures set forth in Section 3.3, as applicable, to ensure that
Secured Party's security interest therein is enforceable, perfected, and
entitled to the priority contemplated by this Agreement.
Section 4.7 Assignment of Licenses. Upon and during the continuance of
an Event of Default, each Grantor shall use its best efforts to obtain all
requisite consents or approvals by the licensor of each Copyright License,
Patent License or Trademark License to effect the assignment of all of such
Grantor's rights, title and interest thereunder to Secured Party or its
designee.
Section 4.8 Liabilities and Indemnification.
(a) Notwithstanding anything to the contrary provided
herein, Secured Party assumes no liabilities with respect to any claims
regarding any Grantor's ownership (or purported ownership) of, or rights or
Secured Obligations (or purported rights or Secured Obligations) arising from,
the Collateral or any use (or actual or alleged misuse), license or sublicense
thereof by any Grantor or any licensee of any Grantor, whether arising out of
any past, current or future event, circumstance, act or omission or otherwise,
or any claim, suit, loss, damage, expense or liability of any kind or nature
arising out of or in connection with the Collateral or the production,
marketing, delivery, sale or provision of goods or services under or in
connection with any of the Collateral. All of such liabilities shall be borne
exclusively by the Grantors.
(b) The Grantors shall, jointly and severally, indemnify
and hold harmless Secured Party from and against, and on demand shall pay to
Secured Party the amount of, any and all claims, actions, suits, judgments,
penalties, losses, damages, costs, disbursements, expenses, obligations or
liabilities of any kind or nature (except those directly caused by Secured
Party's gross negligence or intentional misconduct) specified in Section 4.3 and
Section 4.8(a), or arising in any way out of or in connection with this
Agreement, the Collateral, custody, preservation, use or operation of the
Collateral, any actual or alleged infringement or misappropriation of the rights
or property of any third party, the production, marketing, delivery, sale and
provision of goods or services under or in connection with the Collateral, the
sale, transfer or other disposition of or collection from or other realization
upon any of the Collateral, the exercise or enforcement by Secured Party of any
right or remedy granted to it hereunder, any action taken or omitted to be taken
by
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Secured Party hereunder, the failure of any Grantor to perform or observe any of
the provisions hereof, or matters relating to any of the foregoing.
ARTICLE V
REMEDIES
Section 5.1 COLLECTIONS. Upon the occurrence and during the continuance of
any Event of Default, subject to the rights of the Senior Lender under the
Intercreditor Agreement, Secured Party shall have the right, as the true and
lawful agent of any one or more of the Grantors, with power of substitution for
such Grantor and in such Grantor's name, Secured Party's name or otherwise, for
the use and benefit of Secured Party (a) upon notice from Secured Party, to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to sign
the name of such Grantor on any invoice relating to any of the Collateral; (d)
to commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (e) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to or pertaining to all or any of the Collateral;
(f) to license or, to the extent permitted by any applicable law, sublicense,
whether general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any of the Collateral, throughout the world for such term
or terms, on such conditions, and in such manner, as Secured Party shall
determine (other than in violation of any then existing licensing arrangements
to the extent that waivers or other adequate provision cannot be secured
therefor); and (g) generally to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though Secured Party were the absolute
owner of the Collateral for all purposes; provided, however, that except as
provided for by law or the UCC or its equivalent in other jurisdictions, nothing
herein contained shall be construed as requiring or obligating Secured Party to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken by Secured Party or omitted to be taken with
respect to the Collateral or any part thereof shall give rise to any defense,
counterclaim or offset in favor of the Grantors or to any claim or action
against Secured Party. It is understood and agreed that the appointment of
Secured Party as the attorney-in-fact of the affected Grantor for the purposes
set forth above in this Section 5.1 is coupled with an interest and is
irrevocable. The provisions of this Section 5.1 shall in no event relieve any
Grantor of any of its Secured Obligations hereunder or under the Securities
Purchase Agreement or any other Investment Document with respect to the
Collateral or any part thereof or impose any Secured Obligation on Secured Party
or the Lenders to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by Secured
Party of any other or further right which it may have on the date of
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this Agreement or hereafter, whether hereunder or by law or by the Security
Agreement, or otherwise.
