Exhibit 10.3
FORM OF AMENDED AND RESTATED
INTELLECTUAL PROPERTY SECURITY AGREEMENT
April 30, 2001
from
MEDIABAY, INC., XXXXX XXXXXXX, INC., AUDIO BOOK CLUB, INC.,
XXXXXXXX.XXX, INC., XXXXXXXXXXXXX.XXX, INC., ABC-COA ACQUISITION
CORP., MEDIABAY SERVICES, INC., VIDEO YESTERYEAR, INC., ABC
INVESTMENT CORP., MEDIABAY PUBLISHING, INC. AND
RADIO CLASSICS, INC.,
as Grantors,
to
ING (U.S.) CAPITAL LLC
as Administrative Agent
Table of Contents Page
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PRELIMINARY STATEMENTS:.....................................................1
SECTION 1. Grant of Security.........................................2
SECTION 2. Security for Obligations..................................3
SECTION 3. Grantors Remain Liable....................................3
SECTION 4. Representations and Warranties............................3
SECTION 5. Further Assurances........................................6
SECTION 6. Transfers and Other Liens.................................8
SECTION 7. Administrative Agent Appointed Attorney-in-Fact...........9
SECTION 8. Administrative Agent May Perform..........................9
SECTION 9. The Administrative Agent's Duties.........................9
SECTION 10. Remedies..................................................9
SECTION 11. Indemnity and Expenses...................................11
SECTION 12. Security Interest Absolute...............................11
SECTION 13. Amendments; Waivers; Supplements; Etc....................12
SECTION 14. Addresses for Notices....................................12
SECTION 15. Continuing Security Interest, Assignments................13
SECTION 16. Release and Termination..................................13
SECTION 17. Execution in Counterparts................................14
SECTION 18. Governing Law; Terms.....................................14
SECTION 19. Amendment and Restatement; Reaffirmation
of Continuing Security...................................14
Exhibit A Form of Amended and Restated Intellectual Property
Security Agreement Supplement
SCHEDULES
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Schedule I - Patents and Patent Applications
Schedule II - Trademark Registrations and Applications
Schedule III - Copyright Registrations and Applications
Schedule IV - Licenses
Schedule 4(i) - Litigation
AMENDED AND RESTATED
INTELLECTUAL PROPERTY SECURITY AGREEMENT
AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY AGREEMENT (this
"Agreement"), dated as of April 30, 2001, by and among MediaBay, Inc., a Florida
corporation ("MediaBay"), Xxxxx Xxxxxxx, Inc., a Delaware corporation ("Xxxxx
Xxxxxxx"), Audio Book Club, Inc., a Delaware corporation ("Audio Book Club", and
together with MediaBay and Xxxxx Xxxxxxx, the "Borrowers" and each individually,
a "Borrower"), XxxxxXxx.xxx, Inc., a Delaware corporation ("XxxxxXxx.xxx"),
XxxxxXxxxXxxx.xxx, Inc., a Delaware corporation ("XxxxxXxxxXxxx.xxx"), ABC-COA
Acquisition Corp., a Delaware corporation ("ABC-COA"), MediaBay Services, Inc.,
a Delaware corporation ("MediaBay Services"), Video Yesteryear, Inc., a Delaware
corporation ("Video Yesteryear"), ABC Investment Corp., a Delaware corporation
("ABC Investment"), MediaBay Publishing, Inc., a Delaware corporation ("MediaBay
Publishing") and Radio Classics, Inc., a Delaware corporation ("Radio
Classics"), the Additional Grantors (as defined in Section 13(c) hereof) (the
Additional Grantors, together with the Borrowers, XxxxxXxx.xxx,
XxxxxXxxxXxxx.xxx, ABC-COA, MediaBay Services, Audio Book Club, ABC Investment,
MediaBay Publishing, and Radio Classics, the "Grantors") to ING (U.S.) Capital
LLC, as administrative agent (in such capacity, together its with successors in
such capacity, the "Administrative Agent") for the Secured Parties (as defined
in the Credit Agreement referred to below).
PRELIMINARY STATEMENTS:
(1) MediaBay has entered into a Credit Agreement, dated as of December 31,
1998, which Credit Agreement is contemporaneously herewith being amended and
restated in its entirety to continue in effect pursuant to an Amended and
Restated Credit Agreement dated as of even date herewith (said Agreement, as it
may hereafter be amended, restated, supplemented, extended or otherwise modified
from time to time, the "Credit Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), with the banks,
financial institutions and other institutional lenders party thereto (the
"Lenders") ING (U.S.) Capital LLC, as Issuing Bank and as Administrative Agent.
