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EXHIBIT 10.60
COLLATERAL ASSIGNMENT OF COPYRIGHTS
(SECURITY AGREEMENT)
COLLATERAL ASSIGNMENT OF COPYRIGHTS (SECURITY AGREEMENT) dated May 5, 2000,
between xXXX.xxx, a Delaware corporation ("Pledgor"), and XXXX.XXX, Inc., a
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Delaware corporation ("Pledgee").
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W I T N E S S E T H:
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WHEREAS, Pledgee and Pledgor have entered into a Term Loan Agreement of
even date herewith (together with all supplements thereto and other agreements
entered into in connection therewith, the "Financing Agreements"), pursuant to
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which Pledgee has agreed to extend certain loans to Pledgor, subject to the
terms and provisions of the Financing Agreements;
WHEREAS, Pledgor owns all right, title, and interest in and to, among
other things, all the United States and foreign copyrights, registrations and
applications, set forth on Exhibit A hereto (the "Copyrights"); and
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WHEREAS, in order to secure Pledgor's obligations to repay the loans under
the Financing Agreements ("Obligations") to Pledgee, Pledgor has granted to
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Pledgee a security interest in the Copyrights and certain other copyrights and
assets with respect to the Copyrights as further set forth herein and in the
Financing Agreements, and Pledgee has requested Pledgor to enter into this
Security Agreement to evidence further such security interest.
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for valuable
consideration received and to be received, as security of the full payment and
performance of the Pledgor's Obligations, and to induce Pledgee to make loans
and advances to Pledgor, Pledgor hereby grants to Pledgee a first priority
security interest in:
(1) the Copyrights;
(2) all copyrights, registrations and applications hereafter
acquired
by, granted to, or filed by Pledgor, whether based upon, derived from or
variations of any invention or designs disclosed in the Copyrights or
otherwise (the "Future Copyrights");
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(3) all extensions, renewals, and continuations of the Copyrights
and Future Copyrights;
(4) all rights to xxx for past, present and future infringements of
the Copyrights and Future Copyrights;
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(5) all proceeds, including without limitation, license royalties
and proceeds of infringement suits, based on the Copyrights and Future
Copyrights;
(6) all licenses and other agreements and all fees, rents,
royalties, proceeds or monies thereunder, relating to the Copyrights and
Future Copyrights and the use thereof; and
(7) all goodwill connected with, symbolized by or related to the
foregoing.
All of the foregoing items set forth in clauses (a) through (g) are
hereinafter referred to collectively as the "Collateral."
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AND Pledgor hereby covenants with Pledgee as follows:
2. Pledgor's Obligations. Pledgor agrees that, notwithstanding this
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Security Agreement, they will perform and discharge and remain liable for all
their covenants, duties' and obligations arising in connection with the
Collateral and any licenses and agreements related thereto. Pledgee shall have
no obligation or liability in connection with the Collateral or any licenses or
agreements relating thereto by reason of this Security Agreement or any payment
received by Pledgee relating to the Collateral nor shall Pledgee be required to
perform any covenant, duty or obligation of Pledgor arising in connection with
the Collateral or any license or agreement related thereto or to take any other
action regarding the Collateral or any such licenses or agreement.
3. Representations and Warranties. Pledgor represents and warrants to
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Pledgee that:
(1) Pledgor is the registered owner of, and, to the best of its
knowledge, no adverse claims have been made with respect to its title to,
each of the Copyrights;
(2) such title is indefeasible for the duration of each such
Copyright and the Copyrights are subsisting and no part thereof has been
adjudicated invalid or unenforceable, in whole or in part;
(3) each Copyright is, to its best knowledge, valid and, if granted
and registered, enforceable;
(4) the Copyrights are the only copyrights in which Pledgor has any
or all right, title and interest as of the date hereof; none of the
Collateral is subject to any mortgage, pledge, lien, security interest,
lease, charge, license (by Pledgor as licensor) or encumbrance, except
Pledgee's security interest and other security interests or liens
permitted under the Financing Agreements; and
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(5) when this Security Agreement is filed in the United States
Copyright Office and Pledgee has taken the other actions contemplated by
the Financing Agreements, this Security Agreement will create a legal and
valid perfected and continuing first priority lien on and first priority
security interest in the Collateral, enforceable against Pledgor and all
third parties, subject to no other mortgage, lien, charge, encumbrance, or
security or other interest except as permitted under the Financing
Agreements.
