TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
THIS TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT (this
"Agreement") is made as of the 24th day of April, 2000, between ▇▇▇▇▇▇▇▇.▇▇▇,
INC. a Delaware corporation, having a mailing address at 11410 ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Assignor") and BUSINESS
DEVELOPMENT CORPORATION, a Colorado corporation having a mailing address at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and GJM TRADING
PARTNERS LTD., a Colorado limited partnership, having a mailing address at ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ("Co-Lenders").
PRELIMINARY STATEMENT. Assignor has executed and delivered its certain
promissory note (collectively the "Obligations") to each Co-Lender in connection
with extensions of credit by Co-Lenders, pursuant to a certain Bridge Loan
Agreement dated as of even date herewith, between, inter alia, Assignor and
Co-Lenders (as amended and modified from time to time, the "Loan Agreement"). In
order to induce Co-Lenders to execute and deliver the Loan Agreement, Assignor
has agreed to grant a security interest in and collaterally assign to Co-Lenders
certain trademark rights.
Pursuant to the Loan Agreement, Assignor has granted to Co-Lenders a
lien on and security interest in, inter alia, machinery, equipment,
formulations, manufacturing procedures, quality control procedures, product
specifications, goodwill, customer lists and trade secrets (collectively the
"Other Assets") relating to products sold under the Trademarks, whereby
Co-Lenders shall have the right to foreclose on the Trademarks and the Other
Assets in the event of the occurrence and continuance of an Event of Default, as
that term is defined in the Loan Agreement, in order that the owner of the
Trademarks may continue the publication, marketing and distribution of products
to be sold under the Trademarks and maintain substantially the same product
specifications and quality as maintained by Assignor. This Agreement is executed
pursuant and subject to the terms of the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, Assignor hereby
agrees with Co- Lenders as follows:
1. Assignment of Trademarks.
(a) To secure the complete and timely satisfaction of all
Obligations, as that term is defined in the Loan Agreement, of Assignor to
Co-Lenders, Assignor hereby grants, assigns and conveys to Co-Lenders a
continuing security interest in all of its right, title and interest in and to
any and all now owned or existing or hereafter acquired, created or arising
trade names, trademarks, service marks, designs, trademark, service ▇▇▇▇ and
trade name registrations, and applications for registration (including
registrations resulting therefrom), logos and other business identifiers,
domestic and foreign, and all rights of whatever kind appurtenant thereto
(whether pursuant to a license or otherwise), including, without limitation, all
of those used by the Assignor in whole or in
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part in conducting its business and including, without limitation, the marks,
names, applications and registrations which are listed in Schedule A attached
hereto, together with all proceeds and rights to receive income therefrom (such
as, without limitation, licenses, royalties and proceeds of infringement suits),
the right (but not the obligation) to register claims under any law and to apply
for, renew and extend the same, the right to ▇▇▇ for past, present, and future
infringements, the common law rights therein, goodwill of the businesses to
which they relate and the rights to apply for registrations therefor throughout
the world (collectively the "Trademarks"), and the good will of the business to
which each of the Trademarks relates.
(b) In addition to the grant of a security interest provided
in paragraph l(a), Assignor hereby assigns and conveys to Co-Lenders all of its
right, title and interest in and to the Trademarks, which assignment and
conveyance shall be evidenced by an Assignment of Marks, Registrations and
Applications to be executed contemporaneously herewith, as the same may be
amended and modified from time to time pursuant to paragraph 4 hereof or
otherwise (the "Assignment"), the form of which is attached hereto Exhibit 1;
provided, however, that such assignment and conveyance shall be and become of
force and effect only, and shall immediately and automatically become of force
and effect without further action, upon notice to Assignor by Co- Lenders of the
occurrence of an Event of Default, and Co-Lenders shall be authorized to record
the Assignment with the Patent and Trademark Office only upon the furnishing of
such notice. Unless and until Co-Lenders provides Assignor with notice of an
Event of Default under the Loan Agreement, Assignor shall own the title to the
Trademarks and shall have the exclusive, non- transferable right to use the
Trademarks on and in connection with products sold by Assignor, for Assignor's
own benefit and account and for none other.
