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EXHIBIT 10.54
SECURITY AGREEMENT
AGREEMENT dated as of November 4, 1997 among DOVE ENTERTAINMENT, INC., a
California corporation ("Dove"), DOVE FOUR POINT, INC., a Florida corporation
("Four Point") and DOVE INTERNATIONAL, INC., a California corporation ("Dove
International" and, together with Dove and Four Point, individually and
collectively, the "Borrower"), and MEDIA EQUITIES INTERNATIONAL, LLC, a New York
limited liability company ("MEI").
W I T N E S S E T H:
WHEREAS, Dove has entered into that certain Credit, Security and Pledge
Agreement (the "Credit Agreement"), dated as of the date hereof, among Dove, the
Guarantors named therein and The Chase Manhattan Bank ("Chase").
WHEREAS, Xxxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx, Xxxxx
Xxxxxx and Xxxxxx Xxxxxxxxxx (collectively, the "MEI Principals") are, directly
or indirectly, all of the beneficial owners of MEI.
WHEREAS, it is a condition to the effectiveness of the Credit Agreement
that the MEI Principals guaranty a portion of the obligations of Dove under the
Credit Agreement, as more fully described in the Credit Agreement and the
Guaranty Agreement (as such terms is defined in the Credit Agreement).
WHEREAS, Dove has entered into a certain Fee Agreement of even date
hereof with MEI, pursuant to which Dove agreed to pay the sum of $25,000 per
year and to promptly reimburse MEI if any of the MEI Principals make any
payments to Chase pursuant to a Guaranty Agreement (the "Fee Agreement").
WHEREAS, it is a condition precedent to the making of the Guaranty
Agreement that Borrower shall have granted the security interests contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the MEI Principals to make the guarantees under the Guaranty Agreement, Borrower
hereby agrees with MEI, as follows:
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SECTION I. Definitions
A. Certain Defined Terms. Terms defined in the Credit Agreement and
not otherwise defined herein have the respective meanings provided for in the
Credit Agreement.
The following terms, as used herein, have the meanings set forth below:
"Collateral" has the meaning assigned to that term in Section 2.
"Documents" means all "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing goods now owned or hereafter
acquired by Borrower.
"Proceeds" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, any
Collateral including, without limitation, all claims of Borrower against third
parties for loss of, damage to or destruction of, or for proceeds payable under,
or unearned premiums with respect to, policies of insurance with respect to any
Collateral, and any condemnation or requisition payments with respect to any
Collateral, in each case whether now existing or hereafter arising.
"Secured Obligations" has the meaning assigned to that term in Section
3.
"Security Interests" means the security interests granted pursuant to
Section 2, as well as all other security interests created or assigned as
additional security for the Secured Obligations pursuant to the provisions of
this Agreement.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of New York, provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral or the availability of any remedy hereunder
is governed by the Uniform Commercial Code as in effect on or after the date
hereof in any other jurisdiction, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or availability of
such remedy.
B. Other Definition Provisions. References to "Subsections",
"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.A. may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. All references to statutes and related regulations shall
include (unless otherwise specifically provided herein) any amendments of same
and any successor statutes and regulations.
