EXHIBIT 10.3
MASTER SECURITY AGREEMENT
To: ▇▇▇▇▇▇▇▇ Entertainment Company
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date: December 20, 2004
To Whom It May Concern:
1. To secure the payment of all Obligations (as hereafter defined), each
of AGU Entertainment Corp., a Delaware corporation, The Tube Music Network,
Inc., a Florida corporation, and Pyramid Records International, Inc., a Florida
corporation (each an "Assignor"), hereby assigns and grants to ▇▇▇▇▇▇▇▇
Entertainment Company, a Delaware limited liability company ("▇▇▇▇▇▇▇▇
Entertainment") a continuing security interest in all of the following property
now owned or at any time hereafter acquired by each such Assignor, or in which
each such Assignor now have or at any time in the future may acquire any right,
title or interest (the "Collateral"):
(a) (i) all of the shares of capital stock of whatever class of The
Tube Music Network, Inc. and Pyramid Records International, Inc., now owned or
hereafter acquired by the Assignors, together with in each case the certificates
representing the same (collectively, the "Pledged Stock");
(ii) all shares, securities, moneys or property representing a
dividend on, or a distribution or return of capital in respect of, any of the
Pledged Stock, resulting from a split-up, revision, reclassification or other
like change of any of the Pledged Stock or otherwise received in exchange for
any of the Pledged Stock and all equity rights issued to the holders of, or
otherwise in respect of, any of the Pledged Stock; and
(iii) in the event of any consolidation or merger in which any
Issuer is not the surviving corporation, all shares of each class of the capital
stock of the successor corporation (unless such successor corporation is an
Assignor) formed by or resulting from such consolidation or merger
(collectively, and together with the property described in clauses (i) and (ii)
above, the "Stock Collateral");
(b) All Film Assets and Music Assets (as such terms are defined on
Schedule 1);
(c) All inventories and merchandise, including, without limitation,
work in process, finished products, goods in transit, materials used or consumed
in the manufacture or production thereof, all wrapping, packaging, advertising
and shipping materials (and all documents relating thereto), all labels and
other devices, names and marks affixed or to be affixed thereto for the purpose
of selling or identifying the same or the seller or manufacturer thereof, all
supplies and containers relating to or used in connection with the foregoing,
all goods in which any Assignor has an interest in mass or an interest or right
as a consignee and all goods which are returned to or repossessed by any
Assignor, whether used or consumed in any Assignor's business, held for sale or
otherwise, and all bills of lading, warehouse receipts, documents of title or
general intangibles (including, without limitation, commercial tort claims and
payment intangibles) relating to any of the foregoing (collectively, the
"Inventory");
(d) All goods, equipment, parts, machinery, tools, tooling, molds,
dies, motors, furniture, fixtures (whether or not attached to real property),
furnishings, trade fixtures, (except as provided below) motor vehicles and
rolling stock, materials and parts and all other tangible personal property, all
attachments, accessions and property now or hereafter affixed to or used in
connection with any of the foregoing, and all substitutes and replacements for
any of the foregoing;
(e) All rights to the payment of money or other forms of
consideration, accounts, payment intangibles, notes, accounts receivable,
drafts, documents, chattel paper (including, without limitation, electronic
chattel paper and tangible chattel paper), letter of credit rights, choses in
action, undertakings, surety bonds, insurance policies, acceptances, federal,
state and local tax refunds and all other forms of claims, demands, instruments
and receivables, together with all guarantees, security agreements, leases and
rights and interests securing the same and all right, title and interest of any
Assignor in the merchandise which gave or shall give rise thereto, including the
right of stoppage in transit, replevin, reclamation, repossession and resale
(collectively, the "Receivables");
(f) All agreements, contracts, leases, licenses, letters of credit,
security agreements, indentures and purchase and sales orders of any kind
whatsoever, all rights of any Assignor thereunder, including all rights to
purchase, lease, sell or otherwise acquire or deal with real or personal
property and all warranty rights and contract rights of any nature, whether
written or oral, and all consents or other authorizations relating thereto, to
the extent assignable (collectively, the "Contracts");
(g) All licenses, permits, franchises, certificates and other
governmental authorizations and approvals of any nature whatsoever, to the
extent assignable;
(h) All deposit accounts, including without limitation, all demand,
time, savings, passbook, custodial, safekeeping, escrow or like accounts
maintained by any Assignor with ▇▇▇▇▇▇▇▇ Entertainment or any bank, savings and
loan association, credit union or like organization, and all money, cash, cash
equivalents, investment securities, deposits and prepayments of any Assignor in
any such deposit account (all of the foregoing being deemed to be in any such
account as soon as the same is put in transit to such account by mail or other
courier), now or hereafter existing;
(i) All trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, other source or business identifiers,
proprietary product names or descriptions, designs and general intangibles of
like nature, now existing or hereafter created or acquired, all registrations
and recordings thereof, all registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or political
subdivision thereof (collectively, "Trademarks");
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(j) All copyrights in any original work of authorship fixed in any
tangible medium of expression, now known or later developed, all registrations
and applications for registration of any such copyrights in the United States or
any other country, and all supplemental registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of any other country (collectively, "Copyrights");
(k) All letters patent of the United States or any other country,
all applications therefor and registrations and recordings thereof in the United
States Patent and Trademark Office or in any similar office or agency of the
United States or any state or territory thereof, or any other country, including
the patents and applications therefor (collectively "Patents");
(l) All reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any Trademarks, Patents and/or Copyrights; all income,
royalties, damages and payments now or hereafter due and/or payable with respect
to any Trademarks, Patents and/or Copyrights, including, without limitation,
damages and payments for past or future infringement thereof; all rights (but
not any obligation) to ▇▇▇ for past, present and future infringement of any
Trademarks, Patents and/or Copyrights or to bring interference proceedings with
respect thereto; and all rights corresponding to any Trademarks, Patents and/or
Copyrights throughout the world;
(m) All other proprietary rights and confidential information,
technology, trade secrets, computer programs, source codes, software, customer
lists, sales literature and catalogues, price lists, licensee and sublicensee
information, specifications, telephone numbers and all applications and
registrations relating to any of the foregoing (the foregoing items in clauses
(h) through (l), inclusive, collectively, the "Intellectual Property");
(n) All stocks, bonds, debentures, securities, financial assets,
securities entitlements, securities accounts, commodity contracts, commodity
accounts, subscription rights, options, warrants, puts, calls, certificates,
partnership interests, joint venture interests, investments and/or brokerage
accounts and all rights, preferences, privileges, dividends, distributions,
redemption payments or liquidation payments with respect thereto;
(o) All files, correspondence, books and records of any Assignor,
including without limitation, books of account and ledgers of every kind and
nature, all electronically recorded data relating to the Collateral, any
Assignor or the business thereof, all computer programs, tapes, discs and data
processing software containing the same, and all receptacles and containers for
such records;
(p) All other goods, accounts, general intangibles (including,
without limitation, commercial tort claims and payment intangibles), documents,
instruments, causes of action, rights, interests and properties of every kind
and description, tangible or intangible;
(q) All rights, remedies, powers and/or privileges of any Assignor
with respect to any of the foregoing, all rights in all litigation presently or
hereafter pending for any cause or claim (whether in contract, tort or
otherwise) and all judgments now or hereafter arising therefrom; and
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(r) All proceeds, replacements, products, additions, accessions and
substitutions of any of the foregoing.