4. Covenants. Pledgor will maintain and renew all items of
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Collateral, and will defend the Collateral against the claims of all
persons; provided, however, that Pledgor will not be required to maintain
any Collateral which no longer has any economic value. Without limiting
the generality of the foregoing, Pledgor shall not permit the expiration
of any registration of or termination of any application for any such
Copyright and Future Copyright without the written consent of Pledgee if
such expiration or termination would have a material adverse effect on the
financial condition, operations or business of Pledgor. If before the
Obligations have been satisfied in full, Pledgor shall obtain rights to or
be licensed to use any new copyright, or become entitled to the benefit of
any copyright application or copyright registration, the provisions of
Section I hereof shall automatically apply thereto and Pledgor shall give
Pledgee prompt notice thereof in writing.
5. Use Prior to Default. Effective until Pledgee's exercise of its
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rights and remedies upon an Event of Default under and as defined in the
Financing Agreements (an "Event of Default"), Pledgee hereby grants to
Pledgor the exclusive non-transferable right and license to use the
Collateral in the ordinary course of its business, subject to the terms
and covenants of the Financing Agreements and this Security Agreement.
6. Remedies Upon Default. Whenever any Event of Default shall have
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occurred and be continuing, Pledgor's rights pursuant to Section 4 hereof
shall, at Pledgee's option, terminate and be null and void, and Pledgee
shall have all the rights and remedies granted to it in such event by the
Financing Agreements, which rights and remedies are specifically
incorporated herein by reference and made a part hereof. Pledgee in such
event may collect directly any payments due to Pledgor in respect of the
Collateral and may sell, license, lease, assign or otherwise dispose of
the Collateral in the manner set forth in the Financing Agreements.
Pledgor agrees that, in the event of any disposition of the Collateral
upon any such Event of Default, it will duly execute, acknowledge and
deliver all documents necessary or advisable to record title to the
Collateral in any transferee or transferees thereof, including, without
limitation, valid, recordable assignments of the Copyrights and Future
Copyrights. In the event Pledgor fails or refuses to execute and deliver
such documents, Pledgor hereby irrevocably appoints Pledgee as their
attorney-in-fact, with power of substitution, to execute, deliver, and
record any such documents on Pledgor's behalf. Notwithstanding any
provision hereof to the contrary, during the continuation of an Event of
Default, Pledgor may sell merchandise
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incorporating or utilizing the Copyrights and Future Copyrights in the
ordinary course of its business and in a manner consistent with their past
practices until it receives written notice from Pledgee of an intended
sale or other disposition of the Collateral. The preceding sentence shall
not limit any right or remedy granted to Pledgee with respect to Pledgor's
inventory under the Financing Agreements or any other agreement now or
hereafter in effect.
7. Cumulative Remedies. The rights and remedies provided herein are
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cumulative and not exclusive of any other rights or remedies provided by
the law. The rights and remedies provided herein are intended to be in
addition to and not in substitution of the rights and remedies provided by
the Financing Agreements.
8. Amendments and Waivers. This Security Agreement may not be
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modified, supplemented or amended, or any of its provisions waived at the
request of Pledgor, without the prior written consent of Pledgee. Pledgor
hereby authorizes Pledgee to modify this Security Agreement, following
written notice to Pledgor, by amending Exhibit A hereof to include any
Future Copyrights or additional licenses.