Section 5.2 Other Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor expressly agrees that, subject
to the rights of the Senior Lender under the Intercreditor Agreement, (i)
Secured Party on demand shall have the right at the same or different times,
with or without legal process and with or without previous notice or demand for
performance, to take possession of all tangible manifestations or embodiments of
the Collateral and documentation relocating therefore all business records,
documents, files, prints and labels with respect to the Collateral, and without
liability for trespass to enter any premises where such tangible manifestations
or embodiments, business records, documents, files, prints and labels with
respect to the Collateral may be located for the purpose of taking possession of
or removing such tangible manifestations or embodiments, business records,
documents, files, prints and labels with respect to the Collateral, and (ii)
generally, Secured Party shall have the right to exercise any and all rights
afforded to a secured party under the UCC or other law applicable to any part of
the Collateral. Subject to and without limiting the generality of the foregoing,
the Grantors agree that Secured Party shall have the immediate right, with or
without legal process and with or without previous notice or demand for
performance, all of which are hereby expressly waived, subject to the mandatory
requirements of current law, to sell or otherwise dispose of all or any part of
the Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as Secured
Party shall deem appropriate. Secured Party shall be authorized at any such sale
(if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof where the failure to obtain such a representation
and agreement could result in a violation of any applicable Federal or state
securities laws, and upon consummation of any such sale Secured Party shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of the
Grantors, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
Secured Party shall give the Grantors at least 10 days written notice of
Secured Party's intention to make any sale of Collateral. Such notice shall
comply with the requirements of UCC Section 9613, as applicable, and other
Applicable Law. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as Secured Party may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as Secured Party may (in its sole and absolute discretion) determine.
Secured Party shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to
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which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by Secured Party until the sale price is paid by the purchaser or
purchasers thereof, but Secured Party shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice to the Grantors. At any public sale made pursuant to this Section
5.2, Secured Party may bid for or purchase, free from any right of redemption,
stay, valuation or appraisal on the part of the Grantors (all said rights being
also hereby waived and released to the extent permitted by law), the Collateral
or any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to Secured Party from the Grantors as a
credit against the purchase price, and Secured Party may, upon compliance with
the terms of sale, hold, retain and dispose of such property without further
accountability to the Grantors therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; Secured Party shall be free to carry out such sale pursuant to
such agreement, and the Grantors shall not be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after Secured Party shall have entered into such an agreement all Events of
Default shall have been remedied and the Secured Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, Secured
Party may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court appointed receiver.
Section 5.3 Application of Proceeds. Subject to the rights of the Senior
Lender under the Intercreditor Agreement, Secured Party shall apply the proceeds
of any collection or sale of Collateral, as well as any Collateral consisting of
cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
Secured Party in connection with such collection or sale or otherwise in
connection with this Agreement or any of the Secured Obligations,
including, but not limited to, all court costs and the reasonable fees and
expenses of its agents and legal counsel, the repayment of all advances
made hereunder by Secured Party on behalf of the Grantors and any other
reasonable costs or expenses incurred in connection with the exercise of
any right or remedy hereunder.
SECOND, to the payment in full of the Secured Obligations (the
amounts so applied to be distributed among the holders of the Secured
Obligations pro rata in accordance with the amounts of the Secured
Obligations held by them on the date of any such distribution); and
THIRD, unless otherwise required by UCC Sections 9608 and 9615
or other Applicable Law, to the Grantors, their successors or assigns, or
as a court of competent jurisdiction may otherwise direct.
Secured Party shall have absolute discretion as to the time of application
of any such proceeds, moneys or balances in accordance with this Agreement. Upon
any sale of the Collateral by Secured Party (including a sale pursuant to a
power of sale granted by statute
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or under a judicial proceeding), the receipt of Secured Party or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to Secured Party or such officer or be answerable in any way for the
misapplication thereof. All payments received by any Grantor under or in
connection with any Collateral shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of any Grantor (if such
segregation is not permitted by the Senior Lender, the Grantor shall take such
steps as are reasonably satisfactory to Secured Party) and shall be forthwith
paid over to Secured Party in the same form as so received (with any necessary
indorsement).
Section 5.4 Royalty-free Grant of License to Use Patent, Trademark and
Copyright Collateral. For the purpose of enabling Secured Party to exercise
rights and remedies under Article V at such time as Secured Party shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to Secured Party an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to such Grantor) to use,
license or sub-license any of the Collateral now owned or hereafter acquired by
such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by Secured Party shall
be exercised, at the option of Secured Party, upon the occurrence and the
continuation of an Event of Default; provided that any license, sub-license or
other transaction entered into by Secured Party in accordance herewith shall be
binding upon Grantor notwithstanding any subsequent cure of an Event of Default.
Secured Party agrees to apply the net proceeds received from any license as
provided in Section 5.3.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Secured Party Appointed Attorney-in-Fact. Except as otherwise
provided herein, such Grantor hereby appoints Secured Party the attorney-in-fact
of such Grantor, effective upon the occurrence and during the continuance of an
Event of Default, for the purposes of carrying out the provisions of this
Agreement, taking any action and executing any instrument which Secured Party
may deem necessary or advisable to accomplish the purposes hereof and doing all
other acts which such Grantor is obligated to do hereunder, such appointment is
in each case irrevocable and coupled with an interest. Each Grantor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.