Notwithstanding the foregoing, the Collateral shall not include the trucks
described on Exhibit "A" hereto. Except as otherwise defined herein, all
capitalized terms used herein shall have the meaning provided such terms the
Securities Purchase Agreement referred to below.
2. The term "Obligations" as used herein shall mean and include all debts,
liabilities and obligations owing by any Assignor to ▇▇▇▇▇▇▇▇ Entertainment
arising under, out of, or in connection with: (i) the Note, (ii) that certain
Securities Purchase Agreement dated as of the date hereof by and among each
Assignor and ▇▇▇▇▇▇▇▇ Entertainment (the "Securities Purchase Agreement") and
(iii) the Related Agreements referred to in the Securities Purchase Agreement,
(the Note, the Securities Purchase Agreement and each Related Agreement, as each
may be amended, modified, restated or supplemented from time to time, are
collectively referred to herein as the "Documents"), or any documents,
instruments or agreements relating to or executed in connection with the
Documents or any documents, instruments or agreements referred to therein or
otherwise, or any other indebtedness, obligations or liabilities of the Assignor
to ▇▇▇▇▇▇▇▇ Entertainment, whether now existing or hereafter arising, direct or
indirect, liquidated or unliquidated, absolute or contingent, due or not due and
whether under, pursuant to or evidenced by a note, agreement, guaranty,
instrument or otherwise, in each case, irrespective of the genuineness,
validity, regularity or enforceability of such Obligations, or of any instrument
evidencing any of the Obligations or of any collateral therefor or of the
existence or extent of such collateral, and irrespective of the allowability,
allowance or disallowance of any or all of the Obligations in any case commenced
by or against the Assignor under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, including,
without limitation, obligations or indebtedness of the Assignor for
post-petition interest, fees, costs and charges that would have accrued or been
added to the Obligations but for the commencement of such case.
3. Each Assignor hereby represents, warrants and covenants to ▇▇▇▇▇▇▇▇
Entertainment that:
(a) it is a corporation, partnership or limited liability company,
as the case may be, validly existing, in good standing and organized under the
laws of the jurisdiction of organization, and it will provide ▇▇▇▇▇▇▇▇
Entertainment thirty (30) days' prior written notice of any change in its
jurisdiction of organization;
(b) its legal name, as set forth in its Certificate of Incorporation
(or equivalent organizational document) as amended through the date hereof, is
as set forth in Section 1 hereof and it will provide ▇▇▇▇▇▇▇▇ Entertainment
thirty (30) days' prior written notice of any change in its legal name;
(c) it is the lawful owner of the Collateral, free and clear of all
attachments, levies, taxes, liens, security interests and encumbrances of every
kind and nature ("Encumbrances"), except (i) Encumbrances securing the
Obligations and (ii) Encumbrances set forth on Exhibit "B" hereto and it has the
sole right to grant a security interest therein and will defend the Collateral
against all claims and demands of all persons and entities;
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(d) it will keep the Collateral owned by it free and clear of
Encumbrances, except (i) Encumbrances securing the Obligations and (ii)
Encumbrances set forth on Exhibit "B" hereto.
(e) it will at its own cost and expense keep the Collateral in good
state of repair (ordinary wear and tear excepted) and will not waste or destroy
the same or any part thereof other than ordinary course discarding of items no
longer used or useful in its business;
(f) it will not without ▇▇▇▇▇▇▇▇ Entertainment's prior written
consent, sell, exchange, lease or otherwise dispose of the Collateral, whether
by sale, lease or otherwise, except in the ordinary course of business and for
the disposition or transfer in the ordinary course of business during any fiscal
year of obsolete and worn-out equipment or equipment no longer necessary for its
ongoing needs, having an aggregate fair market value of not more than $150,000
and only to the extent that:
(i) the proceeds of any such disposition are used to acquire
replacement Collateral which is subject to ▇▇▇▇▇▇▇▇ Entertainment's perfected
security interest or are used to repay Obligations or to pay general corporate
expenses; and
(ii) following the occurrence of an Event of Default which
continues to exist the proceeds of which are remitted to ▇▇▇▇▇▇▇▇ Entertainment
to be held as cash collateral for the Obligations;
(g) it will insure the Collateral in ▇▇▇▇▇▇▇▇ Entertainment's name
against loss or damage by fire, theft, burglary, pilferage, loss in transit and
such other hazards as ▇▇▇▇▇▇▇▇ Entertainment shall specify in amounts and under
policies by insurers acceptable to ▇▇▇▇▇▇▇▇ Entertainment and all premiums
thereon shall be paid by the Assignor and the policies delivered to ▇▇▇▇▇▇▇▇
Entertainment. If the Assignor fails to do so, ▇▇▇▇▇▇▇▇ Entertainment may
procure such insurance and the cost thereof shall be promptly reimbursed by the
Assignor and shall constitute Obligations;
(h) it will at all reasonable times allow ▇▇▇▇▇▇▇▇ Entertainment or
▇▇▇▇▇▇▇▇ Entertainment's representatives free access to and the right of
inspection of the Collateral;
(i) it hereby indemnifies and saves ▇▇▇▇▇▇▇▇ Entertainment harmless
from all loss, costs, damage, liability and/or expense, including reasonable
attorneys' fees incurred through all levels of proceedings, that ▇▇▇▇▇▇▇▇
Entertainment may sustain or incur to enforce payment, performance or
fulfillment of any of the Obligations and/or in the enforcement of this Security
Agreement or in the prosecution or defense of any action or proceeding either
against any Assignor or ▇▇▇▇▇▇▇▇ Entertainment concerning any matter growing out
of or in connection with this Security Agreement, and/or any of the Obligations
and/or any of the Collateral except to the extent caused by ▇▇▇▇▇▇▇▇
Entertainment's own gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and nonappealable decision); and
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(j) shall comply with all valid laws, rules, ordinances and
regulations of the Federal, state and local government, and all agencies and
subdivisions thereof which laws, rules, ordinances and regulations apply or
relate to the Collateral.
4. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Security Agreement:
(a) any covenant, warranty, representation or statement made or
furnished to ▇▇▇▇▇▇▇▇ Entertainment by any Assignor or on any Assignor's behalf
was false in any material respect when made or furnished, and if subject to
cure, shall not be cured for a period of twenty (20) days;
(b) the loss, theft, substantial damage, destruction, sale or
encumbrance to or of any of the Collateral or the making of any levy, seizure or
attachment thereof or thereon except to the extent:
(i) such loss is covered by insurance proceeds which are used
to replace the item or repay ▇▇▇▇▇▇▇▇ Entertainment; or
(ii) said levy, seizure or attachment does not secure
indebtedness in excess of $100,000 and such levy, seizure or attachment has not
been removed or otherwise released within ten (10) days of the creation or the
assertion thereof;
(c) the Assignor shall become insolvent, cease operations, dissolve,
terminate our business existence, make an assignment for the benefit of
creditors, suffer the appointment of a receiver, trustee, liquidator or
custodian of all or any part of the Assignor's property;
(d) any proceedings under any bankruptcy or insolvency law shall be
commenced by or against the Assignor and if commenced against the Assignor shall
not be dismissed within thirty (30) days;
(e) the Assignor shall repudiate, purport to revoke or fail to
perform any of its obligations under the Note (after passage of applicable cure
period, if any); or
(f) an Event of Default (or similar occurrence) shall have occurred
under and as defined in the Securities Purchase Agreement or any other Document.
5. Each Assignor supplementally agrees as follows:
(a) Concurrently with the execution and delivery of this Security
Agreement, each Assignor shall (i) file such financing statements, copyright
mortgages, trademark security agreements, and other documents in such offices as
shall be necessary or as ▇▇▇▇▇▇▇▇ Entertainment may request to perfect and
establish the priority of the liens granted by this Security Agreement, (ii)
deliver and pledge to ▇▇▇▇▇▇▇▇ Entertainment any and all instruments, endorsed
or accompanied by such instruments of assignment and transfer in such form and
substance as ▇▇▇▇▇▇▇▇ Entertainment may request, (iii) deliver to ▇▇▇▇▇▇▇▇
Entertainment all certificates with respect to the Pledged Stock, accompanied by
undated stock powers duly executed in blank, , (iv) obtain letter agreements
between ▇▇▇▇▇▇▇▇ Entertainment and the issuer of uncertificated securities with
respect to uncertificated securities held in the name of any Assignor, and (v)
take all such other actions as shall be necessary or as ▇▇▇▇▇▇▇▇ Entertainment
may request to perfect the liens granted by this Security Agreement.
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(b) With respect to each Copyright in which any Assignor has an
ownership interest, neither Assignor nor any of its licensees shall (i) fail to
place an appropriate notice of copyright on any copies embodying such
copyrighted works which are publicly distributed or (ii) fail to do any act or
knowingly omit to do any act whereby the Copyright may become invalidated or
dedicated to the public domain.
(c) If any Assignor creates or obtains an ownership interest in any
Copyright or obtains any rights to any Trademark (or any other Intellectual
Property) after the date hereof, the provisions of this Security Agreement shall
automatically apply thereto and any Assignor shall take such action as ▇▇▇▇▇▇▇▇
Entertainment may request to more fully evidence the same. Each Assignor shall
promptly notify ▇▇▇▇▇▇▇▇ Entertainment in writing of (i) any new Trademark or
Copyright application or registration in which any Assignor has an ownership
interest and (ii) any new copyrighted work in which any Assignor acquires any
ownership interest, which notice shall include the title and author(s) of such
copyrighted work.
(d) Each Assignor shall (i) promptly (but in any event within five
days after becoming aware thereof) notify ▇▇▇▇▇▇▇▇ Entertainment of the
institution of, or any adverse determination in, any proceeding in the U.S.
Patent and Trademark Office, U.S. Copyright Office or in any federal, state or
foreign court or agency regarding any Assignor's claim of ownership, or the
enforceability or validity of any Intellectual Property, or of any other event
that does or could reasonably be expected to adversely affect the value of any
of the Trademarks or Copyrights, the ability of any Assignor or ▇▇▇▇▇▇▇▇
Entertainment to dispose of any of the same or the rights and remedies of
▇▇▇▇▇▇▇▇ Entertainment in relation thereto; (ii) promptly notify ▇▇▇▇▇▇▇▇
Entertainment of any suspected infringement of any Intellectual Property by any
third party that does or could reasonably be expected to adversely affect the
value of any Intellectual Property or Collateral, the ability of any Assignor or
▇▇▇▇▇▇▇▇ Entertainment to dispose of any of the same or the rights and remedies
of ▇▇▇▇▇▇▇▇ Entertainment in relation thereto, or of any claim by any third
party; (iii) concurrently with the filing of any application for registration of
any Trademark, execute, deliver and record in all appropriate registers and
offices, an appropriate form of a collateral security agreement (in form
approved by ▇▇▇▇▇▇▇▇ Entertainment) evidencing the security interest of ▇▇▇▇▇▇▇▇
Entertainment therein; (iv) concurrently with the filing of any application for
registration of any Copyright, execute, deliver and record in all appropriate
registers and offices, a Mortgage of Copyright and Security agreement (in form
approved by ▇▇▇▇▇▇▇▇ Entertainment), evidencing the security interest of
▇▇▇▇▇▇▇▇ Entertainment therein; and (v) diligently keep accurate and complete
records with respect to the Trademarks and Copyrights.
(e) Each Assignor shall, as appropriate and commercially reasonable,
(i) make and diligently prosecute federal applications on any existing or future
registrable but unregistered Intellectual Property owned by it, (ii) preserve,
maintain and renew all of the Intellectual Property and rights and interests
related thereto, including, without limitation, by payment of all taxes,
annuities, issue and maintenance fees and by the use of all proper statutory
notices and designations and (iii) initiate and diligently prosecute in its own
name, for its own benefit and at its own expense, such suits, proceedings or
other actions for infringement, or other damage or opposition, cancellation,
concurrent use or interference proceedings as are necessary to protect its
interests in the Intellectual Property.
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(f) Without limiting the generality of the other provisions of this
Security Agreement and in addition to all other rights and remedies of ▇▇▇▇▇▇▇▇
Entertainment hereunder, each Assignor further agrees that, upon the occurrence
and during the continuance of any Event of Default, ▇▇▇▇▇▇▇▇ Entertainment may
take any or all of the following actions: (i) take and use and/or sell any
Assignor's interest in the Intellectual Property (or any portion thereof), (ii)
bring suit to enforce any Intellectual Property and/or any licenses thereunder
or other rights with respect thereto, (iii) direct any Assignor to refrain, in
which event any Assignor shall refrain, from using the Intellectual Property (or
any portion thereof) in any manner whatsoever, directly or indirectly and (iv)
direct any Assignor to execute, in which event any Assignor shall execute, such
other and further documents that ▇▇▇▇▇▇▇▇ Entertainment may request to further
confirm the provisions hereof. Upon the request of ▇▇▇▇▇▇▇▇ Entertainment, each
Assignor also shall make available to ▇▇▇▇▇▇▇▇ Entertainment, to the extent
within any Assignor's power and authority, such individuals then in such
Assignor's employ to assist in the production, advertisement and sale of the
products and services sold under the Intellectual Property, such individuals to
be available to perform their prior functions on behalf of ▇▇▇▇▇▇▇▇
Entertainment and to be compensated at the expense of any Assignor.