(2) It is a condition precedent to the making of Advances by the Lenders,
the issuance of Letters of Credit by the Issuing Bank under the Credit Agreement
and the Hedge Banks' entering into the Bank Hedge Agreements with the Borrowers
from time to time that the Borrower shall have granted the assignment and
security interest and made the pledge and assignment contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Secured Parties to make Advances under the Credit Agreement, the Issuing Bank to
issue Letters of Credit under the Credit Agreement, and the Hedge Banks to enter
into Bank Hedge Agreements with the Borrowers from time to time, each of the
Grantors hereby agrees with the Administrative Agent for its benefit and the
ratable benefit of the Secured Parties as follows:
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SECTION 1. Grant of Security.
Each of the Grantors hereby assigns as collateral and pledges to the
Administrative Agent for its benefit and the ratable benefit of the Secured
Parties, and hereby grants to the Administrative Agent for its benefit and the
ratable benefit of the Secured Parties a security interest in the following, in
each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, and whether now or hereafter existing
(collectively, the "Intellectual Property Collateral"):
(a) all patents, patent applications and patentable inventions,
including, without limitation, each patent identified in Schedule I
attached hereto and made a part hereof and each patent application
identified in such Schedule I, and including, without limitation, (i) all
inventions and improvements described and claimed therein and the right to
make, use or sell the same, (ii) the right to xxx or otherwise recover for
any misappropriations thereof, (iii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past and future
infringements thereof), and (iv) all rights corresponding thereto
throughout the world and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals and extensions thereof, all
improvements thereon and all other rights of any kind whatsoever of each
Grantor accruing thereunder or pertaining thereto (the "Patents");
(b) all trademarks, service marks, trade names, trade dress or other
indicia of trade origin, trademark and service xxxx registrations, and
applications for trademark or service xxxx registrations and any renewals
thereof (to the extent that assignment of such application is permissible
under 15 U.S.C. 1060), including, without limitation, each registration and
application identified in Schedule II attached hereto and made a part
hereof, and including, without limitation, (i) the right to xxx or
otherwise recover for any and all past, present and future infringements
and misappropriations thereof, (ii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future
infringements thereof), and (iii) all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of the
Grantor accruing thereunder or pertaining thereto, together in each case
with the goodwill of the business connected with the use of, and symbolized
by, each such trademark, service xxxx, trade name, trade dress or other
indicia of trade origin (the "Trademarks");
(c) all copyrights, whether statutory or common law, and whether or
not the underlying works of authorship have been published, and all works
of authorship and other intellectual property rights therein, all
copyrights of works based on, incorporated in, derived from or relating to
works covered by such copyrights, all right, title and interest to make and
exploit all derivative works based on or adopted from works covered by such
copyrights, and all copyright registrations and copyright applications, and
any renewals or extensions thereof, including, without limitation, each
copyright registration and copyright application identified in Schedule III
attached hereto and made a part hereof, and including, without limitation,
(i) the right to reproduce, prepare derivative works, distribute copies,
perform or display any of the foregoing, (ii) the right to xxx or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and other
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payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future
infringements thereof), and (iv) all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of the
Grantor accruing thereunder or pertaining thereto (the "Copyrights");
(d) all license agreements (subject to the rights of the other parties
thereto) with any other Person in connection with any of the Patents,
Trademarks or Copyrights, or such other Person's patents, trade names,
trademarks, service marks, copyrights or works of authorship, or other
intellectual property, whether such Grantor is a licensor or licensee under
any such license agreement, including, without limitation, the license
agreements listed on Schedule IV attached hereto and made a part hereof,
and any right to prepare for sale, sell and advertise for sale, all
Inventory (as defined in the Security Agreement) now or hereafter owned by
the Grantor and now or hereafter covered by any such licenses (the
"Licenses"); provided, however, that to the extent that the consent of any
other party to any of the Licenses is required, under the terms thereof,
for the collateral assignment thereof, then this Agreement shall not effect
any collateral assignment of (or otherwise be applied so as to cause a
default under) such Licenses; and
(e) all proceeds of any of the foregoing Patents, Trademarks,
Copyrights and Licenses, including, without limitation, any claims by such
Grantor against third parties for infringement of the Patents, Trademarks,
Copyrights or Licenses.
SECTION 2. Security for Obligations.
This Agreement secures the payment of all Obligations of each Grantor now
or hereafter existing under the Loan Documents, whether for principal, interest,
fees, expenses or otherwise (all such Obligations secured being the "Secured
Obligations").
SECTION 3. Grantors Remain Liable.
