Exhibit 10-3
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") is dated as of August 3,
2000 and entered into by and among AMERICOM USA, INC., a Delaware corporation
(the "Company"), the other Persons listed on the signature pages hereof (the
Company together with such other Persons, the "Grantors" and each a "Grantor"),
and AVV. GIACOMO TORRENTE of c/o Sylvia Quarnstrom, 51 West 69th Street, Apt.
5D, New York, New York 10023 ("Secured Party").
PRELIMINARY STATEMENTS:
(1) The Company has executed and delivered a promissory note, dated
as of the date hereof (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Note"), in favor of the Sterling
National Bank of New York (the "Bank"), evidencing a loan in the aggregate
principal amount of $1,000,000 made by the Bank to the Company (the "Loan").
(2) As collateral security for the Loan, the Company has entered
into a General Loan and Security Agreement, dated as of the date hereof (the
"Bank Security Agreement"), between the Company and the Bank, pursuant to which
the Company has granted to the Bank a first priority security interest in and
lien on the assets and property of the Company.
(3) As further security for the Loan, and at the request of the
Company and the Bank, Secured Party has (i) entered into a Guaranty of All
Liabilities and Security Agreement (the "Guaranty"), dated as of the date
hereof, between Secured Party and the Bank, and pursuant to and in accordance
with the Guaranty, Secured Party has guaranteed the obligations of the Company
under the Note and the Bank Security Agreement to the Bank and (ii) opened a
bank account with the Bank at the Bank's office in New York, in the name of
Secured Party, and deposited in such bank account the sum of $1,000,000 (the
"Deposit").
(4) In connection with the transactions contemplated by the Note and
the Guaranty and as a condition precedent to (i) the making of the Deposit by
Secured Party and (ii) the execution and delivery by Secured Party of the
Guaranty, Secured Party has requested that each Grantor execute and deliver this
Agreement to Secured Party.
(5) Each Grantor will derive substantial benefits from (i) the
making of the Deposit by Secured Party and (ii) the making of the Loan by the
Bank and the transactions contemplated by the Note and, accordingly, each
Grantor desires to execute and deliver this Agreement to satisfy the condition
described in the preceding paragraph (3).
NOW, THEREFORE, in consideration of the premises and in order to
induce Secured Party to make the Deposit and to enter into the Guaranty and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each Grantor hereby agrees with Secured Party as follows:
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1. Grant of Security. Each Grantor hereby assigns to Secured Party,
and hereby grants to Secured Party a second priority security interest in,
subject to and subordinate in all respects to the first and prior security
interest of the Bank therein, all of such Grantor's right, title and interest in
and to the following, in each case whether now or hereafter existing or in which
such Grantor now has or hereafter acquires an interest and wherever the same may
be located (the "Collateral"):
(a) all equipment in all of its forms, all parts thereof and all
accessions thereto (any and all such equipment, parts and accessions being the
"Equipment");
(b) all inventory in all of its forms (including (i) all goods held
by such Grantor for sale or lease or to be furnished under contracts of service
or so leased or furnished, (ii) all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in such Grantor's business, (iii) all goods in which
such Grantor has an interest in mass or a joint or other interest or right of
any kind, and (iv) all goods which are returned to or repossessed by such
Grantor) and all accessions thereto and products thereof (all such inventory,
accessions and products being the "Inventory") and all negotiable documents of
title (including warehouse receipts, dock receipts and bills of lading) issued
by any Person covering any Inventory (any such negotiable document of title
being a "Negotiable Document of Title");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any kind
and all rights in, to and under all security agreements, leases and other
contracts securing or otherwise relating to any such accounts, contract rights,
chattel paper, documents, instruments, general intangibles or other obligations
(any and all such accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other obligations being the "Accounts", and
any and all such security agreements, leases and other contracts being the
"Related Contracts");
(d) all deposit accounts, all funds from time to time held therein
and all certificates and instruments, if any, from time to time representing or
evidencing such accounts;
(e) all contracts and agreements to which such Grantor is now or may
hereafter become a party, as each such contract and agreement may be amended,
supplemented or otherwise modified from time to time (said contracts and
agreements, as so amended, supplemented or otherwise modified, being referred to
herein individually as an "Assigned Agreement" and collectively as the "Assigned
Agreements"), including (i) all rights of such Grantor to receive moneys due or
to become due under or pursuant to the Assigned Agreements, (ii) all rights of
such Grantor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Assigned Agreements, (iii) all claims of such
Grantor for damages arising out of any breach of or default under the Assigned
Agreements, and (iv) all rights of such Grantor to terminate, amend, supplement,
modify or exercise rights or options under the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder;
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(f) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including tax refunds, rights to
payment or performance, choses in action and judgments taken on any rights or
claims included in the Collateral);
(g) all business fixtures and storage and office facilities
constituting personal property, and all accessions thereto and products thereof;
(h) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon;
(i) all rights and interests in all trademarks, service marks,