(g) For the purpose of enabling ▇▇▇▇▇▇▇▇ Entertainment to exercise
its rights and remedies hereunder at such time as ▇▇▇▇▇▇▇▇ Entertainment shall
be lawfully entitled to do so, each Assignor hereby grants to ▇▇▇▇▇▇▇▇
Entertainment an irrevocable, non-exclusive license (but not an assignment),
exercisable without payment of royalty or other compensation to any Assignor,
(i) to use, assign, license or sublicense any Assignor's interest in any of the
Intellectual Property now owned or hereafter created or acquired by such
Assignor and wherever the same may be located and (ii) to have access to all
media in which any of the items so licensed may be recorded or stored and all
computer equipment, software and programs used for the compilation or printout
thereof.
6. Each Assignor supplementally agrees as follows respecting Receivables:
(a) ▇▇▇▇▇▇▇▇ Entertainment hereby authorizes any Assignor to collect
any Receivables in which ▇▇▇▇▇▇▇▇ Entertainment has been granted a security
interest hereunder, and each Assignor agrees to use its best efforts to effect
the prompt collection thereof. ▇▇▇▇▇▇▇▇ Entertainment hereby further authorizes
any Assignor to use the proceeds of any such collections in the conduct of its
business in the ordinary course. Each Assignor agrees that immediately upon
▇▇▇▇▇▇▇▇ Entertainment's request following the occurrence of a potential Event
of Default (as determined by ▇▇▇▇▇▇▇▇ Entertainment), each Assignor shall, at
its sole expense, establish and maintain (i) an United States Post Office lock
box (the "Lock Box"), to which ▇▇▇▇▇▇▇▇ Entertainment shall have exclusive
access. Each Assignor authorizes ▇▇▇▇▇▇▇▇ Entertainment, from time to time, to
remove the contents of the Lock Box therefrom for disposition in accordance with
this Security Agreement. Each Assignor agrees to notify all account debtors and
other parties obligated to any Assignor that all payments made to any Assignor
(other than payments by electronic funds transfer) shall be remitted, for the
credit of each Assignor, to the Lock Box, and each Assignor shall include a like
statement of all invoices. Each Assignor shall
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also, at the request of ▇▇▇▇▇▇▇▇ Entertainment at any time or from time to time,
execute and deliver to ▇▇▇▇▇▇▇▇ Entertainment an assignment or assignments, in
form satisfactory to ▇▇▇▇▇▇▇▇ Entertainment, of all of any Assignor's then
existing Receivables and the proceeds thereof. If notwithstanding the giving of
any notice, any account debtor or other obligor shall make payment to any
Assignor, such Assignor shall hold all such payments in trust for ▇▇▇▇▇▇▇▇
Entertainment without commingling the same with other funds of any Assignor and
shall deliver the same to ▇▇▇▇▇▇▇▇ Entertainment or any such agent or designee,
immediately upon receipt by any Assignor in the identical form received,
together with any necessary endorsements.
(b) If any Event of Default shall have occurred and be continuing,
with or without notice to any Assignor and without affecting the liability of
any Assignor hereunder, any Receivables in which ▇▇▇▇▇▇▇▇ Entertainment has been
granted a security interest hereunder may be altered or modified by ▇▇▇▇▇▇▇▇
Entertainment in any respect, and ▇▇▇▇▇▇▇▇ Entertainment may: (i) settle and
adjust all disputes and claims directly with the account debtor with respect to
any such Receivables, (ii) alter, accelerate, extend or change the time, manner
and/or amount of any payments made or to be made by the account debtor under any
such Receivable, (iii) consent from time to time to the acceptance of security
or additional or substituted security of any kind for any obligation of the
account debtor under any such Receivable or to the release, surrender or
alteration of any such security, and (iv) deal as aforesaid or in any other
manner with the account debtor of any such Receivable. Nothing herein contained
shall be construed as requiring or obligating ▇▇▇▇▇▇▇▇ Entertainment or any such
agent or designee to make any demand, or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim or
notice or take any action with respect to any Collateral or the monies due or to
become due thereunder or to take any steps necessary to preserve any rights
against prior parties. Neither ▇▇▇▇▇▇▇▇ Entertainment nor the agent or designee
of ▇▇▇▇▇▇▇▇ Entertainment shall have any liability to any Assignor on the
Collateral for actions taken in good faith pursuant to this Section and without
gross negligence.
7. As respects Stock Collateral:
(a) So long as no Event of Default shall have occurred and be
continuing, the Assignors shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Stock Collateral for
all purposes not inconsistent with the terms of any Basic Document, provided
that the Assignors agree that they will not vote the Stock Collateral in any
manner that is inconsistent with the terms of the Purchase Agreement, the Note
or any Related Agreement.
(b) So long as no Event of Default shall have occurred and be
continuing, the Assignors shall be entitled to receive and retain any dividends
on the Stock Collateral paid in cash.
(c) If any Event of Default shall have occurred and be continuing,
and whether or not ▇▇▇▇▇▇▇▇ Entertainment exercises any available right to
declare any Obligation due and payable or seeks or pursues any other right,
remedy, power or privilege available to it under applicable law or this Security
Agreement, all dividends and other distributions on the Stock Collateral shall
be paid directly to ▇▇▇▇▇▇▇▇ Entertainment and shall be deemed part of the Stock
Collateral, subject to the terms of this Security Agreement, and, if ▇▇▇▇▇▇▇▇
Entertainment shall so request, the Assignors shall execute and deliver to
▇▇▇▇▇▇▇▇ Entertainment appropriate additional dividend, distribution and other
orders and instruments to that end, provided that if such Event of Default is
cured, any such dividend or distribution paid to ▇▇▇▇▇▇▇▇ Entertainment prior to
such cure shall, upon request of the Assignors (except to the extent applied to
the Obligations), be returned by ▇▇▇▇▇▇▇▇ Entertainment to the Assignors.
9
8. If any Event of Default shall have occurred and be continuing:
(a) ▇▇▇▇▇▇▇▇ Entertainment may (i) open any Assignor's mail and
collect any and all amounts due to any Assignor from other persons, (ii) notify
any account debtor obligated on any of the Receivables or any purchaser of
Collateral or any other person of ▇▇▇▇▇▇▇▇ Entertainment's interest in the
Collateral and instruct any such persons to make payments thereon directly to
▇▇▇▇▇▇▇▇ Entertainment and (iii) notify postal authorities that all mail
addressed to any Assignor is to be delivered to ▇▇▇▇▇▇▇▇ Entertainment.
(b) ▇▇▇▇▇▇▇▇ Entertainment may grant extensions, compromise claims
and settle Collateral for less than face value, all without prior notice to any
Assignor.
