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EXHIBIT 10.3
EXECUTION COPY
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 30, 1997, made by the
grantors listed on the signature pages hereof (each individually a "Grantor"
and collectively the "Grantors"), in favor of U.S. Trust Company of Texas,
N.A., in its capacity as collateral agent (in such capacity, the "Collateral
Agent") for the ratable benefit of the Holders (the "Noteholders") of the 12%
Senior Secured Notes due 2004 (the "Notes") issued by Source Media, Inc., a
Delaware corporation (the "Company") under the Indenture dated as of October
30, 1997, between the Company and U.S. Trust Company of Texas, N.A., in its
capacity as trustee (the "Indenture").
W I T N E S S E T H :
WHEREAS, the Company, NatWest Capital Markets Limited and
Prudential Securities Incorporated (together, the "Initial Purchasers") have
entered into a Purchase Agreement dated October 23, 1997 (the "Purchase
Agreement"), pursuant to which, among other things, the Initial Purchasers have
agreed to purchase the Notes from the Company; and
WHEREAS, it is a condition precedent to the obligations of the
Initial Purchasers to purchase the Notes under the Purchase Agreement, that the
Grantors shall have executed and delivered this Security Agreement to the
Collateral Agent;
NOW, THEREFORE, in consideration of the premises and to induce
the Initial Purchasers to enter into the Purchase Agreement and to purchase the
Notes, the Grantors hereby agree with the Collateral Agent, as follows:
1. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Indenture and used herein are so used as so defined,
and the meanings assigned to terms defined herein or in the Indenture shall be
equally applicable to both the singular and plural forms of such terms; the
following terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory and Proceeds; and the following terms shall
have the following meanings:
"Closing Date" means October 30, 1997.
"Code" means the Uniform Commercial Code as from time to time
in effect in the State of New York.
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"Collateral" shall have the meaning assigned to it in Section
2 of this Security Agreement.
"Computer Hardware and Software Collateral" means (a) all
computer and other electronic data processing hardware, integrated computer
systems, central processing units, memory units, display terminals, printers,
features, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware; (b)
all software programs (including both source code, object code and related
applications and data files), whether now owned, licensed or leased or
hereafter acquired by each Grantor, designed for use on the computers and
electronic data processing hardware described in clause (a) above; (c) all
firmware associated therewith; (d) all documentation (including flow charts,
logic diagrams, manuals, guides and specifications) with respect to such
hardware, software and firmware described in the preceding clauses (a) through
(c); and (e) all rights with respect to all of the foregoing, including,
without limitation, any and all copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of the
foregoing.
"Contracts" means the contracts entered into by each Grantor,
including, without limitation, (a) all rights of each Grantor to receive moneys
due and to become due to it thereunder or in connection therewith, (b) all
rights of each Grantor to damages arising out of, or for, breach or default in
respect thereof and (c) all rights of each Grantor to perform and exercise all
remedies thereunder.
"Copyright License" means any written agreement naming any
Grantor as licensor or licensee or granting any right under any Copyright,
including the agreements described in Schedule I hereto.
"Copyrights" means (a) all copyrights of any Grantor, whether
published or unpublished and whether now or hereafter in force throughout the
world, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Copyright office referred to in Schedule
I hereto and (b) all renewals thereof.
"ICT Group" means any and all Subsidiaries of ICT including,
but not limited to, Cable Share (U.S.) Limited, Cable Xxxxx Xxxxxxxxxxxxx,
Inc., and 1229501 Ontario, Inc.
"Obligations" shall mean the unpaid principal amount of, or
any premium applicable to, and interest on the Notes (including, without
limitation, interest accruing after the maturity of the Notes and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to any Grantor,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) and all other obligations and
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liabilities of any Grantor to the Holders or the Collateral Agent, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Notes, the Indenture or this Security Agreement (in each such case as
the same may be amended, supplemented or modified from time to time) and any
other document made, delivered or given in connection therewith or herewith,
whether on account of principal, premium, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel) or otherwise.
"Patent License" means any agreement providing for the grant
by or to any Grantor of any right under any patent or patent application, or
any Patent, and all license rights, immunities from suit and all other rights
and interests conferred by or to any Grantor with respect to patents, patent
applications, utility models and utility model applications under all licenses
and agreements, including but not limited to all licenses and agreements
between any Grantor, on the one hand, and any member of the ICT Group, on the
other, and including, without limitation any thereof referred to in Schedule II
hereto.
"Patents" means any and all now or in the future issued or
registered, anywhere in the world, patents and utility models, and any and all
now or in the future filed, anywhere in the world, patent applications and
utility model applications, whose subject matter is now or hereafter conceived,
or reduced to practice, or which is now or hereafter owned, acquired or
controlled, by any Grantor under which such Grantor has the right to grant
licenses; and all divisions, continuations, and continuations-in-part of,
substitutions for and additions to any of the foregoing patent and utility
model applications directly or through one or more intervening applications,
and all reissues, reexaminations, renewals, and extensions of any such patents
and utility models, including, without limitation, any thereof referred to in
Schedule II hereto.
"Security" means any "security," as such term is defined in
Article 8 of the Code and, in any event, shall include, but not be limited to,
any obligation of an "issuer" (as such term is defined in Article 8 of the
Code), or a share, participation, or other interest in an issuer or in property
or an enterprise of an issuer: (a) which is represented by a Security
certificate in bearer or registered form, or the transfer of which may be
registered upon books maintained for that purpose by or on behalf of the
issuer; (b) which is one of a class or series or by its terms is divisible into
a class or series of shares, participations, interests, or obligations; and (c)
which (i) is, or is of a type, dealt in or traded on securities exchanges or
securities markets; or (ii) is a medium for investment and by its terms
expressly provides that it is a security governed by Article 8 of the Code.
"Security Agreement" means this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
"Termination Date" means the date upon which the Grantors
under this Security Agreement, the Pledgors under the Pledge Agreement and the
Company under the Indenture have fulfilled all obligations under the Notes and
the aforementioned agreements.
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"Trademark License" means any agreement providing for the
grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any thereof referred to in Schedule III hereto.
"Trademarks" means (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers of any Grantor,
now existing anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, and the goodwill associated therewith, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, any thereof referred to in Schedule
III hereto, and (b) all renewals thereof.
2. Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, each Grantor hereby
grants to the Collateral Agent a security interest for the benefit of the
Holders in all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Computer Hardware and Software Collateral;
(iv) all Contracts;
(v) all Copyrights;
(vi) all Copyright Licenses;
(vii) all Documents;
(viii) all Equipment;
(ix) all General Intangibles;
(x) all Patents;
(xi) all Patent Licenses;
(xii) all Instruments;
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(xiii) all Inventory;
(xiv) all Trademarks;
(xv) all Trademark Licenses; and
(xvi) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
3. Rights of the Collateral Agent; Limitations on the
Collateral Agent's Obligations.
(a) Grantors Remain Liable under Accounts and Contracts.
Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of its Accounts and Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise to each such Account
and in accordance with and pursuant to the terms and provisions of each such
Contract. The Collateral Agent shall not have any obligation or liability
under any Account (or any agreement giving rise thereto) or under any Contract
by reason of or arising out of this Security Agreement or the receipt by the
Collateral Agent of any payment relating to such Account or Contract pursuant
hereto, nor shall the Collateral Agent be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Account (or any
agreement giving rise thereto) or under or pursuant to any contract, to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
under any Account (or any agreement giving rise thereto) or under any Contract,
to present or file any claim, to take any action to enforce any performance or
to collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(b) Notice to Account Debtors and Contracting Parties.
Upon the request of the Collateral Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify
account debtors on its Accounts and parties to the Contracts that the Accounts
and each Contract have been assigned to the Collateral Agent for the benefit of
the Holders and that payments in respect thereof shall be made directly to the
Collateral Agent. The Collateral Agent may in its own name or in the name of
others communicate with account debtors on the Accounts and parties to the
Contracts to verify with them to its satisfaction the existence, amount and
terms of any Accounts or Contracts.
(c) Analysis of Accounts. The Collateral Agent shall
have the right to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Collateral Agent may
require in connection therewith. At any time and from time to time, upon the
Collateral Agent's request and at the expense of each
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Grantor, each Grantor shall cause independent public accountants or others
satisfactory to the Collateral Agent to furnish to the Collateral Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Accounts.
(d) Collections on Accounts. If required by the
Collateral Agent after the occurrence and during the continuance of an Event of
Default, any payments of Accounts, when collected by any Grantor, shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a special collateral account maintained by the
Collateral Agent, and, until so turned over, shall be held by such Grantor in
trust for the Collateral Agent, segregated from other funds of such Grantor.
Each deposit of any such Proceeds shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the
deposit. All Proceeds constituting collections of Accounts while held by the
Collateral Agent (or by the Grantor in trust for the Collateral Agent) shall
continue to be collateral security for all of the Obligations and shall not
constitute payment thereof until applied as hereinafter provided. At any time
after the occurrence and during the continuance of an Event of Default, at the
Collateral Agent's election, the Collateral Agent shall apply all or any part
of the funds on deposit in said special collateral account on account of the
Obligations in such order as the Collateral Agent may elect, and any part of
such funds which the Collateral Agent elects not so to apply and deems not
required as collateral security for the Obligations shall be paid over from
time to time by the Collateral Agent to the applicable Grantor or to whomsoever
may be lawfully entitled to receive the same. After the occurrence and during
the continuance of an Event of Default, at the Collateral Agent's request, the
Grantors shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Accounts, including, without limitation, all original orders, invoices and
shipping receipts.
4. Representations and Warranties. Each Grantor hereby
represents and warrants that:
(a) Title; No Other Liens. Except for the Lien granted
to the Collateral Agent pursuant to this Security Agreement, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others except as permitted by the Indenture. No security agreement, financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except as permitted by
the Indenture and such as may have been filed in favor of the Collateral Agent,
pursuant to this Security Agreement.
(b) Perfected First Priority Liens. The Liens granted
pursuant to this Security Agreement will constitute upon the completion of all
necessary filings or notices in proper public offices or the taking of any
necessary possessions or similar acts, perfected Liens on all Collateral, which
are, except as permitted by the Indenture, prior to all other Liens on such
Collateral created by such Grantor and in existence on the date hereof and
which are enforceable as such against all creditors of such Grantor.
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(c) Accounts. The amount represented by such Grantor to
the Collateral Agent from time to time as owing by each account debtor or by
all account debtors in respect of the Accounts will at such time be the correct
amount actually owing by such account debtor or debtors thereunder. No amount
payable to such Grantor under or in connection with any Account is evidenced by
any Instrument or Chattel Paper which has not been delivered to the Collateral
Agent. The place where each Grantor keeps its records concerning the Accounts
is set forth on Schedule IV hereto.
(d) Consents. No consent of any party to any Contract is
required, or purports to be required, in connection with the execution,
delivery and performance of this Security Agreement.
(e) Bank Accounts. The bank accounts with the banks
listed on Schedule V hereto are the only bank or deposit accounts that such
Grantor maintains.
(f) Inventory and Equipment. The Inventory and the
Equipment are kept at the locations listed on Schedule VI hereto and have not
been kept at any other location within the five-month period ending on the
Closing Date.
(g) Chief Executive Office. Each Grantor's chief
executive office and chief place of business is located at the offices listed
in Schedule VII.
(h) Farm Products. None of the Collateral constitutes,
or is the Proceeds of, Farm Products.
(i) Governmental Obligors. None of the obligors on any
Account is a Governmental Authority.
5. Covenants. Each Grantor covenants and agrees with the
Collateral Agent, from and after the date of this Security Agreement until the
Obligations are paid in full:
(a) Further Documentation; Pledge of Instruments and
Chattel Paper. At any time and from time to time, upon the written request of
the Collateral Agent, and at the sole expense of each Grantor, each Grantor
will promptly and duly execute and deliver such further instruments and
documents and take such further action as the Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Security Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any such jurisdiction with
respect to the Liens created hereby. Each Grantor also hereby authorizes the
Collateral Agent to file any such financing or continuation statement without
the signature of such Grantor to the extent permitted by applicable law. A
carbon, photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement for filing in any jurisdiction. If any
amount payable under or in
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connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Collateral Agent, duly endorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Security Agreement.
