ASSIGNMENT OF ACCOUNTS RECEIVABLE,
DISTRIBUTION AGREEMENTS, TRAILING ROYALTIES,
CONTRACT RIGHTS, PERMITS, LICENSES AND
DEPOSITS, ETC. AND SECURITY AGREEMENT
WHEREAS, MEDLEY CREDIT ACCEPTANCE CORP., a Delaware corporation.
("Lender") is making a working capital loan to CUTTING EDGE ENTERTAINMENT. INC.
a California corporation, (the "Assignor") in the principal amount of
$600,000.00 (the "Loan"), which Loan shall be evidenced by a Promissory Note
(the "Note"). Loan Agreement and the Assignment of various collaterals owned by
the Assignor including, but not limited to accounts receivable, presale
distribution contracts and the proceeds of same and trailing royalties due and
to become due in connection with the movies From Which it Stands and Two Shades
of Blue (the "Collateral"), and.
WHEREAS, to encumber the Collateral to secure the Lender's loan, the
Assignor shall assign to Lender, free and clear of any and all claims, liens
and encumbrances whatsoever. the Assignor's right, title and interest in the
Collaterals. and.
WHEREAS, the Borrower and Lender desire to memorialize their
Assignment into a written instrument.
NOW, THEREFORE, for the purpose of securing the payment of the Loan
and other good and valuable consideration paid to the Assignor the receipt
whereof is hereby acknowledged. the Assignor does hereby assign, grant. bargain
and convey to Lender all of the Assignor's right, title and interest in and to
the following property cf Assignor, whether now owned or existing or hereafter
acquired or arising:
1. All accounts. accounts receivable, other receivables,
contract rights, chattel paper, instruments and documents and
any other obligations or indebtedness owed to Assignor from
whatever source arising. including but not limited to
trailing royalties and distribution proceeds arising from the
films produced by the Assignor entitled Two Shades or Blue
and From Which it Stands. and all proceeds and revenues
arising out of the multiple rights and distribution
agreements described on Schedule "A" attached hereto.
2. All right, title and interest of the Assignor in and to the
scripts and screenplays for Two Shades or Blue and From Which
it Stands.
3. Distribution Agreement and Motion Picture Licensing Agreement
between Assignor and Calypso Global Entertainment. Inc. and
Two Shades of Blue. Inc.
4. All of the Assignor s right, title and interest in the
Multiple Rights Distribution Agreements described on Exhibit
A.
5. All of Assignor's right, title and interest in the films Tow
Shares of Blue and From Which it Stands.
6. All goods, including without limitation, all machinery.
equipment. furniture. furnishings and appliances owned by the
Assignor.
7. All general intangibles, including without limitation,
corporate or other business records and books, computer
records, tradenames. trademarks, good will, telephone
numbers, licenses, permits, prepaid fees and deposits of the
Assignor.
8. All judgments. awards of damages and settlements arising from
or out of the Assignor pursuing any of its rights under any
of the collateral described herein or in the Loan Agreement
between the Assignor and Lender.
The Assignor shall perform, observe and comply with all of the
provisions of this Assignment and of the Note secured hereby and will pay to
the Assignee the sum of money expressed in the Note with interest thereon and
all other sums required to be paid by the Assignor pursuant to the provisions
of the Note, this Assignment. the Loan Agreement and other loan instruments and
documents executed in furtherance of the Loan.
The Assignor acknowledges that this Assignment shall become operative
and shall vest full title and interest in the Lender immediately, and shall be
in full force and effect as of the date hereof.
Until the occurrence of an event of default, the Assignor shall have
the right to receive all income and other amounts from the Collateral. However,
notwithstanding the foregoing, any payments received by the Assignor for
payment due on the distribution agreements and trailing royalties accruing from
the movies From Which it Stands and Two Shares of Blue shall be immediately
paid by the Assignor to the Lender in order to reduce the amount due by
Assignor to Lender on the Note. Monthly. following the closing date as set
forth in the Loan Agreement between the Assignor and the Lender. the Assignor
shall furnish to the Lender on the first day of each month, a complete
accounting of all payments received by the Assignor on its distribution
agreements and trailing royalties. Upon an event of default as hereinafter
described by the Assignor. the Lender shall have the right to collect all
payments due under any of the Collateral described in this instrument and to
apply said payments to the Note.