Section 6.2 Secured Party's Fees and Expenses. The Grantors agree jointly
and severally to pay upon demand to Secured Party the amount of any and all
reasonable expenses, including the reasonable expenses of its counsel and of any
experts or agents, which Secured Party may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Secured Party
hereunder, or (iv) the failure by the Grantors to perform or observe any of the
provisions
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hereof. Any such amounts payable as provided hereunder or thereunder shall be
additional Secured Obligations secured hereby and under the other Collateral
Documents and shall be payable upon written demand and bear applicable interest
at the interest rate set forth in the Note.
Section 6.3 Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed or sent telex, by graphic scanning or other telegraphic communications
equipment of the sending party, as set forth in Section 12.7 of the Securities
Purchase Agreement.
Section 6.4 Successors and Assigns.
(a) Whenever in this Agreement any of the parties is referred
to, such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the
Grantors or Secured Party or that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.
(b) No Grantor shall assign or delegate any of its rights and
duties hereunder.
(c) The covenants, promises and agreements by the Grantors
shall inure to the benefit of Secured Party and each assignee of Secured Party.
Section 6.5 Waivers; Amendment. No failure or delay of Secured Party in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other right or power. The rights and remedies of Secured Party
hereunder are cumulative and not exclusive of any rights or remedies which it
would otherwise have. No amendment or waiver of any provision of this Agreement
or consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be in writing and signed by Secured Party, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given; provided, however, that a Joinder Agreement may
amend this Agreement by adding an additional Grantor hereunder without Secured
Party's signature. No notice to or demand on any Grantor in any case shall
entitle any Grantor to any other or further notice or demand in similar or other
circumstances.
Section 6.6 Entire Agreement. This Agreement represents the final agreement
between the parties with respect to the matters set forth herein and supersedes
any prior oral or written, or any contemporaneous oral, agreements or
understandings of the parties. There are no unwritten oral agreements among the
parties. Nothing in this Agreement or in the other Investment Document,
expressed or implied, is intended to confer upon any party other than the
parties hereto or thereto any rights, remedies, Secured Obligations or
liabilities under or by reason of this Agreement or the other Investment
Documents.
Section 6.7 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Grantors herein and in the
certificates or other instruments
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prepared or delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon Secured Party and shall survive the
execution and delivery to Secured Party of the Notes pursuant to the Securities
Purchase Agreement, regardless of any investigation made by Secured Party, and
shall continue in full force and effect as long as any Secured Obligation is
outstanding and unpaid.
Section 6.8 Continuing Security Interest; Termination. This Agreement
shall create a continuing security interest in and to all of the Collateral, and
the security interest shall survive until, and this Agreement shall remain in
full force and effect and terminate only upon, the indefeasible payment
(including payment in full in cash in immediately available funds in the case of
Secured Obligations consisting of payment obligations) and performance in full
of any and all Secured Obligations and the expiration or earlier termination of
all obligations of the Secured Party under this Agreement and the other
Investment Documents.
Section 6.9 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, in any jurisdiction, the validity, legality and enforceability of
the remaining provisions contained herein, and the validity, legality and
enforceability of such provision(s) in all other jurisdictions shall not in any
way be affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
Section 6.10 No Interpretation Against Drafter. This Agreement has been
entered into between persons sophisticated and knowledgeable in business
matters. Accordingly, any rule of law or legal decision that would require
interpretation of this Agreement against the party that has drafted it is not
applicable and is irrevocably and unconditionally waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the purposes of
the parties and this Agreement.
Section 6.11 Counterparts. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall constitute an original but
all of which when taken together shall constitute but one contract.
Section 6.12 Reinstatement. The provisions of this Agreement shall remain
in full force and effect and continue to be effective even if: (a) any petition
is filed by or against any Grantor or any Subsidiary of any Grantor for
liquidation or reorganization; (b) any Grantor or any Subsidiary of any Grantor
becomes insolvent or makes an assignment for the benefit of creditors; (c) a
receiver or trustee is appointed for all or any significant part of the assets
of any Grantor or any Subsidiary of any Grantor; or (d) at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
Applicable Law, rescinded or reduced in amount or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such payment or
performance had not been made. In the event that any payment or any part thereof
is rescinded, reduced, restored, or returned, the Secured
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Obligations and Secured Party's Liens in the Collateral shall be reinstated and
deemed reduced only by any amount paid and not so rescinded, reduced, restored,
or returned.