(b) Indemnification. Each Grantor agrees to pay, and to
save the Collateral Agent harmless from, any and all liabilities, costs and
expenses (including, without limitation, legal fees and expenses) (i) with
respect to, or resulting from, any delay in paying, any and all excise, sales
or other taxes which may be payable or determined to be payable with respect to
any of the Collateral, (ii) with respect to, or resulting from, any delay in
complying with any requirement of law applicable to any of the Collateral or
(iii) in connection with any of the transactions contemplated by this Security
Agreement. In any suit, proceeding or action brought by the Collateral Agent
under any Account or Contract for any sum owing thereunder, or to enforce any
provisions of any Account or Contract, each Grantor will save, indemnify and
keep the Collateral Agent harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a breach by such Grantor of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time owing to or
in favor of such account debtor or obligor or its successors from such Grantor.
(c) Maintenance of Records. Each Grantor will keep and
maintain at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments received
and all credits granted with respect to the Accounts. For the Collateral
Agent's further security, the Collateral Agent shall have a security interest
in all of each Grantor's books and records pertaining to the Collateral, and
each Grantor shall turn over any such books and records for inspection at the
office of such Grantor to the Collateral Agent or to its representatives during
normal business hours at the request of the Collateral Agent.
(d) Limitation on Liens on Collateral. Each Grantor (x)
will not create, incur or permit to exist, will defend the Collateral against,
and will take such other action as is necessary to remove, any Lien or claim on
or to the Collateral, other than the Liens created hereby and other than as
permitted pursuant to the Indenture, and (y) will defend the right, title and
interest of the Collateral Agent in and to any of the Collateral against the
claims and demands of all Persons whomsoever.
(e) Limitations on Dispositions of Collateral. Each
Grantor will not sell, transfer, lease or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so except for (x) sales of
Inventory in the ordinary course of its business, (y) so long as no Default or
Event of Default has occurred and is continuing, the disposition in the
ordinary course of business of items of Equipment and which have become worn
out or obsolete and (z) as otherwise permitted by the Indenture.
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(f) Limitations on Modifications, Waivers, Extensions of
Contracts and Agreements Giving Rise to Accounts. Each Grantor will not (i)
amend, modify, terminate or waive any provision of any Contract or any
agreement giving rise to an Account in any manner which could reasonably be
expected to materially adversely affect the value of such Contract or Account
as Collateral, (ii) fail to exercise promptly and diligently each and every
material right which it may have under each Contract and each agreement giving
rise to an Account (other than any right of termination) or (iii) fail to
deliver to the Collateral Agent a copy of each material demand, notice or
document received by it relating in any way to any Contract or any agreement
giving rise to an Account.
(g) Limitations on Discounts, Compromises, Extensions of
Accounts. Other than in the ordinary course of business as generally conducted
by each Grantor over a period of time, each Grantor will not grant any
extension of the time of payment of any of the Accounts, compromise, compound
or settle the same for less than the full amount thereof, release, wholly or
partially, any Person liable for the payment thereof, or allow any credit or
discount whatsoever thereon, to the extent that the same, individually or in
the aggregate, could have a material adverse effect on the business,
properties, assets, liabilities, results of operations, condition (financial or
other) or prospects of such Grantor.
(h) Further Identification of Collateral. Each Grantor
will furnish to the Collateral Agent from time to time, statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.
(i) Notices. Each Grantor will advise the Collateral
Agent promptly, in reasonable detail of, (i) any Lien (other than Liens created
hereby or permitted under the Indenture) on, or claim asserted against, any of
the Collateral, (ii) the opening by such Grantor of any bank or deposit account
after the Closing Date, (iii) any Account arising after the Closing Date with
respect to which the obligor thereon is a Governmental Authority and (iv) the
occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the
Liens created hereunder.
(j) Changes in Locations, Name, etc. Each Grantor will
not (i) change the location of its chief executive office/chief place of
business from that specified in Section 4(g) or remove its books and records
from the location specified in Section 4(c), (ii) permit any of the Inventory
or Equipment to be kept at a location other than that specified in Section 4(f)
or (iii) change its name, identity or corporate structure to such an extent
that any financing statement filed by the Collateral Agent in connection with
this Agreement would become misleading, unless it shall have given the
Collateral Agent at least 30 days' prior written notice thereof.
(k) Copyrights. (i) Each Grantor (either itself or
through licensees) will (a) employ each Copyright with appropriate copyright
notice consistent with its past practice and (b)
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not knowingly (and not permit any licensee or sublicensee thereof knowingly to)
do any act or knowingly omit to do any act whereby any Copyright or any portion
of the Copyright may become invalidated.
(ii) Each Grantor will not (either itself or through
licensees) knowingly do any act, or omit to do any act, whereby any Copyright
or any portion of the Copyrights may become injected into the public domain.
(iii) Each Grantor shall notify the Collateral Agent
immediately if it knows, or has reason to know, that any Copyright or any
portion of the Copyrights may become injected into the public domain or of any
adverse determination (including, without limitation, the institution of, or
any such determination or development in, any court or tribunal in the United
States or any other country) regarding such Grantor's ownership of any
Copyright or any portion of the Copyrights.
(iv) Each Grantor will, with respect to any Copyright that
such Grantor registers after the Closing Date or any Copyright License that
such Grantor knowingly acquires after the Closing Date, promptly (i) take all
actions necessary so that the Collateral Agent shall obtain a perfected
security interest in such Copyright or Copyright License and (ii) provide to
the Collateral Agent a revised Schedule I hereto listing all registered
Copyright and all Copyright Licenses owned by such Grantor.
(v) On each December 31 of each year following the Closing
Date (or, if the Collateral Agent so requests in writing, more often), each
Grantor either itself or through any agent, employee, licensee or designee,
shall provide to the Collateral Agent a document confirming the Collateral
Agent's security interest in all Copyrights and Copyright Licenses acquired by
such Grantor during the preceding calendar year. Upon request of the
Collateral Agent, each Grantor shall execute and deliver any and all additional
agreements, instruments, documents, and papers as the Collateral Agent may
reasonably request to confirm the Collateral Agent's security interest in such
Copyrights and Copyright Licenses, and each Grantor hereby constitutes the
Collateral Agent its attorney-in-fact to file all such writings for the
foregoing purposes, all lawful acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable until the
Obligations are paid in full.
(vi) Each Grantor will take all reasonable and necessary
steps as it shall deem appropriate under the circumstances, to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain each registration of each Copyright owned by such Grantor including,
without limitation, filing of applications for renewal, where necessary.