(c) ▇▇▇▇▇▇▇▇ Entertainment shall have the right, on behalf of any
Assignor, (i) to enter into, or renegotiate, any lease, license, sale or other
agreements relating to any Collateral in which any Assignor has an interest as
▇▇▇▇▇▇▇▇ Entertainment deems appropriate; (ii) to require, demand, collect,
receive, settle, adjust and compromise and to give acquittances and receipts for
the payment of any and all monies payable pursuant to all agreements relating to
any item of Collateral to which any Assignor may be a party; (iii) to file any
claims and/or proofs of claim and to commence, maintain or discontinue any
actions, suits or other proceedings deemed by ▇▇▇▇▇▇▇▇ Entertainment advisable
for the purpose of collecting or enforcing payment of any such monies; (iv) to
receive or endorse any checks, drafts or other orders or instruments for the
payment of monies payable to any Assignor which shall be issued in respect of
such money; (v) to execute any and all instruments, agreements or documents
which may be necessary or desirable under the circumstances; and (vi) to apply
all receipts so derived as herein provided. ▇▇▇▇▇▇▇▇ Entertainment, however,
shall not be obligated to make any demand or present or file any claim or to
take any action authorized hereby. Each Assignor shall gather up and deliver to
▇▇▇▇▇▇▇▇ Entertainment, and shall use its best efforts to cause third parties to
gather up and deliver to ▇▇▇▇▇▇▇▇ Entertainment, all materials, books, records,
documents and things of any nature (including, without limitation, the
Collateral) required by ▇▇▇▇▇▇▇▇ Entertainment in the exercise of its rights
hereunder upon ▇▇▇▇▇▇▇▇ Entertainment's request. Each Assignor shall thereafter,
unless requested to do otherwise by ▇▇▇▇▇▇▇▇ Entertainment, continue to perform
its respective obligations in accordance with all agreements relating to any
Collateral to which it is a party. If any agreement relating to any Collateral
provides for fees to be paid to any Assignor for services rendered thereunder,
any Assignor shall cause all such fees to be remitted directly to ▇▇▇▇▇▇▇▇
Entertainment.
(d) ▇▇▇▇▇▇▇▇ Entertainment 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 under
the Uniform Commercial Code of the State of Florida (the "Code"), and ▇▇▇▇▇▇▇▇
Entertainment may also without notice except as specified below sell the
Collateral or any part thereof in one or more parcels at public or private sale,
10
for cash, on credit or for future delivery, and upon such other terms as
▇▇▇▇▇▇▇▇ Entertainment in its sole and absolute discretion may deem commercially
reasonable. Any Assignor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days' notice to any Assignor 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. ▇▇▇▇▇▇▇▇ Entertainment shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. ▇▇▇▇▇▇▇▇ Entertainment 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. Any Assignor hereby waives any claims against ▇▇▇▇▇▇▇▇ Entertainment
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if ▇▇▇▇▇▇▇▇ Entertainment accepts the first
offer received and does not offer such Collateral to more than one offeree, and
in all events such sale shall be deemed to be commercially reasonable. At any
such public or private sale, ▇▇▇▇▇▇▇▇ Entertainment may be the purchaser of the
Collateral.
(e) Any cash held by ▇▇▇▇▇▇▇▇ Entertainment as Collateral and all
cash proceeds received by ▇▇▇▇▇▇▇▇ Entertainment in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of ▇▇▇▇▇▇▇▇ Entertainment, be held by ▇▇▇▇▇▇▇▇
Entertainment as Collateral for, and/or then or at any time thereafter applied
in whole or in part by ▇▇▇▇▇▇▇▇ Entertainment against all or any part of the
Obligations in such order as ▇▇▇▇▇▇▇▇ Entertainment shall elect. After such
application and after payment by ▇▇▇▇▇▇▇▇ Entertainment of any other amount
required by law, any surplus of such cash or cash proceeds held by ▇▇▇▇▇▇▇▇
Entertainment and remaining after payment in full of all the Obligations shall
be paid over to any Assignor or to whomsoever may be lawfully entitled to
receive such surplus. In a like manner, each Assignor shall pay to ▇▇▇▇▇▇▇▇
Entertainment, without demand, whatever amount of the Obligations remains unpaid
after the Collateral has been sold and the proceeds applied as aforesaid,
together with interest thereon from the date of demand at the highest rate
permitted under applicable law, which interest shall also constitute a part of
the Obligations. Without limiting the foregoing, any Assignor hereby expressly
waives any obligations ▇▇▇▇▇▇▇▇ Entertainment may have regarding the foregoing
under Section 9207(c) of the Code.
(f) ▇▇▇▇▇▇▇▇ Entertainment shall not be obligated to resort to its
rights or remedies with respect to any other security for or guaranty or payment
of the Obligations before resorting to its rights and remedies against any
Assignor or the Collateral hereunder. All rights and remedies of ▇▇▇▇▇▇▇▇
Entertainment shall be cumulative and not in the alternative.
9. If the Assignor defaults in the performance or fulfillment of any of
the terms, conditions, promises, covenants, provisions or warranties on any
Assignor's part to be performed or fulfilled under or pursuant to this Security
Agreement, ▇▇▇▇▇▇▇▇ Entertainment may, at its option without waiving its right
to enforce this Security Agreement according to its terms, immediately or at any
time thereafter and without notice to the Assignor, perform or fulfill the same
or cause the performance or fulfillment of the same for the Assignor's account
and at the Assignor's cost and expense, and the cost and expense thereof
(including reasonable attorneys' fees incurred through all levels of
proceedings) shall be added to the Obligations and shall be payable on demand
with interest thereon at the highest rate permitted by law.
11
10. Each Assignor hereby appoints ▇▇▇▇▇▇▇▇ Entertainment, any of ▇▇▇▇▇▇▇▇
Entertainment's officers, employees or any other person or entity whom ▇▇▇▇▇▇▇▇
Entertainment may designate as our attorney, with power to execute such
documents in our behalf and to supply any omitted information and correct patent
errors in any documents executed by such Assignor or on our behalf; to file
financing statements against the Assignor covering the Collateral (and, in
connection with the filing of any such financing statements, describe the
Collateral as "all assets and all personal property, whether now owned and/or
hereafter acquired" (or any substantially similar variation thereof)); to sign
such Assignor's name on public records; and to do all other things ▇▇▇▇▇▇▇▇
Entertainment deems necessary to carry out this Security Agreement. Each
Assignor hereby ratifies and approve all acts of the attorney and neither
▇▇▇▇▇▇▇▇ Entertainment nor the attorney will be liable for any acts of
commission or omission, nor for any error of judgment or mistake of fact or law
other than their gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision). This
power being coupled with an interest, is irrevocable so long as any Obligations
remains unpaid.
11. No delay or failure on ▇▇▇▇▇▇▇▇ Entertainment's part in exercising any
right, privilege or option hereunder shall operate as a waiver of such or of any
other right, privilege, remedy or option, and no waiver whatever shall be valid
unless in writing, signed by ▇▇▇▇▇▇▇▇ Entertainment and then only to the extent
therein set forth, and no waiver by ▇▇▇▇▇▇▇▇ Entertainment of any default shall
operate as a waiver of any other default or of the same default on a future
occasion. ▇▇▇▇▇▇▇▇ Entertainment's books and records containing entries with
respect to the Obligations shall be admissible in evidence in any action or
proceeding, shall be binding upon the Assignor for the purpose of establishing
the items therein set forth and shall constitute prima facie proof thereof.