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SECTION II. Grant of Security Interests
In order to secure the payment and performance of the Secured
Obligations in accordance with the terms thereof, each of Dove, Four Point and
Dove International hereby grants to MEI a continuing security interest,
subordinated as provided in the Subordination Agreement among Borrower, MEI, the
MEI Principals and Chase dated as of November 4, 1997 (the "Subordination
Agreement"), in and to all of their right, title and interest in the following
property, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the
"Collateral"):
All of the Borrowers' right, title and interest in personal property,
tangible and intangible, wherever located or situated and whether now owned or
hereafter acquired or created, including but not limited to goods, accounts,
intercompany obligations, partnership and joint venture interests, contract
rights, documents, chattel paper, general intangibles, goodwill, equipment,
inventory, investment property, instruments, copyrights, trademarks, trade
names, insurance proceeds, cash and deposit accounts and any proceeds thereon,
products thereof or income therefrom, further including but not limited to all
of such Borrowers' rights, title and interest in and to each and every item and
type of Product and Recorded Product, the scenario, screenplay or script upon
which an item of Product is based, all of the properties thereof, tangible and
intangible, and all domestic and foreign copyrights and all other rights therein
and thereto, of every kind and character, whether now in existence or hereafter
to be made or produced, and whether or not in possession of such Borrower,
including with respect to each and every item of Product and/or Recorded Product
and without limiting the foregoing language, each and all of the following
particular rights and properties (to the extent they are owned or hereafter
created or acquired by such Borrower):
(i) all scenarios, screenplays and/or scripts at every stage
thereof;
(ii) all common law and/or statutory copyright and other
rights in all literary and other properties (hereinafter
called "said literary properties") which form the basis
of each item of Product and/or Recorded Product and/or
which are and/or will be incorporated into each item of
Product and/or Recorded Product, all component parts of
each item of Product and/or Recorded Product consisting
of said literary properties, all rights in and to the
story, all treatments of said story and said literary
properties, together with all preliminary and final
screenplays used and to be used in connection with the
item of Product and/or Recorded Product, and all other
literary material upon which the item of Product and/or
Recorded Product is based or from which it is adapted;
(iii) all rights in and to all music and musical compositions
used and to be used in each item of Product and/or
Recorded Product, including, each without limitation,
all rights to record, rerecord, produce, reproduce or
synchronize all of said music and musical compositions
in and in connection therewith;
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(iv) all tangible personal property relating to each item of
Product and/or Recorded Product, including, without
limitation, all exposed film, developed film, positives,
negatives, prints, positive prints, answer prints,
special effects, preparing materials (including
interpositives, duplicate negatives, internegatives,
color reversals, intermediates, lavenders, fine grain
master prints and matrices, and all other forms of
pre-print elements), sound tracks, cutouts, trims and
any and all other physical properties of every kind and
nature relating to such item of Product and/or Recorded
Product, whether in completed form or in some state of
completion, and all masters, duplicates, drafts,
versions, variations and copies of each thereof, in all
formats whether on film, videotape, disk or otherwise
and all music sheets and promotional materials relating
to such item of Product and/or Recorded Product
(collectively, the "Physical Materials");
(v) all collaterals, allied, subsidiary and merchandising
rights appurtenant or related to each item of Product
and/or Recorded Product including, without limitation,
the following rights: all rights to produce remakes or
sequels or prequels to each item of Product and/or
Recorded Product based upon each item of Product and/or
Recorded Product, said literary properties or the theme
of each item of Product and/or Recorded Product and/or
the text or any part of said literary properties; all
rights throughout the world to broadcast, transmit
and/or reproduce by means of television (including
commercially sponsored, sustaining and subscription or
"pay" television) or by any process analogous thereto,
now known or hereafter devised, each item of Product
and/or Recorded Product or any remake or sequel or
prequel to the item of Product and/or Recorded Product;
all rights to produce primarily for television or
similar use a motion picture or series of motion
pictures, by use of film or any other recording device o
medium now known or hereafter devised, based upon each
item of Product and/or Recorded Product, said literary
properties or any part thereof, including, without
limitation, based upon any script, scenario or the like
used in each item of Product and/or Recorded Product;
all merchandising rights including, without limitation,
all rights to use, exploit and license others to use and
exploit any and all commercial tie-ups of any kind
arising out of or connected with said literary
properties, each item of Product and/or Recorded
Product, the title or titles of each item of Product
and/or Recorded Product, the characters of each item of
Product and/or Recorded Product or said literary
properties and/or the names or characteristics of said
characters and including further, without limitation,
any and all commercial exploitation in connection with
or related to each item of Product and/or Recorded
Product, any remake or sequel thereof and/or said
literary properties;
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(vi) all statutory copyrights, domestic and foreign, obtained
or to be obtained on each item of Product and/or
Recorded Product, together with any and all copyrights
