EXECUTION COPY
SECURITY AND PLEDGE AGREEMENT
This SECURITY AND PLEDGE AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "SECURITY AND PLEDGE
AGREEMENT"), dated as of November 17, 1999, is made by WEEKLY READER
CORPORATION, a Delaware corporation ("WRC"), and JLC LEARNING CORPORATION, a
Delaware corporation ("JLC" and, together with WRC, the "BORROWERS"), WRC MEDIA
INC. (formerly known as EAC II INC.), a Delaware corporation and parent of JLC
("HOLDINGS"), PRIMEDIA REFERENCE INC., a Delaware corporation ("PRI"), AMERICAN
GUIDANCE SERVICE INC., a Minnesota corporation ("AGS"), LIFETIME LEARNING
SYSTEMS, INC., a Delaware corporation ("LLS"), AGS INTERNATIONAL SALES, INC., a
Minnesota corporation ("AIS"), FUNK & WAGNALLS YEARBOOK CORPORATION, a Delaware
corporation ("FW"), and GARETH STEVENS, INC., a Wisconsin corporation ("GS"),
each other Subsidiary (as defined below) of each of the Borrowers a signatory
hereto, and each other Person which may from time to time hereafter become a
party hereto pursuant to SECTION 7.5 (each, individually, an "ADDITIONAL
GRANTOR", and collectively, the "ADDITIONAL GRANTORS", and together with each
Borrower, Holdings, each such Subsidiary, each, individually, a "GRANTOR", and
collectively, the "GRANTORS"), in favor of BANK OF AMERICA, N.A., as
administrative agent (together with its successor(s) thereto, in such capacity
the "ADMINISTRATIVE AGENT") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of November 17, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Borrowers, Holdings, the various
financial institutions as are or may become parties thereto (collectively, the
"LENDERS"), DLJ Capital Funding, Inc., as the Syndication Agent (in such
capacity, the "SYNDICATION AGENT"), the Lead Arranger and the Sole Book Running
Manager, the Administrative Agent and General Electric Capital Corporation, as
the documentation agent (in such capacity, the "DOCUMENTATION AGENT") for the
Lenders, the Lenders and the Issuers have extended Commitments to make Credit
Extensions to the Borrowers;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension)
under the Credit Agreement, each Grantor is required to execute and deliver this
Security and Pledge Agreement;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security and Pledge Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Security and Pledge Agreement inasmuch as such Grantor will derive substantial
direct and indirect benefits from the Credit Extensions made from time to time
to the Borrowers by the Lenders and the Issuers pursuant to the Credit
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
and the Issuers to make Credit Extensions (including the initial Credit
Extension) to the Borrowers pursuant to the Credit Agreement, and to induce the
Secured Parties to enter into Rate Protection Agreement(s), each Grantor agrees,
for the benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Security and Pledge Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"ADDITIONAL GRANTOR" and "ADDITIONAL GRANTORS" are defined in the
PREAMBLE.
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"BORROWERS" is defined in the PREAMBLE.
"COLLATERAL" is defined in SECTION 2.1.
"COMMODITY ACCOUNT" means an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"COMMODITY CONTRACT" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case,
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is (a) traded on or subject to the rules of a board of trade that has been
designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"COMMODITY CUSTOMER" means a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"COMMODITY INTERMEDIARY" means (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of business provides clearance or settlement services
for a board of trade that has been designated as a contract market pursuant to
federal commodities laws.
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed for
use on the computers and electronic data processing hardware described
in CLAUSE (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding CLAUSES (a) through
(c); and
(e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of
the foregoing.
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"CONTROL AGREEMENT" means an agreement in form and substance
satisfactory to the Administrative Agent which provides for the Administrative
Agent to have "control" (as defined in Section 8-106 of the U.C.C., as such term
relates to Investment Property (other than certificated Securities or Commodity
Contracts), or as used in Section 9-115(e) of the U.C.C., as such term relates
to Commodity Contracts).
"COPYRIGHT COLLATERAL" means all copyrights of each Grantor, whether
registered or unregistered, now or hereafter in force throughout the world
including all of such Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in ITEM A of SCHEDULE V
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in ITEM B of SCHEDULE V attached hereto, the right to sue for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or other
account maintained with a bank, savings and loan association, credit union or
other financial institution.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Securities constituting Collateral, but
shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to
any Securities constituting Collateral made in the ordinary course of business
and not a liquidating dividend.
"ENTITLEMENT HOLDER" means a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of
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Section 8-501(b)(2) or (3) of the U.C.C., such Person is the Entitlement Holder.
"EQUIPMENT" is defined in CLAUSE (d) of SECTION 2.1.
"FINANCIAL ASSET" means (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a Person's claims to it is evidenced, including a
certificated or an uncertificated Security, a certificate representing a
Security or a Security Entitlement.
"GRANTOR" and "GRANTORS" are defined in the PREAMBLE.
"HOLDINGS" is defined in the PREAMBLE.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively,
the Computer Hardware and Software Collateral, the Copyright
Collateral, the Patent Collateral, the Trademark Collateral
and the Trade Secrets Collateral.
"INTERCOMPANY NOTE" means, with respect to any Grantor, as the payee
thereunder, a promissory note substantially in the form of EXHIBIT A hereto
(with such modifications as the Administrative Agent may consent to, such
consent not to be unreasonably withheld), which promissory note shall to the
extent required under clause (f)(i) of Section 7.2.2 of the Credit Agreement
evidence all intercompany loans which may be made from time to time by such
Grantor to either Borrower or any of their respective Subsidiaries as the maker
of such promissory note, as such promissory note, in accordance with SECTION
4.2.4, is amended, modified or supplemented from time to time, together with any
promissory note of such maker taken in extension or renewal thereof or
substitution therefor.
"INVESTMENT PROPERTY" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity
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Accounts of any Grantor, whether now owned or hereafter acquired by any Grantor.
"INVENTORY" is defined in CLAUSE (e) of SECTION 2.1
"JLC" is defined in the PREAMBLE.
"LENDER" and "LENDERS" are defined in the FIRST
RECITAL.
"MASTER DEPOSIT ACCOUNT" means (a) in the case of WRC and its
Subsidiaries, the Deposit Account of WRC established and maintained with the
Administrative Agent and designated by WRC as its Master Deposit Account, (b) in
the case of JLC and its Subsidiaries, the Deposit Account of JLC established and
maintained with the Administrative Agent and designated by JLC as its Master
Deposit Account, and (c) in the case of Holdings, either such Deposit Account.
"MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and
other like property, whether or not the title thereto is governed by a
certificate of title or ownership.
"PATENT COLLATERAL" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in ITEM A of SCHEDULE III attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in CLAUSE (a);
(c) all patent licenses, including each patent license
referred to in ITEM B of SCHEDULE III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to sue third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in ITEM A of SCHEDULE III attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred
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to in ITEM B of SCHEDULE III attached hereto, and all rights
corresponding thereto throughout the world.
"RECEIVABLES" is defined in CLAUSE (f) of SECTION 2.1.
"RELATED CONTRACTS" is defined in CLAUSE (f) of SECTION 2.1.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURITIES" means any obligations of an issuer or any shares,
participations, or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of such issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c) (i) are, or are of a type,
dealt with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the U.C.C.
"SECURITIES ACCOUNT" means an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"SECURITIES ACT" is defined in SECTION 6.2.
"SECURITY ENTITLEMENTS" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"SECURITY AND PLEDGE AGREEMENT" is defined in the PREAMBLE.
"SECURITY INTERMEDIARY" means (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"TRADEMARK COLLATERAL" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business
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names, trade styles, service marks, certification marks, collective
marks, logos, designs and other source of business identifiers (all of
the foregoing items in this CLAUSE (a) being collectively called a
"TRADEMARK"), now existing anywhere in the world or hereafter adopted
or acquired, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith,
whether pending or in preparation for filing, including registrations,
recordings and applications in the United States Patent and Trademark
Office or in any other office or agency of the United States of America
or any State thereof or any foreign country, including those referred
to in ITEM A of SCHEDULE IV attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in ITEM B of SCHEDULE IV attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSE (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, CLAUSES (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by any Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in ITEM A and
ITEM B of SCHEDULE IV attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
"TRADE SECRETS COLLATERAL" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "TRADE
SECRET"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in SCHEDULE VI attached hereto,
and including the right to sue for and to enjoin and to collect
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damages for the actual or threatened misappropriation of any Trade Secret and
for the breach or enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
"WRC" is defined in the PREAMBLE.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security and Pledge
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Security and Pledge Agreement,
including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY. Each Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Administrative
Agent for its benefit and the ratable benefit of each of the Secured Parties,
and hereby grants to the Administrative Agent for its benefit and the ratable
benefit of each of the Secured Parties, a security interest in all of the
following, to the extent now or hereafter owned or acquired by such Grantor (the
"COLLATERAL"):
(a) all Intercompany Notes in which such Grantor has an
interest (including each Intercompany Note described in ITEM A of
SCHEDULE I hereto);
(b) all interest and other payments and rights with respect to
each Intercompany Note in which such Grantor has an interest;
(c) all Investment Property in which such Grantor has an
interest (including the Securities of each issuer described in ITEM B
of SCHEDULE I hereto); PROVIDED, that, in the case of Investment
Property consisting of (i) Securities of an issuer that is a Foreign
Subsidiary of such Grantor, the pledge of such
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Securities of such issuer shall be limited to the extent such pledge
would not exceed 65% of the total combined voting power of all classes
of Securities of such Foreign Subsidiary entitled to vote and (ii)
Securities of JLC or WRC that contemporaneously with the issuance
thereof to Holdings by JLC or WRC, as the case may be, are being
transferred or exchanged by Holdings to a holder of substantially
identical Securities of Holdings as a direct result of a Permitted
Equity Exchange in accordance with the Credit Agreement, such
Securities shall not constitute "Collateral";
(d) all equipment in all of its forms (including all Motor
Vehicles) of such Grantor, wherever located, including all parts
thereof and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor and all accessories
related thereto (any and all of the foregoing being the "EQUIPMENT");
(e) all inventory in all of its forms of such Grantor,
wherever located, including
(i) all raw materials and work in process therefor,
finished goods thereof, and materials used or consumed in the
manufacture or production thereof,
(ii) all goods in which such Grantor has an interest
in mass or a joint or other interest or right of any kind
(including goods in which such Grantor has an interest or
right as consignee), and
(iii) all goods which are returned to or repossessed
by such Grantor,
and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products and
documents being the "INVENTORY");
(f) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds)
of such Grantor, whether or not arising out of or in connection with
the sale or lease of goods or the rendering of services, and all rights
of such Grantor now or hereafter existing in and to all security
agreements, guaranties,
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leases and other contracts securing or otherwise relating to any such
accounts, contracts, contract rights, chattel paper, documents,
instruments, and general intangibles (any and all such accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "RECEIVABLES", and any and all such
security agreements, guaranties, leases and other contracts being the
"RELATED CONTRACTS");
(g) all Deposit Accounts of such Grantor (including its Master
Deposit Account in the case where such Grantor is a Borrower) and all
cash, checks, drafts, notes, bills of exchange, money orders and other
like instruments, if any, now owned or hereafter acquired, held therein
(or in sub-accounts thereof) and all certificates and instruments, if
any, from time to time representing or evidencing such investments, and
all interest, earnings and proceeds in respect thereof;
(h) all Intellectual Property Collateral of such
Grantor;
(i) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this SECTION 2.1;
(j) all of such Grantor's other property and rights of every
kind and description and interests therein; and
(k) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in
CLAUSES (a) through (j), proceeds deposited from time to time in any
lock box or Deposit Account of such Grantor (including its Master
Deposit Account in the case where such Grantor is a Borrower), and, to
the extent not otherwise included, all payments under insurance
(whether or not the Administrative Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights described in
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CLAUSE (f) or (h) above arising under any contracts, instruments, licenses or
other documents described in such clause as to which the grant of a security
interest would constitute a violation of a valid and enforceable restriction in
favor of a third party on such grant, unless and until any required consents
shall have been obtained. Each Grantor agrees to use its best efforts to obtain
any such required consent.
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Security and Pledge
Agreement secures the payment of all Obligations of each Grantor now or
hereafter existing under this Security and Pledge Agreement and each other Loan
Document to which such Grantor is or may become a party (collectively, the
"SECURED OBLIGATIONS").
SECTION 2.3. DELIVERY OF CERTIFICATED SECURITIES AND INTERCOMPANY
NOTES. All Collateral comprised of Intercompany Notes and certificated
Securities shall be delivered to and held by or on behalf of (and, in the case
of the Intercompany Notes, endorsed to the order of) the Administrative Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. DIVIDENDS ON SECURITIES AND PAYMENTS ON INTERCOMPANY
NOTES. In the event that any Dividend is to be paid on any Security that
constitutes Collateral or any payment of principal or interest is to be made on
any Intercompany Note at a time when no Specified Default has occurred and is
continuing or would result therefrom, such Dividend or payment may be paid
directly to the applicable Grantor. If any such Specified Default has occurred
and is continuing, then any such Dividend or payment shall be paid directly to
the Administrative Agent.
SECTION 2.5. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security and Pledge Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations, the termination or expiration of all
Letters of Credit, the termination of all Rate Protection Agreements
and the termination of all Commitments,
(b) be binding upon each Grantor, its successors, transferees
and assigns, and
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(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Administrative
Agent and each other Secured Party.
Without limiting the generality of the foregoing CLAUSE (a)(iii), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person, and such other Person shall thereupon become
vested with all the rights and benefits in respect thereof granted to such
Lender under any Loan Document (including this Security and Pledge Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 11.11 and Article X of the Credit
Agreement. Upon (i) the sale, transfer or other disposition of Collateral in
accordance with Section 7.2.11 of the Credit Agreement or (ii) the payment in
full in cash of all Obligations, the termination or expiration of all Letters of
Credit, the termination of all Rate Protection Agreements and the termination of
all Commitments, the security interests granted herein shall automatically
terminate with respect to (x) such Collateral (in the case of CLAUSE (A)) or (B)
all Collateral (in the case of CLAUSE (B)). Upon any such sale, transfer,
disposition or termination, the Administrative Agent will, at such Grantor's
sole expense, deliver to such Grantor, without any representations, warranties
or recourse of any kind whatsoever, all applicable certificated Securities and
all applicable Intercompany Notes, together with all other applicable Collateral
held by the Administrative Agent hereunder, and execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such
termination (including such documents as such Grantor shall reasonably request
to remove the notation of the Administrative Agent as lienholder on any
certificate of title for any applicable Motor Vehicle).
SECTION 2.6. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Security and
Pledge Agreement had not been executed,
(b) the exercise by the Administrative Agent of any of its
rights hereunder shall not release any Grantor from any of its duties
or obligations under any
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such contracts or agreements included in the Collateral, and
(c) neither the Administrative Agent nor any other Secured
Party shall have any obligation or liability under any such contracts
or agreements included in the Collateral by reason of this Security and
Pledge Agreement, nor shall the Administrative Agent or any other
Secured Party be obligated to perform any of the obligations or duties
of any Grantor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
SECTION 2.7. SECURITY INTEREST ABSOLUTE. All rights of the
Administrative Agent and the security interests granted to the Administrative
Agent hereunder, and all obligations of each Grantor hereunder, shall be
absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the
Credit Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any
holder of any Note
(i) to assert any claim or demand or to enforce any
right or remedy against any Borrower, any other Obligor or any
other Person under the provisions of the Credit Agreement, any
Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise;
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(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Credit Agreement, any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Borrower, any other Obligor, any surety or any guarantor.
SECTION 2.8. POSTPONEMENT OF SUBROGATION, ETC. Each Grantor hereby
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in cash of all Secured Obligations,
the termination or expiration of all Letters of Credit, the termination of all
Rate Protection Agreements and the termination of all Commitments. Any amount
paid to any Grantor on account of any payment made hereunder prior to the
payment in full in cash of all Secured Obligations shall be held in trust for
the benefit of the Secured Parties and each holder of a Note and shall
immediately be paid to the Secured Parties and each holder of a Note and
credited and applied against the Secured Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement; PROVIDED,
HOWEVER, that if
(a) such Grantor has made payment to the Secured Parties and
each holder of a Note of all or any part of the Secured Obligations,
and
(b) all Secured Obligations have been paid in full in cash,
all Letters of Credit have been terminated or expired, all Rate
Protection Agreements have been terminated and all Commitments have
been permanently terminated,
each Secured Party and each holder of a Note agrees that, at the requesting
Grantor's request, the Secured Parties and the holders of the Notes will execute
and deliver to such Grantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Grantor of an interest in
15
the Secured Obligations resulting from such payment by such Grantor. In
furtherance of the foregoing, for so long as any Secured Obligations,
Commitments or Letters of Credit remain outstanding or any Rate Protection
Agreement remains in full force and effect, each Grantor shall refrain from
taking any action or commencing any proceeding against any Borrower or any other
Obligor (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
under this Security and Pledge Agreement to any Secured Party or any holder of a
Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. Each Grantor represents
and warrants to each Secured Party insofar as the representations and warranties
contained herein are applicable to such Grantor and its properties, as set forth
in this ARTICLE III, and except as set forth or may be otherwise provided in the
applicable Foreign Pledge Agreement with respect to an issuer of any Security
constituting Collateral that is a Foreign Subsidiary of such Grantor.