▇▇▇▇▇▇▇▇ Entertainment shall have the right to enforce any one or more of the
remedies available to ▇▇▇▇▇▇▇▇ Entertainment, successively, alternately or
concurrently. Each Assignor agrees to join with ▇▇▇▇▇▇▇▇ Entertainment in
executing financing statements or other instruments to the extent required by
the Code in form satisfactory to ▇▇▇▇▇▇▇▇ Entertainment and in executing such
other documents or instruments as may be required or deemed necessary by
▇▇▇▇▇▇▇▇ Entertainment for purposes of affecting or continuing ▇▇▇▇▇▇▇▇
Entertainment's security interest in the Collateral.
12. This Security Agreement shall be governed by and construed in
accordance with the laws of the State of Florida and cannot be terminated
orally. All of the rights, remedies, options, privileges and elections given to
▇▇▇▇▇▇▇▇ Entertainment hereunder shall inure to the benefit of ▇▇▇▇▇▇▇▇
Entertainment's successors and assigns. The term "▇▇▇▇▇▇▇▇ Entertainment" as
herein used shall include ▇▇▇▇▇▇▇▇ Entertainment, any parent of ▇▇▇▇▇▇▇▇
Entertainment, any of ▇▇▇▇▇▇▇▇ Entertainment's subsidiaries and any
co-subsidiaries of ▇▇▇▇▇▇▇▇ Entertainment's parent, whether now existing or
hereafter created or acquired, and all of the terms, conditions, promises,
covenants, provisions and warranties of this Security Agreement shall inure to
the benefit of each of the foregoing and shall bind the representatives,
successors and assigns of any Assignor and each of the foregoing. Each of
▇▇▇▇▇▇▇▇ Entertainment and the Assignor hereby (a) submit to the nonexclusive
jurisdiction of any Florida court sitting in the County of Broward, and (b)
waive any objection such Assignor or ▇▇▇▇▇▇▇▇ Entertainment may have as to the
bringing or maintaining of such action with any such court.
12
13. All notices from ▇▇▇▇▇▇▇▇ Entertainment to any Assignor shall be
sufficiently given if mailed or delivered to the Assignor at its address set
forth in the Securities Purchase Agreement.
14. Assignor hereby waives and releases, for itself and anyone claiming
through, by, or under it, to the maximum extent permitted by the laws of the
State of Florida: (a) all benefit that might accrue to Assignor by virtue of any
present or future law exempting the Collateral, or any part of the proceeds
arising from any sale thereof, from attachment, levy or sale on execution, or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment; (b) all notices of
default, or ▇▇▇▇▇▇▇▇ Entertainment's actual exercise of any option or remedy
under any Documents, or otherwise; and (c) any right to have the Collateral
marshalled.
13
15. EACH ASSIGNOR AND ▇▇▇▇▇▇▇▇ ENTERTAINMENT HEREBY MUTUALLY, KNOWINGLY,
WILLINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE THEIR RIGHT TO TRIAL BY JURY AND
NO PARTY NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF THE
PARTIES (ALL OF WHOM ARE HEREINAFTER COLLECTIVELY REFERRED TO AS THE "PARTIES")
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER
LITIGATION PROCEEDING BASED UPON OR ARISING OUT OF THIS SECURITY AGREEMENT OR
ANY DOCUMENTS OR ANY INSTRUMENT EVIDENCING, SECURING OR RELATING TO THE
INDEBTEDNESS OR OTHER OBLIGATIONS SECURED HEREBY OR ANY RELATED AGREEMENT OR
INSTRUMENT, ANY OTHER COLLATERAL FOR THE INDEBTEDNESS OR OTHER OBLIGATIONS
SECURED HEREBY OR ANY COURSE OF ACTION, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS RELATING TO THE NOTE OR THIS SECURITY AGREEMENT.
THE PARTIES ALSO WAIVE ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED.
THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY NEGOTIATED BY THE PARTIES. THE
WAIVER CONTAINED HEREIN IS IRREVOCABLE, CONSTITUTES A KNOWING AND VOLUNTARY
WAIVER, AND SHALL BE SUBJECT TO NO EXCEPTIONS.
Very truly yours,
AGU Entertainment Corp., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President and Secretary
The Tube Music Network, Inc., a Florida corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President and Secretary
Pyramid Records International, Inc.,
a Florida corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President and Secretary
14
ACKNOWLEDGED:
▇▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Manager
15
Schedule 1
DEFINITION OF "FILM ASSETS"; "MUSIC ASSETS" AND
OTHER ANCILLARY DEFINITIONS
A. Film Assets.
"Film Assets" shall mean, with respect to each feature or non-feature
motion picture, television series or episode thereof, other audio-visual work of
any nature or development project in which any Assignor now has or hereafter
acquires any interest including, without limitation, the following feature
motion pictures and television series [FILL IN] (all of the foregoing are herein
referred to as the "Films" and individually as a "Film"), all rights and
interests therein or pertaining thereto, and all properties and things of value
pertaining thereto, and all products and proceeds thereof, including, without
limitation, all rights and interests of every kind and nature of whatever
description, present and future, direct and indirect, whether now owned or
hereafter acquired (including, without limitation, any rights or interests that
revert), throughout the universe in perpetuity, whether now or hereafter created
or devised, and by all means, whether now known or hereafter created or devised,
including but not limited to all rights and interests in and to the following:
(a) All rights of every kind and nature (including, without
limitation, copyrights) in and to any literary, musical, dramatic or other
literary material of any kind or nature upon which, in whole or in part, the
Film is or may be based, or from which it is or may be adapted or inspired or
which may be or has been used or included in the Film, including, without
limitation, the screenplay and all other scripts, scenarios, screenplays,
bibles, stories, treatments, novels, outlines, books, titles, concepts,
manuscripts or other properties or materials of any kind or nature, in whatever
state of completion and all drafts, versions and variations thereof (all of the
foregoing herein collectively referred to as the "Literary Property");
(b) All physical properties of every kind or nature of or relating
to the Film and all versions thereof and all teasers, trailers, music videos,
featurettes, television spots and "making of Films", to the extent now or
hereafter in existence, including, without limitation, exposed film, developed
film, positives, negatives, prints, answer prints, special effects, pre-print
materials (including interpositives, negatives, duplicate negatives,
internegatives, color reversals, intermediates, lavenders, fine grain master
prints and matrices, title overlays, textless backgrounds and all other forms of
pre-print elements which may be necessary or useful to produce prints or other
copies or additional pre-print elements, whether now known or hereafter
devised), soundtracks, recordings, audio and video tapes and discs of all types
and gauges, cutouts, trims and any and all other physical properties of every
kind and nature relating to the Film in whatever state of completion, and all
duplicates, drafts, versions, variations and copies of each thereof (all of the
foregoing herein collectively referred to as the "Physical Property");
(c) All rights of every kind or nature, present and future, in and
to all agreements, Contracts, contract rights, credits, letters of credit,
security agreements, leases, licenses, indentures, commitments, subscription and
customer agreements, purchase and sale orders, warranty rights and all other
agreements and rights under Contracts of any nature, whether written or oral,
and all consents or other authorization relating thereto, relating to the
production, sale, distribution, marketing, licensing, exhibition, reproduction,
publication, ownership, exploitation or other uses or disposition of the Film,
including, without limitation:
16
(i) consent agreements, control agreements, sales agency
agreements, financing arrangements, acquisition agreements, copyright mortgages,
collective bargaining agreements, and performance bonds;
(ii) agreements relating to the licensing, granting or selling
rights to distribute, broadcast, exhibit or otherwise relating to the
exploitation of the Film or rights therein;
(iii) rights relating to merchandising, publishing, music and
phonorecords derived from or connected with the Film; and
(iv) the proceeds of, and all accounts, accounts receivable
and contract rights (as such terms are defined in the Code) with respect to all
of said agreements.