obtained or to be obtained in connection with each item
of Product and/or Recorded Product or any underlying or
component elements of each item of Product and/or
Recorded Product, including in each case without
limitation, all copyrights on the property described in
subparagraphs (I) through (v) inclusive, of this
paragraph, together with the right to copyright (and all
rights to renew or extend such copyrights) and the right
to xxx in the name of any Borrower for past, present and
future infringements of copyright;
(vii) all insurance policies and completion bonds connected
with each item of Product and/or Recorded Product and
all proceeds which may be derived therefrom;
(viii) all rights to distribute, sell, rent, license the
exhibition of and otherwise exploit and turn to account
each item of Product and/or Recorded Product, the
Physical Materials and rights in and to said story,
other literary material upon which each item of Product
and/or Recorded Product is based or from which it is
adapted, and said music and musical compositions used or
to be used in each item of Product and/or Recorded
Product;
(ix) any and all sums, proceeds, money, products, profits or
increases, including money profits or increases (as
those terms are used in the UCC or otherwise) or other
property obtained or to be obtained from the
distribution, exhibition, sale or other uses or
dispositions of each item of Product and/or Recorded
Product or any part of each item of Product and/or
Recorded Product, including, without limitation, all
proceeds, profits, products and increases, whether in
money or otherwise, from the sale, rental or licensing
of each item of Product and/or Recorded Product
including from collateral, allied, subsidiary and
merchandising rights;
(x) the dramatic, nondramatic, stage, television, radio and
publishing rights, title and interest in and to each
item of Product and/or Recorded Product, and the right
to obtain copyrights and renewals of copyrights therein;
(xi) the name or title of each item of Product and/or
Recorded Product and all rights of such Borrower to the
use thereof; including, without limitation, rights
protected pursuant to trademark, service xxxx, unfair
competition and/or the rules and principles of law and
of any other applicable statutory, common law, or other
applicable statutes, common law, or other rule or
principle of law;
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(xii) any and all contract rights and/or chattel paper which
may arise in connection with each item of Product and/or
Recorded Product;
(xiii) all accounts and/or other rights to payment which such
Borrower presently owns or which may arise in favor of
such Borrower in the future, including, without
limitation, any refund under a completion guaranty, all
accounts and/or rights to payment due from exhibitors in
connection with the distribution of each item of Product
and/or Recorded Product, and from exploitation of any
and all of the collateral, allied, subsidiary,
merchandising and other rights in connection with item
of Product and/or Recorded Product;
(xiv) any and all "general intangibles" (as that term is
defined in the UCC) not elsewhere included in this
definition, including, without limitation, any and all
general intangibles consisting of any right to payment
which may arise in the distribution or exploitation of
any of the rights set out herein, and any and all
general intangible rights in favor of such Borrower for
services or other performances by any third parties,
including actors, writers, directors, individual
producers and/or any and all other performing or
nonperforming artists in any way connected with each
item of Product and/or Recorded Product, any and all
general intangible rights in favor of such Borrower
relating to licenses of sound or other equipment,
licenses for any photograph or photographic process, and
all general intangibles related to the distribution or
exploitation of each item of Product and/or Recorded
Product including general intangibles related to or
which grow out of the exhibition of each item of Product
and/or Recorded Product and the exploitation of any and
all other rights in each item of Product and/or Recorded
Product set out in this definition;
(xv) any and all goods including inventory (as that term is
defined in the UCC) which may arise in connection with
the creation, production or delivery of each item of
Product and/or Recorded and which goods pursuant to any
production or distribution agreement or otherwise are
owned by such Borrower;
(xvi) all and each of the rights, regardless of denomination,
which arise in connection with the creation, production,
completion of production, delivery, distribution, or
other exploitation of each item of Product and/or
Recorded Product, including, without limitation, any and
all rights in favor of such Borrower, the ownership or
control of which are or may become necessary or
desirable, in the opinion of MEI, in order to complete
production of each item of Product and/or Recorded
Product in the event that MEI exercises any rights it
may have to take over and complete production of each
item of Product and/or Recorded Product;
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(xvii) any and all documents issued by any pledgeholder or
bailee with respect to the item of Product and/or
Recorded Product or any Physical Materials (whether or
not in completed form) with respect thereto;
(xviii) any and all production accounts or other bank accounts
established by such Borrower with respect to such item
of Product and/or Recorded Product;
(xix) any and all rights of such Borrower under contracts
relating to the production or acquisition of such item
of Product and/or Recorded Product;
(xx) any and all rights of such Borrower under Distribution
Agreements relating to each item of Product and/or
Recorded Product; and
(xxi) Proceeds of all or any of the foregoing;
provided, that, notwithstanding anything to the contrary contained above,
"Collateral" shall not include the "Real Property" described in the Deed of
Trust dated April 24, 1996 among the Borrower, Asahi Bank of California and
North America Title Company, as Trustee, and the "Accounts" described in the
Assignment of Rents dated April 24, 1996 between the Borrower and Asahi Bank of
California.