tradenames, business names, and/or other business identifiers pertaining to such
Grantor's business and application therefor (collectively, the "Trademarks")
that are presently, or in the future may be, owned, held or used by such
Grantor, in whole or in part (including the Trademarks specifically identified
in Schedule I annexed hereto, as the same may be amended pursuant hereto from
time to time), and including all common law and other rights in and to the
Trademarks in the United States and any state thereof and in all foreign
countries (the "Trademark Rights") and all federal, state and foreign
registrations that heretofore have been or hereafter may be issued or applied
for thereon in the United States, in any state thereof and in any foreign
country ("Trademark Registrations"), the right (but not the obligation) to apply
for and renew and extend the Trademarks, Trademark Registrations and Trademark
Rights, the right (but not the obligation) to sue or bring opposition or
cancellation proceedings in the name of such Grantor or in the name of Secured
Party or otherwise for past, present and future infringements of the Trademarks,
Trademark Registrations or Trademark Rights and all rights (but not obligations)
corresponding thereto in the United States and any foreign country, and all
goodwill of such Grantor's business symbolized by the Trademarks and associated
therewith, including the documents and things described in Section 1(j) (the
"Associated Goodwill"); it being understood that the rights and interests
included herein shall include all rights and interests pursuant to licensing or
other contracts in favor of such Grantor pertaining to the Trademarks, Trademark
Registrations or Trademark Rights presently or in the future owned or used by
third parties but, in the case of third parties which are not affiliates of such
Grantor, only to the extent permitted by such licensing or other contracts and,
if not so permitted, only with the consent of such third parties;
(j) all United States and foreign patents and patent applications
and all re-issues, divisions, continuations thereof, and rights and interests
thereof in the United States and in all foreign countries ("Patent Rights") in
patents and patent applications that are presently, or in the future may be,
owned, held or used by such Grantor, in whole or in part (including the patents
and patent applications listed in Schedule II annexed hereto, as the same may be
amended pursuant hereto from time to time), all rights (but not obligations) to
sue in the name of such Grantor or in the name of Secured Party or otherwise for
past, present and future infringements of the Patents or Patent Rights (all of
the foregoing being collectively referred to as the "Patents"); it being
understood that the rights and interest assigned hereby shall include all rights
and interests pursuant to licensing or other contracts in favor of such Grantor
pertaining to patent applications and patents presently or in the future owned
or used by third parties but, in
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the case of third parties which are not affiliates of such Grantor, only to the
extent permitted by such licensing or other contracts and, if not so permitted,
only with the consent of such third parties;
(k) the following documents and things in such Grantor's possession,
or subject to such Grantor's right to possession, related to (y) the production,
sale and delivery by such Grantor, or by any affiliate, licensee or
subcontractor of such Grantor, of products or services sold or delivered by or
under the authority of such Grantor in connection with the Patents, Patent
Rights, Trademarks, Trademark Registrations or Trademark Rights (which products
and services shall, for purposes of this Agreement, be deemed to include
products and services sold or delivered pursuant to merchandising operations
utilizing any Patents, Patent Rights, Trademarks, Trademark Registrations or
Trademark Rights); or (z) any retail or other merchandising operations conducted
under the name of or in connection with the Patents, Patent Rights, Trademarks,
Trademark Registrations or Trademark Rights by such Grantor or any affiliate,
licensee or subcontractor of such Grantor:
(i) all lists and ancillary documents that identify and describe any
of such Grantor's customers, or those of its affiliates, licensees or
subcontractors, for products sold and services delivered under or in
connection with the Patents, Patent Rights, Trademarks or Trademark
Rights, including any lists and ancillary documents that contain a
customer's name and address, the name and address of any of its
warehouses, branches or other places of business, the identity of the
Person or Persons having the principal responsibility on a customer's
behalf for ordering products or services of the kind supplied by such
Grantor, or the credit, payment, discount, delivery or other sale terms
applicable to such customer, together with information setting forth the
total purchases, by brand, product, service, style, size or other
criteria, and the patterns of such purchases;
(ii) all product and service specification documents and production
and quality control manuals used in the manufacture or delivery of
products and services sold or delivered under or in connection with the
Patents, Patent Rights, Trademarks or Trademark Rights;
(iii) all documents which reveal the name and address of any source
of supply, and any terms of purchase and delivery, for any and all
materials, components and services used in the production of products and
services sold or delivered under or in connection with the Patents, Patent
Rights, Trademarks or Trademark Rights; and
(iv) all documents constituting or concerning the then current or
proposed advertising and promotion by such Grantor or its affiliates,
licensees or subcontractors of products and services sold or delivered
under or in connection with the Patents, Patent Rights, Trademarks or
Trademark Rights including all documents which reveal the media used or to
be used and the cost for all such advertising conducted within the
described period or planned for such products and services;
(l) all copyrights, rights, titles and interests in and to works
protectable by copyright, including the copyrights listed on Schedule III