(d) All rent, revenues, income, compensation, products, increases,
proceeds, rights to the payment of money or other forms of consideration,
accounts, payment intangibles, notes, accounts receivable, general intangibles
(including, without limitation, commercial tort claims and payment intangibles),
contract rights, chattel paper (including, without limitation, electronic
chattel paper and tangible chattel paper), letter of credit rights, choses in
action, undertakings, surety bonds, acceptances, investment property, drafts,
documents, instruments and goods, including Inventory (as those terms are
defined in the applicable Code, and all other forms of claims, demands,
instruments and receivables, whether for goods or other property sold, leased or
licensed, services performed or to be performed, or otherwise, together with all
guarantees, security agreements, leases and rights and interests guaranteeing or
securing the same (including, without limitation, all tax refunds, all refund of
fees, advances or royalties paid or prepaid and profits or other property
obtained or to be obtained), from the production, sale, distribution, marketing,
licensing, exhibition, reproduction, publication, ownership, exploitation or
other uses or disposition of the Film and the Literary Property (or any rights
therein or part thereof, including any and all merchandising and publishing
rights therein and thereto), in any and all media, and any and all amounts
recovered as damages by reason of unfair competition, the infringement of
copyright, breach of any contract or infringement of any rights, or derived
therefrom in any manner whatsoever;
(e) All rights in and to all copyrights and renewals and extensions
of copyrights, domestic and foreign, heretofore or hereafter obtained in the
Film or the Literary Property or any part thereof, and the right (but not the
obligation) to make publication thereof for copyright purposes, to register
claims under copyright, and the right (but not the obligation) to renew and
extend such copyrights, and the right (but not the obligation) to ▇▇▇ in the
name(s) of Grantor or Secured Party (or both) for past, present and future
infringements of copyright and to receive all damages, judgments recoveries or
proceeds therefrom;
(f) All trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, other source or business identifiers,
proprietary product names or descriptions, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature, now existing or hereafter created or acquired, relating to the Film or
the exploitation thereof all registrations and recordings thereof, all
registrations and recordings in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or political subdivision thereof, relating to the
Film or the exploitation thereof and the accompanying good will and other like
business property rights, and the right (but not the obligation) to register
claims under trademark and to renew and extend such trademarks and the right
(but not the obligation) to ▇▇▇ in the name(s) of Grantor or Secured Party (or
both) for past, present or future infringement of trademark;
17
(g) All rights in and to the title of the Film and the exclusive use
thereof including (without limitation) any and all rights protected pursuant to
trademark, service ▇▇▇▇, unfair competition and/or other laws, rules or
principles of law or equity, and, to the extent now or hereafter in existence,
all other licenses and other intellectual property rights, and all renewals and
extensions thereof, domestic and foreign, relating to the Film, whether now
owned or hereafter acquired, and the accompanying good will and other like
business property rights, and the right (but not the obligation) to register
claims under any intellectual property rights and to renew and extend such
intellectual property rights and the right (but not the obligation) to ▇▇▇ in
the name(s) of Grantor or Secured Party (or both) for past, present or future
infringement of any intellectual property rights;
(h) All rights to perform, copy, record, re-record, produce,
publish, reproduce and/or synchronize any or all music, musical compositions and
master recordings created for, used in or to be used in connection with the
Film, and all other rights of every kind and nature in and to any and all of
said music, musical compositions and master recordings created for, used in or
to be used in connection with the Film, including, without limitation, all
copyrights therein as well as all other rights to exploit such music including
recording, soundtrack recording and music publishing rights;
(i) All collateral, allied, ancillary and subsidiary rights, of
every kind and nature, without limitation, derived from, appurtenant to or
related to the Film or the Literary Property, including, without limitation, all
production, exploitation, reissue, remake, sequel, prequel, serial or series
production rights by use of film, tape or any other recording devices now known
or hereafter devised, whether based upon, derived from or inspired by the Film,
the Literary Property or any part thereof; all rights to use, exploit and
license others to use or exploit any and all music, novelization, publishing,
commercial tie-ups and merchandising rights of every kind and nature, including,
without limitation, all music, novelization, publishing, merchandising rights
and commercial tie-ups arising out of or connected with or inspired by the Film
or the Literary Property, the title or titles of the Film, the characters
appearing in the Film or the Literary Property and/or the names or
characteristics of said characters, and including further, without limitation,
any and all commercial exploitation in connection with or related to the Film,
all remakes, sequels, prequels or other adaptations and/or derivative works
thereof and/or said Literary Property;
(j) All insurance and insurance policies heretofore or hereafter
obtained in connection with the Film or the insurable properties thereof and/or
any person or persons engaged in the development, production, completion,
delivery or exploitation of the Film, and the proceeds of all of the foregoing;
18
(k) All rights to develop, produce, acquire, reacquire, finance,
release, sell, distribute, subdistribute, lease, sublease, market, license,
sublicense, exhibit, broadcast, transmit, reproduce, publicize or otherwise
exploit the Film, the Literary Property and any and all rights therein in
perpetuity, without limitation, in any manner and in any media whatsoever
throughout the universe, including without limitation, by projection, radio, all
forms of television (including, without limitation, free, pay, toll, cable,
sustaining, subscription, sponsored and direct satellite broadcast), all forms
of "pay-per-view" and "video-on-demand", in theaters, non-theatrically, on
cassettes, cartridges, DVD, other discs and other similar and dissimilar video
devices, all forms of computer assisted or interactive media (including, but not
limited to, CD-ROM, CD-I and similar disc systems, interactive cable and any
other devices or methods now existing or hereinafter devised), and by any and
all other scientific, mechanical or electronic means, methods, processes or
devices now known or hereafter conceived, devised or created;
(l) All files, receipts, documents, correspondence, books and
records, minute books, ledgers, employee records, customer lists, computer
programs, data processing software, agreements, data, microfiche, microfilm
computer records (including, without limitation, magnetic tape, disc storage,
electronic storage, digital storage, card forms and printed copy), including,
without limitation, documents or receipts of any kind or nature issued by any
pledgeholder, warehouseman or bailee and books of account of every kind and
nature, relating to the Film and/or any Physical Properties thereof, Grantor or
the business thereof, and all copies or reproductions thereof and all
receptacles and containers for such records, whether now or hereafter existing,
and wherever located;
(m) Any and all security interests, liens, pledges, collateral and
all rights therein and thereto as may have been or may be granted to any debtor,
whether by another debtor, an affiliated party of any debtor, or any third
party;
(n) All key art, transparencies, photographs, slides and promotional
materials of whatever nature; and
(o) All cash and cash equivalents of Grantor derived from or
relating to the Film and all drafts, checks, letters of credit, certificates of
deposit, notes, bills of exchange and other writings relating to the Film which
evidence a right to the payment of money and are not themselves security
agreements or leases and are of a type which is in the ordinary course of
business transferred by delivery with any necessary endorsement or assignment
whether now owned or hereafter acquired.