(vii) Each Grantor will promptly notify the Collateral Agent
of any infringement of any Copyright or any portion of the Copyrights of which
it becomes aware and will take all appropriate steps to stop the infringement
as are reasonably mutually agreed upon by such Grantor and the Collateral
Agent.
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(viii) Each Grantor will deliver to the Collateral Agent on
the Closing Date an assignment of security interest in United States Copyrights
substantially in the form of Annex C hereto.
(l) Trademarks. (i) Each Grantor (either itself or
through licensees) will, with respect to each Trademark, (i) continue to use
such Trademark to the extent necessary to maintain such Trademark in full force
free from any claim of abandonment for non-use, if consistent with its overall
business plan or if to do otherwise would be an unsound commercial and business
judgment, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) employ such Trademark with the appropriate
notice of registration, (iv) not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any Trademark
may become invalidated other than solely (x) through the discontinuance of the
sale of goods or the provision of services or (y) the abandonment of a
Trademark where, in each such case covered by (x) and (y) above, the Collateral
Agent shall have received not less than fifteen (15) days' prior written notice
of any such discontinuance or abandonment and such Grantor shall have acted in
a manner consistent with its overall business plan and the exercise of sound
commercial and business judgment. Nothing in this Security Agreement shall
restrict such Grantor from adding new goods and services to its business or,
upon not less than fifteen (15) days' prior written notice to the Collateral
Agent and in a manner consistent with such Grantor's overall business plan and
the exercise of sound commercial and business judgment, discontinuing the
provision of goods or services and thereby abandoning any Trademark relating
thereto.
(ii) Each Grantor will notify the Collateral Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any Trademark may become abandoned, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office or any court or tribunal in any country)
regarding such Grantor's ownership of any Trademark or its right to register
the same or to keep and maintain the same.
(iii) Each Grantor will, with respect to any Trademark that
such Grantor registers after the Closing Date or any Trademark License that
such Grantor acquires after the Closing Date, promptly (i) take all actions
necessary so that the Collateral Agent shall obtain a perfected security
interest in such Trademark or Trademark License and (ii) provide to the
Collateral Agent a revised Schedule III hereto listing all registered
Trademarks and all Trademark Licenses owned by such Grantor.
(iv) On each December 31 of each year following the Closing
Date (or, if the Collateral Agent so requests in writing, more often), each
Grantor either itself or through any agent, employee, licensee or designee,
shall provide to the Collateral Agent, a document confirming the Collateral
Agent's security interest in any Trademark with respect to which such Grantor
has filed an application for registration during the preceding calendar year.
Upon request of the Collateral
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Agent, each Grantor shall execute and deliver any and all agreements,
instruments, documents, and papers as the Collateral Agent may request to
evidence the Collateral Agent's security interest in any Trademark and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby, and each Grantor hereby constitutes the Collateral Agent
its attorney-in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power being coupled with an interest is irrevocable until the Obligations are
paid in full.
(v) Each Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark office, or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
Notwithstanding the foregoing, each Grantor may decline to maintain and pursue
each of its applications and decline to maintain each of its registrations as
aforesaid upon not less than fifteen (15) days' prior written notice to the
Collateral Agent and if to so decline is consistent with such Grantor's overall
business plan and is an exercise of sound commercial and business judgment.
(vi) In the event that any Trademark included in the
Collateral is infringed, misappropriated or diluted by a third party, each
Grantor shall promptly notify the Collateral Agent after it learns thereof and
shall promptly take all appropriate steps to stop the infringement as are
reasonably mutually agreed upon by such Grantor and the Collateral Agent.
(vii) Each Grantor will deliver to the Collateral Agent on
the Closing Date an assignment of security interest in United States Trademarks
substantially in the form of Annex A hereto.
(m) Patents. (i) Each Grantor will notify the
Collateral Agent immediately if it knows, or has reason to know, that any
application relating to any Patent may become abandoned or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office or any court or tribunal in any country)
regarding such Grantor's ownership of any Patent.
(ii) Each Grantor will, with respect to any Patent that
such Grantor obtains after the Closing Date or any Patent License that such
Grantor acquires after the Closing Date, promptly (i) take all actions
necessary so that the Collateral Agent shall obtain a perfected security
interest in such Patent or Patent License and (ii) provide to the Collateral
Agent a revised Schedule II hereto listing all Patents and all Patent Licenses
owned by such Grantor.
-12-
13
(iii) On each December 31 of each year following the
Closing Date (or, if the Collateral Agent so requests in writing, more often),
each Grantor either itself or through any agent, employee, licensee or
designee, shall provide to the Collateral Agent, a document confirming the
Collateral Agent's security interest in any Patent or Patent License which such
Grantor has obtained during the preceding calendar year. Upon request of the
Collateral Agent, each Grantor shall execute and deliver any and all
agreements, instruments, documents, and papers as the Collateral Agent may
request to evidence the Collateral Agent's security interest in such Patents or
Patent Licenses, and each Grantor hereby constitutes the Collateral Agent its
attorney-in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power being coupled with an interest is irrevocable until the Obligations are
paid in full.
(iv) Each Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue each
patent or application for patent and to maintain each Patent, including,
without limitation, payment of maintenance fees. Notwithstanding the
foregoing, each Grantor may decline to maintain and pursue each of its patents
and applications for patents and decline to maintain each Patent as aforesaid
upon not less than fifteen (15) days' prior written notice to the Collateral
Agent and if to so decline is consistent with such Grantor's overall business
plan and is an exercise of sound commercial and business judgment.
(v) In the event that any Patent included in the
Collateral is infringed by a third party, each Grantor shall promptly notify
the Collateral Agent after it learns thereof and shall promptly take all
appropriate steps to stop the infringement as are reasonably mutually agreed
upon by such Grantor and the Collateral Agent.
(vi) Each Grantor will deliver to the Collateral Agent on
the Closing Date an assignment of security interest in United States Patents
substantially in the form of Annex B hereto.
(n) Patent Licenses. Each Grantor shall comply with its
obligations under each of its license agreements relating to each Patent.
