S&A DRAFT: 01/27/98
COPYRIGHT SECURITY AGREEMENT
THIS COPYRIGHT SECURITY AGREEMENT ("Agreement") is made as of
February __, 1998, by and between [______________], a ___________ corporation
("Grantor"), and The First National Bank of Chicago, as contractual
representative (the "Agent") for its benefit and the benefit of the "Holders
of Secured Obligations" (as such term is defined in the "Credit Agreement"
defined below).
W I T N E S S E T H:
WHEREAS, IFR Systems, Inc., a Delaware corporation (the
"Borrower"), the Agent and certain financial institutions from time to time
party thereto (the "Lenders") are parties to that certain Credit Agreement of
even date herewith (as the same may hereafter be modified, amended, restated
or supplemented from time to time, the "Credit Agreement"), pursuant to which
the Lenders may, from time to time, extend credit to Borrower; and
WHEREAS, Grantor and the Agent are parties to that certain Security
Agreement of even date herewith (as the same may hereafter be modified,
amended, restated or supplemented from time to time, the "Security
Agreement"), pursuant to which Grantor has granted a security interest in
certain of its assets to the Agent for the benefit of the Agent and the
Holders of Secured Obligations; and
WHEREAS, the Lenders have required Grantor to execute and deliver
this Agreement (i) in order to secure the prompt and complete payment,
observance and performance of all of the "Secured Obligations" (as defined in
the Credit Agreement) and (ii) as a condition precedent to any extension of
credit to the Borrower under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor agrees as follows:
1. DEFINED TERMS.
(a) Unless otherwise defined herein, each capitalized term used
herein that is defined in the Credit Agreement shall have the meaning
specified for such term in the Credit Agreement. Unless otherwise defined
herein or in the Credit Agreement, each capitalized term used herein that is
defined in the Security Agreement shall have the meaning specified for such
term in the Security Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of like
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular
provision of this Agreement, and section references are to this Agreement
unless otherwise specified.
(c) All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural, and VICE VERSA, unless otherwise
specified.
2. INCORPORATION OF PREMISES. The premises set forth above are
incorporated into this Agreement by this reference thereto and are made a
part hereof.
3. INCORPORATION OF THE CREDIT AGREEMENT. The Credit Agreement
and the terms and provisions thereof are hereby incorporated herein in their
entirety by this reference thereto.
4. SECURITY INTEREST IN COPYRIGHTS. To secure the complete and
timely payment, performance and satisfaction of all of the Secured
Obligations, Grantor hereby grants to the Agent, for the benefit of the
Holders of Secured Obligations, a security interest in, as and by way of a
first mortgage and security interest having priority over all other security
interests, with power of sale to the extent permitted by applicable law, all
of Grantor's now owned or existing and hereafter acquired or arising:
(i) copyrights, whether or not published or registered under the
Copyright Act of 1976, 17 U.S.C. Section 101 et seq., as the same shall
be amended from time to time, and any predecessor or successor statute
thereto, and applications for registration of copyrights, and all works
of authorship and other intellectual property rights therein, including,
without limitation, copyrights for computer programs, source code and
object code data bases and related materials and documentation and
including, without limitation, the registered copyrights and copyright
applications listed on SCHEDULE A attached hereto and made a part
hereof, and (a) all renewals, revisions, derivative works, enhancements,
modifications, updates, new releases or other revisions thereof, (b) all
income, royalties, damages and payments now and hereafter due and/or
payable with respect thereto, including, without limitation, payments
under all licenses entered into in connection therewith and damages and
payments for past or future infringements thereof, (c) the right to xxx
for past, present and future infringements thereof, (d) the goodwill of
Grantor's business symbolized by the foregoing and connected therewith,
and (e) all of Grantor's rights corresponding thereto throughout the
world (all of the foregoing copyrights and applications, together with
the items described in CLAUSES (a)-(e), being sometimes hereinafter
individually and/or collectively referred to as the "Copyrights"); and
(ii) license agreements with any other party now or hereafter
entered into in connection with any Copyrights or such other party's
copyrights or copyright registrations or applications, whether the
Grantor is a licensor or licensee under any such license agreement,
including, without limitation, the license agreements listed on SCHEDULE
B attached hereto and made a part hereof, and the right to use the
foregoing in connection with the enforcement of the Agent's and the
Holders of Secured Obligations' rights under the Credit Agreement,
including, without limitation, the right to prepare for sale or
distribution and sell, copy, as permitted, or distribute any and all
Inventory now and hereafter owned by Grantor and now or hereafter
covered by such license (all of the foregoing being hereinafter referred
to collectively as the "Licenses"). Notwithstanding
the foregoing provisions of this SECTION 4, the Licenses shall not include
any license agreement in effect as of the date hereof which by its terms
prohibits the grant of the security contemplated by this Agreement;
provided, however, that upon the termination of such prohibitions for any
reason whatsoever, the provisions of this SECTION 4 shall be deemed to
apply thereto automatically; and
(iii) copyrightable materials now or hereafter owned by Grantor,
all tangible property embodying the Copyrights or such copyrightable
materials, and all tangible property covered by the Licenses.