SECTION 3.2. AS TO SECURITIES. All Securities constituting Collateral
that are issued by each Subsidiary of such Grantor (a) are duly authorized and
validly issued, fully paid, and non-assessable and (b) constitute all of the
issued and outstanding Securities of such Subsidiary (except, with respect to
CLAUSE (b), (i) in the case of each such Subsidiary that is a Foreign Subsidiary
of such Grantor, in which case, such Securities constitute 65% of the total
combined voting power of all classes of Securities of such Foreign Subsidiary
entitled to vote, (ii) in the case of JLC, the JLC PIK Preferred Equity, if any
(and to the extent issued to the holders thereof in exchange therefor by JLC,
preferred stock of JLC that is identical to the JLC PIK Preferred Equity), the
JLC Warrants and the common stock of JLC issued upon the exercise of the JLC
Warrants (but solely to the extent such common stock does not constitute more
than 13.1%, at the time of such exercise, of the common stock of JLC on a fully
diluted basis) and (iii) in the case of WRC, the WRC PIK Preferred Equity, if
any (and to the extent issued to the holders thereof in exchange therefor by
WRC, preferred stock of WRC that is identical to the WRC PIK Preferred Equity),
the WRC Warrants, the common stock of WRC issued upon the exercise
16
of the WRC Warrants (but solely to the extent such common stock does not
constitute more than 13.1%, at the time of such exercise, of the common stock of
WRC on a fully diluted basis), the common stock of WRC that is issued in
exchange for Holdings (Unit) Common Stock (but solely to the extent such common
stock does not constitute more than 2.85%, at the time of such exercise, of the
common stock of WRC on a fully diluted basis) pursuant to a Permitted Common
Stock Exchange described in clause (ii) of the definition thereof). Except as
otherwise specified in the immediately preceding sentence, all of the Securities
of each Subsidiary of such Grantor are in certificated form and have been
pledged to the Administrative Agent by such Grantor.
SECTION 3.3. AS TO INTERCOMPANY NOTES. In the case of each Intercompany
Note, all of such Intercompany Notes have been duly authorized, executed,
endorsed, issued and delivered, and are the legal, valid and binding obligation
of the issuers thereof, and are not in default.
SECTION 3.4. LOCATION OF COLLATERAL, ETC. All of the Equipment,
Inventory and lock boxes of such Grantor are respectively located at the places
specified in Sections 3(e), (g) and (c) of the Perfection Certificate delivered
by such Grantor. None of the Equipment and Inventory has, within the four months
preceding the date of this Security and Pledge Agreement (if then owned by such
Grantor), been located at any place other than the places specified in Sections
3(e) and (g), respectively, of the Perfection Certificate delivered by such
Grantor. The place(s) of business and chief executive office of such Grantor and
the office(s) where such Grantor keeps its records concerning the Receivables,
and all originals of all chattel paper which evidence Receivables, are
respectively located at the addresses set forth in Sections 3(d), (a) and (b) of
the Perfection Certificate delivered by such Grantor. Such Grantor has no trade
names other than those set forth in Section 1(d) of the Perfection Certificate
delivered by such Grantor. During the four months preceding the date hereof,
such Grantor has not been known by any legal name nor has it had a federal
taxpayer identification number different from the ones set forth in Section 1(a)
(except that Holdings was formerly known as EAC II Inc.) and 2(a), respectively,
of the Perfection Certificate delivered by such Grantor, nor has such Grantor
been the subject of any merger or other corporate reorganization, except as
disclosed pursuant to Section 1(c) of the Perfection Certificate delivered by
such Grantor. If the Collateral includes any Inventory located in the State of
California, such Grantor is not a "retail merchant" within the meaning
17
of Section 9102 of the Uniform Commercial Code - Secured Transactions of the
State of California. All Receivables evidenced by a promissory note or other
instrument, negotiable document or chattel paper have been duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Administrative Agent and delivered and pledged
to the Administrative Agent pursuant to SECTION 4.10. Such Grantor is not a
party to any Federal, state or local government contract except as set forth in
SCHEDULE II hereto.
SECTION 3.5. OWNERSHIP, NO LIENS, ETC. Such Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security and Pledge Agreement and except
in the case of Collateral not consisting of Securities and Intercompany Notes as
permitted by the Credit Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Administrative Agent relating to this Security and Pledge Agreement or as have
been filed in connection with Liens permitted pursuant to Section 7.2.3 of the
Credit Agreement or as to which a duly executed termination statement relating
to such financing statement or other instrument has been delivered to the
Administrative Agent on the Closing Date.
SECTION 3.6. POSSESSION AND CONTROL. Such Grantor has exclusive
possession and control of its Equipment and Inventory.
SECTION 3.7. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. If
requested by the Administrative Agent, such Grantor has, contemporaneously
herewith, delivered to the Administrative Agent possession of all originals of
all negotiable documents, instruments and chattel paper currently owned or held
by such Grantor duly endorsed in blank.
SECTION 3.8. INTELLECTUAL PROPERTY COLLATERAL. With
respect to any Intellectual Property Collateral the loss,
impairment or infringement of which might have a Material
Adverse Effect:
(a) to the best knowledge of the Grantor, such Intellectual
Property Collateral is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part;
18
(b) to the best knowledge of the Grantor, such Intellectual
Property Collateral is valid and enforceable;
(c) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including recordations of all of its interests in the
Patent Collateral and Trademark Collateral in the United States Patent
and Trademark Office and in corresponding offices in countries in which
the failure to so file and/or record could reasonably have a Material
Adverse Effect and its claims to the Copyright Collateral in the United
States Copyright Office and in corresponding offices in countries in
which the failure to so file and/or record could reasonably have a
Material Adverse Effect;
(d) to the best knowledge of the Grantor, no claim has been
made that the use of such Intellectual Property Collateral does or may
violate the asserted rights of any third party and such Grantor is the
exclusive owner of the entire and unencumbered right, title and
interest in and to such Intellectual Property Collateral;
(e) to the best knowledge of the Grantor, such Grantor has
performed all acts and has paid all required fees and taxes to maintain
each and every such item of Intellectual Property Collateral in full
force and effect throughout the world, as applicable; and
(f) to the best knowledge of the Grantor, such Grantor owns
directly or is entitled to use by license or otherwise, all patents,
Trademarks, Trade Secrets, copyrights, licenses, technology, know-how,
processes and rights with respect to any of the foregoing used in or
necessary for the conduct of such Grantor's business.
SECTION 3.9. VALIDITY, ETC. This Security and Pledge Agreement creates
a valid security interest in the Collateral securing the payment of the Secured
Obligations, and
(a) in the case of Collateral comprised of certificated
Securities or instruments, upon the delivery of such Collateral to the
Administrative Agent, such security interest will be a valid first
priority perfected security interest;
19
(b) in the case of Collateral comprised of uncertificated
Securities and other Investment Property (other than certificated
Securities), upon the Administrative Agent obtaining "control" (as
defined in Section 8-106 of the U.C.C., as such term relates to
Investment Property (other than certificated Securities or Commodity
Contracts), or as used in Section 9-115(e) of the U.C.C., as such term
relates to Commodity Contracts) of such Collateral and the filing of
the Uniform Commercial Code financing statements delivered by the
Grantor having an interest in such Collateral to the Administrative
Agent with respect to such Collateral, such security interest will be a
valid first priority perfected security interest;
(c) in the case of Collateral comprised of Motor Vehicles,
upon the recordation or notation of the Administrative Agent's Lien on
the certificates of title or ownership in respect of such Motor
Vehicles and the filing of the Uniform Commercial Code financing
statements delivered by the Grantor having an interest in such Motor
Vehicles to the Administrative Agent with respect to such Collateral,
such security interest will be a valid first priority perfected
security interest;
(d) in the case of Collateral comprised of the Master Deposit
Accounts, (i) such security interest is a valid first priority
perfected security interest or (ii) if applicable law would not
characterize such security interest as "perfected" or "first priority",
the Administrative Agent has rights with respect to such Collateral
that are senior to any other Person that obtains a judicial lien on or
execution against such Collateral or obtains a lien thereon granted by
the holder of such Collateral; and
(e) in the case of all other Collateral in which a security
interest may be perfected by the filing of Uniform Commercial Code
financing statements, upon the filing of the Uniform Commercial Code
financing statements delivered by the Grantor to the Administrative
Agent with respect to such Collateral, such security interest will be a
valid first priority perfected security interest.
Each Grantor has filed all Uniform Commercial Code financing statements referred
to above in the appropriate offices therefor (or has provided the Administrative
Agent with copies thereof suitable for filing in such offices) and has taken all
of the other actions referred to above necessary
20
to create perfected, first-priority security interests in the applicable
Collateral.
SECTION 3.10. AUTHORIZATION, APPROVAL, ETC. Except as have been
obtained or made and are in full force and effect (or otherwise provided for to
the satisfaction of the Agents), no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required either
(a) for the grant by such Grantor of the security interest
granted hereby, the pledge by such Grantor of any Collateral pursuant
hereto or for the execution, delivery and performance of this Security
and Pledge Agreement by such Grantor,
(b) for the perfection of or the exercise by the
Administrative Agent of its rights and remedies hereunder, or
(c) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Security and Pledge Agreement, or,
except with respect to any Securities issued by a Subsidiary of such
Grantor, as may be required in connection with a disposition of such
Securities by laws affecting the offering and sale of securities
generally, the remedies in respect of the Collateral pursuant to this
Security and Pledge Agreement.
SECTION 3.11. COMPLIANCE WITH LAWS. Such Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. CERTAIN COVENANTS. Each Grantor covenants and agrees that,
so long as any portion of the Secured Obligations shall remain unpaid, any Rate
Protection Agreements shall remain in full force and effect, any Letters of
Credit shall be outstanding or any Lender shall
21
have any outstanding Commitment, such Grantor will, unless the Required Lenders
shall otherwise consent in writing, perform, comply with and be bound by the
obligations set forth in this ARTICLE IV.
SECTION 4.2. AS TO INVESTMENT PROPERTY AND INTERCOMPANY NOTES; ETC.
SECTION 4.2.1. CERTIFICATED SECURITIES. Such Grantor shall cause each
of its Subsidiaries (a) to provide in its Organic Documents that all equity
interests in such Subsidiaries shall be Securities governed by Article 8 of the
Uniform Commercial Code and (b) to ensure that all such interests are evidenced
by certificated Securities.
SECTION 4.2.2. INVESTMENT PROPERTY (OTHER THAN CERTIFICATED
SECURITIES). With respect to any Investment Property (other than certificated
Securities) of such Grantor, such Grantor shall (a) cause a Control Agreement
relating to such Investment Property to be executed and delivered in favor of
the Administrative Agent and (b) deliver Uniform Commercial Code financing
statements which when filed will result in the Administrative Agent having a
first priority perfected security interest in such Investment Property.
SECTION 4.2.3. STOCK POWERS, ETC. Such Grantor agrees that all
certificated Securities constituting Collateral delivered by such Grantor
pursuant to this Security and Pledge Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Administrative Agent. Such Grantor will, from time to time
upon the request of the Administrative Agent, promptly deliver to the
Administrative Agent such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Administrative Agent, with respect to
such Collateral as the Administrative Agent may reasonably request and will,
from time to time upon the request of the Administrative Agent after the
occurrence of any Specified Default, promptly transfer any Securities
constituting Collateral into the name of any nominee designated by the
Administrative Agent.
SECTION 4.2.4. CONTINUOUS PLEDGE. Such Grantor will, at all times, keep
pledged to the Administrative Agent pursuant hereto on a first priority
perfected basis all Investment Property constituting Collateral, all Dividends
and Distributions with respect thereto, all Intercompany Notes, all interest,
principal and other proceeds received by the Administrative Agent with respect
to the Intercompany
22
Notes, and all other Collateral and other securities, instruments, proceeds, and
rights from time to time received by or distributable to such Grantor in respect
of any of the foregoing Collateral and will not permit any Subsidiary of such
Grantor to issue any Securities which shall not have been immediately duly
pledged hereunder on a first priority perfected basis.
SECTION 4.2.5. VOTING RIGHTS; DIVIDENDS, ETC. Such Grantor agrees:
(a) after any Specified Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by such Grantor and
without any request therefor by the Administrative Agent, to deliver
(properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Dividends,
Distributions, all interest, all principal, all other cash payments,
and all proceeds of the Collateral, all of which shall be held by the
Administrative Agent as additional Collateral for use in accordance
with CLAUSE (b) of SECTION 6.1; and
(b) after any Specified Default shall have occurred and be
continuing and the Administrative Agent has notified such Grantor of
the Administrative Agent's intention to exercise its voting power under
this SECTION 4.2.5(b)
(i) the Administrative Agent may exercise (to the
exclusion of such Grantor) the voting power and all other
incidental rights of ownership with respect to any Securities
or other Investment Property constituting Collateral and such
Grantor hereby grants the Administrative Agent an irrevocable
proxy, exercisable under such circumstances, to vote such
Securities and such other Collateral; and
(ii) promptly to deliver to the Administrative Agent
such additional proxies and other documents as may be
necessary to allow the Administrative Agent to exercise such
voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by such Grantor but which
such Grantor is then obligated to deliver to the Administrative Agent, shall,
until delivery to the Administrative Agent, be held
23
by such Grantor separate and apart from its other property in trust for the
Administrative Agent. The Administrative Agent agrees that unless a Specified
Default shall have occurred and be continuing and the Administrative Agent shall
have given the notice referred to in SECTION 4.2.5(b), such Grantor shall have
the exclusive voting power with respect to any Securities constituting
Collateral and the Administrative Agent shall, upon the written request of such
Grantor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by such Grantor which are necessary to allow such Grantor
to exercise voting power with respect to any such Securities; PROVIDED, HOWEVER,
that no vote shall be cast, or consent, waiver, or ratification given, or action
taken by such Grantor that would impair any such Collateral or be inconsistent
with or violate any provision of the Credit Agreement or any other Loan Document
(including this Security and Pledge Agreement).
SECTION 4.2.6. AMENDMENT OF ORGANIC DOCUMENTS. Such Grantor will not
amend, supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any Organic Document of any issuer of any Security comprising
the Collateral in which it has an equity interest if the effect thereof is to
impair, or is in any manner adverse to, the rights or interests of the
Administrative Agent or any other Secured Party hereunder or under the Credit
Agreement or any other Loan Document, without the prior written consent of the
Administrative Agent and the Required Lenders; PROVIDED, HOWEVER, that in
connection with a Permitted Equity Exchange of the type described in clause (i)
or (iii) of the definition thereof, a certificate of designation, having
substantially the same terms as the Holdings Certificate of Designation, may be
filed by JLC and/or WRC, as the case may be.
SECTION 4.3. AS TO EQUIPMENT AND INVENTORY. Such Grantor hereby agrees
that it shall
(a) keep all the Equipment and Inventory (other than Inventory
sold in the ordinary course of business) at the places therefor
specified in SECTION 3.4 or, upon 30 days' prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in ARTICLE III (including
SECTION 3.9) shall be true and correct, and all action required
pursuant to the FIRST SENTENCE of SECTION 4.10 shall have been taken
with respect to the Equipment and Inventory;
24
(b) cause the Equipment to be maintained and preserved as
required by Section 7.1.3 of the Credit Agreement; and promptly furnish
to the Administrative Agent a statement respecting any loss or damage
to any of such material Equipment; and
(c) pay promptly when due all property and other material
taxes, assessments and governmental charges or levies imposed upon, and
all claims (including claims for labor, materials and supplies)
against, the Equipment and Inventory, except to the extent the validity
thereof is being contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP have been set
aside.
SECTION 4.4. AS TO RECEIVABLES. (a) Such Grantor shall keep its
place(s) of business and chief executive office and the office(s) where it keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidences Receivables, located at the address(es) set forth in Section
3(b) of the Perfection Certificate delivered by such Grantor, or, upon 30 days'
prior written notice to the Administrative Agent, at such other locations in a
jurisdiction where all actions required by the FIRST SENTENCE of SECTION 4.10
shall have been taken with respect to the Receivables; not change its name or
federal taxpayer identification number except upon 30 days' prior written notice
to the Administrative Agent; hold and preserve such records and chattel paper;
and permit representatives of the Administrative Agent at any time during normal
business hours to inspect and make abstracts from such records and chattel
paper. In addition, the Grantor shall give the Administrative Agent a supplement
to such Perfection Certificate on each date a Compliance Certificate is required
to be delivered to the Administrative Agent under the Credit Agreement, which
shall set forth any changes to the information set forth in SECTION 3.4.