Anything herein to the contrary notwithstanding, (a) each Grantor shall
remain liable under the contracts and agreements included in the Intellectual
Property Collateral to which it is a party to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights or remedies hereunder shall not release any Grantor
from any of its duties or obligations under any of the contracts and agreements
included in the Intellectual Property Collateral, and (c) neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under any of the contracts and agreements included in the Intellectual
Property Collateral by reason of this Agreement, nor shall the Administrative
Agent or any Secured Party be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 4. Representations and Warranties.
The Grantors jointly and severally represent and warrant as follows:
(a) Each Grantor is the legal and beneficial owner of the Intellectual
Property Collateral pledged by such Grantor free and clear of any Lien,
claim, option or right of others, except for the liens and security
interests created under this Agreement or permitted under the
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Loan Documents (including, without limitation, any Liens disclosed in
Section 6.1 of the Credit Agreement); provided, however, Grantors may
possess derivative copyrights in works considered to be in the "public
domain" as to which third parties may also have claims. No effective
financing statement or other instrument similar in effect covering all or
any part of the Intellectual Property Collateral or listing any Grantor or
any of its Subsidiaries or any trade name of any Grantor or any of its
Subsidiaries as debtor is on file in any recording office (including,
without limitation, the United States Patent and Trademark Office and the
United States Copyright Office) (except that the foregoing representation
as to the Acquired Intellectual Property Collateral is made only to the
knowledge of the Grantors in respect of filings or recordings that are not
Uniform Commercial Code filings), except such as may have been filed in
favor of the Administrative Agent relating to this Agreement or one of the
other Loan Documents, or as may be permitted pursuant to the Credit
Agreement.
(b) Set forth in Schedule I is a complete and accurate list of all
patents owned by each Grantor. Set forth in Schedule II is a complete and
accurate list of all trademark and service xxxx registrations and all
trademark and service xxxx applications owned by each Grantor. Set forth in
Schedule III is a complete and accurate list of all copyright registrations
and copyright applications owned by each Grantor. Set forth in Schedule IV
is a complete and accurate list, in all material respects, of all material
Licenses in which each Grantor is (i) a licensor with respect to any of the
Patents, Trademarks, or Copyrights or (ii) a licensee of any other Person's
patents, trade names, trademarks, service marks, copyrights or works of
authorship. Such Grantor has made all necessary filings and recordations to
protect and maintain its interest in the patents, patent applications,
trademark and service xxxx registrations, trademark and service xxxx
applications, copyright registrations and copyright applications and
Licenses set forth in Schedules I, II, III and IV hereto except where the
failure to make any such filings and recordations would not have a Material
Adverse Effect.
(c) Each patent, patent application, trademark or service xxxx
registration, trademark or service xxxx application, copyright
registration, and copyright application of each Grantor set forth in
Schedule I, II or III hereto (except for any which is immaterial to the
business of such Grantor) is subsisting and has not been adjudged invalid,
unregisterable or unenforceable, in whole or in part, and is valid,
registrable and enforceable. Each License of each Grantor identified in
Schedule IV is, to the best of each Grantor's knowledge, subsisting and has
not been adjudged invalid or unenforceable, in whole or in part, and is, to
the best of each Grantor's knowledge, valid and enforceable. No Grantor is
aware of any uses of any item of Intellectual Property Collateral (except
for any which is immaterial to the business of such Grantor) which would be
expected to lead to such item becoming invalid or unenforceable, including
unauthorized uses by third parties and uses which were not supported by the
goodwill of the business connected with such Intellectual Property
Collateral.
(d) No Grantor has made any previous assignment, transfer or agreement
constituting a present or future assignment, transfer or encumbrance of any
of the Intellectual Property Collateral (except for any which is immaterial
to the business of such Grantor). Except as set forth on Schedule 4(d), no
Grantor has granted any license (other than those listed on Schedule IV
hereto), release, covenant not to xxx, or non-assertion assurance to any
Person with
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respect to any part of the Intellectual Property Collateral (except for any
which is immaterial to the business of such Grantor).
(e) Each Grantor has used proper statutory notice in connection with
its use of each patent, each registered trademark and service xxxx and each
copyright contained in Schedule I, II or III (except for any which is
immaterial to the business of such Grantor).
(f) This Agreement creates in favor of the Administrative Agent, on
behalf of itself and the Lender Parties, a valid (upon filing of financing
statements and with the appropriate U.S. patent and trademark or copyright
office) first priority security interest in the Intellectual Property
Collateral of each Grantor which can be perfected by such filings, securing
the payment of the Secured Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest as
requested by the Administrative Agent have been duly taken; provided
however, it is understood that with respect to any rights which any Grantor
may have in copyrights licensed or acquired from third parties, a security
interest in such copyrights can only be perfected through filing in the
U.S. Copyright Office if such copyrights have been previously registered
with the U.S. Copyright Office; and provided further, except as set forth
in the Schedules attached hereto, each Grantor makes no representations or
warranties about which, if any, of such copyrights have been registered
with the U.S. Copyright Office.