5. RESTRICTIONS ON FUTURE AGREEMENTS. Grantor will not, without
the Agent's prior written consent, enter into any agreement, including,
without limitation, any license agreement, which is inconsistent with this
Agreement, and Grantor further agrees that it will not take any action, and
will use its best efforts not to permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would in any respect affect the validity or enforcement of the rights
transferred to the Agent under this Agreement or the rights associated with
the Copyrights or Licenses.
6. NEW COPYRIGHTS AND LICENSES. Grantor represents and warrants
that, from and after the Closing Date, (a) the Copyrights listed on SCHEDULE
A include all of the registered copyrights and applications for registration
of copyrights in connection therewith now owned or held by Grantor, (b) the
Licenses listed on SCHEDULE B include all of the copyright license agreements
under which Grantor is the licensee or licensor and (c) no liens, claims or
security interests in such Copyrights and Licenses have been granted by
Grantor to any Person other than the Agent. If, prior to the termination of
this Agreement, Grantor shall (i) obtain rights to any new copyrights,
registered copyrights, or copyright applications, (ii) become entitled to the
benefit of any copyrights, registered copyrights, copyright applications,
copyright licenses or copyright license renewals, whether as licensee or
licensor, or (iii) enter into any new copyright license agreement, the
provisions of PARAGRAPH 4 above shall automatically apply thereto. Grantor
shall give to the Agent written notice of events described in CLAUSES (i),
(ii) and (iii) of the preceding sentence promptly after the occurrence
thereof, but in any event not less frequently than on a quarterly basis.
Grantor hereby authorizes the Agent to modify this Agreement unilaterally (i)
by amending SCHEDULE A to include any future copyrights, registered
copyrights and copyright applications and by amending SCHEDULE B to include
any future copyright license agreements which are Copyrights or Licenses
under PARAGRAPH 4 above or under this PARAGRAPH 6, and (ii) by filing, in
addition to and not in substitution for this Agreement, a duplicate original
of this Agreement containing on Schedule A or B thereto, as the case may be,
such future copyrights, registered copyrights, copyright applications and
copyright license agreements.
7. ROYALTIES. Grantor hereby agrees that the use by the Agent of
the Copyrights and Licenses as authorized hereunder in connection with the
Agent's exercise of its rights and remedies under PARAGRAPH 15 or pursuant to
Section 17 of the Security Agreement shall be coextensive with Grantor's
rights thereunder and with respect thereto and without any liability for
royalties or other related charges from the Agent or the other Holders of
Secured Obligations to Grantor.
8. RIGHT TO INSPECT; FURTHER ASSIGNMENTS AND SECURITY INTERESTS.
The Agent may at all reasonable times (and at any time when an Unmatured Default
or Default exists) have
access to, examine, audit, make copies (at Grantor's expense) and extracts
from and inspect Grantor's premises and examine Grantor's books, records and
operations relating to the Copyrights and Licenses; PROVIDED, that in
conducting such inspections and examinations, the Agent shall use reasonable
efforts not to disturb unnecessarily the conduct of Grantor's ordinary
business operations. Grantor agrees not to sell or assign its respective
interests in, or grant any license under, the Copyrights or the Licenses
without the prior and express written consent of the Agent.
9. NATURE AND CONTINUATION OF THE AGENT'S SECURITY INTEREST;
TERMINATION OF THE AGENT'S SECURITY INTEREST. This Agreement is made for
collateral security purposes only. This Agreement shall create a continuing
security interest in the Copyrights and Licenses and shall terminate only
when the Secured Obligations have been paid in full in cash and the Credit
Agreement and the Security Agreement have been terminated. When this
Agreement has terminated, the Agent shall promptly execute and deliver to
Grantor, at Grantor's expense, all termination statements and other
instruments as may be necessary or proper to terminate the Agent's security
interest in the Copyrights and the Licenses, subject to any disposition
thereof which may have been made by the Agent pursuant to this Agreement or
the Security Agreement.