B. Music Assets.
"Music Assets" shall mean (a) the Composition Collateral, (b) the Master
Recording Collateral, and (c) the Physical Property, and all collateral, allied,
ancillary and subsidiary rights of every kind and nature, without limitation,
derived from, appurtenant to or related to the Composition Collateral, the
Master Recording Collateral, or the Physical Property, including, without
limitation, all production, exploitation, commercial tie-up and merchandising
rights of every kind and nature and all commercial tort claims.
19
"Composition Collateral" shall mean the Musical Compositions and all
copyrights and all renewals and extensions thereof and other rights with regard
thereto, all contract rights (including, but not limited to, all rights of every
kind and nature, present and future, in and to all agreements relating to the
creation, performance, publication, administration and exploitation of the
Musical Compositions, including all agreements relating to the Musical
Compositions), accounts receivable, royalties, rights to receive royalties,
commercial tort claims, and any other proceeds of the Musical Compositions,
whether presently existing or hereafter arising, including, without limitation,
the gross receipts derived by any Assignor from: (a) the exploitation of the
Musical Compositions in the form of sheet music, orchestrations, folios,
compilations, songbooks and other forms of print; (b) the exploitation of the
Musical Compositions as embodied in Records; (c) the inclusion of the Musical
Compositions in motion pictures, videotapes and other audiovisual works; (d) the
granting to third parties of the right to perform publicly the Musical
Compositions by any and all means throughout the universe; and (e) any other
royalty or royalty interest of any Assignor, payments and other monies and
valuable consideration, regardless of how denominated, now or hereafter owing to
any Assignor or hereafter derived from the exploitation (including, without
limitation, the license and/or sale) of the Musical Compositions, and all other
rights in and to the Musical Compositions, including any renewals or extensions
thereof.
"Master Recording Collateral" shall mean the Sound Recordings and all
copyrights and all renewals and extensions thereof and other rights with regard
thereto, all contract rights (including, but not limited to, all rights of every
kind and nature, present and future, in and to all agreements relating to the
creation, performance, publication, administration and exploitation of the Sound
Recordings, including all agreements relating to the Sound Recordings), accounts
receivable, royalties, rights to receive royalties, commercial tort claims, and
any other proceeds of the Sound Recordings, whether presently existing or
hereafter arising, including, without limitation, the gross receipts derived by
any Assignor from: (a) the exploitation of the Sound Recordings as embodied in
Records; (b) the inclusion of the Sound Recordings in motion pictures,
videotapes and other audiovisual works; (c) the granting to third parties of the
right to exploit the Sound Recordings; (d) the right to perform the Sound
Recordings publicly by means of a digital audio transmission; and (e) any other
royalty or royalty interest of any Assignor, payments and other monies and
valuable consideration, regardless of how dominated, now or hereafter owing to
any Assignor or hereafter derived from the exploitation (including, without
limitation, the license and/or sale) of the Sound Recordings, and all other
rights in and to the Sound Recordings, including any renewals or extensions
thereof.
"Physical Property" shall mean all physical properties of every kind or
nature of or relating to the Composition Collateral or the Master Recording
Collateral to the extent now or hereafter in existence, including, without
limitation, all sheet music, orchestrations, folios, compilations, songbooks and
other forms of print; all Records; and all Master Tapes.
"Musical Compositions" shall mean all of any Assignor's right, title and
interest in and to all musical compositions (whether published or unpublished,
registered or unregistered, presently existing or created or acquired in the
future) which is owned or controlled, in whole or in part, by any Assignor or
any of their respective Subsidiaries, or with respect to which any Assignor has
any right to receive royalties or other proceeds, including, without limitation,
all rights to: (a) the exploitation thereof in the form of sheet music,
orchestrations, folios, compilations, songbooks and other forms of print; (b)
the exploitation thereof as embodied in Records; (c) the inclusion thereof in
motion pictures, videotapes and other audiovisual works; (d) the granting to
third parties of the right to perform publicly such musical compositions by any
and all means, throughout the universe; and (e) any other royalty or royalty
interest of any Assignor, payments and other monies and valuable consideration,
regardless of how denominated, now or hereafter owing to any Assignor or
hereafter derived from the exploitation (including, without limitation, the
license and/or sale) thereof.
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"Records" shall mean any form of reproduction, distribution, transmission
or communication of Recordings (whether or not in physical form) now or
hereafter known (including reproductions of sound alone or together with visual
images) which is manufactured, distributed, transmitted or communicated
primarily for personal use, home use, institutional (e.g., library or school)
use, jukebox use, or use in means of transportation, including any
computer-assisted media (e.g., CD-ROM, DVD Audio, CD Extra, Enhanced CD) or use
as a so-called "ring tone." For the avoidance of doubt, "Records" shall include
the transmission or communication of a master recording directly to the consumer
regardless of whether previously or subsequently embodied in a physical record
configuration by any Person.
"Recording" shall mean any recording of sound, whether or not coupled with
a visual image, by any method and on any substance or material, whether now or
hereafter known, which is used or useful in the recording, production and/or
manufacture of Records or for any other exploitation of sound.
"Sound Recordings" shall mean all copyrights in and other rights with
respect to sound recordings (whether published or unpublished, registered or
unregistered, presently existing or created or acquired in the future),
including sound recordings embodied on Records, with respect to which any
Assignor now or in the future has any ownership interest or distribution right
or which any Assignor otherwise controls.
"Master Tapes" shall mean all original master recording tapes (whether
digital or analog) and every recording of sound (by any method and on any
substance or material, now known or hereafter developed), whether or not coupled
with a visual image, including the following elements: (1) master mix reels
(i.e., two-track master mixes on analog tape) recorded and compiled at the
mixing studio (i.e., prior to mastering) ; (2) analog and/or digital multitrack
tapes (masters and slaves) (including any two, three, four, eight, sixteen,
twenty-four and forty-eight track master tapes and all other multitrack master
tapes) with accompanying tone reels (if available); (3) Two Track Masters; (4)
computer-based recording storage formats (e.g., ProTools session and audio data
files, Exabyte reels, magneto-optical discs, CD-Rs, hard discs, etc.); (5)
sample and automation discs (if any); (6) all existing documentation (e.g.,
console strips, outboard settings, session notes, etc.); and (7) and all
acetates and metal or other equivalent parts or reproductions of such master
tapes and recordings, and all other materials used or useful in the Recording,
production or manufacture of Records.
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