attached hereto, as the same may be
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amended pursuant hereto from time to time (all of the foregoing being
collectively referred to as the "Copyrights"), which are presently, or in the
future may be, owned, created, authored (as a work for hire), acquired or used
(whether pursuant to a license or otherwise) by such Grantor, in whole or in
part, and all common law and other rights in and to the Copyrights in the United
States and any state thereof and in all foreign countries, and all federal,
state and foreign registrations that heretofore have been or hereafter may be
issued or applied for thereon in the United States, in any state thereof and in
any foreign country, heretofore or hereafter granted or applied for, and all
renewals and extensions thereof, throughout the world, including all proceeds
thereof (such as, by way of example and not by limitation, license royalties and
proceeds of infringement suits), and the right (but not the obligation) to sue
in the name of such Grantor or in the name of Secured Party for past, present
and future infringements of the Copyrights; it being understood and agreed that
the Collateral assigned hereby shall include rights and interests pursuant to
licensing or other contracts in favor of such Grantor pertaining to copyrights
and works protectable by copyright presently or in the future owned or used by
third-parties, but in the case of third-parties which are not affiliates of such
Grantor, only to the extent permitted by such licensing or other contracts and,
if not so permitted, only with the consent of such third-parties; and
(m) all proceeds, products, rents and profits (including license
royalties and proceeds of infringement suits) of or from any and all of the
foregoing Collateral and, to the extent not otherwise included, all payments
under insurance (whether or not Secured Party is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral. For purposes of this
Agreement, the term "proceeds" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
2. Conditional Assignment; License. In addition to, and not by way
of limitation of, the granting of a security interest in the Collateral pursuant
to Sections 1(i), (j), (k) or (l) (the "IP Collateral"), each Grantor hereby,
effective upon the occurrence of an Event of Default (as hereinafter defined)
and upon written notice from Secured Party, grants, sells, conveys, transfers,
assigns and sets over to Secured Party, for its benefit, all of such Grantor's
right, title and interest in and to the IP Collateral, including such Grantor's
right, title and interest in and to the Trademarks identified in Schedule I
annexed hereto, the goodwill of the business symbolized by said Trademarks, all
Trademark Registrations relating to said Trademark, the Patents and patent
applications identified in Schedule II annexed hereto and the Copyrights
identified in Schedule III annexed hereto. Each Grantor hereby assigns,
transfers and conveys to Secured Party, effective upon the occurrence of any
Event of Default, the nonexclusive right and license to use all trademarks,
tradenames, copyrights, patents or technical processes owned or used by such
Grantor that relate to the Collateral and any other collateral granted by such
Grantor as security for the Secured Obligations (as hereinafter defined),
together with any goodwill associated therewith, all to the extent necessary to
enable Secured Party to use, possess and realize on the Collateral and to enable
any successor or assign to enjoy the benefits of the Collateral. This right and
license shall inure to the benefit of all successors, assigns and transferees of
Secured Party and its successors, assigns and transferees, whether by voluntary
conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of
foreclosure or
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otherwise. Such right and license is granted free of charge, without requirement
that any monetary payment whatsoever be made to such Grantor.
3. Security for Obligations; Subordination. (a) This Agreement
secures, and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and
liabilities of every nature of the Company to the Bank now or hereafter existing
under or arising out of or in connection with the Loan and the Note and all
substitutions, extensions or renewals thereof, whether for principal, interest
(including interest that, but for the filing of a petition in bankruptcy with
respect to the Company or any other Grantor, would accrue on such obligations
whether or not a claim is allowed against the Company for such interest in the
related bankruptcy proceeding), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, whether or
not from time to time decreased or extinguished and later increased, created or
incurred, and whether or not such obligations or liabilities are paid by the
Secured Party to the Bank pursuant to the Guaranty, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly as a preference,
fraudulent transfer or otherwise and all obligations of every nature of the
Company and each other Grantor now or hereafter existing under this Agreement
(all such obligations being the "Secured Obligations").
(b) Secured Party hereby agrees that all Liens that such Secured
Party may now have or hereafter acquire against any of the Collateral resulting
from or relating to the Secured Obligations shall be subordinate and junior in
all respects to the Liens against the property of the Grantors of the Bank
created by the Bank Security Agreement, regardless of the order or time as of
which any Liens attach to any of the Collateral, the order or time of financing
statement filings or any other filings or recordings, the order of time of
granting of any such Liens, or the physical possession of any of the Collateral.
4. Grantors Remain Liable. Anything contained herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under any 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 Secured Party of any
of its rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Secured Party shall not have any obligation or liability under any contracts
and agreements included in the Collateral by reason of this Agreement, nor shall
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.