2. Representations and Warranties. Assignor covenants and
warrants that:
(a) The Trademarks are subsisting and have not been adjudged
invalid or unenforceable, and, except as disclosed in Schedule 6.7 of the Loan
Agreement, are not subject to or a subject of any pending or, to the best of
Assignor's knowledge, threatened litigation;
(b) To the best of Assignor's knowledge, each of the
Trademarks is valid and enforceable;
(c) No claim has been made that the use of any of the
Trademarks does or may violate the rights of any third person;
(d) Except as disclosed in Schedule 6.10 of the Loan
Agreement, Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Trademarks, free
and clear of any liens, charges and encumbrances, including, without limitation,
pledges, assignments, licenses, registered user agreements and covenants by
Assignor not to ▇▇▇ third persons;
(e) Assignor has the unqualified right to enter into this
Agreement and perform its terms;
(f) Assignor has used, and will continue to use for the
duration of this Agreement,
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notice in connection with its use of the Trademarks;
(g) Assignor has used, and will continue to use for the
duration of this Agreement, consistent standards of quality in its publication,
marketing and distribution of products sold under the Trademarks;
(h) Schedule A attached hereto identifies all of the
Trademarks that Assignor owns or of which Assignor is entitled to the benefit;
and
(i) Assignor agrees not to sell or assign its interest in, or
grant any license under the Trademarks, without the prior written consent of
Co-Lenders.
3. Co-Lenders' Right to Inspect. Assignor hereby grants to Co-Lenders
and their employees and agents the right to visit Assignor's plants and
facilities which publish or store products sold under any of the Trademarks, and
to inspect the products and quality control records relating thereto upon
reasonable notice to Assignor and at reasonable times during regular business
hours. Assignor shall do any and all acts required in good faith by Co-Lenders
to ensure Assignor's compliance with paragraph 2(g).
4. Rights to New Trademarks. If, before the Obligations shall have been
satisfied in full and Assignor has no further right to obtain extensions of
credit pursuant to the Loan Agreement, Assignor shall obtain rights to any new
trade names, trademarks, service marks, designs, or trademark, service ▇▇▇▇ and
trade name registrations or applications, the provisions of paragraph 1 shall
automatically apply to such new Trademarks and Assignor shall give Co-Lenders
prompt written notice thereof.
Assignor authorizes Co-Lenders to modify this Agreement, without the
signature of Assignor, by amending Schedule A and the Assignment to include any
new Trademarks covered by paragraphs 1 and 4 hereof.
5. Remedies Upon Default. Upon Co-Lenders' provision of notice to
Assignor of the occurrence of an Event of Default, as that term is defined in
the Loan Agreement, Assignor's ownership and rights in the Trademarks shall
terminate forthwith, and Co-Lenders shall have, in addition to all other rights
and remedies given them by this Agreement, those provided in the Loan Agreement
and those allowed by law and the rights and remedies of a secured party under
the Uniform Commercial Code as enacted in any jurisdiction in which the
Trademarks may be used, located, or enforced.
6. Termination of Agreement. At such time as Assignor shall completely
satisfy all of the Obligations, this Agreement shall terminate and Co-Lenders
shall execute and deliver to Assignor all deeds, assignments and other
instruments as may be necessary or proper to re-vest in Assignor full title to
the Trademarks, subject to any disposition thereof which may have been made by
Co-Lenders pursuant hereto.
7. Fees and Expenses. Any and all fees, costs and expenses, of whatever
kind or nature, including the reasonable attorney's fees and legal expenses
incurred by Co-Lenders in
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connection with he preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances or otherwise protecting, maintaining or preserving the
Trademarks, or in defending or prosecuting any actions or proceedings arising
out of or related to the Trademarks, shall be borne and paid by Assignor on
demand by Co-Lenders end until so paid shall be added to the principal amount of
the Obligations and shall bear interest at the highest rate prescribed in the
Loan Agreement or the Obligations.
8. Duties of the Assignor. Assignor agrees that, until all of the
Obligations shall have been satisfied in full and Assignor shall have no further
right to obtain extensions of credit pursuant to the Loan Agreement, it will not
enter into any agreement (for example, a license agreement) which is
inconsistent with Assignor's obligations under this Agreement, without
Co-Lenders' prior written consent. Assignor further agrees that at any time and
from time to time, at the expense of Assignor, Assignor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that Co-Lenders' may in good faith
request, in order to perfect and protect the security interest and collateral
assignment granted or purported to be granted hereby or to enable Co-Lenders' to
exercise their rights and remedies hereunder.