(g) Except as set forth in Schedule 4.4 of the Credit Agreement, and
any required consent of other parties to Licenses, no consent of any Person
and no authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or other Person
is required (i) for the grant by any Grantor of the assignment and security
interest granted hereby, for the pledge by any Grantor of the Intellectual
Property Collateral pursuant hereto, or for the execution, delivery or
performance of this Agreement by each Grantor, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment and
security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements
have been duly filed, and the filing and recording of this Agreement in the
United States Patent and Trademark Office and the United States Copyright
Office against each patent, patent application, trademark or service xxxx
registration, trademark or service xxxx application, copyright
registration, and copyright application of each Grantor set forth in
Schedule I, II or III hereto, or (iii) for the exercise by the
Administrative Agent of its rights provided for in this Agreement or the
remedies in respect of the Intellectual Property Collateral pursuant to
this Agreement. To the extent that any of the Licenses entered into after
the date hereof is material to the business of the subject Grantor or
accounted for or could reasonably be expected to account for more than
$250,000 in gross revenues to the Grantors during any Borrower's current or
subsequent fiscal year, such Grantor will hereafter promptly use its
commercially reasonable efforts (without being required to incur any
unreasonable expense) to obtain any required third party consent for the
assignment of such License hereunder.
(h) Except as set forth on Schedule 4(i) hereto or Schedule 4.4 or 4.9
to the Credit Agreement, no claim has been made to or by any Grantor and is
continuing or threatened to or by any Grantor that any item of Intellectual
Property Collateral (except that which is
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immaterial to such Grantor's business) is invalid or unenforceable or that
the use by any Grantor of any Intellectual Property Collateral (except that
which is immaterial to such Grantor's business) does or may violate the
rights of any Person. To the best of each Grantor's knowledge, there is
currently no infringement or unauthorized use of any item of Intellectual
Property Collateral (except that which is immaterial to such Grantor's
business) or could not reasonably be expected to result in a claim or
claiming against such Grantor for amount exceeding $250,000 individually or
in the aggregate.
(i) Each Grantor has taken all reasonably necessary steps to use
consistent standards of quality in the manufacture, distribution and sale
of all products sold and the provision of all services provided under or in
connection with any of the Intellectual Property Collateral, which is
material to such Grantor's business, and has taken all commercially
reasonable steps to ensure that all licensed users of any of the
Intellectual Property Collateral, which is material to such Grantor's
business, use such consistent standards of quality.
SECTION 5. Further Assurances.
(a) Each of the Grantors jointly and severally agrees that from time to
time, at the expense of such Grantor, such Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action, that
the Administrative Agent believes may be reasonably necessary, or that the
Administrative Agent may reasonably request, in order to perfect and protect any
pledge, assignment or security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to any part of the Intellectual Property
Collateral. Without limiting the generality of the foregoing, each Grantor will,
upon the reasonable request of the Administrative Agent, with respect to the
Intellectual Property Collateral owned by such Grantor, execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be reasonably necessary, or as the Administrative
Agent may reasonably request, in order to perfect and preserve the pledge,
assignment and security interest granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Intellectual Property Collateral without the signature of
such Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Intellectual Property
Collateral or any part thereof will be sufficient as a financing statement where
permitted by law.
(c) Each Grantor will furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Intellectual
Property Collateral and such other reports in connection with the Intellectual
Property Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(d) Each Grantor agrees that, if it obtains an ownership interest in any
patent, patent application, patentable invention, trademark, service xxxx, trade
name, trade dress, other indicia of trade origin, trademark or service xxxx
registration, trademark or service xxxx application, copyright, copyright
registration, copyright application, work of authorship or License, which is not
now a part of the Intellectual Property Collateral, (i) the provisions of
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Section 1 will automatically apply thereto, and (ii) any such patent, patent
application, patentable invention, trademark, service xxxx, trade name, trade
dress, indicia of trade origin, trademark or service xxxx registration,
trademark or service xxxx application (together with the goodwill of the
business connected with the use of same and symbolized by same), copyright,
copyright registration, copyright application, work of authorship or License
will automatically become part of the Intellectual Property Collateral;
provided, however, that to the extent the consent of any other party to any such
License is required, under the terms thereof, for the collateral assignment
thereof, then this Agreement shall not effect any collateral assignment of (or
otherwise be applied so as to cause a default under) such License for so long as
(but only for so long as) such consent would be required and has not been
obtained. Each Grantor further agrees that it shall deliver to the
Administrative Agent a written report, in reasonable detail, on an annual basis
(starting on or about December 31, 1999, and thereafter on or about December 31
of each succeeding year), setting forth each new patent, patent application,
trademark or service xxxx registration, trademark or service xxxx application,
copyright registration, copyright application or License that such Grantor has
filed, acquired or otherwise obtained in U.S. the preceding six month reporting
period. Such Grantor authorizes the Administrative Agent to modify this
Agreement by amending Schedules I, II, III and IV hereto (and shall cooperate
with the Administrative Agent in effecting any such amendment) to include any
patent, patent application, trademark or service xxxx registration, trademark or
service xxxx application, copyright registration, copyright application or
License which becomes part of the Intellectual Property Collateral.