SECTION III. Security for Obligations
This Agreement secures the payment and prompt performance of Dove
pursuant to the Fee Agreement and all obligations of Borrower now or hereafter
existing under this Agreement and all renewals, extensions, restructurings and
refinancings of any of the above (all such debts, obligations and liabilities of
Borrower being collectively called the "Secured Obligations").
SECTION IV. Borrower Remains Liable
Anything herein to the contrary notwithstanding: (a) Borrower shall
remain liable under the contracts and agreements included in the Collateral 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 MEI of any of the rights hereunder shall not release Borrower
from any of its duties or obligations under the contracts and agreements
included in the Collateral; and (C) MEI shall not have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall MEI be obligated to perform any of the
obligations or duties of Borrower thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
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SECTION V. Representations and Warranties
Borrower represents and warrants as follows:
A. Binding Obligation. This Agreement is the legally valid and
binding obligation of Borrower, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws or equitable principles relating to
or limiting creditor's rights generally.
B. Location of Tangible Personal Property. All of the tangible
personal property is located at the places specified on Schedule I.
C. Ownership of Collateral; Bailees. Except for matters disclosed on
Schedule II, other than Permitted Encumbrances and the Security Interests,
Borrower owns the Collateral free and clear of any Lien. No effective financing
statement or other form of lien notice covering all or any part of the
Collateral is on file in any recording office, except for those in favor of
Chase and MEI and as disclosed on Schedule II.
D. Office Locations; Fictitious Names. The chief place of business,
the chief executive office and the office where Borrower keeps its books and
records are located at the places specified on Schedule I. Borrower does not do
business and has not done business during the past five years under any
trade-name or fictitious business name except as disclosed on Schedule III.
E. Perfection. This Agreement creates a valid, perfected and, except
for the Permitted Encumbrances, and the security interest in favor of Chase
pursuant to the Credit Agreement, a first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
F. Governmental Authorizations; Consents. No authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or consent of any other Person (including without limitation
any Licensor of Intellectual Property or party to any Assigned Agreement) is
required either (a) for the grant by Borrower of the security interest granted
hereby or for the execution, delivery or performance of this Agreement by
Borrower or (b) for the perfection of or the exercise by MEI of its rights and
remedies hereunder (except as may have been taken by or at the direction of
Borrower or MEI).
G. Accounts. Each Account constitutes the legally valid and binding
obligation of the customer obligated to pay the same. No customer has any
defense, set-off, claim or counterclaim against Borrower that can be asserted
against MEI, whether in any proceeding to enforce MEI's rights in the Collateral
or otherwise except defenses, set-offs, claims or counterclaims that are not, in
the aggregate, material to the value of the accounts. None of the accounts is
evidenced by a promissory note or other instrument other than a check.
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H. Intellectual Property. The copyrights and copyright licenses
constitute all of the intellectual property owned by Borrower.
I. Accurate Information. All information heretofore, herein or
hereafter supplied to MEI by or on behalf of Borrower with respect to the
Collateral is and will be accurate and complete in all material respects.
J. Credit Agreement Warranties. Each representation and warranty set
forth in the Credit Agreement is true and correct in all material respects and
such representations and warranties are hereby incorporated herein by this
reference with the same effect as though set forth in their entirety herein.
SECTION VI. Further Assurances; Covenants
A. Other Documents and Actions. Borrower will, from time to time, at
its expense, promptly execute and deliver all further instruments and documents
and take all further action that may be necessary or desirable, or that MEI may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable MEI to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Borrower will: (a) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as MEI may request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby; (b) at any reasonable time, upon demand by MEI exhibit the
Collateral to allow inspection of the Collateral by MEI or persons designated by
MEI; and (c) upon MEI's request, appear in and defend any action or proceeding
that may affect Borrower's title to or MEI's security interest in the
Collateral.