(b) Such Grantor shall have the right to collect all Receivables so
long as no Specified Default shall have occurred and be continuing; PROVIDED,
HOWEVER, that such Grantor agrees to promptly deposit all payments received by
such Grantor on account of the Receivables, whether in the form of cash, checks,
drafts, notes, bills of exchange, money orders or other like instruments or
otherwise, in a Deposit Account in precisely the form in which received (but
with any endorsements of such Grantor necessary for deposit or collection).
25
(c) All proceeds of Collateral received by such Grantor shall be
deposited into a Deposit Account of such Grantor, unless, during the occurrence
and continuance of a Specified Default, such Grantor is otherwise notified in
writing by the Administrative Agent. Following any such notice by the
Administrative Agent to such Grantor pursuant to this SECTION 4.4(c), all
proceeds of Collateral received by such Grantor shall be delivered in kind to a
Master Deposit Account or any other account or accounts specified by the
Administrative Agent. Proceeds of Collateral received by such Grantor shall,
prior to deposit in such Master Deposit Account or such other account or
accounts specified by the Administrative Agent, be held separate and apart from,
and not commingled with, all other property and in express trust for the benefit
of the Administrative Agent until delivery thereof is made to such Master
Deposit Account or such other account or accounts.
(d) Such Grantor shall transfer all funds out of each of its Deposit
Accounts that is not a Master Deposit Account (other than, in the aggregate,
cash or Cash Equivalent Investments in all Deposit Accounts (other than the
Master Deposit Accounts) that do not exceed at any time $10,000) for deposit
into a Master Deposit Account at the close of business each day or, if not
commercially reasonable to do so, no less frequently than once every five
Business Days.
(e) The Administrative Agent shall have the right to apply any amount
in each Deposit Account (including either Master Deposit Account) to the payment
of any Secured Obligations which are due and payable or payable upon demand or
to the payment of any Secured Obligations at any time that a Specified Default
shall have occurred and be continuing.
(f) With respect to each Deposit Account maintained with the
Administrative Agent (including each Master Deposit Account), it is hereby
agreed that (i) deposits in each such Deposit Account are subject to a security
interest as contemplated hereby, (ii) each such Deposit Account shall be under
the sole dominion and control of the Administrative Agent and (iii) the
Administrative Agent shall have the sole right of withdrawal over each such
Deposit Account; PROVIDED, HOWEVER, that, unless and until the Administrative
Agent shall notify the applicable Grantors that a Specified Default shall have
occurred and be continuing and that during the continuance thereof no such
Grantor shall withdraw any of the funds contained in any such Deposit Account
(which notice may be given by telephone if promptly confirmed in writing or by
facsimile), any such Grantor may
26
at any time withdraw any of the funds contained in its Deposit Account for use
in any lawful manner not inconsistent with the provisions of this Security and
Pledge Agreement, the Credit Agreement or any other Loan Document.
SECTION 4.5. MOTOR VEHICLES. (a) Such Grantor shall deliver to the
Administrative Agent the original of the certificate of title or ownership
listing the Administrative Agent as lienholder for (i) any Motor Vehicle owned
by such Grantor that has a fair market value of at least $50,000 or (ii) at the
request of the Administrative Agent, any other Motor Vehicle owned by such
Grantor.
(b) Upon the acquisition after the date hereof by such Grantor of (i)
any Motor Vehicle having a fair market value of at least $50,000 or (ii) any
other Motor Vehicle for which the Administrative Agent has requested the
original of the certificate of title or ownership thereof, such Grantor shall
deliver to the Administrative Agent originals of the certificates of title or
ownership for such Motor Vehicles, together with the manufacturer's statement of
origin with the Administrative Agent listed as lienholder.
(c) Without limiting SECTION 5.1, such Grantor hereby appoints the
Administrative Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of this Security and Pledge Agreement, for the
purpose of (i) executing on behalf of such Grantor title or ownership
applications for filing with appropriate state agencies to enable Motor Vehicles
now owned or hereafter acquired by such Grantor to be retitled and the
Administrative Agent listed as lienholder thereon, (ii) filing such applications
with such state agencies and (iii) executing such other documents and
instruments on behalf of, and taking such other action in the name of, such
Grantor as the Administrative Agent may deem necessary or advisable to
accomplish the purposes hereof (including, without limitation, the purpose of
creating in favor of the Administrative Agent a perfected lien on the Motor
Vehicles and exercising the rights and remedies of the Administrative Agent
under SECTION 6.1 hereof). This appointment as attorney-in-fact is irrevocable
and coupled with an interest.
(d) Any certificates of title or ownership delivered pursuant to the
terms hereof shall be accompanied by odometer statements for each Motor Vehicle
covered thereby.
27
SECTION 4.6. AS TO COLLATERAL. (a) Until the occurrence and continuance
of a Specified Default, and such time as the Administrative Agent shall notify
such Grantor of the revocation of such power and authority such Grantor (i) may
in the ordinary course of its business (except as otherwise permitted under the
Credit Agreement), at its own expense, sell, lease or furnish under the
contracts of service any of the Inventory normally held by such Grantor for such
purpose, and use and consume, in the ordinary course of its business (except as
otherwise permitted under the Credit Agreement), any raw materials, work in
process or materials normally held by such Grantor for such purpose, (ii) will,
at its own expense, endeavor to collect, as and when due, all amounts due with
respect to any of the Collateral, including the taking of such action with
respect to such collection as the Administrative Agent may reasonably request
following the occurrence of a Specified Default or, in the absence of such
request, as such Grantor may deem advisable, and (iii) may grant, in the
ordinary course of business (except as otherwise permitted under the Credit
Agreement), to any party obligated on any of the Collateral, any rebate, refund
or allowance to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of which shall have
given rise to such Collateral. The Administrative Agent, however, may, at any
time following a Specified Default, whether before or after any revocation of
such power and authority or the maturity of any of the Secured Obligations,
notify any parties obligated on any of the Collateral to make payment to the
Administrative Agent of any amounts due or to become due thereunder and enforce
collection of any of the Collateral by suit or otherwise and surrender, release,
or exchange all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby. Upon request of the Administrative Agent
following a Specified Default, such Grantor will, at its own expense, notify any
parties obligated on any of the Collateral to make payment to the Administrative
Agent of any amounts due or to become due thereunder.
(b) Following a Specified Default, the Administrative Agent is
authorized to endorse, in the name of such Grantor, any item, howsoever received
by the Administrative Agent, representing any payment on or other proceeds of
any of the Collateral.
28
SECTION 4.7. AS TO INTELLECTUAL PROPERTY COLLATERAL. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor:
(a) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and make commercially
reasonable efforts to provide notice of such determination to the
Administrative Agent) that any of the Patent Collateral is of
negligible economic value to such Grantor, or (ii) have a valid
business purpose to do otherwise, do any act, or omit to do any act,
whereby any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable except upon expiration of the
end of an unrenewable term of a registration thereof;
(b) such Grantor shall not, and such Grantor shall not permit
any of its licensees to, unless such Grantor shall either (i)
reasonably and in good faith determine (and all commercially reasonable
efforts to provide notice of such determination shall have been
delivered to the Administrative Agent) that any of the Trademark
Collateral is of negligible economic value to such Grantor, or (ii)
have a valid business purpose to do otherwise,
(i) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark
Collateral in full force free from any claim of abandonment
for non-use,
(ii) fail to maintain as in the past the quality of
products and services offered under all of the Trademark
Collateral,
(iii) fail to use all commercially reasonable efforts
to employ all of the Trademark Collateral registered with any
Federal or state or foreign authority with an appropriate
notice of such registration except where the failure to do so
would not have a Material Adverse Effect, and
(iv) do or permit any act or knowingly omit to do any
act whereby any of the Trademark Collateral may lapse or
become invalid or unenforceable;
29
(c) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and make commercially
reasonable efforts to provide notice of such determination to the
Administrative Agent) that any of the Copyright Collateral or any of
the Trade Secrets Collateral is of negligible economic value to such
Grantor, or (ii) have a valid business purpose to do otherwise, do or
permit any act or knowingly omit to do any act whereby any of the
Copyright Collateral or any of the Trade Secrets Collateral may lapse
or become invalid or unenforceable or placed in the public domain
except upon expiration of the end of an unrenewable term of a
registration thereof;
(d) such Grantor shall notify the Administrative Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any material item of the Intellectual Property
Collateral may become abandoned or dedicated to the public or placed in
the public domain or invalid or unenforceable except upon expiration of
the end of an unrenewable term of a registration thereof, or of any
adverse determination or development, which alone or in the aggregate
might have a Material Adverse Effect (including the institution of, or
any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office
or any foreign counterpart thereof or any court) regarding such
Grantor's ownership of any of the Intellectual Property Collateral, its
right to register the same or to keep and maintain and enforce the
same;
(e) in no event shall such Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Administrative
Agent, and upon request of the Administrative Agent, executes and
delivers any and all agreements, instruments, documents and papers as
the Administrative Agent may reasonably request to evidence the
Administrative Agent's security interest in such Intellectual Property
Collateral and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
30
(f) such Grantor shall take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and
pursue any application (and to obtain the relevant registration) filed
with respect to, and to maintain any registration of, the Intellectual
Property Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing CLAUSES (a), (b) and
(c));
(g) such Grantor shall, contemporaneously herewith, execute
and deliver to the Administrative Agent a Patent Security Agreement,
Trademark Security Agreement and Copyright Security Agreement in the
forms of EXHIBIT B, EXHIBIT C and EXHIBIT D hereto, and shall execute
and deliver to the Administrative Agent any other document reasonably
required to acknowledge or register or perfect the Administrative
Agent's interest in any part of the Intellectual Property Collateral;
and
(h) such Grantor shall continue to perform (subject to the
compliance standards in this Section 4.3) all acts and will continue to
pay (subject to the compliance standards in this Section 4.3) all
required fees and taxes to maintain each and every such item of
Intellectual Property Collateral in full force and effect throughout
the world, as applicable.
SECTION 4.8. INSURANCE. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Credit Agreement and will, upon the request of the
Administrative Agent, furnish a certificate of a reputable insurance broker
setting forth the nature and extent of all insurance maintained by such Grantor
in accordance with this Section.
SECTION 4.9. TRANSFERS AND OTHER LIENS. Such Grantor
shall not:
31
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except Inventory in the
ordinary course of business or as permitted by the Credit Agreement; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
Indebtedness of any Person or entity, except for the security interest
created by this Security and Pledge Agreement and except as permitted
by the Credit Agreement.
SECTION 4.10. FURTHER ASSURANCES, ETC. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Administrative Agent may request, in order
to perfect, preserve and protect any security interest granted or purported to
be granted hereby or to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, such Grantor will
(a) mark conspicuously each document included in the
Inventory, each chattel paper included in the Receivables and each
Related Contract and, at the request of the Administrative Agent, each
of its records pertaining to the Collateral with a legend, in form and
substance satisfactory to the Administrative Agent, indicating that
such document, chattel paper, Related Contract or Collateral is subject
to the security interest granted hereby;
(b) if any Receivable shall be evidenced by a promissory note
or other instrument, negotiable document or chattel paper, deliver and
pledge to the Administrative Agent (if requested by the Administrative
Agent following the occurrence and during the continuance of a
Specified Default) hereunder such promissory note, instrument,
negotiable document or chattel paper duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Administrative Agent;
(c) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices (including any assignment of claim form under or pursuant to
the
32
federal assignment of claims statute, 31 U.S.C. Section 3726, any
successor or amended version thereof or any regulation promulgated
under or pursuant to any version thereof), as may be necessary or
desirable, or as the Administrative Agent may request, in order to
perfect and preserve the security interests and other rights granted
or purported to be granted to the Administrative Agent hereby;
(d) not enter into any agreement amending, supplementing, or
waiving any provision of any Intercompany Note (including any
underlying instrument pursuant to which such Intercompany Note is
issued) or compromising or releasing or extending the time for payment
of any obligation of the maker thereof;
(e) promptly execute and deliver all further instruments
(including in the event that the issuer of any Security comprising
Collateral of such Grantor is a Foreign Subsidiary of such Grantor, by
entering into a Foreign Pledge Agreement), and take all further action,
that may be necessary or desirable, or that the Administrative Agent
may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral;
(f) cause the Administrative Agent to be listed as the
lienholder on the certificate of title or ownership relating to (i) any
Motor Vehicle owned by such Grantor that has a fair market value of at
least $50,000 or (ii) at the request of the Administrative Agent, any
other Motor Vehicle owned by such Grantor;
(g) not take or omit to take any action the taking or the
omission of which would result in any impairment or alteration of any
obligation of the maker of any Intercompany Note or other instrument
constituting Collateral; and
(h) furnish to the Administrative Agent, from time to time at
the Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
With respect to the foregoing and the grant of the security
interest hereunder, such Grantor hereby authorizes the
33
Administrative Agent to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral without
the signature of such Grantor where permitted by law. A carbon, photographic or
other reproduction of this Security and Pledge Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the
Administrative Agent's discretion, following the occurrence and continuation of
a Specified Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Security and Pledge Agreement, including:
(a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent with respect to any of
the Collateral; and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
SECTION 4.10).
Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
34
SECTION 5.2. ADMINISTRATIVE AGENT MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by such
Grantor pursuant to SECTION 6.4.
SECTION 5.3. ADMINISTRATIVE AGENT HAS NO DUTY. In addition to, and not
in limitation of, SECTION 2.6, the powers conferred on the Administrative Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Investment Property, whether or not the Administrative Agent has
or is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; PROVIDED, HOWEVER, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Specified Default shall have
occurred and be continuing:
35
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Administrative Agent forthwith, assemble all or part of the
Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place to be
designated by the Administrative Agent which is reasonably
convenient to both parties, and
(ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Administrative Agent's
offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative
Agent may deem commercially reasonable. Each Grantor agrees
that, to the extent notice of sale shall be required by law,
at least ten days' prior notice to such Grantor of the time
and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was
so adjourned.
(b) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral shall be applied by the Administrative
Agent against, all or any part of the Obligations as follows:
(i) first, to the payment of any amounts payable to
the Administrative Agent pursuant to Section 11.3 of the
Credit Agreement and SECTION 6.4;
36
(ii) second, to the equal and ratable payment of
Obligations, in accordance with each Secured Party's
Obligations owing to it under or pursuant to the Credit
Agreement or any other Loan Document, or under or pursuant to
any Hedging Obligation included in the Obligations as to each
Secured Party, applied
(A) first to fees and expense reimbursements
then due to such Secured Party,
(B) then to interest due to such Secured
Party,
(C) then to pay or prepay principal of the
Loans owing to, or to reduce the "credit exposure"
of, such Secured Party under such Hedging Obligation,
as the case may be, and
(D) then to pay the remaining outstanding
Obligations and cash collateralize all Letter of
Credit Outstandings;
(iii) third, without duplication of any amounts paid
pursuant to CLAUSE (b)(ii) above, to the Indemnified Parties
to the extent of any amounts owing pursuant to Section 11.4 of
the Credit Agreement; and
(iv) fourth, to be held as additional collateral
security until the payment in full in cash of all of the
Obligations, the termination or expiration of all Letters of
Credit, the termination of all Rate Protection Agreements and
the termination of all Commitments, after which such remaining
cash proceeds shall be paid over to the applicable Grantor or
to whomsoever may be lawfully entitled to receive such
surplus.
For purposes of this Security and Pledge Agreement, the "credit
exposure" at any time of any Secured Party with respect to a Hedging
Obligation to which such Secured Party is a party shall be determined
at such time in accordance with the customary methods of calculating
credit exposure under similar arrangements by the counterparty to such
arrangements, taking into account potential interest rate movements and
the respective
37
termination provisions and notional principal amount and term of such
Hedging Obligation.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into
the name of the Administrative Agent or its nominee, with or
without disclosing that such Collateral is subject to the lien
and security interest hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in
such Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the
Collateral, and
(vi) execute (in the name, place and stead of such
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. SECURITIES LAWS. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
SECTION 6.1, each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Administrative Agent, advisable to
register such Collateral under the
38
provisions of the Securities Act of 1933, as from time to time amended
(the "SECURITIES ACT"), and to cause the registration statement
relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or
advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Administrative Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent or the Secured
Parties by reason of the failure by any Grantor to perform any of the covenants
contained in this Section and, consequently, agrees that, if such Grantor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by the
Administrative Agent) of the Collateral on the date the Administrative Agent
shall demand compliance with this Section.