Section 6.13 Definitions. Unless the context indicates otherwise or the
terms are otherwise defined herein, definitions in the UCC apply to words and
phrases in this Agreement. Each of the terms "Company," "Overhill Ventures," and
"Grantors" includes such Person, such Person's heirs, successors and assigns,
such Person as a debtor-in-possession, and any receiver, trustee, liquidator,
conservator, custodian, or similar party appointed for such Person or all or
substantially all of its assets under any Applicable Law.
Section 6.14 Governing Law. THIS AGREEMENT AND THE OBLIGATIONS OF THE
GRANTORS HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA (WITHOUT REFERENCE TO CONFLICT OF LAWS), EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN CALIFORNIA, IN WHICH EVENT
SUCH MATTER SHALL BE GOVERNED BY THE LAWS OF SUCH OTHER JURISDICTION.
Section 6.15 Secured Party's Right to Use Agents. Secured Party may
exercise its rights under this Agreement through an agent or other designee.
Section 6.16 No Interference, Compensation or Expense. Secured Party may
exercise its rights under this Agreement (a) without resistance or interference
by any Grantor except to the extent such Grantor has valid defenses, and (b)
without payment of any rent, license fee or compensation of any kind to any
Grantor.
Section 6.17 Waivers. Each Grantor waives (a) any claim that, as to any
part of the Collateral, a public sale, should Secured Party elect so to proceed,
is, in and of itself, not a commercially reasonable method of sale for such
Collateral, (b) except as otherwise provided in this Agreement, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH
SECURED PARTY'S DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT
THAT COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE
AND TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF
SECURED PARTY'S RIGHTS HEREUNDER, and (c) all rights of redemption, appraisal or
valuation. To the maximum extent permitted by Applicable Law, each Grantor waive
all claims, damages, and demands against Secured Party, its Affiliates, agents,
and the officers and employees of any of them arising out of the repossession,
retention, or sale of any Collateral except such as are determined in a final
judgment by a court of competent jurisdiction to have arisen solely out of the
gross negligence or willful misconduct of any such Person. Each Grantor agrees
that ten days' prior notice by Secured Party to the Grantors of the time and
place of any public
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sale or of the time after which a private sale may take place is reasonable
notification of such matters.
Section 6.18 Other Parties and Other Collateral. Secured Party need not
file suit or assert a claim for personal judgment against any Person for any
part of the Secured Obligations or seek to realize upon any other security for
the Secured Obligations, before foreclosing upon the Collateral for the purpose
of paying the Secured Obligations.
Section 6.19 Amendment and Restatement. Effective on and as of the
Effective Date, this Agreement shall supersede the Original PTC Security
Agreement insofar as they are inconsistent with this Agreement. However, the
execution and delivery of this Agreement shall not excuse, or constitute a
waiver of, any Defaults or Events of Default under the Original PTC Security
Agreement, it being understood that this Agreement is not a termination of the
Original PTC Security Agreement but is a modification (and, as modified, a
continuation) thereof. The Grantors acknowledge and agree that the Original PTC
Security Agreement, as amended and restated hereby, is affirmed in all respects
and that the first priority liens and security interests granted thereunder are
continued hereby and under the Security Agreement and the Company Pledge
Agreement.