(e) With respect to each patent, patent application, trademark or service
xxxx registration, trademark or service xxxx application, copyright registration
and copyright application set forth in Schedule I, II or III hereto (except for
those which individually and in the aggregate are immaterial to the Grantor's
business), each Grantor agrees to take all reasonably necessary steps,
including, without limitation, in the United States Patent and Trademark Office
and the United States Copyright Office or in any court, to (i) maintain each
such patent, trademark or service xxxx registration, and copyright registration,
and (ii) pursue each such patent application, trademark or service xxxx
application and copyright application now or hereafter included in the
Intellectual Property Collateral, including, without limitation, the filing of
responses to office actions issued by the United States Patent and Trademark
Office, the filing of affidavits under Sections 8 and 15 of the United States
Trademark Act, the filing of divisional, continuation, continuation-in-part and
substitute applications, the filing of applications for re-issue, renewal or
extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. Each Grantor agrees to take corresponding steps
with respect to each new or acquired patent, patent application, trademark or
service xxxx registration, trademark or service xxxx application, copyright
registration, or copyright application to which it is now or later becomes
entitled (except for those which individually and in the aggregate are
immaterial to the Grantor's business). Any and all expenses incurred in
connection with such activities will be borne by such Grantor. No Grantor shall
discontinue use of or otherwise abandon any patent, patent application,
trademark or service xxxx, trademark or service xxxx registration, trademark or
service xxxx application, copyright registration, or copyright application now
or hereafter included in the Intellectual Property Collateral (except for those
which individually and in the aggregate are immaterial to the Grantor's
business), unless the relevant Grantor shall have first
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determined in its sound and reasonable business judgment that such use or
pursuit or maintenance of same is no longer desirable in the conduct of such
Grantor's business, in which case, such Grantor shall give written notice of any
such abandonment or discontinuance to the Administrative Agent pursuant to the
annual reporting requirement contained in Section 5(d) above.
(f) Each Grantor agrees to notify the Administrative Agent promptly and in
writing if it learns (i) that any item of the Intellectual Property Collateral
(except for those which individually and in the aggregate are immaterial to the
Grantor's business) has been determined to have become abandoned or dedicated to
the public, (ii) of the institution of any proceeding by or against such Grantor
(including, without limitation, the institution of any proceeding in the United
States Patent and Trademark Office or any court) regarding any infringement or
unauthorized use of (or similar claim with respect to) item of the Intellectual
Property Collateral which is material to such Grantor's business, or (iii) of
any adverse determination in any such proceeding.
(g) In the event that a Grantor makes a determination in its reasonable
business judgment that any item of the Intellectual Property Collateral, which
is material to such Grantor's business, is infringed or misappropriated by a
third party, such Grantor shall promptly notify the Administrative Agent and
will take such actions as such Grantor or, following the occurrence and during
the continuance of a Default of an Event of Default, the Administrative Agent
deems reasonable and appropriate under the circumstances to protect such
Intellectual Property Collateral, including, without limitation, suing for
infringement or misappropriation and for an injunction against such infringement
or misappropriation. Any expense incurred in connection with such activities
will be borne by such Grantor.
(h) Each Grantor shall use proper statutory notice in connection with its
use of each of its patents, registered trademarks and service marks, and
copyrights contained in Schedule I, II or III (except for those which
individually and in the aggregate are immaterial to the Grantor's business).
(i) Each Grantor shall take all steps which it or, following the occurrence
and during the continuance of a Default or an Event of Default, the
Administrative Agent deems reasonable and appropriate under the circumstances to
preserve and protect its Intellectual Property Collateral, which is material to
such Grantor's business, including, without limitation, maintaining the quality
of any and all products or services used or provided in connection with any of
the Intellectual Property Collateral, consistent with the quality of the
products and services as of the date hereof, and taking all steps reasonably
appropriate to ensure that all licensed users of any of the Intellectual
Property Collateral use such consistent standards of quality.