SECTION 6.3. COMPLIANCE WITH RESTRICTIONS. Each Grantor agrees that in
any sale of any of the Collateral whenever a Specified Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain
39
qualifications, and restrict such prospective bidders and purchasers to Persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and such Grantor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to such Grantor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION 6.4. INDEMNITY AND EXPENSES.
(a) Each Grantor jointly and severally agrees to indemnify the
Administrative Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security and Pledge
Agreement (including enforcement of this Security and Pledge
Agreement), except claims, losses or liabilities resulting from the
Administrative Agent's gross negligence or wilful misconduct.
(b) Each Grantor will upon demand pay to the Administrative
Agent the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts and
agents, which the Administrative Agent may incur in connection with
(i) the administration of this Security and
Pledge Agreement,
(ii) the custody, preservation, use or operation 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 the Administrative Agent or the Secured Parties
hereunder, and
(iv) the failure by any Grantor to perform or observe
any of the provisions hereof.
40
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Security and Pledge Agreement is a
Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2. AMENDMENTS; ETC. No amendment to or waiver of any
provision of this Security and Pledge Agreement nor consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent (on behalf of the Lenders or
the Required Lenders, as the case may be), and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.3. PROTECTION OF COLLATERAL. The Administrative Agent may
from time to time, at its option, perform any act which each Grantor agrees
hereunder to perform and which such Grantor shall fail to perform after being
requested in writing so to perform (it being understood that no such request
need be given after the occurrence and during the continuance of a Specified
Default) and the Administrative Agent may from time to time take any other
action which the Administrative Agent reasonably deems necessary for the
maintenance, preservation or protection of any of the Collateral or of its
security interest therein.
SECTION 7.4. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and, if to any Grantor, mailed or telecopied or delivered to it,
addressed to it in care of Holdings at the address of Holdings specified in the
Credit Agreement, if to the Administrative Agent, mailed or telecopied or
delivered to it, addressed to it at the address of the Administrative Agent
specified in the Credit Agreement. All such notices and other communications,
when mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received; any
such notice or communication, if transmitted by telecopier, shall be deemed
given when transmitted and electronically confirmed.
41
SECTION 7.5. ADDITIONAL GRANTORS. Upon the execution and delivery by
any other Person of an instrument in the form of ANNEX I hereto, together with a
Perfection Certificate, such Person shall become a "Grantor" hereunder with the
same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Grantor hereunder. The rights and obligations of each Grantor hereunder shall
remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Security and Pledge Agreement.
SECTION 7.6. SECTION CAPTIONS. Section captions used in this Security
and Pledge Agreement are for convenience of reference only, and shall not affect
the construction of this Security and Pledge Agreement.
SECTION 7.7. SEVERABILITY. Wherever possible each provision of this
Security and Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Security
and Pledge Agreement shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Security and Pledge Agreement.
SECTION 7.8. COUNTERPARTS. This Security and Pledge Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed an original and all of which shall constitute together but one and the
same agreement.
SECTION 7.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY AND
PLEDGE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, 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 INTERNAL LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AND PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10. FOREIGN PLEDGE AGREEMENTS. Without limiting any of the
rights, remedies, privileges or benefits provided hereunder to the
Administrative Agent for its benefit and the ratable benefit of the other
Secured
42
Parties, each Grantor and the Administrative Agent hereby agree that the terms
and provisions of this Security and Pledge Agreement in respect of any
Collateral subject to the pledge or other lien of a Foreign Pledge Agreement
are, and shall be deemed to be, supplemental and in addition to the rights,
remedies, privileges and benefits provided to the Administrative Agent and the
other Secured Parties under such Foreign Pledge Agreement and under applicable
law to the extent consistent with applicable law; PROVIDED, that, in the event
that the terms of this Security and Pledge Agreement conflict or are
inconsistent with the applicable Foreign Pledge Agreement or applicable law
governing such Foreign Pledge Agreement, the terms of such Foreign Pledge
Agreement or such applicable law shall be controlling.
SECTION 7.11. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
SECURITY AND PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY SECURED PARTY OR ANY GRANTOR RELATING THERETO SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) IN THE
COURTS OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE LOCATED IN NEW YORK COUNTY OF THE
STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE
LOCATED IN NEW YORK COUNTY OF THE STATE OF NEW YORK, FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH GRANTOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH GRANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH ANY OF THEM MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO
43
ITSELF OR ITS PROPERTY, EACH GRANTOR HEREBY IRREVOCABLY WAIVES (TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW) SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS SECURITY AND PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 7.12. WAIVER OF JURY TRIAL. THE SECURED PARTIES AND THE
GRANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS SECURITY AND PLEDGE AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR THE
GRANTORS RELATING THERETO. THE GRANTORS ACKNOWLEDGE AND AGREE THAT EACH SUCH
PERSON HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH SUCH PERSON IS A
PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES
ENTERING INTO THE CREDIT AGREEMENT, THIS SECURITY AND PLEDGE AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
44
IN WITNESS WHEREOF, each Grantor has caused this Security and Pledge
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
WEEKLY READER CORPORATION
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
JLC LEARNING CORPORATION
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
WRC MEDIA INC.
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
PRIMEDIA REFERENCE INC.
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
AMERICAN GUIDANCE SERVICE INC.
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
LIFETIME LEARNING SYSTEMS, INC.
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
AGS INTERNATIONAL SALES, INC.
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
FUNK & WAGNALLS YEARBOOK CORPORATION
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
GARETH STEVENS, INC.
By /s/ Charles Lavrey
----------------------------------------
Name: Charles Lavrey
Title:
BANK OF AMERICA, N.A., as Administrative Agent
By /s/ Peter Hall
----------------------------------------
Name: Peter Hall
Title:
SCHEDULE I
to Security and Pledge Agreement
(WRC Media Inc.)
Item A. INTERCOMPANY NOTES
None.
Item B. SECURITIES
Authorized Outstanding % of Shares
Issuer (corporate) Shares Shares Pledged
- ------------------ ------ ------ -------
Weekly Reader Corporation 20,000,000 2,830,000 94.9%*
(Voting Common)
Weekly Reader Corporation 20,000,000 3,000,000 100%
(15% Senior Preferred Stock)
JLC Learning Corporation 20,000 10,000 100%
(Common Stock)
- ---------------------
* WRC Media Inc. owns 94.9% of the Voting Common Stock of Weekly Reader
Corporation. PRIMEDIA, Inc. owns the remaining 5.1%.
SCHEDULE II
to Security and Pledge Agreement
(WRC Media Inc.)
GOVERNMENT CONTRACTS
None.
SCHEDULE III
to Security and Pledge Agreement
(WRC Media Inc.)
Item A. PATENTS
None.
Item B. PATENT LICENSES
None.
SCHEDULE IV
to Security and Pledge Agreement
(WRC Media Inc.)
Item A. TRADEMARKS
None.
Item B. TRADEMARK LICENSES
None.
SCHEDULE V
to Security and Pledge Agreement
(WRC Media Inc.)
Item A. COPYRIGHTS
None.
Item B. COPYRIGHT LICENSES
None.
SCHEDULE VI
to Security and Pledge Agreement
(WRC Media Inc.)
TRADE SECRET OR KNOW-HOW LICENSES
None.
SCHEDULE I
to Security and Pledge Agreement
(Lifetime Learning Systems, Inc.)
Item A. INTERCOMPANY NOTES
None.
Item B. SECURITIES
None.
SCHEDULE II
to Security and Pledge Agreement
(Lifetime Learning Systems, Inc.)
GOVERNMENT CONTRACTS
None.
SCHEDULE III
to Security and Pledge Agreement
(Lifetime Learning Systems, Inc.)
Item A. PATENTS
None.
Item B. PATENT LICENSES
None.
SCHEDULE IV
to Security and Pledge Agreement
(Lifetime Learning Systems, Inc.)
Item A. TRADEMARKS
COUNTRY MARK CLASSES APP. # APP. DT REG. # REG. DT STATUS
------- ---- ------- ------ ------- ------ ------- ------
United States LIFETIME LEARNING 16 75/168449 9/9/96 2147187 3/31/98 Registered
SYSTEMS & DESIGN
Item B. TRADEMARK LICENSES
None.
SCHEDULE V
to Security and Pledge Agreement
(Lifetime Learning Systems, Inc.)
Item A. COPYRIGHTS
Copyrights which are ordinary course copyrights and which have no individual
material value are not listed.
Item B. COPYRIGHT LICENSES
None.
SCHEDULE VI
to Security and Pledge Agreement
(Lifetime Learning Systems, Inc.)
TRADE SECRET OR KNOW-HOW LICENSES
None.
SCHEDULE I
to Security and Pledge Agreement
(Gareth Stevens, Inc.)
Item A. INTERCOMPANY NOTES
None.
Item B. SECURITIES
None.
SCHEDULE II
to Security and Pledge Agreement
(Gareth Stevens, Inc.)
GOVERNMENT CONTRACTS
None.
SCHEDULE III
to Security and Pledge Agreement
(Gareth Stevens, Inc.)
Item A. PATENTS
None.
Item B. PATENT LICENSES
None.
SCHEDULE IV
to Security and Pledge Agreement
(Gareth Stevens, Inc.)
Item A. TRADEMARKS
None.
Item B. TRADEMARK LICENSES
None.
SCHEDULE V
to Security and Pledge Agreement
(Gareth Stevens, Inc.)
Item A. COPYRIGHTS
Copyrights which are ordinary course copyrights and which have no individual
material value are not listed.
Item B. COPYRIGHT LICENSES
None.
SCHEDULE VI
to Security and Pledge Agreement
(Gareth Stevens, Inc.)
TRADE SECRET OR KNOW-HOW LICENSES
None.
SCHEDULE I
to Security and Pledge Agreement
(AGS International Sales, Inc.)
Item A. INTERCOMPANY NOTES
None.
Item B. SECURITIES
None.
SCHEDULE II
to Security and Pledge Agreement
(AGS International Sales, Inc.)
GOVERNMENT CONTRACTS
None.
SCHEDULE III
to Security and Pledge Agreement
(AGS International Sales, Inc.)
Item A. PATENTS
None.
Item B. PATENT LICENSES
None.
SCHEDULE IV
to Security and Pledge Agreement
(AGS International Sales, Inc.)
Item A. TRADEMARKS
None.
Item B. TRADEMARK LICENSES
None.
SCHEDULE V
to Security and Pledge Agreement
(AGS International Sales, Inc.)
Item A. COPYRIGHTS
Copyrights which are ordinary course copyrights and which have no individual
material value are not listed.
Item B. COPYRIGHT LICENSES
None.
SCHEDULE VI
to Security and Pledge Agreement
(AGS International Sales, Inc.)
TRADE SECRET OR KNOW-HOW LICENSES
None.
SCHEDULE I
to Security and Pledge Agreement
(JLC Learning Corporation)
Item A. INTERCOMPANY NOTES
None.
Item B. SECURITIES
None.
SCHEDULE II
to Security and Pledge Agreement
(JLC Learning Corporation)
GOVERNMENT CONTRACTS
Educational Technology Agreement between JLC Learning Corporation and California
State Department of Education on February 10, 1989.
Contractual Agreement between School Board of Dade County, Florida and JLC
Learning Corporation of San Diego entered into on December 20, 1990, amended on
April 1, 1992, June 29, 1993 and March 11, 1994.
ESOL Curriculum Development Contract between JLC Learning Corporation and the
Florida Department of Education dated June 22, 1993.
West Virginia Basic Skills Computer Education Contract #01-A between JLC
Learning Corporation and the West Virginia Department of Education on June 14,
1990.
2
SCHEDULE III
to Security and Pledge Agreement
(JLC Learning Corporation)
Item A. PATENTS
None.
Item B. PATENT LICENSES
None.