The Assignor shall be in default upon the happening of any one or more
of the following events:
(a) Failure of the Assignor to pay any installment of
principal or interest due under the Note.
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(b) Failure of the Assignor to keep, perform and observe
every covenant. condition and agreement in the Note,
Loan Agreement. this instrument or any other loan
document entered into by the Assignor in furtherance
of the Loan.
(c) Failure by the Assignor to pay any tax or assessment
due by it prior to same becoming delinquent.
(d) Any material misstatement in the representations and
warranties made by the Assignor in any of the loan
documents
(e) Upon the insolvency or bankruptcy of the Assignor or
Guarantor of the Loan.
(f) The stopping of the production of the movie Two
Shades of Blue for a period of two weeks without
recommencing production.
Upon the happening of any event of default, the Lender may collect all
proceeds due the Assignor from the Collateral and shall have such additional
rights as that of a secured party under the Uniform Commercial Code and under
any other applicable law from time to time in effect.
This Assignment shall be considered in addition to a present
assignment, a Security Agreement under the Florida Uniform Commercial Code for
the purposes of creating a lien on the Collateral described herein.
This Assignment shall be construed, interpreted and enforced in
accordance with the laws of the State of Florida, excluding the principals
thereof governing conflicts of law.
Assignor will make. execute and deliver to Lender and where
appropriate shall cause to be recorded and or filed, and from time to time
thereafter to be re-recorded and or refiled at such time and at such offices
and places as shall be deemed desirable by the Lender any and all such further
assignments. instruments of further assurance certificates and other documents
as may, in the opinion of the Lender. be necessary of desirable in order to
effectuate, complete, perfect or continue and preserve the Lender's rights in
the collateral described in this instrument.
Lender and Assignor hereby knowingly, voluntarily and intentionally
waive the right either may have to a trial by jury in respect to any litigation
based thereon or arising out of, under or in connection with this Assignment,
the loan documents and any agreement contemplated to be executed in conjunction
herewith, or any course of conduct, course of dealing, statements (whether
verbal or written) or action of either party.
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This Agreement shall be construed and enforced under the laws of the State of
Florida. In the event any provision of this Agreement shall be declared invalid
by a court of competent jurisdiction, said invalidity shall not invalidate the
Agreement as a whole but said Agreement shall be construed as if the
invalidated provision was omitted from the Agreement.
This Agreement supersedes and cancels any and all other contracts
referring to the subject matter herein. No modifications, alteration or waiver
of this Agreement shall be effective unless in writing. executed by the parties
hereto.
This Agreement shall inure to the benefit of the Parties, their
successors and assigns.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which counterparts collectively shall
constitute one instrument representing the Agreement between the Parties
hereto.
In the event of any disputes arising under this instrument or should
it become necessary for the Lender to enforce its rights, the prevailing party
shall be entitled to reimbursement of reasonable attorneys fees and costs at
the trial and appellate court level.
IN WITNESS WHEREOF, the Assignor has duly executed this Assignment the
23rd day of January, 1998.
SIGNED, SEALED AND DELIVERED IN CUTTING EDGE ENTERTAINMENT, INC.,
THE PRESENCE OF: a California corporation
____________________________ BY.________________________________
Witness Xxxxx X. Xxxxxxx, President
___________________________
Witness
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STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
The foregoing instrument was acknowledged before me this 23rd day of
January 1998, by XXXXX X. XXXXXXX, President of CUTTING EDGE ENTERTAINMENT.
INC.. a California corporation, on behalf of the Corporation, who is personally
known to me or who has produced______________________ as identification and who
did not take an oath.
__________________________________
NOTARY PUBLIC, STATE OF
CALIFORNIA
My Commission Expires:
Commission Number
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