SECTION 6. Transfers and Other Liens.
Each of the Grantors agrees that it shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Intellectual Property Collateral except as expressly
permitted by the Credit Agreement, or (ii) create or suffer to exist any Lien
upon or with respect to any of the Intellectual Property Collateral except for
the pledge, assignment and security interest created by this
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Agreement and except for Liens expressly permitted by Section 6.1 of the Credit
Agreement; provided, however, that this Section 6 shall not, unless an Event of
Default has occurred and is then continuing, prohibit, impair or limit the right
or ability of any Grantor to grant licenses in respect of any of the
Intellectual Property Collateral in the ordinary course of business.
SECTION 7. Administrative Agent Appointed Attorney-in-Fact.
Each of the Grantors hereby irrevocably appoints the Administrative Agent
such Grantor's attorney-in-fact, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, upon the occurrence
and during the continuance of an Event of Default and upon notice to such
Grantor to take any action and to execute any instrument that the Administrative
Agent may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Intellectual Property Collateral;
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and
(c) to file any claims or take any action or institute any proceedings
that the Administrative Agent may deem necessary or desirable to enforce
the rights of the Administrative Agent with respect to any of the
Intellectual Property Collateral.
SECTION 8. Administrative Agent May Perform.
If any of the Grantors fails to perform any agreement contained herein, the
Administrative Agent may itself, upon fifteen (15) days' notice to such Grantor,
perform, or cause performance of, such agreement, and the reasonable expenses of
the Administrative Agent incurred in connection therewith shall be borne by such
Grantor.
SECTION 9. The Administrative Agent's Duties.
The powers conferred on the Administrative Agent hereunder are solely to
protect its interest in the Intellectual Property Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Intellectual Property Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Administrative Agent shall have no
duty as to any Intellectual Property Collateral, whether or not the
Administrative Agent or any other Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Intellectual Property Collateral. The Administrative Agent shall exercise
reasonable care in the custody and preservation of any Intellectual Property
Collateral in its possession and shall accord such Intellectual Property
Collateral treatment equal to that which the Administrative Agent accords its
own property.
SECTION 10. Remedies.
If any Event of Default shall have occurred and be continuing:
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(a) The Administrative Agent may exercise in respect of the
Intellectual Property Collateral, in addition to other rights and remedies
provided for herein or in any other Loan Document or otherwise available to
it, all the rights and remedies of a secured party upon default under the
New York Uniform Commercial Code in effect in the State of New York at such
time (the "N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform
Commercial Code applies to the affected Intellectual Property Collateral)
and also may (i) require any and all of the Grantors to, and each Grantor
hereby agrees that it will at its expense and upon request of the
Administrative Agent forthwith, assemble all or part of the documents and
things embodying any part of the Intellectual Property Collateral as
directed by the Administrative Agent and make them available to the
Administrative Agent at a place and time to be designated by the
Administrative Agent; (ii) without notice except as specified below and as
required by law, sell the Intellectual Property Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Administrative Agent may
deem commercially reasonable; and (iii) occupy any premises owned or leased
by any Grantor where documents and things embodying the Intellectual
Property Collateral or any part thereof are assembled or located for a
reasonable period in order to effectuate its rights and remedies hereunder
or under law, without obligation to such Grantor in respect of such
occupation. In the event of any sale, assignment, or other disposition of
any of the Intellectual Property Collateral, the goodwill of the business
connected with and symbolized by any of the Intellectual Property
Collateral subject to such disposition will be included, and such Grantor
will supply to the Administrative Agent or its designee such Grantor's
know-how and expertise, and documents and things embodying the same,
relating to the manufacture, distribution, advertising and sale of products
or the provision of services relating to any Intellectual Property
Collateral subject to such disposition and, including, but not limited to,
such Grantor's customer lists and other records and documents relating to
such Intellectual Property Collateral and to the manufacture, distribution,
advertising and sale of such products and services. Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten
(10) days' written notice to such Grantor of the time and place of any
public sale or the time after which any private sale is to be made will
constitute reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Intellectual Property Collateral regardless
of notice of sale having been given. The Administrative Agent may adjourn
any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice except
as required by law, be made at the time and place to which it was so
adjourned.
(b) All cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon, all or any part
of the Intellectual Property Collateral may, in the discretion of the
Administrative Agent, be held by the Administrative Agent as collateral
for, and/or then or at any time thereafter applied (after payment of any
amounts payable to the Administrative Agent pursuant to Section 11(b)), in
whole or in part, by the Administrative Agent, for the ratable benefit of
the Secured Parties against all or any part of the Secured Obligations in
such order as the Loan Documents may require and otherwise as the
Administrative Agent may elect. Any surplus of such cash or cash proceeds
held by the Administrative Agent and remaining after payment in full of all
of the Secured Obligations shall be paid over to the applicable Grantors or
to whomever may be lawfully entitled to receive such surplus.