X. XXX Authorized. Borrower hereby authorizes MEI to file one or
more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral without the signature of
Borrower where permitted by law.
C. Corporate or Name Change. Borrower will notify MEI promptly in
writing prior to any change in Borrower's name, identity or corporate structure.
D. Business Locations. Borrower will keep the Collateral at the
locations specified on Schedule I. Borrower will give MEI thirty (30) days prior
written notice of any change in Borrower's chief place of business or of any new
location of business or any new location for any of the Collateral. With respect
to any new location (which in any event shall be within the continental United
States), Borrower will execute such documents and take such actions as XXX xxxxx
necessary to perfect and protect the Security Interests.
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E. Collateral Description. Borrower will furnish to MEI, from time
to time, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as MEI may
reasonably request, all in reasonable detail.
F. Records of Collateral. Borrower shall keep full and accurate
books and records relating to the Collateral and shall stamp or otherwise xxxx
such books and records in such manner as MEI may reasonably request indicating
that the Collateral is subject to the Security Interests.
G. Other Information. Borrower will, promptly upon request, provide
to MEI all information and evidence it may reasonably request concerning the
Collateral, and in particular the Accounts, to enable MEI to enforce the
provisions of this Agreement.
SECTION VII. MEI Appointed Attorney-in-Fact
Subject to the terms of the Intercreditor Agreement, if Dove is in
default of any of its obligations under the Fee Agreement and during the
continuance thereof, Borrower hereby irrevocably MEI as Borrower's
attorney-in-fact, with full authority in the place and stead of Borrower and in
the name of Borrower, MEI or otherwise, from time to time in MEI's discretion to
take any action and to execute any instrument that MEI may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation:
(i) to obtain and adjust insurance required to be paid to
MEI;
(ii) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the
Collateral;
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection
with clauses (a) and (b) above;
(iv) to file any claims or take any action or institute any
proceedings that MEI may deem necessary or desirable for
the collection of any of the Collateral or otherwise to
enforce the rights of MEI with respect to any of the
Collateral;
(v) to pay or discharge taxes or Liens, levied or placed upon
or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge
the same to be determined by MEI in its sole discretion,
and such payments made by MEI to become obligations of
Borrower to MEI, due and payable immediately without
demand;
(vi) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts,
assignments, verifications and notices in
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connection with Accounts and other documents (including
without limitation financing statements, continuation
statements and other documents necessary or advisable to
perfect the Security Interests) relating to the
Collateral; and
(vii) generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the
Collateral as fully and completely as though MEI were the
absolute owner thereof for all purposes, and to do, at
MEI's option and Borrower's expense, at any time or from
time to time, all acts and things that XXX xxxxx necessary
to protect, preserve or realize upon the Collateral.
Borrower hereby ratifies and approves all acts of MEI made or taken pursuant to
this Section 7. Neither MEI nor any person designated by MEI shall be liable for
any acts or omissions or for any error of judgment or mistake of fact or law.
This power, being coupled with an interest, is irrevocable so long as this
Agreement shall remain in force.
SECTION VIII. Transfers and Other Liens
Except as otherwise permitted by the Credit Agreement, Borrower 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 Collateral, except that Borrower may sell
inventory in the ordinary course of business.
(ii) Create or suffer to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of
the Collateral to secure indebtedness of any Person except
for the security interest created by this Agreement or
permitted under the Credit Agreement, except with written
permission of MEI.