5. Representations and Warranties. Each Grantor jointly and
severally represents and warrants as follows:
(a) Formation; Good Standing. Such Grantor is a duly formed and
validly existing corporation in good standing under the laws of the jurisdiction
of the its incorporation,
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(ii) has the power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
is duly qualified and is authorized to do business and is in good standing in
each jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualifications except for failures to be
so qualified which, in the aggregate, would not have a material adverse effect
on the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of such Grantor.
(b) Ownership of Collateral. Except for the security interest
created by this Agreement and the Bank Security Agreement, such Grantor owns the
Collateral free and clear of any Lien. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of (i)
Secured Party relating to this Agreement and (ii) Bank relating to the Bank
Security Agreement. No effective filing with the United States Patent and
Trademark Office covering all or any part of the Collateral is on file with the
United States Patent and Trademark Office, except such as may be filed in favor
of such Grantor evidencing such Grantor's right, title and interest in the
Patents and Trademarks or in favor of Secured Party relating to this Agreement
or in favor of the Bank relating to the Bank Security Agreement. No effective
filing with the United States Copyright Office covering all or any part of the
Collateral is on file with the United States Copyright Office, except such as
may be filed in favor of such Grantor evidencing such Grantor's right, title and
interest in the Copyrights or in favor of Secured Party relating to this
Agreement or in favor of the Bank relating to the Bank Security Agreement.
(c) Location of Equipment and Inventory. All of the Equipment and
Inventory is, as of the date hereof, located at the places specified in Schedule
IV annexed hereto.
(d) Description of IP Collateral. A true and complete list of all
Trademarks, Trademark Registrations, Trademark Rights, Copyrights owned, held
(whether pursuant to a license or otherwise) or used by such Grantor, in whole
or in part, as of the date of this Agreement is set forth in Schedule I and III
annexed hereto, and a true and complete list of all Patents and Patent Rights
owned, held (whether pursuant to a license or otherwise) or used by such
Grantor, in whole or in part, as of the date of this Agreement is set forth in
Schedule II annexed hereto.
(e) Validity and Enforceability of IP Collateral. Each of the
Patents, Patent Rights, Trademarks, Trademark Registrations, Trademark Rights
and Copyrights owned by such Grantor and, to the best of such Grantor's
knowledge, each of the Patents, Patent Rights, Trademarks, Trademark
Registrations, Trademark Rights and Copyrights used by such Grantor pursuant to
a license, is valid, subsisting and enforceable and such Grantor is not aware of
any pending or threatened claim by any third party that any of the Patents,
Patent Rights, Trademarks, Trademark Registrations, Trademark Rights and
Copyrights is invalid or unenforceable or that the use by such Grantor of any of
the Patents, Patent Rights, Trademarks, Trademark Registrations, Trademark
Rights and Copyrights violates the rights of any third Person or of any basis
for any such claim.
(f) Negotiable Documents of Title. No Negotiable Documents of Title
are outstanding with respect to any of the Inventory.
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(g) Office Locations; Other Names. The chief place of business, the
chief executive office and the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that evidence
Accounts is, and has been for the four month period preceding the date hereof,
located at the places specified in Schedule IV annexed hereto. No Grantor has in
the past done, and does not now do, business under any other name (including any
trade-name or fictitious business name).
(h) Delivery of Certain Collateral. All notes and other instruments
(excluding checks) comprising any and all items of Collateral have been
delivered to Secured Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(i) Perfection. This Agreement, together with the filing of all
necessary financing statements, creates a valid and perfected 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 made or taken or appropriate documents have
been delivered to Secured Party.
(j) Authorizations. Other than the consent of the Bank to the grant
of the security interest created hereby, 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 third party is required (i)
for the grant by such Grantor of the assignment and security interest granted
hereunder, for the pledge by such Grantor of the Collateral pursuant hereto or
for the execution, delivery or performance of this Agreement by such Grantor,
(ii) for the perfection or maintenance of the pledge, assignment and security
interest created hereunder (including the second priority nature of such pledge,
assignment or security interest), except for the filing of financing and
continuation statements under the UCC, which financing statements have been duly
filed and are effective, under applicable law, and recordings of fixture filings
and recordings with the Patent and Trademark Office and the Copyright Office to
perfect the security interest granted to Secured Party herein, or (iii) for the
exercise by Secured Party of its voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement.
(k) Corporate Power; Legal Right; Valid and Binding Obligation. Such
Grantor has the corporate power and authority and the legal right to execute and
deliver, to perform its obligations under, and to grant the security interests
in the Collateral pursuant to, this Agreement and has taken all necessary
corporate action to authorize its execution, delivery and performance of, and
grant of the security interests in the Collateral pursuant to, this Agreement.
This Agreement constitutes a legal, valid and binding obligation of such Grantor
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by the availability
of equitable remedies. Such Grantor is the sole owner of, and has valid and
legal title to, all of the Collateral, free and clear of any Liens, other than
Liens created hereby and by the Bank Security Agreement.