6. Collateral Agent's Appointment as Attorney-in-Fact.
(a) Powers. Each Grantor hereby irrevocably constitutes and
appoints the Collateral Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time (in the Collateral Agent's
discretion) for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of
the foregoing, each Grantor hereby gives the Collateral Agent the power and
right, on
-13-
14
behalf of such Grantor, without notice to or assent by such Grantor, except any
notice required by law referred to in Section 9 hereof, to do the following:
(i) at any time when any Event of Default shall have
occurred and is continuing, in the name of such Grantor or its own
name, or otherwise, to take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account, Instrument, General
Intangible or Contract or with respect to any other Collateral and to
file any claim or to take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Collateral
Agent for the purpose of collecting any and all such moneys due under
any Account, Instrument, General Intangible or Contract or with
respect to any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to
pay all or any part of the premiums therefor and the costs thereof;
and
(iii) upon the occurrence and during the continuance of any
Event of Default, (A) to direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Collateral Agent or as the
Collateral Agent shall direct; (B) to ask for or demand, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (D) to
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any thereof and to enforce any other right in respect of
any Collateral; (E) to defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharges
or releases as the Collateral Agent may deem appropriate; (G) to
assign any Copyright or Trademark (along with the goodwill of the
business to which any such Copyright or Trademark pertains),
throughout the world for such term or terms, on such conditions, and
in such manner, as the Collateral Agent shall in its sole discretion
determine; and (H) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent were the
absolute owner thereof for all purposes, and to do, at the Collateral
Agent's option and such Grantor's expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's Liens thereon and to effect the intent of this
Security Agreement, all as fully and effectively as the Grantor might
do.
-14-
15
Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until the Obligations are paid in full.
(b) Other Powers. Each Grantor also authorizes the
Collateral Agent, at any time and from time to time, to execute, in connection
with the sale provided for in Section 9 hereof, any endorsements, assignments
or other instruments of conveyance or transfer with respect to the Collateral.
(c) No Duty on Collateral Agent's Part. The powers
conferred on the Collateral Agent hereunder are solely to protect the
Collateral Agent's interests in the Collateral and shall not impose any duty
upon the Collateral Agent to exercise any such powers. The Collateral Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to such Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7. Performance by Collateral Agent of Each Grantor's
Obligations. If any Grantor fails to perform or comply with any of its
agreements contained herein and the Collateral Agent, as provided for by the
terms of this Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of the
Collateral Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum specified in the Indenture,
shall be payable by such Grantor to the Collateral Agent on demand and shall
constitute Obligations secured hereby.
8. Proceeds. In addition to the rights of the Collateral
Agent specified in Section 3(d) with respect to payments of Accounts, it is
agreed that if an Event of Default shall occur and be continuing (a) all
Proceeds received by each Grantor consisting of cash, checks and other
instruments shall be held by such Grantor in trust for the Collateral Agent,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Collateral Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Collateral
Agent, if required), and (b) any and all such Proceeds received by the
Collateral Agent (whether from such Grantor or otherwise) may, in the sole
discretion of the Collateral Agent, be held by the Collateral Agent as
collateral security for, and/or then or at any time thereafter may be applied
by the Collateral Agent against, the Obligations (whether matured or
unmatured), such application to be in such order as the Collateral Agent shall
elect. Any balance of such Proceeds remaining after the Obligations shall have
been paid in full shall be paid over to such Grantor or to whomsoever may be
lawfully entitled to receive the same.
9. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may exercise, in addition to all other rights
and remedies granted to it in this Security Agreement and in any other
instrument or agreement securing, evidencing or relating to the
-15-
16
Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the Collateral Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are, to the extent permitted by applicable law,
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Collateral Agent or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Collateral Agent shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in such Grantor,
which right or equity is hereby waived, to the extent permitted by applicable
law, or released. Each Grantor further agrees, at the Collateral Agent's
request, to assemble the Collateral and make it available to the Collateral
Agent at places which the Collateral Agent shall reasonably select, whether at
such Grantor's premises or elsewhere. The Collateral Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all costs and expenses of every kind incurred therein
or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Collateral Agent hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as the
Collateral Agent may elect, and only after such application and after the
payment by the Collateral Agent of any other amount required by any provision
of law, including, without limitation, Section 9-504(1)(c) of the Code, need
the Collateral Agent account for the surplus, if any, to such Grantor. To the
extent permitted by applicable law, such Grantor waives all claims, damages and
demands it may acquire against the Collateral Agent arising out of the exercise
by them of any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay the Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent to collect such deficiency.
In furtherance, but not in limitation of, the foregoing, if an
Event of Default shall occur and be continuing, each Grantor shall assign,
license, or sublicense, as requested by Collateral Agent, any or all of the
Patent Licenses to the Collateral Agent.
10. Limitation on Duties Regarding Preservation of
Collateral. The Collateral Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the Code or otherwise, shall be to deal with it in the
same manner as the Collateral Agent deals with similar property for its own
account. Neither the
-16-
17
Collateral Agent, nor any of its directors, officers, employees or agents shall
be liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
otherwise.
11. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest until the Obligations are indefeasibly paid in
full.
12. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
14. No Waiver; Cumulative Remedies. The Collateral Agent
shall not by any act (except by a written instrument pursuant to Section 15
hereof), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Collateral Agent,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Collateral Agent of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
15. Waivers and Amendments; Successors and Assigns. None
of the terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Grantor and the Collateral Agent, provided that any provision of this
Security Agreement may be waived by the Collateral Agent in a written letter or
agreement executed by the Collateral Agent or by facsimile transmission from
the Collateral Agent. This Security Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent, the Holders and their respective successors and assigns.
-17-
18
16. Termination of Security Interest; Release of
Collateral. (a) Upon the repayment in full of all Obligations, the security
interest granted in the Collateral pursuant to this Security Agreement shall
terminate and all rights to the Collateral shall revert to the Grantors.
(b) Upon any such termination of the security interest
granted in the Collateral pursuant to this Security Agreement or release of
Collateral pursuant to this Section, the Collateral Agent will, at the expense
of each Grantor, execute and deliver to each Grantor such documents as such
Grantor shall reasonably request to evidence the termination of such security
interest and deliver to such Grantor all Collateral so released then in its
possession.
17. Notices. All notices or other communications
provided for hereunder shall be in writing and sent by first class mail or
nationwide overnight delivery service, (i) if to a Grantor, addressed to it at
its chief executive office listed in Schedule VII, or at such other address as
such Grantor shall have specified to the Collateral Agent, and (ii) if to the
Collateral Agent, addressed to it at 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX
00000.
