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Party City - Copyright Security Agreement
EXHIBIT 10.17
Execution Copy
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this " Agreement" ) is made as of January 9, 2003 by and between Party City Corporation, a Delaware corporation (" Grantor" ), and WELLS FARGO RETAIL FINANCE, LLC, as the arranger, collateral agent, and administrative agent for the Lender Group and any other holder of Obligations under, and as defined in, the Loan Agreement referred to below (together with its successor(s) thereto in such capacity, the " Agent" ).
INTRODUCTION:
Pursuant to the Loan and Security Agreement dated as of the date hereof (as amended, restated, supplemented and/or modified from time to time, the " Loan Agreement" ) by and among the Grantor, the Agent and the financial institutions from time to time party thereto as Lenders (the " Lenders" ), the Agent and the Lenders have agreed, subject to the terms and conditions set forth therein, to make revolving credit loans and to provide other financial accommodations to the Grantor (collectively, the " Loans" ).
It is a condition precedent to the effectiveness of the Loan Agreement that the Grantor execute and deliver this Agreement and grant to the Agent, for the benefit of the Lender Group and any other holder of Obligations under, and as defined in, the Loan Agreement (the Lender Group and such other holders of Obligations collectively with the Agent, the " Secured Parties" ), a continuing security interest in all of the Trademark Collateral referred to below to secure all of the Obligations.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Agent and Lenders to make Loans to the Grantor pursuant to the Loan Agreement, the Grantor agrees, for the benefit of the Agent and each other 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 in the Loan Agreement.
SECTION 2. Grant of Security Interest. To secure the prompt performance of the Obligations, the Grantor hereby collaterally assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to the Agent, for the benefit of the Secured Parties, and hereby grants to the Agent, for the benefit of the Secured Parties, a continuing security interest in all of the Copyright Collateral, whether now or hereafter existing or acquired by the Grantor.
" Copyright Collateral" means all copyrights of the Grantor, whether statutory or common law, registered or unregistered and whether published or unpublished, 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 Schedule I attached hereto, and registrations and recordings thereof
and all applications for registration thereof, whether pending or in preparation, the right to sue for past, present and future infringements of any of the foregoing, all rights corresponding thereto, all extensions and renewals of any thereof and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.
SECTION 3. Security Agreement. This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Agent in the Copyright Collateral with the United States Copyright Office 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 Agent for its benefit and the ratable benefit of each other Secured Party under the Loan Agreement. The Loan Agreement (and all rights and remedies of each Secured Party thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4. Covenants. The Grantor covenants and agrees to comply with the following provisions as such provisions relate to any item of Copyright Collateral (other than items of Copyright Collateral which are not, individually or in the aggregate, material):
(a) the Grantor shall promptly notify the Agent if it knows, or has reason to know, that any application or registration relating to any material item of the Copyright Collateral may become abandoned or dedicated to the public or placed in the public domain or invalid or unenforceable, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Copyright Office or any foreign counterpart thereof or any court) regarding the Grantor' s ownership of any of the Copyright Collateral, its right to register the same or to keep and maintain and enforce the same;
(b) in no event will the Grantor or any of its respective agents, employees, designees or licensees file an application for the registration of any Copyright Collateral with 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 Agent, and upon request of the Agent, executes and delivers all agreements, instruments and documents as the Agent may reasonably request to evidence the security interest of the Agent and the other Secured Parties in such Copyright Collateral;
(c) the Grantor will take all the necessary steps, including in any proceeding before 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 after application) filed with respect to, and to maintain any registration of, all material items of the Copyright 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 (i) dedication, abandonment or invalidation is permitted under the foregoing clause (b) or (ii) the Grantor shall either (a) reasonably and in good faith determine that any of such Copyright Collateral is of negligible economic value to the Grantor, or (b) have a valid business purpose to do otherwise); and
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(d) the Grantor will promptly (but no less than quarterly) execute and deliver to the Agent a Copyright Security Agreement, substantially in the form of this Copyright Security Agreement following its obtaining an interest in any material copyrights, and shall execute and deliver to the Agent any other document required to acknowledge or register or perfect the interest of the Agent and the other Secured Parties in any part of such item of material Copyright Collateral, in each case at the request of the Agent.
SECTION 5. Release of Liens. Upon (a) the disposition of Copyright Collateral in accordance with the Loan Agreement or (b) the payment in full of the Obligations (other than contingent indemnification obligations for which neither the Agent nor the Lenders have yet made a claim) and the termination of the Lender Group' s obligations to make Loans under the Loan Agreement, the security interests granted herein shall automatically terminate with respect to (i) such Copyright Collateral (in the case of clause 5(a)) or (ii) all Copyright Collateral (in the case of clause 5(b)). Upon any such disposition or termination, the Agent will, at the Grantor' s sole expense, deliver to the Grantor, without any representations, warranties or recourse of any kind whatsoever, all Copyright Collateral held by the Agent hereunder, and execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination.
SECTION 6. Acknowledgment. The Grantor further acknowledges and affirms that the rights and remedies of the Agent with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Loan 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 7. Due Authorization. The Grantor represents and warrants that the execution, delivery, and performance by the Grantor of this Agreement have been duly authorized by all necessary action on the part of the Grantor.
SECTION 8. Loan Document. This Agreement is a Loan Document executed pursuant to the Loan Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof.
SECTION 9. 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.
SECTION 10. Governing Law. This Agreement shall be construed under and governed by the laws of The State of New York.
[Signatures appear on next page.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. GRANTOR: PARTY CITY CORPORATION By: /s/ Linda M. Siluk Linda M. Siluk Chief Financial Officer AGENT: WELLS FARGO RETAIL FINANCE, LLC, as Agent By: /s/ David Molinario David Molinario Vice President State of New Jersey County of Morris January , 2003
Then personally appeared the above named Linda M. Siluk, as Chief Financial Officer of Party City Corporation, and acknowledged the foregoing instrument to be her free act and deed as Chief Financial Officer of Party City Corporation, before me, /s/ Maura Santos Notary Public My commission expires: Maura Santos
Bergen County Notary Public of New Jersey My commission expires Dec. 12, 2004 ID #2172812
Signature Page
Schedule I to Copyright Security Agreement Registration Registration Country No. Date Author Title United States TX-4-349-250 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-251 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-252 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-253 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-254 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-255 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-256 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-257 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-349-258 11/04/96 Peters
Communications
Corporation Party City: The Discount Party Super Store United States TX-4-744-362 03/19/98 Peters
Communications
Corporation Party City, The Discount Party Super Store: Mardi Gras Headquarters United States TX-4-744-363 03/19/98 Peters
Co...
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