(l) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of such Grantor with respect
to the Collateral is accurate and complete in all material respects.
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6. Further Assurances; New Patents, Patent Rights, Trademarks,
Trademark Registrations, Trademark Rights, Applications and Copyrights.
(a) Each Grantor agrees that from time to time, at the expense of
such Grantor, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that Secured Party may request, in order to perfect and protect any security
interest or conditional assignment granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) mark conspicuously each item of chattel paper
included in the Accounts, each Related Contract and, at the request of Secured
Party, each of its records pertaining to the Collateral, with a legend, in form
and substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) at the request of Secured
Party, deliver and pledge to Secured Party hereunder all promissory notes and
other instruments (including checks) and all original counterparts of chattel
paper constituting Collateral, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party, (iii) 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 Secured Party may request, in order to perfect and
preserve the security interests granted or purported to be granted hereby, (iv)
at any reasonable time, upon request by Secured Party, exhibit the Collateral to
and allow inspection of the Collateral by Secured Party, or Persons designated
by Secured Party, and (v) at Secured Party's request, appear in and defend any
action or proceeding that could reasonably be expected to adversely affect such
Grantor's title to or Secured Party's security interest in all or any part of
the Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(d) If any Grantor shall hereafter obtain rights to any new
Trademarks, Trademark Registrations, Trademark Rights, patentable inventions,
become entitled to the benefit of any patent application or patent or any
reissue, division, continuation, renewal, extension or continuation-in-part of
any Patent or any improvement or any Patent, any new works protectable by
Copyright, or become entitled to the benefit of any Copyright registration,
application for Copyright registration or renewal or extension of any Copyright,
the provisions of this Agreement shall automatically apply thereto. Each Grantor
shall promptly notify Secured Party in writing of any rights to any new
Trademarks or Trademark Rights acquired by such Grantor after the date hereof
and of any Trademark Registrations issued or applications for Trademark
Registration or any Patent made after the date hereof. Concurrently with the
filing of an application for any Patent or Trademark or Copyright registration,
such Grantor shall execute,
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deliver and record in all places where this Agreement is recorded an appropriate
Security Agreement, substantially in the form hereof, with appropriate
insertions, or an amendment to this Agreement, in form and substance reasonably
satisfactory to Secured Party, pursuant to which such Grantor shall grant a
security interest and conditional assignment to the extent of its interest in
such Patent or Trademark or Copyright registration as provided herein to Secured
Party unless so doing would, in the commercially reasonable judgment of such
Grantor, after due inquiry, result in the grant of a Patent or Trademark or
Copyright registration in the name of Secured Party, in which event such Grantor
shall give written notice to Secured Party as soon as reasonably practicable and
the filing shall instead be undertaken as soon as practicable but in no case
later than immediately following the grant of the Trademark or Copyright
registration, as the case may be, or Patent.
7. Certain Covenants of Each Grantor. Each Grantor shall:
(a) not use or permit any Collateral to be used by its employees or
its affiliates unlawfully or in violation of any provision of this Agreement or
any applicable statute, regulation or ordinance or any policy of insurance
covering the Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change
in such Grantor's chief place of business, chief executive office or residence
or the office where such Grantor keeps its records regarding the Accounts, all
originals of all chattel paper that evidence Accounts and the IP Collateral;
(d) if Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes;
(e) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except to the
extent the validity thereof is being contested in good faith; provided that such
Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such payment;
(f) diligently keep reasonable records respecting the Collateral and
at all times keep at least one complete set of its records concerning
substantially all of the Patents, Patent Rights, Trademarks, Trademark
Registrations and Trademark Rights at its chief executive office or principal
place of business;
(g) not permit the inclusion in any contract to which it becomes a
party of any provision that could or might in any way impair or prevent the
creation of a security interest in, or the assignment of, such Grantor's rights
and interests in any property included within the definitions of any Patents,
Patent Rights, Trademarks, Trademark Registrations, Trademark Rights and
Associated Goodwill acquired under such contracts;
10
<PAGE>
(h) take all steps necessary in its reasonably business judgment to
protect the secrecy of all trade secrets relating to the products and services
sold or delivered under or in connection with the Patents, Patent Rights,
Trademarks and Trademark Rights, including entering into confidentiality
agreements with employees and labeling and restricting access to secret
information and documents;
(i) use proper statutory notice in connection with its use of each
of the Patents, Patent Rights, Trademarks, Trademark Registrations, Trademark
Rights and Copyrights;
(j) use standards of high quality consistent with such Grantor's
past practices in the manufacture, sale and delivery of products and services
sold or delivered under or in connection with the Trademarks, Trademark
Registrations and Trademark Rights, including, to the extent applicable, in the
operation and maintenance of its retail stores and other merchandising
operations; and
(k) upon any officer of such Grantor obtaining knowledge thereof,
promptly notify Secured Party in writing of any event that could reasonably be
expected to materially and adversely affect the value of the Collateral or any
portion thereof, the ability of such Grantor or Secured Party to dispose of the
Collateral or any material portion thereof, or the rights and remedies of
Secured Party in relation thereto, including the levy of any legal process
against the Collateral or any portion thereof.