18. Grant of Access to Trademark, Trademark License,
Copyright, Copyright License, Patent or Patent License or Collateral. For the
purposes of enabling the Collateral Agent to exercise rights and remedies under
Sections 6 and 9 hereof at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to
the Collateral Agent during the continuance of an Event of Default access to
all media in which any Trademark, Copyright, Patent, Trademark License,
Copyright License or Patent License may be recorded or stored and to all
computer and automatic machinery software and programs used for the compilation
or printout thereof to the extent that such Grantor may lawfully do so.
19. Integration. This Security Agreement represents the
agreement of each Grantor and the Collateral Agent with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Collateral Agent relative to subject matter hereof not
expressly set forth or referred to herein or in the other Notes and Units
Purchase Documents.
20. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF EACH GRANTOR UNDER THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION AND THE EFFECT OF
PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, IN
RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
-18-
19
IN WITNESS WHEREOF, each Grantor has caused this Security
Agreement to be duly executed and delivered as of the date first above written.
GRANTORS: SOURCE MEDIA, INC.
By /s/ XXXXXXX X. XXXX
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
SMI HOLDINGS, INC.
By /s/ XXXXXXX X. XXXX
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
IT NETWORK, INC.
By /s/ XXXXXXX XXXXX
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
INTERACTIVE CHANNEL, INC.
By /s/ XXXXXXX XXXXX
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
-19-
20
CABLESHARE (U.S.) LIMITED
By /s/ XXXXXXX X. XXXX
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Director
Accepted and Agreed:
U.S. TRUST COMPANY OF TEXAS, N.A.
as Collateral Agent
By /s/ XXXX XXXXXX
---------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
-20-
21
SCHEDULE I
Copyrights and Copyright Licenses
Source Media, Inc.
Development and Licensing Agreement entered into as of April 1, 1995, between
IT Network, Inc., Source Media, Inc., Interactive Channel Technologies, Inc.,
Cable Xxxxx Xxxxxxxxxxxxx Inc., Cableshare (U.S.) Limited and Cableshare B.V.,
First Amendment to Development and Licensing Agreement, dated October 31, 1996.
Second Amendment to Development and Licensing Agreement, dated March 17, 1997.
SMI Holdings, Inc.
None
IT Network, Inc.
Development and Licensing Agreement entered into as of April 1, 1995, between
IT Network, Inc., Source Media, Inc., Interactive Channel Technologies, Inc.,
Cable Xxxxx Xxxxxxxxxxxxx Inc., Cableshare (U.S.) Limited and Cableshare B.V.,
First Amendment to Development and Licensing Agreement, dated October 31, 1996.
Second Amendment to Development and Licensing Agreement, dated March 17, 1997.
Interactive Channel, Inc.
Cableshare (U.S.) Limited
Development and Licensing Agreement entered into as of April 1, 1995, between
IT Network, Inc., Source Media, Inc., Interactive Channel Technologies, Inc.,
Cable Xxxxx Xxxxxxxxxxxxx Inc., Cableshare (U.S.) Limited and Cableshare B.V.,
First Amendment to Development and Licensing Agreement, dated October 31, 1996.
Second Amendment to Development and Licensing Agreement, dated March 17, 1997.
22
SCHEDULE II
Patents and Patent Licenses
U.S. Patent No. Description Expiration
--------------- ----------- ----------
Source Media, Inc. Development and Licensing Agreement entered
into as of April 1, 1995, between IT
Network, Inc., Source Media, Inc.,
Interactive Channel Technologies, Inc.,
Cable Xxxxx Xxxxxxxxxxxxx Inc., Cableshare
(U.S.) Limited and Cableshare B.V.
First Amendment to Development and
Licensing Agreement, dated October 31,
1996.
Second Amendment to Development and
Licensing Agreement, dated March 17, 1997.
SMI Holdings, Inc. None
IT Network, Inc. Development and Licensing Agreement entered
into as of April 1, 1995, between IT
Network, Inc., Source Media, Inc.,
Interactive Channel Technologies, Inc.,
Cable Xxxxx Xxxxxxxxxxxxx Inc., Cableshare
(U.S.) Limited and Cableshare B.V.
First Amendment to Development and
Licensing Agreement, dated October 31,
1996.
23
SCHEDULE II
Page 2
U.S. Patent No. Description Expiration
--------------- ----------- ----------
Second Amendment to Development and
Licensing Agreement, dated March 17, 1997.
Interactive Channel, Inc. US 4,792,849 Digital interactive communication system August 2007
US 4,829,372 Presentation player to serve users within a August 2007
digital interactive communication system
US 4,860,123 Video/audio presentation of still-frame October 2007
images for electronic store
US 4,905,094 System to assemble video/audio June 2008
presentations
US 5,113,496 Interconnection structure with redundancy May 2009
for communication of media presentations
US 5,119,188 Digital audio-video presentation display June 2009
system
US 5,191,410 Communications system for particular March 2010
multimedia presentations to multiple
viewers
US 5,195,092 Distribution system for presentation of a March 2010
continuous flow of information, using fixed
frames
US 5,208,665 Presentation player in digital format to May 2010
distribute information to viewers via
television
24
SCHEDULE II
Page 3
U.S. Patent No. Description Expiration
--------------- ----------- ----------
Cableshare (U.S.) Limited Development and Licensing Agreement entered
into as of April 1, 1995, between IT
Network, Inc., Source Media, Inc.,
Interactive Channel Technologies, Inc.,
Cable Xxxxx Xxxxxxxxxxxxx Inc., Cableshare
(U.S.) Limited and Cableshare B.V.
First Amendment to Development and
Licensing Agreement, dated October 31,
1996.
Second Amendment to Development and
Licensing Agreement, dated March 17, 1997.
25
SCHEDULE III
Trademarks and Trademark Licenses
Trademark Name Serial/ Application or
-------------- Registration Registration
Number Date
---------------------------------------------------------------- -------------
Source Media, Inc.
None
SMI Holdings, Inc.
None
IT Network, Inc.
None
Interactive Channel, Inc.
There are presently five (5) registered U.S. trademarks, TEACHERS ASSISTANTS PROGRAM (TAP)(R), THE IT
NETWORK(R) and TELEHOME & DESIGN(R), INTERACTIVE CHANNEL & DESIGN(R), and TOUCHING TOMORROW TODAY(R) and four (4)
pending U.S. applications "IT NETWORK GUIDE", CHANNELINK", "ADLINK" and "LOCAL SOURCE." There is one (1) Canadian
registered trademark for "THE IT NETWORK."