3
SCHEDULE IV
to Security and Pledge Agreement
(JLC Learning Corporation)
Item A. TRADEMARKS
Australia
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Assessment Designer 796210 6/4/99 RN 06/04/09 Abandoned
Compass 710447 6/12/96 RN 06/12/06 Pending
Compass Worldware 761158 5/4/96 RN 05/04/06 Pending
Design of Tree 761668 5/8/99 761668 1/25/99 RN 05/08/09 Registered
JCAT 761159 5/4/98 761159 12/18/98 RN 05/04/08 Registered
Tomorrow's Promise 752687 1/14/98 752687 8/31/98 RN 01/14/08 Registered
Worldware 775431 10/13/98 775431 2/12/98 RN 10/13/08 Registered
Brunei
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Assessment Designer 30,031 6/3/99 Pending
Compass 29,032 2/24/99 Pending
Compass Worldware 29,205 4/21/98 Pending
Design of Tree 28,201 4/21/98 Pending
Design of Tree 29,202 4/21/98 Pending
JCAT 29,206 4/21/98 24,991 4/21/99 RN 04/21/05 Registered
Tomorrow's Promise 29,031 2/24/98 24,314 2/24/99 RN 02/24/05 Registered
Worldware 29,894 11/24/98 Pending
Writing Expedition 29,204 4/21/98 Pending
Writing Expedition 29,202 4/21/98 Pending
Canada
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Assessment Designer 1,017,274 5/31/99 Pending
Compass 977,358 5/6/99 Pending
Compass Worldware 977,187 5/6/98 Pending
Center Software 567,467 5/6/94 Abandoned
Design of Tree 877,196 5/6/99 Pending
4
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
JCAT 877,239 5/6/99 Pending
Microsystem80 452,173 11/26/80 291,816 6/8/84 RN 06/09/99 Abandoned
System80 379,418 10/1/74 209,350 10/10/75 5N 10/10/05 Abandoned
Tomorrow's Promise 877,185 6/5/99 Pending
Worldware 894,306 10/22/95 Pending
Writing Expedition 977,357 5/6/99 Pending
China
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage 950112050 9/1/95 Abandoned
Worldware
Design of Tree 950110123 9/1/95 Abandoned
Learning First 950118235 9/1/95 Abandoned
France
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Center Software 34-523,327 6/7/94 94529527 6/7/84 RN 06/07/94 Registered
Hong Kong
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage 95 10658 9/23/95 86072/1998 2/2/95 RN 02/01/02 Registered
Worldware
Design of Tree 95 10667 9/23/95 1296/1997 9/22/95 RN 08/23/02 Registered
Learning First 92 11502 9/12/99 RN 09/13/02 Pending
Indonesia
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage D96 18772 9/4/96 354704 9/4/95 RN 09/04/05 Registered
Worldware
Assessment Designer D99-12347 7/13/99 Pending
Compass D99-2472 2/17/99 Pending
Compass Worldware D96 07733 4/27/98 Pending
Design of Tree J98 16035 9/7/95 30136 5/5/96 RN 09/07/05 Registered
JCAT D99 07734 4/27/98 Pending
Learning First D95 15771 9/4/95 260510 9/4/95 RN 02/04/05 Registered
Tomorrow's Promise D98 2478 2/17/98 Pending
5
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Worldware D98 15917 11/6/99 Pending
Writing Expedition D98 07732 4/27/98 Pending
Writing Expedition 2304/98 4/8/95 Pending
Ireland
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Compass 96/3961 6/12/96 173124 6/12/96 RN 06/12/03 Registered
Compass Worldware 96/2924 7/15/98 RN 07/15/05 Pending
Design of Tree 98/3925 7/15/98 RN 07/15/05 Pending
Learning Expedition 96/4375 0712/96 202178 7/12/96 RN 07/12/05 Registered
NCAT 98/1437 4/15/98 RN 04/15/05 Pending
Tomorrow's Promise 97/4604 12/19/97 RN 12/19/04 Pending
Worldware 2179233 10/9/98 RN10/03/05 Pending
Writing Expedition 96/4376 7/12/96 202179 7/12/96 RN 07/12/06 Registered
Japan
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Compass Proposed
Malaysia
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage 9175/95 9/5/95 RN 09/05/05 Pending
Worldware
Assessment Designer 99/05346 6/15/99 RN 05/19/05 Pending
Compass 95/06076 7/18/96 Pending
Compass Worldware 99/05613 5/8/99 RN 03/00/05 Pending
Design of Tree 93/09669 5/14/95 05/05668 7/18/96 RN 09/14/03 Registered
JCAT 95/05611 6/8/98 RN 06/08/05 Pending
Learning Expedition 97/16819 11/21/97 RN 11/21/04 Pending
Learning First 95/09638 9/12/96 RN 09/13/02 Pending
Tomorrow's Promise 99/00802 1/20/98 RN 01/20/06 Pending
Worldware 98/13772 11/28/98 RN11/28/03 Pending
Writing Expedition 98/05612 5/8/98 RN 05/08/05 Pending
Writing Expedition 87/16816 11/21/97 RN 11/21/04 Pending
6
Singapore
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage 9443/95 9/4/95 RN 09/04/05 Pending
Worldware
Assessment Designer T99/066379 5/25/99 RN 06/25/03 Pending
Compass 7454/96 7/19/96 RN 07/19/06 Pending
Compass Worldware 3302/96 4/5/98 RN 04/06/08 Pending
Design of Tree 8407/96 9/2/98 8407/95 9/2/95 RN 09/02/08 Registered
JCAT 3305/96 4/2/98 RN 04/09/05 Pending
Learning First 9934/95 9/12/96 RN 09/16/05 Abandoned
Tomorrow's Promise 15161/97 12/12/97 RN 12/12/07 Pending
Worldware 12024/98 12/1/99 RN 12/01/09 Pending
Writing Expedition 3303/95 4/9/98 RN 04/09/02 Pending
Taiwan
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage 94-44705 8/30/95 Abandoned
Worldware
Design of Tree 94-47275 9/19/95 Abandoned
Learning First 94-44009 9/30/95 739935 12/16/96 RN 12/15/05 Registered
United Kingdom
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A+dvantage 2032589 9/1/95 2032399 9/1/95 RN 09/01/05 Registered
Worldware
Assessment Designer 2199674 6/10/99 Abandoned
Compass 2103147 6/12/96 2101167 6/12/96 RN 06/12/06 Registered
Compass 2117672 12/5/96 2117672 12/5/96 RN 12/04/05 Registered
Management System
Compass-Worldware 2172279 7/16/95 RN 07/16/09 Pending
Center Software 1674184 6/6/94 RN 06/06/01 Abandoned
Design of Tree 2031172 5/21/95 2031172 9/21/95 RN 05/21/05 Registered
Learning Expedition 2106235 7/26/96 2106235 7/26/96 RN 07/26/05 Registered
Learning First 2033465 9/14/95 RN 09/14/05 Abandoned
MCAT 2163913 4/9/96 2163913 4/9/96 RN 04/09/08 Registered
Tomorrow's Promise 2192372 11/26/97 2152272 11/28/97 RN 11/28/07 Registered
7
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Worldware 2179333 10/9/95 2179333 10/9/95 RN 10/09/06 Registered
Writing Expedition 2106237 7/26/96 2106237 7/26/96 RN 07/26/06 Registered
United States
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
A Renaissance in 74/255,759 3/16/92 1,743,676 12/29/92 AU 12/29/92 Transfer
Learning
A World of Habitats 74/231,724 12/18/81 Abandoned
A+dvantage 74/541,327 3/2/95 1,084,423 7/19/97 AU 07/29/03 Registered
Worldware
Actionmate (Stylized) 74/641,332 3/2/95 2,014,451 11/5/96 AU11/5/02 Registered
Assessment Designer 76/633,157 2/2/99 Pending
Assessment Examiner 75/723,609 6/7/99 Pending
Brick by Brick 72/567,330 11/7/95 1,411,115 9/30/95 RN 09/30/05 Registered
Classroom Essentials 79/452,678 3/31/98 2,240,746 4/20/99 AU4/20/05 Registered
Compass 74/429,993 9/24/93 2,053,034 4/15/97 AU 4/15/02 Registered
Compass Virtual 75/668,976 3/26/99 Pending
Classroom
Compass Worldware 78/173,299 9/27/96 2,229,394 3/2/99 AU 3/2/05 Registered
Conter 74/467,978 12/10/93 Abandoned
Conter 74/465,452 12/7/93 Abandoned
Conter Software 74/467,014 12/9/93 Abandoned
Conter Software 74/456,453 12/7/93 Abandoned
Cuentos de Coqui 74/592,363 10/31/94 1,925,500 10/3/95 AU 10/03/01 Registered
(stylized)
Design of Toy with 73/563,225 10/15/85 1,396,585 5/10/96 RN 6/10/95 Registered
Wagon
Design of Children 72/749,425 8/26/89 1,536,875 4/25/89 RN 04/25/05 Abandoned
Holding Hands
Design of Reading 74/581,992 5/30/95 Abandoned
Frog
Design of Tree 73/819,707 5/17/99 1,712,302 3/1/92 RN 9/1/02 Registered
DiscoverySearch 74/171,456 3/31/91 Abandoned
Dragon Tales 74/709,330 7/31/95 2,054,029 4/22/97 AU 4/22/03 Registered
First Connections 74/395,268 6/1/93 1,860,722 11/1/94 AU 11/1/00 Registered
First Connections 74/203,218 10/3/91 Abandoned
8
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Frequent Learner 75/295,449 5/31/97 Abandoned
Miles
Hartley and Design 74/257,129 3/12/92 1,755,662 4/20/93 RN 4/20/03 Registered
Idea Shaper 74/707,944 7/31/95 2,106,204 10/21/97 AU 10/21/03 Registered
IL Design 73/526,796 3/25/95 1,355,833 11/5/95 RN 11/5/05 Registered
Interpretools 75/180,100 10/11/96 2,202,904 10/20/96 AU 10/20/04 Registered
JCAT 74/709,041 7/31/95 2,050,312 4/6/97 AU 04/03/02 Registered
JLC Financial 74/042,225 3/26/90 1,026,458 2/26/91 RN 2/26/01 Transfer
Job Task Link 74/266,366 Abandoned
Jostene learning 73/519,706 8/17/89 1,627,650 12/11/95 RN 12/11/00 Transfer
Corporation
Jostene Learning 74/552,366 10/31/94 3,029,506 1/14/97 AU 1/14/03 Registered
Litenet
Learning First 74/706,275 7/31/95 Abandoned
Meta4 74/378,430 4/13/93 Abandoned
Next Level 75/291,081 5/12/97 Abandoned
Number Workshop 74/769,293 5/1/95 2,025,755 1/14/97 AU 1/14/03 Registered
OneNet 74/653,702 3/30/95 1,956,175 2/13/96 AU 2/13/02 Registered
Out-Of-The-Box 75/179,213 5/27/96 Abandoned
Partnerships, 74/252,257 3/5/92 1,729,965 11/3/93 AU 11/03/05 Abandoned
Resources, Results
Play and Say 74/264,189 4/3/92 Abandoned
Prescription Learning 73/742,432 8/26/98 1,536,877 4/25/99 RN 4/25/09 Abandoned
Quest 74/362,001 2/25/93 Abandoned
Shape Studio 74/709,276 8/1/95 1,987,165 7/16/96 AU 7/15/03 Registered
Storybook Maker 74/705,283 9/1/95 2,108,135 10/28/97 AU 10/28/02 Registered
System90 73/350,213 3/3/70 918,463 8/17/71 RN 8/17/01 Registered
Take Home 76/568,977 3/16/99 Pending
Connection
Teacher to teacher 74/644,326 3/10/95 1,930,919 8/5/95 AU 8/5/02 Registered
Connection
Teacher to Teacher 74/266,267 4/16/92 Abandoned
Connection
Teachnet (stylized) 75/159,918 9/23/94 Pending
THC 74/025,545 2/14/90 1,633,030 1/29/91 RN 1/19/01 Registered
The Hub 74/311,945 9/4/92 Abandoned
9
Mark Serial No. Date (R) Number Date Other Status
---- ---------- ---- ---------- ---- ----- ------
Time for Rhyme 74/264,160 4/5/92 Abandoned
Tomorrow's Promise 75/236,256 2/5/97 2,219,515 1/19/97 AU 1/19/05 Registered
Ufonic 73/453,455 1/21/94 1,332,979 4/30/95 RN 4/30/05 Registered
Word Time 74/364,138 4/9/93 Abandoned
Words on Wings 74/709,329 7/31/95 3,042,902 3/11/97 AU 3/11/03 Registered
WorldWare 75/526,634 7/30/99 Pending
WorldWare 75/526,634 7/28/99 Pending
Zevite Time 74/709,331 7/31/95 2,042,802 3/11/97 AU 03/11/03 Registered
10
SCHEDULE V
to Security and Pledge Agreement
(JLC Learning Corporation)
COPYRIGHTS
All copyrights for JLC Learning Corporation are filed in the United States.
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Advantage Mgmt Sys. 1.1 March 23, 1998 TX-4-620-089
Advantage Mgmt. Sys. 1.2 March 23, 1998 TX-4-620-087
Advantage Mgmt. Sys. 2.0 March 20, 1998 TX-4-613-682
Advantage Mgmt. Sys. 2.1 March 20, 1998 TX-4-613-679
AIMS 2.2.4 Adv. Instruc. Mgmt. Sys. March 20, 1998 TX-4-613-680
Compass 2.2 for Windows/MacIntosh March 23, 1998 TX-4-620-090
Compass 2.2 for ILA April 7, 1998 TX-4-634-221
Compass 2.3 for Windows/MacIntosh March 23, 1998 TX-620-094
Compass 3.0 for Windows/MacIntosh March 20, 1998 TX-4-613-681
LMS 3.15 April 7, 1998 TX-4-634-220
Peer to Peer Install Compass/Tomorrow's Promise 3.1 September 30, 1998 TX-4-626-266
Personal Compass 1.0 for Windows/ MacIntosh March 23, 1998 TX-4-620-099
Worldware 2.0 March 27, 1998 TX-4-623-250
Worldware 2.01 March 20, 1998 TX-4-620-084
RIMS I April 7, 1998 TX-4-634-224
RIMS II 1.72 for MAC March 27, 1998 TX-4-623-266
Jostens Comprehensive Assessment Tests/Compass March 23, 1998 TX-4-620-091
Jostens Comprehensive Assessment Tests/Advantage March 23, 1998 TX-4-620-088
Learning Expedition Language Arts March 27, 1998 TX-4-623-253
Learning Expedition Mathematics Level 1-3 March 27, 1998 TX-4-623-256
Learning Expedition Mathematics Leval 4-8 March 27, 1998 TX-4-623-248
Learning Expedition Math Higher Level Activities March 27, 1998 TX-4-623-252
Learning Expedition Reading Levels 1-3 March 27, 1998 TX-4-623-255
Learning Expedition Reading Levels 4-8 March 27, 1998 TX-4-623-247
Learning Expedition Written Expression March 27, 1998 TX-4-623-251
Learning First Elementary Mathematics March 23, 1998 TX-4-620-095
Learning First Skills and Employability Skills March 23, 1998 TX-4-620-102
Learning First Foundations in Mathematics March 27, 1998 TX-4-623-259
Learning First Middle School Mathematics March 27, 1998 TX-4-623-258
Learning First Foundations in Reading March 27, 1998 TX-4-623-260
Learning First New Edition: Elementary Mathematics March 23, 1998 TX-4-620-103
Learning First New Edition: Elementary Reading March 23, 1998 TX-4-623-106
Integrated Language Arts - Primary Level March 25, 1998 TX-4-623-208
Tomorrow's Promise Biology March 23, 1998 TX-4-620-092
Tomorrow's Promise Chemistry March 23, 1998 TX-4-620-096
Tomorrow's Promise Earth Science March 23, 1998 TX-4-620-097
Tomorrow's Promise Language Arts Level 3 March 20, 1998 TX-4-613-670
Tomorrow's Promise Language Arts Level 4 March 20, 1998 TX-4-613-672
Tomorrow's Promise Language Arts Level 5 March 20, 1998 TX-4-613-676
Tomorrow's Promise Language Arts Level 6 March 20, 1998 TX-4-613-674
Tomorrow's Promise Language Arts Level 7 March 20, 1998 TX-4-613-671
Tomorrow's Promise Language Arts Level 8 March 20, 1998 TX-4-613-677
Tomorrow's Promise Language Arts Essay Levels 6-8 March 27, 1998 TX-4-623-246
Tomorrow's Promise Mathematics Level K March 20, 1998 TX-4-613-675
Tomorrow's Promise Mathematics Level 1 March 20, 1998 TX-4-613-687
- ---------------------------------------------------------------------------------------------------------------------
11
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Tomorrow's Promise Mathematics Level 2 March 20, 1998 TX-4-613-690
Tomorrow's Promise Mathematics Level 3 March 20, 1998 TX-4-613-685
Tomorrow's Promise Mathematics Level 4 March 20, 1998 TX-4-613-688
Tomorrow's Promise Mathematics Level 5 March 20, 1998 TX-4-613-686
Tomorrow's Promise Mathematics Level 6 March 20, 1998 TX-4-613-683
Tomorrow's Promise Mathematics Level 7 March 20, 1998 TX-4-613-693
Tomorrow's Promise Mathematics Level 8 March 20, 1998 TX-4-613-689
Tomorrow's Promise Physical Science March 23, 1998 TX-4-620-093
Tomorrow's Promise Problem Solving Strategies 6-8 March 27, 1998 TX-4-623-245
Tomorrow's Promise Reading Level K March 20, 1998 TX-4-613-697
Tomorrow's Promise Reading Level 1 March 20, 1998 TX-4-613-684
Tomorrow's Promise Reading Level 2 March 20, 1998 TX-4-613-673
Tomorrow's Promise Reading Level 3 March 20, 1998 TX-4-613-696
Tomorrow's Promise Reading Level 4 March 20, 1998 TX-4-613-691
Tomorrow's Promise Reading Level 5 March 20, 1998 TX-4-613-695
Tomorrow's Promise Reading Level 6 March 20, 1998 TX-4-613-692
Tomorrow's Promise Reading Level 7 March 20, 1998 TX-4-613-698
Tomorrow's Promise Reading Level 8 March 20, 1998 TX-4-613-694
Tomorrow's Promise Spelling Level 1 March 23, 1998 TX-4-620-098
Tomorrow's Promise Spelling Level 2 March 20, 1998 TX-4-613-678
Action Math March 27, 1998 TX-4-623-265
Community Exploration April 7, 1998 TX-4-634-223
English Language Development - Primary March 25, 1998 TX-4-623-213
Steps to English Language Development - Beginner Level March 25, 1998 TX-4-623-215
Steps to English Language Development - March 25, 1998 TX-4-623-214
Intermediate/Advanced
Explorations in Science, Earth, Physical, Biology March 27, 1998 TX-4-623-267
Friday Afternoon April 7, 1998 TX-4-634-222
Learning With Literature March 23, 1998 TX-4-620-101
Literature Based Mathematics March 27, 1998 TX-4-623-257
Middle School Mathematics March 23, 1998 TX-4-620-100
Reading Skills Collection Reading All Around You April 7, 1998 TX-4-634-226
Reading Skills Collection Read to Imagine April 7, 1998 TX-4-634-227
Reading Skills Collection Reading for Meaning April 7, 1998 TX-4-634-228
Reading Skills Collection Read to Think April 7, 1998 TX-4-634-229
Spanish Language Arts March 27, 1998 TX-4-623-264
Stems April 7, 1998 TX-4-634-225
Tapestry March 27, 1998 TX-4-623-244
Writing Expedition 1.1 for Mac/Windows March 20, 1998 TX-4-613-669
8th Grade Math Course Outline March 27, 1998 TX-1-912-790
Grade 8 Math Support Materials March 27, 1998 TX-1-920-115
8th Grade Math Teaching Aide March 27, 1998 TX-1-920-450
Integrated Classroom Learning System
Mathematics Documentation March 27, 1998 TX-1-922-225
Spanish I Teachers' Guide March 27, 1998 TX-2-680-774
Spanish I: Course Outline, Answer Keys, Worksheets, Tests March 27, 1998 TX-2-686-570
ICLS: Spanish Courseware Sample March 27, 1998 TX-2-723-547
Language Arts 3: Teachers' Guide March 27, 1998 TX-2-671-312
Language Arts 3 Course Outline, Answer Keys, Worksheets, March 27, 1998 TX-2-671-313
Tests
Calculus: Teachers' Guide March 27, 1998 TX-2-125-878
Calculus: Course Outline, Answers Keys, Worksheets, Tests March 27, 1998 TX-2-125-879
Calculus: I C L S courseware sample March 27, 1998 TX-2-172-445