10. DUTIES OF GRANTOR. Grantor shall have the duty, to the extent
desirable in the normal conduct of Grantor's business, to: (i) prosecute
diligently any copyright application included in the Copyrights, (ii) make
application for registration of such uncopyrighted but copyrightable material
as Grantor deems appropriate, (iii) place notices of copyright on all
property embodying the Copyrights and use its best efforts to have its
licensees do the same and (iv) take all reasonable and necessary action to
preserve and maintain all of Grantor's rights in the Copyrights and Licenses
including, without limitation, making timely filings for renewals and
extensions and diligently monitoring unauthorized use thereof. Any expenses
incurred in connection with the foregoing shall be borne by Grantor. Neither
the Agent nor any of the Holders of Secured Obligations shall have any duty
with respect to the Copyrights and Licenses. Without limiting the generality
of the foregoing, neither the Agent nor any of the Holders of Secured
Obligations shall be under any obligation to take any steps necessary to
preserve rights in the Copyrights or Licenses against any other parties, but
the Agent may do so at its option from and after the occurrence of a Default,
and all expenses incurred in connection therewith shall be for the sole
account of Grantor and shall be added to the Secured Obligations secured
hereby.
11. THE AGENT'S RIGHT TO XXX. From and after the occurrence of a
Default, the Agent shall have the right, but shall not be obligated, to bring
suit in its own name to enforce the Copyrights and the Licenses and, if the
Agent shall commence any such suit, Grantor shall, at the request of the
Agent, do any and all lawful acts and execute any and all proper documents
required by the Agent in aid of such enforcement. Grantor shall, upon
demand, promptly reimburse the Agent for all costs and expenses incurred by
the Agent in the exercise of its rights under this PARAGRAPH 11 (including,
without limitation, reasonable fees and expenses of attorneys and paralegals
for the Agent).
12. WAIVERS. The Agent's failure, at any time or times hereafter,
to require strict performance by Grantor of any provision of this Agreement
shall not waive, affect or diminish any right of the Agent thereafter to
demand strict compliance and performance therewith nor shall any course of
dealing between Grantor and the Agent have such effect. No single or partial
exercise of any right hereunder shall preclude any other or further exercise
thereof or the exercise of any other right. None of the undertakings,
agreements, warranties, covenants and
representations of Grantor contained in this Agreement shall be deemed to
have been suspended or waived by the Agent unless such suspension or waiver
is in writing signed by an officer of the Agent and directed to Grantor
specifying such suspension or waiver.
13. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but the provisions of this Agreement are severable, and
if any clause or provision shall be held invalid and unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part hereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
14. MODIFICATION. This Agreement cannot be altered, amended or
modified in any way, except as specifically provided in PARAGRAPH 6 hereof or
by a writing signed by the parties hereto.
15. CUMULATIVE REMEDIES; POWER OF ATTORNEY. Grantor hereby
irrevocably designates, constitutes and appoints the Agent (and all Persons
designated by the Agent in its sole and absolute discretion) as Grantor's
true and lawful attorney-in-fact, and authorizes the Agent and any of the
Agent's designees, in Grantor's or the Agent's name, to take any action and
execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation,
from and after the occurrence of a Default and the giving by the Agent of
notice to Grantor of the Agent's intention to enforce its rights and claims
against Grantor, to (i) endorse Grantor's name on all applications,
documents, papers and instruments necessary or desirable for the Agent in the
use of the Copyrights, the Licenses or copyrightable materials, (ii) assign,
pledge, convey or otherwise transfer title in or dispose of the Copyrights,
the Licenses or copyrightable materials to anyone on commercially reasonable
terms, (iii) grant or issue any exclusive or nonexclusive license under the
Copyrights or, to the extent permitted, under the Licenses, to anyone on
commercially reasonable terms, and (iv) take any other actions with respect
to the Copyrights, the Licenses or any copyrightable materials as the Agent
deems in its own or the Holders of Secured Obligations' best interest.
Grantor hereby ratifies all that such attorney shall lawfully do or cause to
be done by virtue hereof. This power of attorney is coupled with an interest
and shall be irrevocable until all of the Secured Obligations shall have been
paid in full in cash and the Credit Agreement shall have been terminated.