SECTION IX. Remedies
Subject to the terms of the Subordination Agreement, if Dove is in
default of any of its obligations under the Fee Agreement or an Event of Default
has occurred and such default is continuing, MEI may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may: (a) require Borrower to, and Borrower hereby agrees
that it will, at its expense and upon request of MEI forthwith, assemble all or
part of the Collateral as directed by MEI and make it available to MEI at a
place to be designated by MEI which is reasonably convenient to both parties;
(b) without notice or demand or legal process, enter upon any premises of
Borrower and take possession of the
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Collateral; and (C) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of MEI's offices or elsewhere, at such time or times, for cash, on credit
or for future delivery, and at such price or prices and upon such other terms as
MEI may deem commercially reasonable. Borrower agrees that, to the extent notice
of sale shall be required by law, at least ten days notice to Borrower of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. At any sale of the Collateral,
if permitted by law, MEI may bid (which bid may be, in whole or in part, in the
form of cancellation of indebtedness) for the purchase of the Collateral or any
portion thereof for the account of MEI (on behalf of MEI). MEI shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. MEI may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the extent permitted by law, Borrower hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under any law now
existing or hereafter enacted.
SECTION X. Limitation on Duty of MEI with Respect to Collateral
Beyond the safe custody thereof, MEI shall have no duty with respect to
any Collateral in its possession or control (or in the possession or control of
any MEI or bailee) or with respect to any income thereon or the preservation of
rights against prior parties or any other rights pertaining thereto. MEI shall
be deemed to have exercised reasonable care in the custody and preservation of
the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property. MEI shall not be
liable or responsible for any loss or damage to any of the Collateral, or for
any diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other MEI or bailee
selected by MEI in good faith.
SECTION XI. Application of Proceeds
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral shall be applied as set forth in the Credit Agreement and/or the
Subordination Agreement, whichever is applicable.
SECTION XII. Expenses
Borrower shall pay all insurance expenses and all expenses of
protecting, storing, warehousing, appraising, insuring, handling, maintaining
and shipping the Collateral, all costs, fees and expenses of perfecting and
maintaining the Security Interests, and any and all excise, property, sales and
use taxes imposed by any state, federal or local authority on any of the
Collateral, or with respect to periodic appraisals and inspections of the
Collateral, or with respect to the sale or other disposition thereof. If
Borrower fails promptly to pay any portion of the above expenses when due
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or to perform any other obligation of Borrower under this Agreement, MEI or any
other MEI may, at its option, but shall not be required to, pay or perform the
same and charge Borrower's account for all costs and expenses incurred therefor,
and Borrower agrees to reimburse MEI or such MEI therefor on demand. All sums so
paid or incurred by MEI or any other MEI for any of the foregoing, any and all
other sums for which Borrower may become liable hereunder and all costs and
expenses (including attorneys' fees, legal expenses and court costs) incurred by
MEI or any other MEI in enforcing or protecting the Security Interests or any of
their rights or remedies under this Agreement shall be payable on demand, shall
constitute Obligations, shall bear interest until paid at the highest rate
provided in the Credit Agreement and shall be secured by the Collateral.
SECTION XIII. Termination of Security Interests; Release of Collateral
Upon payment in full of all Secured Obligations and the termination of
all commitments under the Fee Agreement and the Guaranty Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to
Borrower. Upon such termination of the Security Interests or release of any
Collateral, MEI will, at the expense of Borrower, execute and deliver to
Borrower such documents as Borrower shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be.
SECTION XIV. Notices
Notices and other communications provided for herein shall be in writing
and shall be delivered or mailed (or if by telecopier, delivered by such
equipment) addressed (I) if to the Borrower, to it at 0000 Xxxxxxx Xxxxxxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxxxx Xxxxxx, Esq. and Xxxxxx Xxxxxxxxxx,
Facsimile No.: (000) 000-0000, (ii) if to MEI, to it c/o Xxxxx Xxxxxx, H.A.M.
Media Group LLC, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
Facsimile No.: (000) 000-0000, (with a copy to Xxxxxxxx Xxxxx Singer &
Xxxxxxxxx, LLP, 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxx X. Xxxxxxx, Esq., Facsimile No.: (000) 000-0000) or such other address as
such party may from time to time designate by giving written notice to the other
party hereunder. All notices and other communications given to any party hereto
in accordance with the provisions of this Security Agreement shall be deemed to
have been on the fifth Business Day after the date when sent by registered or
certified mail, postage prepaid, return receipt requested, if by mail, or when
receipt is acknowledged, if by telecopier, in each case addressed to such party
as provided in this Section 14 or in accordance with the latest unrevoked
written direction from such party.