Cableshare (U.S.) Limited
None
26
SCHEDULE IV
Location of Records Regarding Accounts
--------------------------------------
Source Media, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
SMI Holdings, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
IT Network, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Interactive Channel, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Cableshare (U.S.) Limited
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
27
SCHEDULE V
Bank Accounts
-------------
Source Media, Inc.
None
SMI Holdings, Inc.
Texas Bank & Trust, N.A.
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Account #00-0000-0 Money Market
Account #1219-5 Operating
Account #1220-3 Payroll
Account #1375-5 Escrow
Texas Commerce Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Account #08805147244 Operating
Account #00000000 Money Market
Account #319473 Investment
IT Network, Inc.
None
Interactive Channel, Inc.
None
28
SCHEDULE V
Page 2
Cableshare (U.S.) Limited
None
29
SCHEDULE VI
Location of Inventory and Equipment
-----------------------------------
Source Media, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
SMI Holdings, Inc.
None
IT Network, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX
000 Xxxx Xxxxxxx Xxxxxx
Xxxx X
Xxxxxxx, XX
100 Park Offices
30
SCHEDULE VI
Page 2
Xxxxx 000-X
Xxxxxx Xxxx, XX
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, XX
00000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX
0000 Xxxxx Xxxx Xxxxxx
Xxxxx X-0
Xxxxxx, XX
00000 Xxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxxxx Xxxxx, XX
00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 00
Xxxxxxx, XX
000 Xxxxx Xxxx Xxxx
Xxxxx 000X
Xxxxxxx, XX
0000 Xxxx Xxxx Xxx
Xxxxx 000
Xx Xxxx, XX
000 Xxxxxxxxxx Xx.
Xxxxx 000
Xxxxxxx, XX
1440 Broadway
31
SCHEDULE VI
Page 0
Xxxxx 000
Xxxxxxx, XX
000 X. Xxxxx Xxxxxx
Xxxxx 0
Xxxxxxxx, XX
00000 Xxxxxxx Xxx
Xxxxx 000
Xxxxxx, XX
000 Xxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX
000 X. Xxxxxx Xxxx
Xxxxx 00
Xxx Xxxxxxxx, XX
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 00
Xxx Xxxxx, XX
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX
00000 Xxxx Xxxxxx Xxxx
Xxxxx 000X
Xxx Xxxxx, XX
000 Xxxxx Xxxxxx, Xxxxx 000
32
SCHEDULE VI
Page 4
Santa Barbara, CA
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX
000 Xxxxxxxxx Xxxxxx
Xxxxx X
Xxxxx, XX
0000 Xxxx Xxxx
Xxxxx X/X
Xxxxxxx, XX
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX
00 Xxxxxxx Xxx
0xx Xxxxx
Xxxxxx, XX
One Lincoln Centre
0000 XXX
Xxxxx 000
Xxxxxx, XX
000 Xxxxxxxx Xxxxxx
Xxxxx 000
33
SCHEDULE VI
Page 0
Xxxxxx, Xxxxxxx, Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
0000 Xxxxxx Xxxxx Xxxxxxxx
Xxxxx Xxxx, XX 00000
0000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxxxx, XX 00000
[Alliance Media]
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
[Charlotte Observer]
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
[Blue Valley]
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx HMDX
[Coastal - Savannah]
0000 Xxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
[Dalton Area Talkin]
X.X. Xxx 0000
Xxxxxx, XX 00000
[Kiwi Publishing]
P.O. Box 1757
34
SCHEDULE VI
Page 0
Xx. Xxxxxx, XX 00000
[Mast Advertising]
000 Xxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
[Pennco Publishing]
0000 Xxxxx 00 Xxxx
Xxxxx X
XxXxxxxxxxx, XX 00000
Interactive Channel, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
000 Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX
Xxxxxxxx & Worcester LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Cablevision Systems Corporation
Xxx Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Cablevision Systems Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Cableshare (U.S.) Limited
None
35
SCHEDULE VII
Chief Executive Offices
-----------------------
Source Media, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
SMI Holdings, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
IT Network, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Interactive Channel, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Cableshare (U.S.) Limited
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
36
SCHEDULE VII
Page 0
Xxxxx X
XXXXXXXXXX XX XXXXXXXX XXXXXXXX
XX XXXXXX XXXXXX TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt
and sufficiency of which are hereby acknowledged, the undersigned with
principal offices at the address set forth next to their name appearing in the
signature pages hereof, (each individually an "Assignor" and collectively the
"Assignors") hereby assigns and grants to U.S. Trust Company of Texas, N.A., as
Collateral Agent, with principal offices at 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000 (the "Assignee"), a security interest in (i) all of the
Assignors' right, title and interest in and to the United States trademarks,
trademark registrations and trademark applications (the "Marks") set forth on
Schedule A attached hereto, together with (ii) all Proceeds (as such term is
defined in the Security Agreement referred to below) and products of the Marks,
(iii) the goodwill of the businesses symbolized by the Marks and (iv) all
causes of action arising prior to or after the date hereof for infringement of
any of the Marks or unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt
performance and payment of all the Obligations of the Assignors, as such term
is defined in the Security Agreement among the Assignors, the other assignors
party thereto and the Assignee, dated as of October 30, 1997 (as amended from
time to time, the "Security Agreement"). Upon the occurrence of the
Termination Date (as defined in the Security Agreement), the
37
ANNEX A
Page 2
Assignee shall, upon such satisfaction, execute, acknowledge, and deliver to
the Assignors an instrument in writing releasing the security interest in the
Marks acquired under this Assignment.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
38
ANNEX A
Page 3
IN WITNESS WHEREOF, the undersigned have executed this
Assignment of Security Interest as of the ____ day of _______, ____.