8. Special Covenants With Respect to Equipment and Inventory. Each
Grantor shall:
(a) keep the Equipment and Inventory at the places therefor
specified on Schedule IV annexed hereto or, upon 30 days' prior written notice
to Secured Party, at such other places in jurisdictions where all action that
may be necessary or desirable, or that Secured Party may request, in order to
perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Equipment and Inventory shall have been
taken;
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with such Grantor's past practices, and shall
forthwith make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Each Grantor shall promptly furnish to Secured Party a statement respecting
any material loss or material damage to any of the Equipment in excess of
$20,000;
(c) keep correct and accurate records of the Inventory, itemizing
and describing the kind, type and quantity of Inventory, such Grantor's cost
therefor and (where applicable) the current list prices for the Inventory;
(d) if any Inventory is in possession or control of any of such
Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $20,000, and in any event upon the occurrence of a default or
an event of default under the Note (an "Event of Default" for purposes of this
Agreement), instruct such agent or processor to hold all such Inventory for the
account of Secured Party and subject to the instructions of Secured Party; and
11
<PAGE>
(e) promptly upon the issuance and delivery to such Grantor of any
Negotiable Document of Title, deliver such Negotiable Document of Title to
Secured Party.
9. Insurance. Each Grantor shall, at its own expense, maintain
insurance with respect to the Equipment and Inventory in accordance with
commercially sound business practices for similar companies in the Company's
industry.
10. Special Covenants With Respect to the Assigned Agreements. Upon
the occurrence and during the continuation of an Event of Default, each Grantor
agrees that all payments due or to become due under or in connection with the
Assigned Agreements shall be made directly to Secured Party at its address set
forth in Section 23 if Secured Party so requests and that it will promptly so
instruct the parties with whom such Grantor has entered the Assigned Agreements.
11. Special Covenants With Respect to Accounts and Related
Contracts.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified on Schedule IV annexed
hereto or, upon 30 days' prior written notice to Secured Party, at such other
location in a jurisdiction where all action that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Secured Party
to exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at such Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon the
request of Secured Party, such Grantor shall deliver to Secured Party complete
and correct copies of each Related Contract.
(b) Such Grantor shall maintain (i) complete records of each
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, each Grantor may take (and, upon the
occurrence and during the continuance of an Event of Default, at Secured Party's
direction, shall take) such action as such Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its intention to do so, to
notify the account debtors or obligors under any Accounts of the assignment of
such Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to such Grantor thereunder
directly to Secured Party, to notify each Person maintaining a lockbox or
similar arrangement to which account debtors or obligors
12
<PAGE>
under any Accounts have been directed to make payment to remit all amounts
representing collections on checks and other payment items from time to time
sent to or deposited in such lockbox or other arrangement directly to Secured
Party and, upon such notification and, at the expense of such Grantor, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by a Grantor of the notice from Secured
Party referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including checks and other instruments) received by such Grantor in
respect of the Accounts and the Related Contracts shall be received in trust for
the benefit of Secured Party hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over or delivered to Secured Party in
the same form as so received (with any necessary endorsement) to be held as cash
collateral and applied as provided by Section 19, and (ii) no Grantor shall
adjust, settle or compromise the amount or payment of any Account, or release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
12. Special Covenants With Respect to Patent Registration, Renewal
and Litigation.
(a) Each Grantor shall make all applications for the registration of
its Patents on any existing or future unregistered but patentable works that in
its commercially reasonable judgment are material to its business and do any and
all acts which are reasonably necessary or desirable to preserve, renew and
maintain all rights in all Patents and Patent Rights that in its commercially
reasonable judgment are material to its business. Any expenses incurred in
connection therewith shall be borne solely by such Grantor. Such Grantor shall
not abandon any Patents that in its commercially reasonable judgment are
material to its business.
(b) Except as provided in this Agreement, each Grantor shall have
the right and obligation to commence and diligently prosecute in its own name,
as real party in interest, for its own benefit and at its own expense, such
suits, proceedings or other actions for infringement or other damage as are in
its reasonable business judgment necessary to protect the Collateral. Such
Grantor shall provide to Secured Party any information with respect thereto
requested by Secured Party. Secured Party shall provide at such Grantor's
expense all and necessary cooperation in connection with any such suit,
proceeding or action including joining as a necessary party.
(c) Each Grantor shall promptly, following its becoming aware
thereof, notify Secured Party of the institution of, or any adverse
determination in, any proceeding in the United States Patent and Trademark
Office or any United States or foreign court or regarding such Grantor's claim
of ownership in any of the Patents, its right to register the same, or its right
to keep and maintain such registration.