Algebra I: Teachers' Guide March 27, 1998 TX-2-178-697
Algebra I: Support materials sample March 27, 1998 TX-2-178-698
Algebra I: Integrated classroom learning system: course March 27, 1998 TX-2-179-056
outline, answer keys, worksheets, tests
- ---------------------------------------------------------------------------------------------------------------------
12
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Integrated Classroom Learning System: Mathematics: Grade 7: March 27, 1998 TX-2-289-047
Support materials sample
Integrated Classroom Learning System: Trig/Analysis: March 27, 1998 TX-2-289-047
Teachers' Guide
Integrated Classroom Learning System: Trig/Analysis: Course March 27, 1998 TX-2-289-049
outline, answer keys, worksheets, tests
Integrated Classroom Learning System: Mathematics: Grade 7: March 27, 1998 TX-2-289-050
course outline, answers keys, worksheets, tests
Integrated Classroom Learning System: Mathematics: Grade 7: March 27, 1998 TX-2-289-051
Teachers' Guide
Geometry: course outline, answer keys worksheets, tests March 27, 1998 TX-2-311-453
Geometry: Teachers' Guide March 27, 1998 TX-2-311-454
Integrated Classroom Learning System: Algebra II, Teachers' March 27, 1998 TX-2-326-534
Guide
Trigonometry/math analysis: support material's sample March 27, 1998 TX-2-326-535
Algebra II: support material sample March 27, 1998 TX-2-345-457
Algebra II: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-351-931
Geometry: support material sample March 27, 1998 TX-2-400-824
ICLS courseware sample: Language Arts 6 March 27, 1998 TX-2-582-332
Integrated Classroom Learning System, Language Arts 6: March 27, 1998 TX-2-582-333
course outline, answer keys, worksheets, tests
ICLS courseware sample: Language Arts March 27, 1998 TX-2-582-334
Integrated Classroom Learning Systemk Language Arts 5: March 27, 1998 TX-2-582-335
course outline, answer keys, worksheets, test
Integrated Classroom Learning System: Language Arts 5: March 27, 1998 TX-2-582-336
Teachers' Guide
Integrated Classroom Learning System: Language Arts 6: March 27, 1998 TX-2-582-337
Teachers' Guide
Language Arts 4: Teachers' Guide March 27, 1998 TX-2-582-936
Language Arts 4: course outline, answer keys, worksheets tests March 27, 1998 TX-2-582-937
ICLS courseware sample March 27, 1998 TX-2-584-925
ICLS courseware sample March 27, 1998 TX-2-584-928
Secondary Language Arts: course outline, answer keys, March 27, 1998 TX-2-593-770
worksheets, tests
Math - Level 5: Teachers' Guide March 27, 1998 TX-2-671-309
German 1: Teachers' Guide March 27, 1998 TX-2-671-310
Physics: course outline, answer keys, worksheets, tests March 27, 1998 TX 2-671-315
ICLS courseware sample: 6th Grade Math March 27, 1998 TX-2-672-548
Physics: Teachers' Guide March 27, 1998 TX-2-672-549
German March 27, 1998 TX-2-672-555
Physics March 27, 1998 TX-2-672-556
Math, Level 5 March 27, 1998 TX-2-672-557
ICLS courseware sample: 4th Grade Math March 27, 1998 TX-2-678-479
Math - Level 6: Teachers' Guide March 27, 1998 TX-2-680-775
German 1: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-686-566
ICLS courseware sample: 5th Grade Math March 27, 1998 TX-2-686-567
Math - Level 6: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-686-568
Math - Level 4: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-686-569
Mathematics: Grade 4: Teachers' Guide March 27, 1998 TX-2-686-571
ICLS Spanish 1: courseware sample March 27, 1998 TX-2-723-547
ICLS courseware sample: Language Arts 3 Ideal Learning: a March 27, 1998 TX-2-455-456
preschool curriculum for home use/created by Brett W. Rogers
- --------------------------------------------------------------------------------------------------------------------------------
Copyrights transferred from Hartley
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PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
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Homonyms September 14, 1998 TX-1-919-673
Antonyms/Synonyms September 14, 1998 TX-1-923-273
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13
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Consonants September 14, 1998 TX-1-923-274
Vowels Tutorial September 14, 1998 TX-1-923-582
Number Words Level 2 September 14, 1998 TX-1-925-907
Create Your Own - Vocabulary French September 14, 1998 TX-1-926-180
Adjectives September 14, 1998 TX-1-926-189
Student Word Study September 14, 1998 TX-1-926-372
Super Wordfind September 14, 1998 TX-1-926-444
Create Intermediate September 14, 1998 TX-1-926-933
Create Vocabulary September 14, 1998 TX-1-926-934
Create Your Own - Vocabulary Spanish September 14, 1998 TX-1-927-484
Print Your Own - Bingo September 14, 1998 TX-1-928-566
Vocabulary Controlled September 14, 1998 TX-1-928-661
Presidents Physical Fitness September 14, 1998 TX-1-928-664
Letter Recognition September 14, 1998 TX-1-928-811
Create Your Own - Elementary September 14, 1998 TX-1-929-475
Parent Reporting September 14, 1998 TX-1-929-605
Fact Sheets September 14, 1998 TX-1-931-540
Word - a - Tech September 14, 1998 TX-1-940-789
Create Your Own - CCD Lessons September 14, 1998 TX-1-956-151
Metric Skills I & II September 14, 1998 TX-1-951-715
Adverbs September 14, 1998 TX-1-965-834
Wordsearch September 14, 1998 TX-1-965-935
The Medalist Series: Continents September 14, 1998 TX-2-012-225
Vowels September 14, 1998 TX-2-013-525
Prescriptive Math Drill September 14, 1998 TX-2-023-375
Analogies Tutorial I and II September 14, 1998 TX-2-025-231
Chariots, Cougars, and Kings September 14, 1998 TX-2-025-232
Kittens, Kids and a Frog September 14, 1998 TX-2-025-233
Scuffy and Friends September 14, 1998 TX-2-025-234
The Medalist Series: Presidents September 14, 1998 TX-2-025-245
Analogies Advanced I and II September 14, 1998 TX-2-026-237
The Medalist Series: Women in History September 14, 1998 TX-2-026-763
Famous Scientists September 14, 1998 TX-2-026-764
Number Words Level 1 September 14, 1998 TX-2-026-823
Create You Own - Spell It September 14, 1998 TX-2-027-287
Perplexing Puzzles September 14, 1998 TX-2-027-420
Temperature Experiments September 14, 1998 TX-2-029-315
Create Your Own - Medalists September 14, 1998 TX-2-029-641
Chemical Elements September 14, 1998 TX-2-029-797
The Medalist Series: States September 14, 1998 TX-2-029-798
Integers/Equations I & II September 14, 1998 TX-2-030-245
Match Espanol September 14, 1998 TX-2-030-375
Reading For Meaning Level 1 Fairy Tales and Rhymes September 14, 1998 TX-2-030-397
Compound Words and Contractions September 14, 1998 TX-2-030-398
Early Skills September 14, 1998 TX-2-030-399
Expanded Notation September 14, 1998 TX-2-031-150
Expanded Notation September 14, 1998 TX-2-031-151
Fact or Opinion September 14, 1998 TX-2-031-425
Cause and Effect September 14, 1998 TX-2-031-444
Match Francais September 14, 1998 TX-2-031-613
Figurative Language I and II September 14, 1998 TX-2-031-654
The Medalist Series: Black Americans September 14, 1998 TX-2-033-164
Binary Math September 14, 1998 TX-2-038-700
Create Your Own - Lessons September 14, 1998 TX-2-038-794
What's First? What's Next? September 14, 1998 TX-2-057-107
Sense or Nonsense September 14, 1998 TX-2-057-108
Little Riddles September 14, 1998 TX-2-057-109
- ---------------------------------------------------------------------------------------------------------------------
14
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PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Word Families II September 14, 1998 TX-2-057-110
U.S. History September 14, 1998 TX-2-057-111
Harper and Sellers - A Guide to the Classics: Macbeth September 14, 1998 TX-2-080-883
Harper and Sellers - A Guide to the Classics: The Adventures September 14, 1998 TX-2-081-007
of Huckleberry Finn
Reading For Meaning Level 2: Fairy Tales and Rhymes September 14, 1998 TX-2-159-771
Double 'N' Trouble September 14, 1998 TX-2-180-698
Word Ladders September 14, 1998 TX-2-212-911
Capitalization Practice and Test September 14, 1998 TX-2-219-871
Print Your Own Bingo Plus September 14, 1998 TX-2-240-339
Create Your Own Lessons Advanced September 14, 1998 TX-2-242-832
Shakespeare September 14, 1998 TX-2-243-374
Opposites September 14, 1998 TX-2-247-992
Milt's Math Drills September 14, 1998 TX-2-249-310
Drawing Conclusions and Problem Solving September 14, 1998 TX-2-258-394
Verb Usage III September 14, 1998 TX-2-279-559
Verb Usage I September 14, 1998 TX-2-315-676
Brick by Brick Level 1 Building Usage Skills September 14, 1998 TX-2-369-842
Brick by Brick Level 2 Building Usage Skills September 14, 1998 TX-2-370-451
Brick by Brick Level 1 Building Comprehension September 14, 1998 TX-2-373-860
Brick by Brick Level 4 Building Usage Skills September 14, 1998 TX-2-375-505
Brick by Brick Level 2 Building Vocabulary September 14, 1998 TX-2-378-720
Brick by Brick Level 4 Building Comprehension September 14, 1998 TX-2-384-016
Vocabulary Dolch September 14, 1998 TX-2-398-411
Brick by Brick Level 5 Building Comprehension September 14, 1998 TX-2-400-368
- ---------------------------------------------------------------------------------------------------------------------
Copyrights being transferred from Ideal
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PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Calculus: Teacher's Guide Transfer Application Pending TX-2-125-878
as of June 18, 1998
Calculus: Outline, Answer Keys, Worksheets, Tests Transfer Application Pending TX-2-125-879
as of June 18, 1998
Calculus: Support Materials Sample Transfer Application Pending TX-2-172-445
as of June 18, 1998
Algebra I: Teacher's Guide Transfer Application Pending TX-2-178-697
as of June 18, 1998
Algebra I: Support Materials Sample Transfer Application Pending TX-2-178-698
as of June 18, 1998
Algebra I: Outline, Answer Keys, Worksheets, Tests Transfer Application Pending TX-2-179-056
as of June 18, 1998
Mathematics Grade 7: Support Materials Sample Transfer Application Pending TX-2-289-047
as of June 18, 1998
Trigonometry/Math Analysis: Teacher's Guide Transfer Application Pending TX-2-289-048
as of June 18, 1998
Trigonometry/Math Analysis: Outline, Answer Keys, Transfer Application Pending TX-2-289-049
Worksheets, Tests as of June 18, 1998
Mathematics Grade 7: Outline, Answer Keys, Transfer Application Pending TX-2-289-050
Worksheets, Tests as of June 18, 1998
Mathematics Grade 7: Teacher's Guide Transfer Application Pending TX-2-289-051
as of June 18, 1998
Geometry: Course Outline, Answer Keys,, Transfer Application Pending TX-2-311-453
Worksheets, Tests as of June 18, 1998
Geometry: Teacher's Guide Transfer Application Pending TX-2-311-454
as of June 18, 1998
Algebra II: Teacher's Guide Transfer Application Pending TX-2-326-534
as of June 18, 1998
- ---------------------------------------------------------------------------------------------------------------------
15
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Trigonometry/Math Analysis: Support Materials Transfer Application Pending TX-2-326-535
Sample as of June 18, 1998
Algebra II: Support Materials Sample Transfer Application Pending TX-2-345-457
as of June 18, 1998
Algebra II: Outline, Answer Keys, Worksheets, Tests Transfer Application Pending TX-2-351-931
as of June 18, 1998
Geometry: Support Materials Sample Transfer Application Pending TX-2-400-824
as of June 18, 1998
ICLS Courseware Sample Language Arts 6 Transfer Application Pending TX-2-582-332
as of June 18, 1998
Language Arts 6 Course Outline, Answer Keys, Transfer Application Pending TX-2-582-333
Worksheets, Tests as of June 18, 1998
ICLS Courseware Sample: Language Arts 5 Transfer Application Pending TX-2-582-334
as of June 18, 1998
ICLS Courseware Sample: Language Arts 5 Transfer Application Pending TX-2-582-334
as of June 18, 1998
Language Arts 5: Course Outline, Answer Keys, Transfer Application Pending TX-2-582-335
Worksheets, Tests as of June 18, 1998
Language Arts 5: Teacher's Guide Transfer Application Pending TX-2-582-336
as of June 18, 1998
Language Arts 6: Teacher's Guide Transfer Application Pending TX-2-582-337
as of June 18, 1998
Language Arts 4: Teacher's Guide Transfer Application Pending TX-2-582-936
as of June 18, 1998
Language Arts 4: Course Outline, Answer Keys, Transfer Application Pending TX-2-582-937
Worksheets, Tests as of June 18, 1998
ICLS Courseware Sample: Secondary Language Arts Transfer Application Pending TX-2-584-925
as of June 18, 1998
ICLS Courseware Sample: Language Arts 4 Transfer Application Pending TX-2-593-770
as of June 18, 1998
Secondary Language Arts: Course Outline, Answer Transfer Application Pending TX-2-686-566
Keys, Worksheets, Tests as of June 18, 1998
Math - Level 5: Teacher's Guide Transfer Application Pending TX-2-671-309
as of June 18, 1998
German I: Teacher's Guide Transfer Application Pending TX-2-671-310
as of June 18, 1998
Physics: Course Outlines, Answer Keys, Worksheets, Transfer Application Pending TX-2-671-315
Tests as of June 18, 1998
ICLS Courseware Sample: 6th Grade Math Transfer Application Pending TX-2-672-548
as of June 18, 1998
Physics: Teacher's Guide Transfer Application Pending TX-2-672-549
as of June 18, 1998
ICLS Courseware Sample: German Transfer Application Pending TX-2-672-555
as of June 18, 1998
ICLS Courseware Sample: Physics Transfer Application Pending TX-2-672-556
as of June 18, 1998
Math - Level 5: Course Outline, Answer Keys, Transfer Application Pending TX-2-672-557
Worksheets, Tests as of June 18, 1998
ICLS Courseware Sample: 4th Grade Math Transfer Application Pending TX-2-678-479
as of June 18, 1998
Math - Level 6: Teacher's Guide Transfer Application Pending TX-2-680-775
as of June 18, 1998
German I: Course Outline, Answer Keys, Worksheets, Transfer Application Pending TX-2-686-566
Tests as of June 18, 1998
ICLS Courseware Sample: 5th Grade Math Transfer Application Pending TX-2-686-567
as of June 18, 1998
Math - Level 6: Course Outline, Answer Keys, Transfer Application Pending TX-2-686-568
Worksheets, Tests as of June 18, 1998
- ---------------------------------------------------------------------------------------------------------------------
16
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
- ------------ ----------------- ----------------
Math - Level 4: Course Outline, Answer Keys, Transfer Application Pending TX-2-686-569
Worksheets, Tests as of June 18, 1998
Mathematics Grade 4: Teacher's Guide Transfer Application Pending TX-2-686-571
as of June 18, 1998
ICLS Courseware Sample: Language Arts 3 Transfer Application Pending TX-2-739-191
as of June 18, 1998
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United States Infographics 16 75/158987 8/30/96 2101274 9/30/97 Registered
United States Kidkit & Design 16 1582492 2/13/90 Registered
United States Kids TV & Design 41 74/046859 4/6/90 1652023 7/23/91 Registered
United States Know Your World 16 851484 6/25/68 Registered
United States Map Skills for 16 879296 10/21/69 Registered
Today
United States Map Skills for 16 1606402 7/17/90 Registered
Today
United States My Weekly Reader 16 254284 3/19/29 Registered
United States My Weekly Reader 16 75/719301 6/2/99 Filed
Summer Magazine
United States Nip 28 75/322190 7/19/97 2152626 4/21/98 Registered
United States Peanut and Jocko 16 1549117 7/25/89 Registered
United States Pulse for Today's 16 74/505517 3/28/94 1945000 1/2/96 Registered
Middleschools &
Design
- ----------------------------------------------------------------------------------------------------------
2
- ----------------------------------------------------------------------------------------------------------
APP. REG.
COUNTRY MARK CLASSES APP. # DATE REG. # DATE STATUS
- ----------------------------------------------------------------------------------------------------------
United States Read (Stylized) 16 574960 5/26/53 Registered
United States Read-Study-Think 16 880929 11/18/69 Registered
United States Science Matters 16 74/442122 9/30/93 1967619 4/16/96 Registered
United States Science Spin 16 75/313516 6/23/97 Filed
United States The Largest 16 75/611854 12/24/98 Filed
Newspaper for Kids
in the World!
United States The Weekly Reader 16 75/611852 12/24/98 Filed
Teacher
United States Weekly Reader 16 1503004 9/6/88 Registered
United States Weekly Reader 42 1519333 1/3/89 Registered
United States Weekly Reader 42 75/584518 11/6/98 Filed
United States Weekly Reader Big 16 75/158992 8/30/96 2077656 7/8/97 Registered
Issue!