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(c) The Administrative Agent may exercise any and all rights and
remedies of any of the Grantors in respect of the Intellectual Property
Collateral.
(d) All payments received by any Grantor in respect of the
Intellectual Property Collateral shall be received in trust for the benefit
of the Administrative Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent in the
same form as so received (with any necessary or desirable endorsement or
assignment).
SECTION 11. Indemnity and Expenses.
(a) Each of the Grantors hereby jointly or severally agrees to indemnify
the Administrative Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Administrative Agent's gross negligence or willful misconduct
as determined by a final non-appealable judgment of a court of competent
jurisdiction.
(b) The Borrowers will, upon demand, pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use, or operation of, or the sale of, collection
from or other realization upon, any of the Intellectual Property Collateral,
(iii) the exercise or enforcement of any of the rights of the Administrative
Agent or the Lender Parties hereunder or (iv) the failure by any Grantor to
perform or observe any of the provisions hereof.
SECTION 12. Security Interest Absolute.
The obligations of each Grantor under this Agreement are independent of the
Secured Obligations, and a separate action or actions may be brought and
prosecuted against any or all Grantors to enforce this Agreement, irrespective
of whether any action is brought against the Borrowers or whether the Borrowers
are joined in any such action or actions. All rights of the Administrative Agent
and the pledge, assignment and security interest hereunder, and all obligations
of each Grantor hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement, instrument or document relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
amendment, restatement or other modification or waiver of or any consent to
any departure from any Loan Document, including, without limitation, any
increase in the Secured Obligations resulting from the extension of
additional credit to the Borrowers or any Grantor or any of their
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment, restatement, other
modification or waiver of or consent to any departure from any guaranty,
for all or any of the Secured Obligations;
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(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Borrowers, any Grantor or any of their
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrowers or any Grantor or any of their
Subsidiaries; or
(f) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or a third party grantor of a
security interest.
SECTION 13. Amendments; Waivers; Supplements; Etc.
(a) No amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent and the Grantors, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(b) No failure on the part of the Administrative Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(c) Upon the execution and delivery by any Person of an intellectual
property security agreement supplement, in each case in substantially the form
of Exhibit A hereto (each an "Intellectual Property Security Agreement
Supplement"), (i) such Person shall be referred to as an "Additional Grantor"
and shall be and become a Grantor, and each reference in this Agreement to
"Grantor" shall also mean and be a reference to such Additional Grantor and each
reference in any other Loan Document to a "Grantor" or a "Loan Party" shall also
mean and be a reference to such Additional Grantor, and (ii) the annexes
attached to each Intellectual Property Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules I, II, III and
IV, as appropriate, hereto and the Administrative Agent may attach such annexes
as supplements to such Schedules, and each reference to such Schedules shall
mean and be a reference to such Schedules, as so supplemented.
SECTION 14. Addresses for Notices.
All notices and other communications provided for hereunder shall be in
writing (including telegraphic, telecopy or telex communication) and, mailed,
telegraphed, telecopied, telexed or delivered, if to any Grantor, addressed to
it at the address set forth below its name on the signature pages hereof; if to
any Additional Grantor, addressed to it at the address set forth below its name
on the signature page to the Intellectual Property Security Agreement Supplement
executed and delivered by such Additional Grantor; if to the Administrative
Agent, addressed to it at its address set forth in Section 11.2 of the Credit
Agreement; or, as to each other party, at such other address as shall be
designated by such party in a written notice to the Grantors and the
Administrative Agent. All such notices and communications shall be effective
three (3) Business Days after being mailed by certified mail, return receipt
requested, two (2) Business Days after being deposited with a recognized
overnight delivery service with all charges prepaid or billed to the account of
the sender, upon
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delivery to the telegraph company, upon personal delivery or transmission by
telecopier or upon confirmation by telex answerback, respectively, addressed as
aforesaid.
SECTION 15. Continuing Security Interest, Assignments.
This Agreement shall create a continuing security interest in the
Intellectual Property Collateral and shall (a) remain in full force and effect
until the latest of (i) the indefeasible payment in full in cash of all of the
Secured Obligations, (ii) the expiration, termination or cancellation of all of
the Letters of Credit and (iii) the date of termination in whole of all
Commitments under the Credit Agreement, (b) be binding upon each Grantor, its
successors and assigns and (c) inure, together with the rights and remedies of
the Administrative Agent hereunder, to the benefit of the Lender Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may, subject to and in
accordance with the requirements of the Credit Agreement, assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 11.7 of the Credit Agreement).