13. Patent Litigation After Default. Upon the occurrence and during
the continuance of an Event of Default, Secured Party shall have the right but
shall in no way be obligated to bring suit in the name of a Grantor or Secured
Party to enforce any Patent, Patent Right and any license thereunder, and such
Grantor shall, the request of Secured Party, do any and all lawful acts and
execute any and all documents reasonably required by Secured Party in aid of
such enforcement and such Grantor shall promptly, upon demand, reimburse and
13
<PAGE>
indemnify Secured Party. To the extent that Secured Party shall elect not to
bring suit to enforce any Patent, Patent Right or any license thereunder, each
Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement of any of the Patents by
others and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing necessary to prevent such
infringement.
14. Transfers and Other Liens. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral; or
(b) except for the security interest created by this Agreement and
the Bank Security Agreement, create or suffer to exist any Lien upon or with
respect to any of the Collateral to secure the indebtedness or other obligations
of any Person.
15. Secured Party Appointed Attorney-in-Fact. Each Grantor hereby
irrevocably appoints Secured Party as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such
Grantor, Secured Party or otherwise, from time to time in Secured Party's
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including:
(a) to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to Section 9;
(b) to ask for, demand, collect, sue 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;
(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) to endorse such Grantor's name on all applications, documents,
papers and instruments necessary for Secured Party in the use or maintenance of
the Collateral;
(e) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(f) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement) 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 Secured Party in its sole discretion, any
such payments made by Secured Party to become obligations of such Grantor to
Secured Party, due and payable immediately without demand;
(g) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
14
<PAGE>
(h) upon the occurrence and during the continuation of an Event of
Default, (i) to execute and deliver any of the assignments or documents
requested by Secured Party pursuant to Section 18(b), (ii) to grant or issue an
exclusive or non-exclusive license to the IP Collateral or any portion thereof
to any Person, and (iii) otherwise 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 Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and such Grantor's expense, at
any time or from time to time, all acts and things that Secured Party deems
necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
16. Secured Party May Perform. If any Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by such Grantor.
17. Standard of Care. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.
18. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) Secured Party 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 Uniform Commercial Code as in effect in any relevant jurisdiction (the
"Code") (whether or not the Code applies to the affected Collateral), and also
may (i) require each Grantor to, and each Grantor hereby agrees that it will at
its expense and upon request of Secured Party forthwith, assemble all or part of
the Collateral as directed by Secured Party and make it available to Secured
Party at a place to be designated by Secured Party that is reasonably convenient
to both parties, (ii) enter onto the property where any Collateral is located
and take possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Secured Party deems appropriate, (iv) take possession of such
Grantor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same and any of such Grantor's equipment for the
purpose of completing any work in process, taking any actions described in the
preceding clause (iii) and collecting any Secured Obligation, (v) exercise any
and all rights and remedies of such Grantor under or in connection with the
contracts related to the IP Collateral or any Assigned Agreements or otherwise
in respect of the IP Collateral, including any and all rights of such Grantor to
demand or otherwise require payment of any amount under, or performance of any
provision of, such contracts or such Assigned Agreements, and (vi) without
notice except as
15
<PAGE>
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of Secured Party's offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such price
or prices and upon such other terms as Secured Party may deem commercially
reasonable. Secured Party may be the purchaser of any or all of the Collateral
at any such sale and Secured Party shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' 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 shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party 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. Each Grantor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all the Secured
Obligations, each Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
(b) Upon written demand from Secured Party, each Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Patents, Patent Rights, Trademarks, Trademark Registrations, Trademark Rights,
the Associated Goodwill and Copyrights and such other documents as are necessary
or appropriate to carry out the intent and purposes of this Agreement; provided
that the failure of any Grantor to comply with such demand will not impair or
affect the validity of the conditional assignment effected by Section 2 or its
effectiveness upon notice by Secured Party as specified in Section 2. Such
Grantor agrees that such an assignment (including the conditional assignment
effected by Section 2) and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that any Secured Party receives cash
proceeds in respect of the sale of, or other realization upon, the Collateral.
19. Application of Proceeds. Except as expressly provided elsewhere
in this Agreement, all proceeds received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
shall be applied at Secured Party's discretion.
20. Continuing Security Interest and Conditional Assignment;
Transfer of Loans. This Agreement shall create a continuing security interest in
the Collateral as well as a continuing conditional assignment of the IP
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations and the termination and release of the Guaranty,
(b) be binding upon each Grantor, its successors and assigns, and (c) inure,
together
16
<PAGE>
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns. Upon the payment in
full of all Secured Obligations, the security interest and conditional
assignment granted hereby shall terminate and all rights to the Collateral shall
revert to the relevant Grantor. Upon any such termination Secured Party will, at
the Grantor's expense, execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such termination.