Assignor shall have the duty to prosecute diligently any trademark
applications of the Trademarks pending as of me date of this Agreement or
thereafter until the Obligations shall have been paid in full and Assignor shall
have no further right to obtain extensions of credit pursuant to the Loan
Agreement, to make federal application on registrable but unregistered
Trademarks, to file and prosecute opposition and cancellation proceedings and to
do any and all acts which are necessary or desirable to preserve and maintain
all rights in the Trademarks. Any expenses incurred in connection with the
Trademarks shall be borne by Assignor. After an Event of Default, the Assignor
shall not abandon any Trademark without the consent of the Co-Lenders, which
consent shall not be unreasonably withheld.
Assignor shall have the right, to bring any opposition proceedings,
cancellation proceedings or lawsuit in its own name to enforce or protect the
Trademarks, in which event Co-Lenders may, if necessary, be joined as a nominal
parties to such suit if Co-Lenders shall have been satisfied that they are not
thereby incurring any risk of liability because of such joinder. Assignor shall
promptly, upon demand, reimburse and indemnify Co-Lenders for all damages, costs
and expenses, including attorney's fees, incurred by Co-Lenders in the
fulfillment of the provisions of this paragraph 8.
9. Appointment as Attorney-in-Fact. In the event of the occurrence of
an Event of Default under the Loan Agreement, Assignor hereby irrevocably
authorizes and empowers Co- Lenders to make, constitute and appoint any officers
or agents of Co-Lenders as Co-Lenders may select, in their exclusive discretion,
as Assignor's true and lawful attorney-in-fact, with the power to endorse
Assignor's name on all applications, documents, papers and instruments necessary
to assign, pledge, convey or otherwise transfer or dispose of all of Assignor's
right, title and interest in and to the Trademarks to Co-Lenders or any other
party, or to grant or issue any exclusive or nonexclusive license under the
Trademarks to anyone else, or necessary for Co-Lenders to assign, pledge, convey
or otherwise transfer title in or dispose of the Trademarks to anyone else.
Assignor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof. This
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power of attorney is a power coupled with an interest and shall be irrevocable
for the life of this Agreement. The rights and powers conferred upon Co-Lenders
under this Agreement are solely to protect their interests in the Trademarks and
shall not impose any duty upon Co-Lenders to exercise any such rights or powers.
Co-Lenders shall be accountable only for amounts that Co-Lenders actually
receive as a result of the exercise of such rights and powers and neither
Co-Lenders nor any of their officers, directors, employees or agents shall be
responsible to Assignor for any act or failure to act, except for Co-Lenders'
own gross negligence or willful misconduct.
10. Right to Enforce Trademarks. If Assignor fails to comply with any
of its obligations hereunder, Co-Lenders may do so in Assignor's name or in
Co-Lenders' names, but at Assignor's expense, and Assignor hereby agrees to
reimburse Co-Lenders in fill for all expenses, including reasonable attorney's
fees, incurred by Co-Lenders in protecting, defending and maintaining the
Trademarks.
11. Cumulative Rights and Remedies; Waiver. All of Co-Lenders' rights
and remedies with respect to the Trademarks, whether established hereby or by
the Loan Agreement, or by any other agreements or by law shall be cumulative and
may be exercised singularly or concurrently.
No course of dealing between Assignor and Co-Lenders, nor any failure
to exercise, nor any delay in exercising, on the part of Co-Lenders, any right,
power or privilege hereunder or under the Loan Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
12. Enforceability; Governing Law. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid and
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction. The validity and interpretation of this Agreement and the
rights and obligations of the parties shall be governed by the laws of the State
of Colorado.
13. Modification. This Agreement is subject to modification only by a
writing signed by the parties, except as provided in paragraph 4.
14. Successors and Assigns. The benefits and burdens of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties; provided, however, that the foregoing
provisions shall not invalidate or otherwise modify the restriction imposed on
Assignor hereunder with respect to transferring any part of or interest in the
Trademarks.
15. Headings. All headings herein are inserted only for convenience and
ease of reference and are not to be considered in two construction or
interpretation of any provisions of this Agreement.
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IN WITNESS WHEREOF, Assignor and Co-Lenders have executed this
instrument as of the date set forth above.
ASSIGNOR:
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:\s\ Euburn ▇▇▇▇▇
-------------------
Its:President
-------------
CO-LENDERS:
BUSINESS DEVELOPMENT
CORPORATION
By:\s\ Van ▇. ▇▇▇▇▇▇▇
------------------
Van ▇. ▇▇▇▇▇▇▇
Its: President
GJM TRADING PARTNERS, LTD.