Grantor acknowledges and agrees that this Agreement is not intended to limit
or restrict in any way the rights and remedies of the Agent or the other
Holders of Secured Obligations under the Security Agreement, but rather is
intended to facilitate the exercise of such rights and remedies.
The Agent shall have, in addition to all other rights and remedies
given it by the terms of this Agreement, all rights and remedies allowed by
law and the rights and remedies of a secured party under the Uniform
Commercial Code as enacted in any jurisdiction in which the Copyrights or the
Licenses may be located or deemed located. Upon the occurrence of a Default
and the election by the Agent to exercise any of its remedies under Section
9-504 or Section 9-505 of the Uniform Commercial Code with respect to the
Copyrights and Licenses, Grantor agrees to assign, convey and otherwise
transfer title in and to the Copyrights and the Licenses to the Agent or any
transferee of the Agent and to execute and deliver to the Agent or any such
transferee all such agreements, documents and instruments as may be
necessary, in the Agent's sole discretion, to effect such assignment,
conveyance and transfer. All of the Agent's rights and remedies with
respect to the Copyrights and the Licenses, whether established hereby, by
the Security Agreement, by any other agreements or by law, shall be
cumulative and may be exercised separately or concurrently. Notwithstanding
anything set forth herein to the contrary, it is hereby expressly agreed that
upon the occurrence of a Default, the Agent may exercise any of the rights
and remedies provided in this Agreement, the Security Agreement and any of
the other Loan Documents. Grantor agrees that any notification of intended
disposition of any of the Copyrights and Licenses required by law shall be
deemed reasonably and properly given if given at least ten (10) days before
such disposition; PROVIDED, HOWEVER, that the Agent may give any shorter
notice that is commercially reasonable under the circumstances.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Grantor and its successors and assigns, and shall inure to the benefit of
each of the Holders of Secured Obligations and its nominees, successors and
assigns. Grantor's successors and assigns shall include, without limitation,
a receiver, trustee or debtor-in-possession of or for Grantor; PROVIDED,
HOWEVER, that Grantor shall not voluntarily assign or transfer its rights or
obligations hereunder without the Agent's prior written consent.
17. GOVERNING LAW. This Agreement shall be construed and enforced
and the rights and duties of the parties shall be governed by in all respects
in accordance with the internal laws and decisions of the State of Illinois.
18. NOTICES. All notices or other communications hereunder shall
be given in the manner and to the address of the Borrower, in the case of the
Grantor, and to the address of the Agent, in each case, as set forth in the
Credit Agreement.
19. SECTION TITLES. The section titles herein are for convenience
of reference only, and shall not affect in any way the interpretation of any
of the provisions hereof.
20. EXECUTION IN COUNTERPARTS. This Agreement 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.
21. MERGER. This Agreement represents the final agreement of the
Grantor and the Agent with respect to the matters contained herein and may
not be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Grantor and the Agent or any Holder
of Secured Obligations.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
[ ]
-------------------------------
By:
------------------------------
Name:
Title:
ATTEST:
By:
---------------------------
Title:
Accepted and agreed to as of the day and
year first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
--------------------
Name:
Title:
Schedule A
to
Copyright Security Agreement
Dated as of February ___, 1998
REGISTERED COPYRIGHTS
None, except:
TITLE/DESCRIPTION REGISTRATION NO.
---------------------------------------------------
COPYRIGHT APPLICATIONS
None, except:
TITLE/DESCRIPTION APPLICATION DATE
---------------------------------------------------
OTHER COPYRIGHTS
None, except:
TITLE/DESCRIPTION
Schedule B
to
Copyright Security Agreement
Dated as of February ___, 1998
LICENSE AGREEMENTS
None, except:
STATE OF ILLINOIS )
) SS
COUNTY OF XXXX )
The foregoing Copyright Security Agreement was acknowledged before me
this ___ day of February, 1998, by _____________________, a ____________ of
[________________________], a ___________________ corporation, on behalf of such
corporation.
-----------------------------
Notary Public
Xxxx County, Illinois
My commission expires:
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STATE OF ILLINOIS )
) SS
COUNTY OF XXXX )
The foregoing Copyright Security Agreement was acknowledged before me
this ___ day of February, 1998, by __________________, a ____________ of The
First National Bank of Chicago, a national banking association, on behalf of
such association.
-----------------------------
Notary Public
Xxxx County, Illinois
My commission expires:
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