Section 6.20 Waiver of Jury Trial. THE PARTIES EACH KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
WAIVES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR
OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY RELATING TO (a) THIS
AGREEMENT, THE SECURITIES PURCHASE AGREEMENT, ANY OTHER INVESTMENT DOCUMENT OR
THE SECURED OBLIGATIONS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED TO THIS AGREEMENT OR ANY
OTHER INVESTMENT DOCUMENT, OR (b) ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR
THEIR AFFILIATES (OR ANY OF THEM) WITH RESPECT TO THIS AGREEMENT, THE SECURITIES
PURCHASE AGREEMENT, ANY OTHER INVESTMENT DOCUMENT OR THE SECURED OBLIGATIONS,
INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR
OTHER PROCEEDING. Each Grantor (a) certifies that neither Secured Party nor any
representative, agent or attorney of Secured Party has represented, expressly or
otherwise, that Secured Party would not, in the event of litigation, seek to
enforce the foregoing waivers and (b) acknowledges that, in entering into the
Securities Purchase Agreement, Secured Party are relying upon, among other
things, the waivers and certifications contained in this Section 6.20.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
GRANTORS
OVERHILL FARMS, INC., a Nevada corporation
By: _________________________________
Xxxxx Xxxxx
President and Chief Executive Officer
By: _________________________________
R. Xxxxxx Xxxxxxx
Vice President and Chief Financial Officer
OVERHILL L.C. VENTURES, INC., a California
corporation
By: _________________________________
Xxxxx Xxxxx
President
By: _________________________________
R. Xxxxxx Xxxxxxx
Vice President and Chief Financial Officer
AGREED TO AND ACKNOWLEDGED BY:
SECURED PARTY
XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P.,
a California limited partnership
By: LLCP California Equity Partners II, L.P., a
California limited partnership, its General
Partner
By: Xxxxxx Xxxxxxxxx Capital Partners,
Inc., a California corporation, its
General Partner
By: ___________________________________
Xxxxxx X. Xxxxxx
President
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Exhibit A to
Amended and Restated Patent,
Trademark and Copyright Security Agreement
FORM OF
JOINDER AGREEMENT
JOINDER AGREEMENT, dated as of ________________, 200__, made by
___________________________________ (the "Additional Grantor"), in favor of,
XXXXXX XXXXXXXXX CAPITAL PARTNERS, II, L.P., a California limited partnership,
its successors and assigns, as Secured Party (in such capacity, "Secured Party")
in connection with the Securities Purchase Agreement (as defined below). All
capitalized terms not defined herein shall have the respective meanings ascribed
to them in the PTC Security Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, Overhill Farms, Inc., a Nevada corporation ("Company"), the
entities from time to time parties thereto as Guarantors (including Overhill
Ventures) and Secured Party have entered into that certain Amended and Restated
Securities Purchase Agreement dated as of ___________, 2001 (as amended from
time to time, thc "Securities Purchase Agreement");
WHEREAS, in connection with the Securities Purchase Agreement, Company,
Overhill Ventures and their Subsidiaries (other than the Additional Grantor)
have entered into that certain Amended and Restated Patent, Trademark and
Copyright Security Agreement, dated as of ___________, 2002 (as amended from
time to time, the "PTC Security Agreement") in favor of Secured Party;
WHEREAS, the Securities Purchase Agreement requires the Additional Grantor
to become a party to the PTC Security Agreement;
WHEREAS, Company, Overhill Ventures and their Subsidiaries are members of a
consolidated group of entities whose success is mutually interdependent, and
each of the Company, Overhill Ventures, and their Subsidiaries has derived, and
expects to continue to derive, substantial direct and indirect benefits from the
proceeds of the borrowings made available to the Company under the Note; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Joinder Agreement in order to become a party to the PTC Security Agreement.
NOW, THEREFORE, IT IS AGREED:
1. Security Agreement. By executing and delivering this Joinder
Agreement, the Additional Grantor, as provided in Section 2.2 of the PTC
Security Agreement, hereby becomes a party to the PTC Security Agreement as a
Grantor thereunder with the same force and effect as if originally named therein
as a Grantor and, without limiting thc generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Grantor
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thereunder. Without limiting the generality of the foregoing, the Additional
Grantor hereby assigns, pledges and grants to Secured Party a continuing
security interest (subject, as to priority, only to the Senior Liens and
Permitted Liens to the extent entitled to priority by Applicable Law) in and to
all of the Additional Grantor's right, title and interest to Collateral. The
information set forth in Annex 1-A hereto is hereby added to the information set
forth in the Schedules to the PTC Security Agreement. The Additional Grantor
hereby represents and warrants that each of the representations and warranties
contained in Section 3 of the PTC Security Agreement is true and correct on and
as the date hereof (after giving effect to this Joinder Agreement) as if made on
and as of such date.
2. The Joining Party hereby represents and warrants that the
representations, warranties and acknowledgments in the Securities Purchase
Agreement or the Subsidiary Guaranty, as the case may be, made by or with
respect to a Guarantor are true and correct in all material respects on and of
the date hereof as though made on and as of the date hereof, and further
represents and warrants that:
(a) The Joining Party is a corporation duly organized, validly
existing and in good standing under the laws of the State of ________;
(b) The Joining Party has all requisite power and authority to own
and hold or lease the properties it purports to own, hold or lease, to
carry on its business as currently conducted and as proposed to be
conducted and to enter into and deliver this Joinder Agreement and perform
its obligations hereunder and under the PTC Security Agreement; and
(c) This Joinder Agreement and the Subsidiary Guaranty constitute the
legal, valid and binding obligations of the Joining Party, enforceable
against the Joining Party in accordance with their respective terms.
3. Binding Effect. This Joinder Agreement shall be binding upon, and
inure to the benefit of, the Joining Party and its successors and permitted
assigns.
4. Governing Law. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA.
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be
duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: ______________________________
Name:
Title:
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