By:\s\ Van ▇. ▇▇▇▇▇▇▇
------------------
Van ▇. ▇▇▇▇▇▇▇
Its: Attorney-In-Fact
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CERTIFICATE OF ACKNOWLEDGMENT
STATE OF VIRGINIA
COUNTY OF FAIRFAX
On this 25 day of April, 2000, before me, a Notary Public in and for
said County and State, personally appeared Euburn ▇▇▇▇▇, known to me to be the
person who as President of ▇▇▇▇▇▇▇▇.▇▇▇, INC., the company which executed the
foregoing instrument, sign the same, and acknowledge to me that he/she did so
sign said instrument in the name and upon behalf of said company as such
officer, and by authority of the resolution of its Board of Directors; and that
the same is his free act and deed as such officer, and the free and corporate
act and deed of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
\s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Notary Public Commonwealth of Virginia
My Commission Expires:
December 31, 2001 [SEAL]
STATE OF FLORIDA
COUNTY OF BROWARD
On this 27 day of April, 2000, before me, a Notary Public in and for
said County and State, personally appeared Van ▇. ▇▇▇▇▇▇▇, known to me to be the
person who as President of BUSINESS DEVELOPMENT CORPORATION, the company which
executed the foregoing instrument, sign the same, and acknowledge to me that he
did so sign said instrument in the name and upon behalf of said company as such
officer, and by authority of the resolution of its Board of Directors; and that
the same is his free act and deed as such officer, and the free and corporate
act and deed of said company, and who produced U.S. Passport as identification.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
\s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Notary Public, State of Florida
My Commission Expires:
June 1, 2003 [SEAL]
▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ this 27 day of April, 2000, before me, a Notary Public in and for
said County and State, personally appeared Van ▇. ▇▇▇▇▇▇▇, known to me to be the
person who, as Attorney-In-Fact for GJM TRADING PARTNERS, LTD., the limited
partnership which executed the foregoing instrument, sign the same, and
acknowledge to me that he did so sign said instrument in the name and upon
behalf of said limited partnership by authority of the limited partnership; and
that the same is his free act and deed, and the free act and deed of said
limited partnership and who produced U.S. Passport as identification.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
\s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Notary Public, State of Florida
My Commission Expires:
June 1, 2003 [SEAL]
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SCHEDULE A
▇▇▇▇: TUTORNET
REGISTRATION NUMBER: 2282387
REGISTRATION DATE: 10/05/99
▇▇▇▇: NETUCATORS
REGISTRATION NUMBER: 2297637
REGISTRATION DATE: 12/07/99
▇▇▇▇: NETCLASS
SERIAL NUMBER: 75-494253
FILING DATE OF APPLICATION: 06/01/98
▇
▇▇▇▇▇▇▇ ▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ PATENT AND TRADEMARK OFFICE
ASSIGNMENT OF MARKS, REGISTRATIONS AND APPLICATIONS
WHEREAS, ▇▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation, having a mailing
address at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Assignor") is the owner of the trademark registrations and the trademark
applications identified by serial number shown in Schedule A (collectively "the
Marks'); and
WHEREAS, BUSINESS DEVELOPMENT CORPORATION, a Colorado corporation,
having a mailing address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ and GJM TRADING PARTNERS, LTD., a Colorado limited partnership,
having a mailing address of ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
("Co-Assignees"), are desirous of acquiring the Marks;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor does hereby assign unto
Co-Assignees all right, title and interest in and to the Marks, including all
claims for damages for past infringement, together with the goodwill of the
businesses symbolized by the Marks.
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:\s\ Euburn ▇▇▇▇▇
-------------------
Its:President and CEO
---------------------
STATE OF VIRGINIA
COUNTY OF FAIRFAX
On this 25 day of April, 2000, before me, the subscriber, a notary
public in and for said county and state, personally appeared Euburn ▇▇▇▇▇, known
to me to be the person who as President of ▇▇▇▇▇▇▇▇.▇▇▇, INC., the company which
executed the foregoing instrument, signed the same, and acknowledged that he did
so sign said instrument in the name and upon behalf of the said company as such
officer, and by authority of the resolution of its Board of Directors; and that
the same is his free act and deed as such officer, and the free and corporate
act and deed of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
\s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Notary Public Commonwealth of Virginia
My Commission Expires:
December 31, 2001 [SEAL]
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