SECTION XV. Waivers, Non-Exclusive Remedies
No failure on the part of MEI to exercise, and no delay in exercising
and no course of dealing with respect to, any right under the Credit Agreement
or this Agreement shall operate as a waiver
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thereof; nor shall any single or partial exercise by MEI of any right under the
Credit Agreement or this Agreement preclude any other or further exercise
thereof or the exercise of any other right. The rights in this Agreement and the
Credit Agreement are cumulative and are not exclusive of any other remedies
provided by law.
SECTION XVI. Successors and Assigns
This Agreement is for the benefit of MEI and it successors and assigns,
and in the event of an assignment of all or any of the Secured Obligations, the
rights hereunder, to the extent applicable to the Secured Obligations so
assigned, may be transferred with such Secured Obligations. This Agreement shall
be binding on Borrower and its successors and assigns.
SECTION XVII. Changes in Writing
No amendment, modification, termination or waiver of any provision of
this Agreement or consent to any departure by Borrower therefrom, shall in any
event be effective without the written concurrence of MEI and the Borrower.
SECTION XVIII. Applicable Law
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
SECTION XIX. Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of MEI in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or any other right, power or privilege. All rights
and remedies existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION XX. Headings
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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SECTION XXI. Counterparts
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the day first above written.
DOVE ENTERTAINMENT, INC. MEDIA EQUITIES INTERNATIONAL, LLC
By: /s/ XXXX XXXXXX By: /s/ XXXXX XXXXXX
------------------------------- -------------------------------
Title: Chief Financial Officer Title: President
---------------------------- ----------------------------
DOVE FOUR POINT ENTERTAINMENT, INC.
By: /s/ XXXX XXXXXX
-------------------------------
Title: Chief Financial Officer
----------------------------
DOVE INTERNATIONAL, INC.
By: /s/ XXXX XXXXXX
-------------------------------
Title: Chief Financial Officer
----------------------------
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SCHEDULE I
0000 XXXXXXX XXXXXXXXX
XXX XXXXXXX, XX 00000
INTERNATIONAL CINE SERVICES, INC.
000 XXXXX XXXXXX
XXXXXXXX, XX 00000
BONDED ARCHIVES
0000 XXXXXX XXXXXX
XXXXXXX, XX 00000
LASER PACIFIC MEDIA CORP.
000 X. XXXXXXXX XXXX.
XXXXXXXXX, XX 00000
AMERICAN DIRECT MAIL
0000 XXXXXXX XXXXXXXXX
XXX XXXXXXX, XX 00000
GES EXPOSITION SERVICES
00000 XXXXXXXXXX XXXXXX
XXXXX XX XXXXXXX, XX 00000
XXXXXXX PRODUCTION SERVICES, INC.
0000 XXXXXXXXXX XXXXX
XXX XXXXXXX, XX 00000
KEEP IT SELF STORAGE
0000 XXXXXXX XXXXXX
XXX XXXX, XX 00000
SELECT STORAGE
000 XXXX XXXXXX 00
XXX XXXXXXX, XX 00000
MERCEDES
00 XXXXX XXXXXX
XXXXXXXX, XX
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SCHEDULE II
THE DIRECTORS GUILD AND THE SCREEN ACTORS GUILD WILL HAVE A FIRST PRIORITY
PERFECTED SECURITY INTEREST (AND RELATED FINANCING STATEMENTS) ON THE PROPERTY
OF DOVE FOUR POINT, INC. CONSISTING OF THE MADE FOR TELEVISION MOVIE KNOWN AS
"FUTURESPORT" AND ASSETS RELATED THERETO.
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SCHEDULE III
DOVE*
DOVE ENTERTAINMENT*
DOVE FOUR POINT*
DOVE INTERNATIONAL*
FOUR POINT
DOVE BOOKS*
DOVE AUDIO*
DOVE TELEVISION*
DOVE FRONTLIST
AUDIO SELECT
DOVE BOOKS ON TAPE
DOVE KIDS
OLIVE BRANCH
DOVE PICTURES, INC.
*NAMES WITH AN ASTERISK ARE NAMES CURRENTLY USED BY THE CREDIT
PARTIES.
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