United States Weekly Reader 16 75/611853 12/24/98 Filed
News for Kids
United States Weekly Reader 16 75/719300 6/2/99 Filed
Summer Magazine
United States World Newsmap of 16 75/572449 10/19/98 Filed
the Month
United States World Newsmap of 16 1421904 12/23/86 Registered
the Week
United States World Newsmap of 16 1132464 4/1/80 Registered
the Week
United States Writing Pals & 42 74/464121 11/30/93 1913914 8/22/95 Registered
Design
United States Writing! 16 74/087100 8/13/90 1655545 9/3/91 Registered
United States Writing! (Stylized) 16 1238958 5/17/83 Registered
United States Young America 16 75/179427 10/10/96 2087840 8/12/97 Registered
Votes
Canada Current Consumer TMA 4/11/80 Inactive
242690
United States A Heart Song 16 1495789 7/12/88 Inactive
Novel & Design
United States A Weekly Reader 16 1500483 8/16/88 Inactive
Fairy Tale &
Design
United States A Whiskers Book 16 1495787 7/12/88 Inactive
& Design
United States B.J. 28 75/322189 7/10/97 Inactive
United States Challenges 16 74/208565 9/30/91 Inactive
United States Current Health 16 1018333 8/12/75 Inactive
United States Curriculum 16 1333189 4/30/85 Inactive
Innovations, Inc.
United States Eye (Stylized) 16 995713 10/15/74 Inactive
United States Fun Facts & Design 16 1479584 3/8/88 Inactive
United States Jelly Bean 16 1042268 6/29/76 Inactive
Jamboree
United States Little Sprout & 16 1515344 12/6/88 Inactive
Design
- ----------------------------------------------------------------------------------------------------------
3
- ----------------------------------------------------------------------------------------------------------
APP. REG.
COUNTRY MARK CLASSES APP. # DATE REG. # DATE STATUS
- ----------------------------------------------------------------------------------------------------------
United States Make It Happen the 16 1477639 2/23/88 Inactive
Choice Is Yours
United States Newsprobe 16 1595351 5/8/90 Inactive
United States Smart Start & 16 1485252 4/19/88 Inactive
Design
United States Tomorrow Star & 16 1479585 3/8/88 Inactive
Design
United States U.S. Kids & Design 16 1507100 10/4/88 Inactive
United States Values and 16 1019377 9/2/75 Inactive
Decisions
United States Weekly Reader & 16 74/089880 8/20/90 1681978 4/7/92 Inactive
Design
United States Zip 28 75/322146 7/10/97 2152625 4/21/98 Registered
United States Zips 16 890134 4/28/70 Registered
- ----------------------------------------------------------------------------------------------------------
Item B. TRADMARK LICENSES
None.
SCHEDULE V
to Security and Pledge Agreement
(Weekly Reader Corporation)
Item A. COPYRIGHTS
Weekly Reader and its subsidiaries generate numerous copyrights each week in
connection with numerous ongoing publishing activities. None of these copyrights
are individually material and they are not listed here.
Item B. COPYRIGHT LICENSES
None.
SCHEDULE VI
to Security and Pledge Agreement
(Weekly Reader Corporation)
TRADE SECRET OR KNOW-HOW LICENSES
None.
SCHEDULE I
to Security and Pledge Agreement
(American Guidance Service Inc.)
Item A. INTERCOMPANY NOTES
None.
Item B. SECURITIES
Common Stock
Authorized Outstanding % of Shares
Issuer (corporate) Shares Shares Pledged
- ------------------ ------ ------ -------
AGS International Sales, Inc. 2,500 250 100%
SCHEDULE II
to Security and Pledge Agreement
(American Guidance Service Inc.)
GOVERNMENT CONTRACTS
Assessment Agreement and Assessor's Certification, dated 5/25/93, between City
of Circle Pines and AGS.
Professional/Consultant Services Contract, dated 10/01/97, between Fairfax
County Board of Supervisors and AGS.
Agreement, dated 10/27/97, between Montgomery County Public Schools and AGS.
Agreement, dated 10/09/90, between Fairfax County Public Schools and AGS.
Requirements Contract, dated 07/06/94, between Board of Education of the City of
New York and AGS.
Agreement, dated 8/31/89, between Albany City School District and Delmar
Publishers Inc.
SCHEDULE III
to Security and Pledge Agreement
(American Guidance Service Inc.)
Item A. PATENTS
None.
Item B. PATENT LICENSES
None.
SCHEDULE IV
to Security and Pledge Agreement
(American Guidance Service Inc.)
Item A. TRADEMARKS
Country Mark Classes App. # App. Dt Reg. # Reg. Dt Status
------- ---- ------- ------ ------- ------ ------- ------
USA COOPERATIVE 16 74/155,635 04/09/91 1,674,693 02/04/92 Registered
DISCIPLINE
USA STEP SYSTEMATIC 9 74/060,441 05/18/90 1,666,489 12/03/91 Registered
TRAINING FOR
EFFECTIVE PARENTING
USA STEP AND DESIGN 9, 16 74/059,930 05/17/90 1,666,672 12/03/91 Registered
USA AGS 9 73/489,334 07/11/84 1,337,644 05/28/85 Registered
USA DATA SCAN 16 73/341,618 12/14/81 1,229,687 03/08/83 Registered
USA AGS 9,16, 28, 73/245,478 01/09/80 1,164,458 08/11/81 Registered
41
USA WOODCOCK READING 9, 16 74/601,874 11/22/94 Inactive
MASTERY TESTS
USA I AM AMAZING 16 73/720,848 04/04/88 1,522,601 01/31/89 Inactive
USA I AM AMAZING 41 73/720,318 04/04/88 1,514,909 11/29/88 Inactive
USA EASEL-KIT 16 72/337,876 08/15/69 918,523 08/17/71 Inactive
Item B. TRADEMARK LICENSES
None.
SCHEDULE V
to Security and Pledge Agreement
(American Guidance Service Inc.)
Item A. COPYRIGHTS
All copyrights for American Guidance Service Inc. are filed in the United
States.
- --------------------------------------------------------------------------------
Product Name Copyright Number
- ------------ ----------------
PPVT TX4-531-097
K-TEA TX4-737-590
DIAL TX2-907-985
BASC TX4-172-450
Vineland TX3-431-949
WRMT TX2-276-301
KeyMath Test TX2-380-291
OWLS (LC/OE Version) TX3-803-842
OWLS (WE Version) TX4-198-026
PIAT TX2-624-349
GFTA TX1-856-134
K-BIT TX3-003-231
K-ABC (Easel 1) TX1-563-401
K-ABC (Easel 2) TX1-499-140
K-ABC (Easel 3) TX1-452-750
K-ABC (Test Record Form) TX1-499-139
K-ABC (Manual) TX1-458-788
K-ABC (Photo Cards) TX-176-650
K-ABC (ASSIST) TX1-412-461
K-ABC (Scoring Manual) TX1-458-787
K-ABC (Supplemental Forms) TX2-268-847
- --------------------------------------------------------------------------------
* Copyrights are for educational tests. Information provided above is for the
10 most valuable tests of an approximate total of 40. Information for the
remaining tests will be provided as it is received.
Item B. COPYRIGHT LICENSES
None.
SCHEDULE VI
to Security and Pledge Agreement
(American Guidance Service Inc.)
TRADE SECRET OR KNOW-HOW LICENSES
None.
EXHIBIT A
to Security and Pledge Agreement
PROMISSORY NOTE
$--------------- -------- --, ----
FOR VALUE RECEIVED, the undersigned, ______________, a
_______________ corporation (the "MAKER"), promises to pay to the order of
________________, a ___________ _________ (the "PAYEE"), in equal ________
installments, commencing __________ __, ____ to and including __________ __,
____, the principal sum of ________________________ DOLLARS ($___________),
representing the aggregate principal amount of an intercompany loan made by
the Payee to the Maker.
The unpaid principal amount of this promissory note (this "NOTE") from
time to time outstanding shall bear interest at a rate of interest equal to
____________, which the Maker represents to be a lawful and commercially
reasonable rate, payable __________, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to an account
established by the Payee at _______________ and shall be recorded on the grid
attached hereto by the holder hereof (including the Administrative Agent
(hereinafter defined) as pledgee). Upon notice from the Administrative Agent
that a Specified Default (as defined in the Credit Agreement) has occurred and
is continuing under the Credit Agreement, the Maker shall make such payments, in
same day funds, to such other account as the Administrative Agent shall direct
in such notice.
This Note is one of the Intercompany Notes referred to in, and
evidences Indebtedness incurred pursuant to Section 7.2.2 of the Credit
Agreement, dated as of November 17, 1999 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
Weekly Reader Corporation, a Delaware corporation ("WRC"), and JLC Learning
Corporation, a Delaware corporation ("JLC" and, together with WRC, the
"BORROWERS"), WRC Media Inc.(formerly known as EAC II Inc.), a Delaware
corporation and parent of JLC ("HOLDINGS"), as a guarantor, the various
financial institutions as are or may become parties thereto (collectively, the
"LENDERS"), DLJ Capital Funding, Inc., as the Syndication Agent (in such
capacity, the "SYNDICATION AGENT"), the Lead Arranger and the Sole Book Running
Manager, Bank of America, N.A., as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Lenders, and General Electric Capital
Corporation, as the documentation agent (in such capacity, the "DOCUMENTATION
AGENT") for the Lenders. Upon the occurrence and continuance of a Specified
Default under the Credit Agreement, and notice thereof by the Administrative
Agent to the Maker, the Administrative Agent shall have all rights of the Payee
to collect and accelerate, and enforce all
rights with respect to, the Indebtedness evidenced by this Note. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the
Security and Pledge Agreement pursuant to which this Note has been pledged to
the Administrative Agent as security for the Secured Obligations outstanding
from time to time under the Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Administrative Agent as
pledgee) of this Note endeavoring to collect any amounts payable hereunder which
are not paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By ___________________________________________
Name:
Title:
Pay to the order of BANK OF AMERICA, N.A., as
Administrative Agent
[NAME OF PAYEE]
By ___________________________________________
Name:
Title:
-2-
GRID
Intercompany Loans made by [Name of Payee] to [Name of Maker] and payments
of principal of such Loans.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Amount of Amount of
Intercompany Principal Outstanding Principal
Date Loan Payment Balance Notation Made By
- --------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
EXHIBIT B
to Security and Pledge Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, ____, is made between _______________, a ____________ corporation
(the "GRANTOR"), and BANK OF AMERICA, N.A., as administrative agent (together
with its successor(s) thereto in such capacity, the "ADMINISTRATIVE AGENT") for
each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of November 17, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Weekly Reader Corporation, a Delaware
corporation ("WRC"), and JLC Learning Corporation, a Delaware corporation
("JLC" and, together with WRC, the "Borrowers"), WRC Media Inc. (formerly known
as EAC II Inc.), a Delaware corporation and parent of JLC ("HOLDINGS"), as a
guarantor, the various financial institutions as are or may become parties
thereto (collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the
Syndication Agent (in such capacity, the "SYNDICATION AGENT"), the Lead Arranger
and the Sole Book Running Manager, the Administrative Agent and General Electric
Capital Corporation, as the documentation agent (in such capacity, the
"DOCUMENTATION AGENT") for the Lenders, the Lenders and the Issuers have
extended Commitments to make Credit Extensions to the Borrowers;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security and Pledge Agreement, dated as of November 17,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AND PLEDGE AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Administrative Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security and Pledge Agreement inasmuch as the Grantor will derive substantial
direct and indirect benefits from the Credit Extensions made from time to time
to the Borrowers by the Lenders and the Issuers pursuant to the Credit
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders and the Issuers
to make Credit Extensions (including the initial Credit Extension) to the
Borrowers pursuant to the Credit Agreement, and to induce the Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Secured Party, as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security and Pledge Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property, to the extent now or
hereafter owned or acquired or existing by the Grantor (the "PATENT
COLLATERAL"):
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in ITEM A of SCHEDULE III attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in CLAUSE (a);
(c) all patent licenses, including each patent license
referred to in ITEM B of SCHEDULE III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to sue third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in ITEM A of SCHEDULE III attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in ITEM B of SCHEDULE III attached hereto, and all
rights corresponding thereto throughout the world.
The "Patent Collateral" shall not include any general intangibles or other
rights arising under any contracts, instruments, licenses or other documents as
to which the grant of a security
-2-
interest would constitute a violation of a valid and enforceable restriction in
favor of a third party on such grant, unless and until any required consents
shall have been obtained. The undersigned agrees to use its best efforts to
obtain any such required consent.
SECTION 3. SECURITY AND PLEDGE AGREEMENT. This Agreement has been
prepared by the Administrative Agent for the purpose of registering the security
interest of the Administrative Agent in the Patent Collateral with the United
States Patent and Trademark Office (the "PTO") and corresponding offices in
other countries of the world. The security interest granted hereby has been
granted as a supplement to, and not in limitation of, the security interest
granted to the Administrative Agent for its benefit and the benefit of each
Secured Party under the Security and Pledge Agreement. The Security and Pledge
Agreement (and all rights and remedies of the Administrative Agent and each
Secured Party thereunder) shall remain in full force and effect in accordance
with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon payment in full in cash
of all Secured Obligations, the termination or expiry of all Letters of Credit,
the termination of all Rate Protection Agreements and the termination of all
Commitments, the Administrative Agent shall, at the Grantor's commercially
reasonable expense, execute and deliver to the Grantor all instruments and other
documents, and perform all other acts, as may be necessary or proper to fully
release the lien on and security interest in the Patent Collateral which has
been granted hereunder. The Grantor shall be free to file and record such
instruments and documents in the PTO or other office anywhere in the world.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Patent Collateral granted hereby are more fully
set forth in the Security and Pledge Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall
-3-
be deemed to be an original and all of which shall constitute together but one
and the same agreement.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By__________________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent
By__________________________________________
Name:
Title:
-5-
SCHEDULE III
to Patent Security Agreement
Item A. PATENTS
ISSUED PATENTS
**COUNTRY PATENT NO. ISSUE DATE INVENTOR(S)
TITLE
PENDING PATENT APPLICATIONS
*COUNTRY SERIAL NO. FILING DATE INVENTOR(S)
TITLE
PATENT APPLICATIONS IN PREPARATION
EXPECTED
*COUNTRY DOCKET NO. FILING DATE INVENTOR(S)
TITLE
Item B. PATENT LICENSES
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- --------- ---------- -------
- --------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
EXHIBIT C
to Security and Pledge Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, ____, is made between _______________, a ____________ corporation
(the "GRANTOR"), and BANK OF AMERICA, N.A., as administrative agent (together
with its successor(s) thereto in such capacity, the "ADMINISTRATIVE AGENT") for
each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of November 17, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Weekly Reader Corporation, a Delaware
corporation ("WRC"), and JLC Learning Corporation, a Delaware corporation
("JLC" and, together with WRC, the "Borrowers"), WRC Media Inc. (formerly known
as EAC II Inc.), a Delaware corporation and parent of JLC ("HOLDINGS"), as a
guarantor, the various financial institutions as are or may become parties
thereto (collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the
Syndication Agent (in such capacity, the "SYNDICATION AGENT"), the Lead Arranger
and the Sole Book Running Manager, the Administrative Agent and General Electric
Capital Corporation, as the documentation agent (in such capacity, the
"DOCUMENTATION AGENT") for the Lenders, the Lenders and the Issuers have
extended Commitments to make Credit Extensions to the Borrowers;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security and Pledge Agreement, dated as of November 17,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AND PLEDGE AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Administrative Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution,
delivery and performance of this Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security and Pledge Agreement inasmuch as the Grantor will derive substantial
direct and indirect benefits from the Credit Extensions made from time to time
to the Borrowers by the Lenders and the Issuers pursuant to the Credit
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders and the Issuers
to make Credit Extensions (including the initial Credit Extension) to the
Borrowers pursuant to the Credit Agreement, and to induce the Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Secured Party, as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security and Pledge Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property, to the extent now or
hereafter owned or acquired or existing by the Grantor (the "TRADEMARK
COLLATERAL"):
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, designs and other
source of business identifiers (all of the foregoing items in this
CLAUSE (a) being collectively called a "TRADEMARK"), now existing
anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and
all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office (the
"PTO") or in any other office or agency of the United States of America
or any State thereof or any foreign country, including those referred
to in ITEM A of SCHEDULE IV attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in ITEM B of SCHEDULE IV attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSE (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, CLAUSE (a); and
-2-
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in ITEM A and
ITEM B of SCHEDULE IV attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
The "Trademark Collateral" shall not include any general intangibles or other
rights arising under any contracts, instruments, licenses or other documents as
to which the grant of a security interest would constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained. The undersigned
agrees to use its best efforts to obtain any such required consent.