9. Waiver of Rights. No course of dealing between the parties to
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this Security Agreement or any failure or delay on the part of any such
party in exercising any rights or remedies hereunder shall operate as a
waiver of any rights or remedies of such party or any other party and no
single or partial exercise of any rights or remedies hereunder shall
operate as a waiver or preclude the exercise of any other rights or
remedies of such party or any other party. No waiver by Pledgee of any
breach or default by Pledgor shall be deemed a waiver of any other
previous breach or default or of any breach or default occurring
thereafter.
10. Assignment. The provisions of this Security Agreement shall be
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binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto; provided however, that no interest herein
or in or to the Collateral may be assigned by Pledgor without the prior
written consent of Pledgee; and provided, further, that the Pledgee may
assign the rights and benefits hereof to any party acquiring any interest
in the Obligations or any part thereof in accordance with the terms of the
Financing Agreements.
11. Future Acts. Pledgor shall have the duty to prosecute
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diligently any applications for the Copyrights and Future Copyrights
pending as of the date of this Security Agreement or thereafter, until the
Obligations shall have been paid in full, to make applications on material
uncopyrighted but copyrightable, in any location where Pledgor does
business, and to preserve and maintain all rights in the Copyrights. Any
expenses incurred in connection with such applications shall be borne by
Pledgor. Pledgor shall not abandon any right to file a copyright
application or registration for any copyright, nor abandon any such
pending copyright application or registration, without the consent of the
Pledgee, except to the extent that such abandonment
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would not have a material adverse effect on the financial condition,
operations or business of Pledgor.
12. Enforcement. Upon Pledgor's failure to do so after Pledgee's
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demand, or upon an Event of Default, Pledgee shall have the right but
shall in no way be obligated to bring suit in its own name to enforce the
Copyrights and Future Copyrights and any license thereunder, in which
event Pledgor, shall at the request of Pledgee, do any and all lawful
acts and execute any and all proper documents required by Pledgee in aid
of such enforcement and Pledgor shall promptly, upon demand, reimburse and
indemnify Pledgee for all costs and expenses incurred by Pledgee in the
exercise of their rights under this Section 11.
13. Re-Assignment. At such time as Pledgor shall completely satisfy
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all of the Obligations, and the Financing Agreements have been terminated,
other than upon enforcement of Pledgee's remedies under the Financing
Agreements after an Event of Default, Pledgee will execute and deliver to
Pledgor all deeds, assignments and other instruments as may be necessary
or proper to re-vest Pledgor with all right and title to the Copyrights
and Future Copyrights pledged or assigned to Pledgee hereunder, subject to
dispositions thereof which may have been made by Pledgee pursuant hereto.
14. Severability. If any clause or provision of this Security
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Agreement shall be held invalid or unenforceable, in whole or in part, in
any jurisdiction, such invalidity or unenforceability shall attach only to
such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect any other clause or provision in any
jurisdiction.
15. Notices. All notices, requests and demands to or upon Pledgor
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or Pledgee under this Security Agreement shall be given in the manner
prescribed by the Financing Agreements.
16. Governing Law. This Security Agreement shall be governed by,
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and construed applied and enforced in accordance with the federal laws of
the United States of America applicable to copyrights and the laws of the
State of California except that no doctrine of choice of law shall be used
to apply the laws of any other State or jurisdiction. PLEDGOR AND PLEDGEE
EACH WAIVES THE RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION ARISING UNDER THIS SECURITY AGREEMENT, WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND ANY RIGHT EITHER MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS, LACK OF PERSONAL JURISDICTION, OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 15.
17. Supplement. This Security Agreement is a supplement to, and is
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hereby incorporated into, the Financing Agreements and made a part
thereof.
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IN WITNESS WHEREOF, the parties have entered into this Security Agreement as of
the date first above written.
PLEDGOR
xXXX.xxx, a Delaware corporation
By:
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Name:
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Title:
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PLEDGEE
XXXX.XXX, Inc., a Delaware corporation
By:
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Name:
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Title:
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