21. Indemnity and Expenses.
(a) Each Grantor agrees jointly and severally to indemnify Secured
Party and its directors, officers, employees and agents from and against any and
all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
(b) Each Grantor shall pay to Secured Party upon demand the amount
of any and all costs and expenses, including the fees and expenses of its
counsel and of any experts and agents, that Secured Party may incur in
connection with the failure by such Grantor to perform or observe any of the
provisions hereof.
22. Amendments; Etc. No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
any Grantor therefrom, shall in any event be effective unless the same shall be
in writing and signed by Secured Party and, in the case of any such amendment or
modification, by the Grantors. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
23. Notices. Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile or telex, or three business days after depositing it in
the United States mail with postage prepaid and properly addressed to the
address of each party listed below:
If to Secured Party:
Avv. Giacomo Torrente
c/o 51 West 69th Street
Apt. 5D
New York, New York 10023
Telecopy Number: 212-208-0944
17
<PAGE>
If to any Grantor:
AmeriCom USA, Inc.
5900 Hollis St. R-1
Emeryville, California 94608
Attention: Thomas Hopfensperger and
Carol Fullam
Telecopy Number:
24. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Secured Party 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 any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
25. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
26. 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.
27. Governing Law; Terms.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) Unless otherwise defined herein, terms used in articles 8 and 9
of the Uniform Commercial Code in the State of New York are used herein as
therein defined. As used in this Agreement, the following terms shall have the
following definitions:
"Lien" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.
18
<PAGE>
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
28. Consent to Jurisdiction and Service of Process. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH
GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH GRANTOR
HEREBY AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
SUCH GRANTOR AT ITS ADDRESS PROVIDED IN SECTION 23, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY SUCH GRANTOR TO BE SUFFICIENT FOR PERSONAL JURISDICTION IN ANY
ACTION AGAINST SUCH GRANTOR IN ANY SUCH COURT AND TO BE OTHERWISE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF SECURED
PARTY TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER
JURISDICTION.
29. Waiver of Jury Trial. EACH GRANTOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH GRANTOR AND SECURED PARTY EACH ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR SUCH GRANTOR AND SECURED PARTY TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT SUCH GRANTOR AND SECURED PARTY HAVE ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH GRANTOR AND SECURED
PARTY FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
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<PAGE>
30. Counterparts. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
20
<PAGE>
IN WITNESS WHEREOF, each Grantor and Secured Party have caused this
Agreement to be duly executed and delivered as of the date first written above.
AMERICOM USA, INC., as a Grantor
By: /s/ Thomas J. Hopfensperger
--------------------------------
Name: Thomas J. Hopfensperger
Title: President
KIOSK SOFTWARE, INC., as a Grantor
By: /s/ Thomas J. Hopfensperger
-----------------------------------
Name: Thomas J. Hopfensperger
Title: Authorized Person
By: /s/ Giacomo Torrente
-----------------------------------
AVV. GIACOMO TORRENTE,
as Secured Party
21
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SCHEDULE I
TRADEMARKS
NONE
22
<PAGE>
SCHEDULE II
FOREIGN PATENT APPLICATIONS
Serial Number Filing Date
------------- -----------
AmeriCom USA, Inc.
-------- ---------
PCT/00/09663 April 11, 2000
Kiosk Software, Inc.
--------------------
None
<PAGE>
PENDING U.S. PATENT APPLICATIONS
Serial Number Filing Date
------------- -----------
AmeriCom USA, Inc.
09/291,785 April 14, 1999
09/335,384 June 17, 1999
09/488,666 January 20, 2000
An application for Letters Patent of the United States to be assigned to
AmeriCom USA, Inc. with respect to the technology assigned to AmeriCom USA,
Inc. known as Virtual Object State Explication (VOSX).
Kiosk Software, Inc.
None
<PAGE>
SCHEDULE III
U.S. COPYRIGHTS
NONE
<PAGE>
SCHEDULE IV
PRINCIPAL PLACE OF BUSINESS;
LOCATIONS OF EQUIPMENT AND INVENTORY
Principal Place of Business and Chief Executive Office
------------------------------------------------------
AmeriCom USA, Inc.
------------------
5900 Hollis St. R-1
Emeryville, California 94608
Kiosk Software, Inc.
--------------------
5900 Hollis St. R-1
Emeryville, California 94608
Locations of Equipment and Inventory
------------------------------------
AmeriCom USA, Inc.
------------------
5900 Hollis St. R-1
Emeryville, California 94608
825 Buckley Road, Ste. B
San Luis Obispo, California 93401
124 S. Halcyon
Arroyo Grande, California 93420
Kiosk Software, Inc.
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5900 Hollis St. R-1
Emeryville, California 94608
825 Buckley Road, Ste. B
San Luis Obispo, California 93401
124 S. Halcyon
Arroyo Grande, California 93420