SECTION 3. SECURITY AND PLEDGE AGREEMENT. This Agreement has been
prepared by the Administrative Agent for the purpose of registering the security
interest of the Administrative Agent in the Trademark Collateral with the PTO
and corresponding offices in other countries of the world. The security interest
granted hereby has been granted as a supplement to, and not in limitation of,
the security interest granted to the Administrative Agent for its benefit and
the benefit of each Secured Party under the Security and Pledge Agreement. The
Security and Pledge Agreement (and all rights and remedies of the Administrative
Agent and each Secured Party thereunder) shall remain in full force and effect
in accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon payment in full in cash
of all Secured Obligations, the termination or expiry of all Letters of Credit,
the termination of all Rate Protection Agreements and the termination of all
Commitments, the Administrative Agent shall, at the Grantor's commercially
reasonable expense, execute and deliver to the Grantor all instruments and other
documents, and perform all other acts, as may be necessary or proper to fully
release the lien on and security interest in the Trademark Collateral which has
been granted hereunder. The Grantor shall be free to file and record such
instruments and documents in the PTO or other office anywhere in the world.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Trademark Collateral granted hereby are more
fully set forth in the Security and Pledge Agreement, the terms and provisions
of
-3-
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By___________________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent
By___________________________________________
Name:
Title:
-5-
SCHEDULE IV
to Trademark Security Agreement
Item A. TRADEMARKS
REGISTERED TRADEMARKS
*Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
PENDING TRADEMARK APPLICATIONS
*Country Trademark Serial No. Filing Date
------- --------- ----------- -----------
TRADEMARK APPLICATIONS IN PREPARATION
Expected
Products/
*Country Trademark Docket No. Filing Date Services
------- --------- ---------- ----------- --------
Item B. TRADEMARK LICENSES
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- --------- ----------
- --------------------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
EXHIBIT D
to Security and Pledge Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, ____, is made between _______________, a ____________ corporation
(the "GRANTOR"), and BANK OF AMERICA, N.A., as administrative agent (together
with its successor(s) thereto in such capacity, the "ADMINISTRATIVE AGENT") for
each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of November 17, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Weekly Reader Corporation, a Delaware
corporation ("WRC"), and JLC Learning Corporation, a Delaware corporation (
"JLC" and, together with WRC, the "Borrowers"), WRC Media Inc. (formerly known
as EAC II Inc.), a Delaware corporation and parent of WRC ("HOLDINGS"), as a
guarantor, the various financial institutions as are or may become parties
thereto (collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the
Syndication Agent (in such capacity, the "SYNDICATION AGENT"), the Lead Arranger
and the Sole Book Running Manager, the Administrative Agent and General Electric
Capital Corporation, as the documentation agent (in such capacity, the
"DOCUMENTATION AGENT") for the Lenders, the Lenders and the Issuers have
extended Commitments to make Credit Extensions to the Borrowers;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Security and Pledge Agreement, dated as of November 17,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AND PLEDGE AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Administrative Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution,
delivery and performance of this Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security and Pledge Agreement inasmuch as the Grantor will derive substantial
direct and indirect benefits from the Credit Extensions made from time to time
to the Borrowers by the Lenders and the Issuers pursuant to the Credit
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders and the Issuers
to make Credit Extensions (including the initial Credit Extension) to the
Borrowers pursuant to the Credit Agreement, and to induce the Secured Parties to
enter into Rate Protection Agreements, the Grantor agrees, for the benefit of
each Secured Party, as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security and Pledge Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby grant to the
Administrative Agent a security interest in, for its benefit and the benefit of
each Secured Party, all of the following property (the "COPYRIGHT COLLATERAL"),
to the extent now or hereafter owned or acquired or existing by it, being all
copyrights of the Grantor, registered or unregistered, now or hereafter in force
throughout the world, including all of the Grantor's right, title and interest
in and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in ITEM
A of SCHEDULE V attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in ITEM B of SCHEDULE V attached hereto, the right
to sue for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
The "Copyright Collateral" shall not include any general intangibles or other
rights arising under any contracts, instruments, licenses or other documents as
to which the grant of a security interest would constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained. The undersigned
agrees to use its best efforts to obtain any such required consent.
SECTION 3. SECURITY AND PLEDGE AGREEMENT. This Agreement has been
prepared by the Administrative Agent for the purpose of registering the security
interest of the Administrative Agent in the Copyright Collateral with the United
States Copyright Office. The security interest granted hereby has been granted
as a
-2-
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the benefit of each Secured Party under
the Security and Pledge Agreement. The Security and Pledge Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4. RELEASE OF SECURITY INTEREST. Upon payment in full in cash
of all Secured Obligations, the termination or expiry of all Letters of Credit,
the termination of all Rate Protection Agreements and the termination of all
Commitments, the Administrative Agent shall, at the Grantor's commercially
reasonable expense, execute and deliver to the Grantor all instruments and other
documents, and perform all other acts, as may be necessary or proper to fully
release the lien on and security interest in the Copyright Collateral which has
been granted hereunder. The Grantor shall be free to file and record such
instruments and documents in the United States Copyright Office or other office
anywhere in the world.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Administrative Agent with respect
to the security interest in the Copyright Collateral granted hereby are more
fully set forth in the Security and Pledge Agreement, the terms and provisions
of which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT, ETC. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION 7. COUNTERPARTS. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By____________________________________________
Name:
Title:
BANK OF AMERICA, N.A.
as Administrative Agent
By____________________________________________
Name:
Title:
-4-
SCHEDULE V
to Copyright
Security Agreement
Item A. COPYRIGHTS
*Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
COPYRIGHT PENDING REGISTRATION APPLICATIONS
*Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
COPYRIGHT REGISTRATION APPLICATIONS IN PREPARATION
Expected
*Country Docket No. Filing Date Author(s) Title
- -------- ---------- ----------- --------- -----
- -----------------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
Item B. COPYRIGHT LICENSES
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- --------- ---------- -------
ANNEX I
to Security and Pledge Agreement
SUPPLEMENT TO SECURITY AND PLEDGE AGREEMENT
This SUPPLEMENT NO. ___, dated as of ________ __, ____ (this
"SUPPLEMENT"), to the Security and Pledge Agreement, dated as of November 17,
1999 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AND PLEDGE AGREEMENT"), among the initial
signatories thereto and each other Person which from time to time thereafter
became a party thereto pursuant to Section 7.5 thereof (each, individually, a
"GRANTOR", and, collectively, the "GRANTORS"), in favor of BANK OF AMERICA,
N.A., as administrative agent (together with any successor(s) thereto in such
capacity, the "ADMINISTRATIVE AGENT") for each of the Secured Parties (such and
other capitalized terms being used herein with the meanings provided, or
incorporated by reference, in the Security and Pledge Agreement), is made by the
undersigned.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of
November 17, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among Weekly Reader
Corporation, a Delaware corporation ("WRC"), and JLC Learning Corporation, a
Delaware corporation ("JLC" and, together with WRC, the "BORROWERS"), WRC Media
Inc. (formerly known as EAC II Inc.), a Delaware corporation and parent of JLC
("HOLDINGS"), as a guarantor, the various financial institutions as are or may
become parties thereto (collectively, the "LENDERS"), DLJ Capital Funding, Inc.,
as the Syndication Agent (in such capacity, the "SYNDICATION AGENT"), the Lead
Arranger and the Sole Book Running Manager, the Administrative Agent and General
Electric Capital Corporation, as the documentation agent (in such capacity, the
"DOCUMENTATION AGENT") for the Lenders, the Lenders and the Issuers have
extended Commitments to make Credit Extensions to the Borrowers;
WHEREAS, as a condition precedent to the making and maintenance of the
Credit Extensions under the Credit Agreement, the undersigned is required to
execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Security and Pledge Agreement;
WHEREAS, the Security and Pledge Agreement provides that additional
parties may become Grantors under the Security and Pledge Agreement by execution
and delivery of an instrument in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.5 of the Security and
Pledge Agreement, the undersigned is becoming an Additional Grantor under the
Security and Pledge Agreement; and
WHEREAS, the undersigned desires to become a Grantor under the Security
and Pledge Agreement in order to induce the Secured Parties to continue to make
and maintain Credit Extensions under the Credit Agreement as consideration
therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Security and Pledge Agreement, the
undersigned by its signature below becomes a Grantor under the Security and
Pledge Agreement with the same force and effect as if it were an original
signatory thereto as a Grantor and the undersigned hereby
(a) agrees to all the terms and provisions of the
Security and Pledge Agreement applicable to it as a Grantor
thereunder;
(b) assigns and pledges to the Administrative Agent for its
benefit and the ratable benefit of each of the Secured Parties, and
grants to the Administrative Agent for its benefit and the ratable
benefit of each of the Secured Parties, a security interest in all of
the following, whether now or hereafter existing or acquired by the
undersigned (its "COLLATERAL"):
(i) all Intercompany Notes in which the undersigned
has an interest (including each Intercompany Note described in
ITEM A of SCHEDULE I hereto);
(ii) all interest and other payments and rights with
respect to each Intercompany Note in which the undersigned has
an interest;
(iii) all Investment Property in which the
undersigned has an interest (including the Securities of each
issuer described in ITEM B of SCHEDULE I hereto); PROVIDED,
that, in the case of Investment Property consisting of
Securities of an issuer that is a Foreign Subsidiary of the
undersigned, the pledge of such Securities of such issuer
shall be limited to the extent such pledge would not exceed
65% of the total combined voting power of all classes of
Securities of such Foreign Subsidiary entitled to vote;
-2-
(iv) all equipment in all of its forms (including all
Motor Vehicles) of the undersigned, wherever located,
including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements
thereto and therefor and all accessories related thereto (any
and all of the foregoing being the "EQUIPMENT");
(v) all inventory in all of its forms of the
undersigned, wherever located, including
(A) all raw materials and work in process
therefor, finished goods thereof, and materials used
or consumed in the manufacture or production thereof,
(B) all goods in which the undersigned has
an interest in mass or a joint or other interest or
right of any kind (including goods in which the
undersigned has an interest or right as consignee),
and
(C) all goods which are returned to or
repossessed by the undersigned,
and all accessions thereto, products thereof and documents
therefor (any and all such inventory, materials, goods,
accessions, products and documents being the "INVENTORY");
(vi) all accounts, contracts, contract rights,
chattel paper, documents, instruments, and general intangibles
(including tax refunds) of the undersigned, whether or not
arising out of or in connection with the sale or lease of
goods or the rendering of services, and all rights of the
undersigned now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract
rights, chattel paper, documents, instruments, and general
intangibles (any and all such accounts, contracts, contract
rights, chattel paper, documents, instruments, and general
intangibles being the "RECEIVABLES", and any and all such
security agreements, guaranties, leases and other contracts
being the "RELATED CONTRACTS");
(vii) all Deposit Accounts of the undersigned and all
cash, checks, drafts, notes, bills of exchange, money orders
and other like instruments, if any, now
-3-
owned or hereafter acquired, held therein (or in sub- accounts
thereof) and all certificates and instruments, if any, from
time to time representing or evidencing such investments, and
all interest, earnings and proceeds in respect thereof;
(viii) all Intellectual Property Collateral of
the undersigned;
(ix) all books, records, writings, data bases,
information and other property relating to, used or useful in
connection with, evidencing, embodying, incorporating or
referring to, any of the foregoing in this SECTION 2.1;
(x) all of the undersigned's other property and
rights of every kind and description and interests therein;
and
(xi) all products, offspring, rents, issues, profits,
returns, income and proceeds of and from any and all of the
foregoing Collateral (including proceeds which constitute
property of the types described in SUBCLAUSES (b)(i) through
(b)(x), proceeds deposited from time to time in any lock box
or Deposit Account of the undersigned, and, to the extent not
otherwise included, all payments under insurance (whether or
not the Administrative Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss
or damage to or otherwise with respect to any of the foregoing
Collateral);
PROVIDED, HOWEVER, that "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments,
licenses or other documents as to which the grant of a security
interest would constitute a violation of a valid and enforceable
restriction in favor of a third party on such grant, unless and until
any required consents shall have been obtained and the undersigned
agrees to use its best efforts to obtain any such required consent;
(c) agrees that each of the Schedules attached hereto
shall be deemed to be a Schedule thereto; and
(d) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on
and as of the date hereof.
-4-
In furtherance of the foregoing, each reference to a "Grantor" or "Additional
Grantor" in the Security and Pledge Agreement shall be deemed to include the
undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Security and
Pledge Agreement shall remain in full force and effect in accordance with its
terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security and Pledge Agreement shall not in any way be affected
or impaired.
SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Security and Pledge Agreement), the
undersigned agrees to reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including reasonable
attorneys' fees and expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE
SECURITY AND PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Security and Pledge Agreement, which provisions are deemed to
be a part hereof, and this Supplement shall be deemed to be a part of the
Security and Pledge Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
SECTION 9. WITHOUT LIMITING THE EFFECT OF SECTION 7.11 OF
THE SECURITY AND PLEDGE AGREEMENT, THE SECURED PARTIES AND THE
UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE
-5-
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE LOCATED IN
NEW YORK COUNTY OF THE STATE OF NEW YORK, FOR THE PURPOSE OF ANY SUCH LITIGATION
AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION. THE UNDERSIGNED IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE UNDERSIGNED HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT THE UNDERSIGNED HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES (TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW) SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS SUPPLEMENT, THE SECURITY AND PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
SECTION 10. WITHOUT LIMITING THE EFFECT OF SECTION 7.12 OF THE SECURITY
AND PLEDGE AGREEMENT, THE SECURED PARTIES AND THE UNDERSIGNED HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS SUPPLEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE SECURED PARTIES OR THE UNDERSIGNED RELATING THERETO. THE UNDERSIGNED
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
SECURED PARTIES ENTERING INTO THE CREDIT AGREEMENT, THIS SUPPLEMENT, THE
SECURITY AND PLEDGE AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
-6-
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
[NAME OF ADDITIONAL GRANTOR]
By:__________________________________________
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
BANK OF AMERICA, N.A., as
Administrative Agent
By:___________________________
Name:
Title:
-7-
SCHEDULE I
to Supplement No. __
to Security and Pledge Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. INTERCOMPANY NOTES
Maximum Amount of
Intercompany Loans
Maker Evidenced Thereby Date
- ----- ----------------- ----
Item B. SECURITIES
Common Stock
------------
% of
Authorized Outstanding Shares
Issuer (corporate) Shares Shares Pledged
- ------------------ ------ ------ -------
Limited Liability Company Interests
-----------------------------------
% of Limited Type of Limited
Liability Liability
Issuer (limited Company Interests Company Interests
liability company) Pledged Pledged
- ------------------ ------- -------
Partnership Interests
---------------------
% of Partnership Type of Partnership
Issuer (partnership) Interests Pledged Interests Pledged
- -------------------- ----------------- -----------------
SCHEDULE II
to Supplement No. __
to Security and Pledge Agreement
([NAME OF ADDITIONAL GRANTOR])
GOVERNMENT CONTRACTS
SCHEDULE III
to Supplement No. __
to Security and Pledge Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. PATENTS
ISSUED PATENTS
*Country Patent No. Issue Date Inventor(s)
Title
PENDING PATENT APPLICATIONS
*Country Serial No. Filing Date Inventor(s)
Title
PATENT APPLICATIONS IN PREPARATION
Expected
*Country Docket No. Filing Date Inventor(s)
Title
Item B. PATENT LICENSES
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
- ----------- -------- -------- --------- ---------- -------
- --------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
SCHEDULE IV
to Supplement No. __
to Security and Pledge Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. TRADEMARKS
REGISTERED TRADEMARKS
*Country Trademark Registration No. Registration Date
- -------- --------- ---------------- -----------------
PENDING TRADEMARK APPLICATIONS
*Country Trademark Serial No. Filing Date
- -------- --------- ---------- -----------
TRADEMARK APPLICATIONS IN PREPARATION
Products/ Expected
*Country Trademark Docket No. Filing Date Services
- -------- --------- ---------- ----------- --------
Item B. TRADEMARK LICENSES
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
- ---------- --------- -------- -------- --------- ----------
- --------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
SCHEDULE V
to Supplement No. __
to Security and Pledge Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. COPYRIGHTS
REGISTERED COPYRIGHTS
*Country Registration No. Registration Date Author(s) Title
- -------- ---------------- ----------------- --------- -----
COPYRIGHT PENDING REGISTRATION APPLICATIONS
*Country Serial No. Filing Date Author(s) Title
- -------- ---------- ----------- --------- -----
COPYRIGHT REGISTRATION APPLICATIONS IN PREPARATION
Expected
*Country Docket No. Filing Date Author(s) Title
- -------- ---------- ----------- --------- -----
- --------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
Item B. COPYRIGHT LICENSES
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
- ----------- -------- -------- --------- ---------- -------
SCHEDULE VI
to Supplement No. __
to Security and Pledge Agreement
([NAME OF ADDITIONAL GRANTOR])
TRADE SECRET OR KNOW-HOW LICENSES
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
- ----------- -------- -------- --------- ---------- -------
- --------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.