SECTION 16. Release and Termination.
(a) Upon any sale, lease, transfer or other disposition of any item of
Intellectual Property Collateral (subject to compliance, if required, with any
terms of the Loan Documents), the Administrative Agent will, at the Grantors'
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Intellectual
Property Collateral from the assignment and security interest granted hereby;
provided, however, that (i) at the time of such request and such release, no
Default shall have occurred and be continuing, (ii) such Grantor shall have
delivered to the Administrative Agent, at least ten (10) days prior to the date
of the proposed release, a written request for release describing the item of
Intellectual Property Collateral and the terms of the sale, lease, transfer or
other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a form of release for execution
by the Administrative Agent and a certification by such Grantor to the effect
that the transaction is in compliance with the Loan Documents and as to such
other matters as the Administrative Agent may reasonably request and (iii) the
proceeds of any such sale, lease, transfer or other disposition required to be
applied in accordance with Section 2.6 of the Credit Agreement shall be paid to,
or in accordance with the instructions of, the Administrative Agent at the
closing or thereafter, as the case may be.
(b) Upon the latest of (i) the indefeasible payment in full in cash of the
Secured Obligations, (ii) the expiration, termination or cancellation (or full
cash collateralization thereof as provided in the Credit Agreement) of all of
the Letters of Credit and (iii) the date of termination in whole of all
Commitments under the Credit Agreement, the pledge, assignment and security
interest granted by each of the Grantors hereby shall terminate and all rights
to the Intellectual Property Collateral shall revert to the appropriate Grantor.
Upon any such termination, the Administrative Agent will, upon receipt of a
written request and at the Grantors' expense, execute and deliver to the
appropriate Grantor such documents as such Grantor shall reasonably request to
evidence such termination, and shall return to the appropriate Grantor all
Intellectual Property Collateral in the Administrative Agent's possession or
under its control.
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(c) To the extent any one or more provisions of this Agreement shall
conflict with one or more provisions in the Credit Agreement, the provisions of
the Credit Agreement shall control and supersede any such conflicting
provision(s) of this Agreement.
SECTION 17. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be as effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 18. Governing Law; Terms.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York (without giving effect to its conflicts of law
principles), except to the extent that the validity or perfection of the
security interest hereunder, or remedies hereunder, in respect of the
Intellectual Property Collateral are governed by the laws of a jurisdiction
other than the State of New York. Unless otherwise defined herein or in the
Credit Agreement, terms used in Article 9 of the N.Y. Uniform Commercial Code
are used herein as therein defined.
SECTION 19. Amendment and Restatement; Reaffirmation of Continuing
Security.
This Agreement amends and restates in its entirety the Intellectual
Property Security Agreement, originally dated December 31, 1998, by and among
MediaBay, the other Loan Parties party thereto and Fleet National Bank, as
Administrative Agent, which Intellectual Property Security Agreement continues
in effect as so amended and restated as set forth herein. Without limiting the
generality of the immediately preceding sentence, the Liens granted under the
Intellectual Property Security Agreement as so amended and restated as set forth
herein shall in all respects be and remain continuing, securing the payment of
all Obligations. MediaBay and the other Loan Parties party to the Intellectual
Property Security Agreement as so amended and restated as set forth herein,
hereby reaffirm the security interests and Liens granted to the Administrative
Agent for its benefit and the ratable benefit of the other Secured Parties
pursuant to the Intellectual Property Security Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MEDIABAY, INC.
By:_________________________________
Title:______________________________
Address:
XXXXX XXXXXXX, INC.
By:_________________________________
Title:______________________________
Address:
AUDIO BOOK CLUB, INC.
By:_________________________________
Title:______________________________
Address:
XXXXXXXX.XXX, INC.
By:_________________________________
Title:______________________________
Address:
XXXXXXXXXXXXX.XXX, INC.
By:_________________________________
Title:______________________________
Address:
ABC-COA ACQUISITION CORP.
By:_________________________________
Title:______________________________
Address:
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MEDIABAY SERVICES, INC.
By:_________________________________
Title:______________________________
Address:
VIDEO YESTERYEAR, INC.
By:_________________________________
Title:______________________________
Address:
ABC INVESTMENT CORP.
By:_________________________________
Title:______________________________
Address:
MEDIABAY PUBLISHING, INC.
By:_________________________________
Title:______________________________
Address:
RADIO CLASSICS, INC.
By:_________________________________
Title:______________________________
Address:
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