SOURCE MEDIA, INC.,
as Assignor
By
------------------------------------
Name:
Title:
SMI HOLDINGS, INC.
as Assignor
By
------------------------------------
Name:
Title:
IT NETWORK, INC.,
as Assignor
By
------------------------------------
Name:
Title:
39
ANNEX A
Page 4
INTERACTIVE CHANNEL, INC.
as Assignor
By
------------------------------------
Name:
Title:
CABLESHARE (U.S.) LIMITED,
as Assignor
By
------------------------------------
Name:
Title:
U.S. TRUST COMPANY OF TEXAS, N.A.
as Collateral Agent and Assignee
By
------------------------------------
Name:
Title:
40
[To be notarized for each signatory]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _______, ____ before me personally came
____________ who, being by me duly sworn, did state as follows: that [s]he is
______________ of __________________________, that [s]he is authorized to
execute the foregoing Assignment of Security Interest on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of
said corporation.
____________________________
Notary Public
00
Xxxxx X
XXXXXXXXXX XX XXXXXXXX XXXXXXXX
XX XXXXXX XXXXXX PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt
and sufficiency of which are hereby acknowledged, the undersigned with
principal offices at the address set forth next to their name appearing in the
signature pages hereof (each individually an "Assignor" and collectively the
"Assignors") hereby assigns and grants to U.S. Trust Company of Texas, N.A., as
Collateral Agent, with principal offices at 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000 (the "Assignee"), a security interest in (i) all of the
Assignors' right, title and interest in and to the United States patents (the
"Patents") set forth on Schedule A attached hereto, together with (ii) all
Proceeds (as such term is defined in the Security Agreement referred to below)
and products of the Patents and (iii) all causes of action arising prior to or
after the date hereof for infringement of any of the Patents or unfair
competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt
performance and payment of all the Obligations of the Assignors, as such term
is defined in the Security Agreement among the Assignors, the other assignors
party thereto and the Assignee, dated as of October 30, 1997 (as amended from
time to time, the "Security Agreement"). Upon the occurrence of the
Termination Date (as defined in the Security Agreement), the Assignee shall,
upon such satisfaction, execute, acknowledge, and deliver to the Assignors
42
ANNEX B
Page 2
an instrument in writing releasing the security interest in the Patents
acquired under this Assignment.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
43
ANNEX B
Page 3
IN WITNESS WHEREOF, the undersigned have executed this
Assignment of Security Interest as of the ____ day of _______, ____.
Address:
SOURCE MEDIA, INC.,
as Assignor
By
-------------------------------------
Name:
Title:
SMI HOLDINGS, INC.
as Assignor
By
-------------------------------------
Name:
Title:
IT NETWORK, INC.,
as Assignor
By
-------------------------------------
Name:
Title:
44
ANNEX B
Page 4
INTERACTIVE CHANNEL, INC.
as Assignor
By
-------------------------------------
Name:
Title:
CABLESHARE (U.S.) LIMITED,
as Assignor
By
-------------------------------------
Name:
Title:
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Collateral Agent and Assignee
By
-------------------------------------
Name:
Title:
45
[Notarized for each signatory]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _______, ____ before me personally came
_______________, who being duly sworn, did depose and say that [s]he is
_________________ of ____________________, that [s]he is authorized to execute
the foregoing Assignment of Security Interest on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said Corporation.
_________________________
Notary Public
00
XXXXX X
XXXXXXXXXX XX XXXXXXXX XXXXXXXX
XX XXXXXX XXXXXX COPYRIGHTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency
of which are hereby acknowledged, the undersigned with principal offices at the
address set forth next to their name appearing in the signature pages hereof
(each individually an "Assignor" and collectively the "Assignors") is the owner
of all right, title and interest in and to the United States copyrights and
associated United States copyright registrations and applications for
registration set forth in Schedule A attached hereto;
WHEREAS, U.S. Trust Company of Texas, N.A., as Collateral
Agent, having its principal offices at 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX
00000 (the "Assignee"), desires to acquire a security interest in, and lien on,
all of Assignors' right, title and interest in and to Assignors' copyrights and
copyright registrations and applications therefor; and
WHEREAS, the Assignors are willing to assign to the Assignee,
and to grant to the Assignee a security interest in and lien upon the
copyrights and copyright registrations and applications therefor described
above;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, dated as of October 30, 1997, among the
Assignors, the other assignors from
47
ANNEX C
Page 2
time to time party thereto and the Assignee (as amended from time to time, the
"Security Agreement"), each of the Assignors hereby assigns to the Assignee,
and grants to the Assignee a security interest in and a lien upon, all of
Assignors' right, title and interest in and to Assignors' copyrights and
copyright registrations and applications more particularly set forth on
Schedule A attached hereto, (the "Copyrights") together with (i) all Proceeds
(as such term is defined in the Security Agreement referred to below) of the
Copyrights, and (ii) all causes of action arising prior to or after the date
hereof for infringement of any Copyright.
This ASSIGNMENT OF SECURITY INTEREST is made to secure the
satisfactory performance and payment of all the Obligations (as such term is
defined in the Security Agreement) of the Assignors and shall be effective as
of the date of the Security Agreement. Upon the occurrence of the Termination
Date (as defined in the Security Agreement), the Assignee shall, upon such
satisfaction, execute, acknowledge, and deliver to the Assignors an instrument
in writing releasing the security interest in the Copyrights acquired under
this Assignment of Security Interest.
This Assignment of Security Interest has been granted in
conjunction with the security interest granted to Assignee under the Security
Agreement. The rights and remedies of the Assignee with respect to the
security interest granted herein are without
48
ANNEX C
Page 3
prejudice to, and are in addition to those set forth in the Security Agreement,
all terms and provisions of which are incorporated herein by reference. In the
event that any provisions of this Assignment of Security Interest are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this
Assignment as of the _____ day of _____________, ____.
SOURCE MEDIA, INC.,
as Assignor
By
---------------------------
Name:
Title:
SMI HOLDINGS, INC.
as Assignor
By
---------------------------
Name:
Title:
IT NETWORK, INC.,
as Assignor
49
ANNEX C
Page 4
By
---------------------------
Name:
Title:
50
ANNEX C
Page 5
INTERACTIVE CHANNEL, INC.
as Assignor
By
---------------------------
Name:
Title:
CABLESHARE (U.S.) LIMITED,
as Assignor
By
---------------------------
Name:
Title:
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Collateral Agent and Assignee
By
---------------------------
Name:
Title:
51
[Notary for each signatory]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of ____________, ____, before me personally
came ______________ who, being by me duly sworn, did state as follows: that
[s]he is _______________ of __________________, that [s]he is authorized to
execute the foregoing Assignment of Security Interest on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of
said corporation.
_________________________
Notary Public
