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EXHIBIT 10.43
SUPPLEMENTAL LOAN AGREEMENT
(Copyrights)
THIS SUPPLEMENTAL LOAN AGREEMENT (this "Agreement") is made and dated
this 28 day of April, 1997 by and between DOVE ENTERTAINMENT, INC., a
California corporation, with its chief executive office at 8955 Beverly
Boulevard, West Hollywood, California 90048 and formerly named Dove Audio, Inc.
(the "Borrower") and SANWA BANK CALIFORNIA, a California bank (the "Bank").
RECITALS
A. Reference is made to the Term Loan Agreement dated August 16, 1996,
between the Borrower and the Bank (as such agreement may be amended, modified or
supplemented from time to time, the "Loan Agreement"). Capitalized terms used
herein without definition have the meanings assigned thereto in the Loan
Agreement.
B. Pursuant to the Loan Agreement the Borrower has granted to the Bank
a security interest in certain assets of the Borrower, including, without
limitation, all of the general intangibles now owned or hereafter created or
acquired by the Borrower.
C. The parties hereto desire to supplement the Loan Agreement as it
relates to certain general intangible Collateral consisting generally of
copyrights and to create hereby a document appropriate for recordation in the
Copyright Office of the United States (the "Copyright Office").
AGREEMENT
In consideration of the above Recitals and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows.
1. CONFIRMATION OF GRANT OF SECURITY INTEREST. The Borrower hereby
confirms the grant of the security interest in, lien on, and assignment of the
Collateral described in the Loan Agreement, as set forth therein, and
acknowledges that such Collateral includes, without limitation, all of the
Borrower's right, title and interest in the following (the "Copyrights"):
(a) All now existing or hereafter created or acquired,
copyrights of the Borrower, including, without limitation, the copyrights in the
materials specifically described on Exhibit A attached hereto, as the same may
be amended or replaced from time to time with the consent of the Bank;
(b) All now existing and hereafter arising registrations and
applications for registration relating to any of the foregoing, all renewals and
extensions thereof throughout the world for as long as permissible under any
federal or foreign copyright law or regulation, and all rights to make such
applications and to renew and extend the same;
(c) All now existing and hereafter arising rights and licenses
to make, have made, use and/or sell any items disclosed, claimed or covered by
any of the foregoing;
(d) All now existing and hereafter arising rights (but not any
obligation) to register claims under any state, federal or foreign copyright law
or regulation;
(e) All now existing and hereafter arising rights, claims
and interests under licensing or other contracts pertaining to any of the
foregoing;
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(f) All now existing and hereafter arising documents,
instruments and agreements which reveal the name and address of sources of
supply, distribution methods and all terms of purchase, rental, license or use
and delivery for all materials, products and components used in connection with
any of the foregoing;
(g) All now existing and hereafter arising goodwill
associated with any of the foregoing;
(h) All now existing and hereafter arising rights (but not any
obligation) to sue or bring opposition or cancellation proceedings in the name
of the Borrower or the Bank for past, present and future infringements of any of
the foregoing; and
(i) All products and proceeds of any of the foregoing.
2. RESTRICTIONS ON FUTURE AGREEMENTS. The Borrower agrees that until
the Obligations have been satisfied in full, except as permitted by the Loan
Agreement, the Borrower shall not, without the Bank's prior written consent
(which consent shall not be unreasonably withheld), abandon any Copyrights or
enter into any agreement, including, without limitation, any license agreement,
which is inconsistent with the Borrower's obligations under the Loan Agreement,
and the Borrower further agrees that it will not take any action, or permit any
action to be taken by others subject to its control, including licensees, or
fail to take any action, which would affect the validity or enforcement of the
rights of the Bank under this Agreement.
3. NEW COPYRIGHTS. The Borrower represents and warrants that the
Copyrights listed on Exhibit A constitute all of the material Copyrights now
owned by the Borrower which are registered (or pending for registration) with
the Copyright Office. If, before the Obligations have been satisfied in full,
the Borrower shall obtain rights to any new registered Copyrights (or Copyrights
for which registrations are pending) the provisions of this Agreement shall
automatically apply thereto and the Borrower shall give to the Bank prompt
written notice of any such event. The Borrower hereby authorizes the Bank to
modify this Agreement by amending Exhibit A to include any future Copyrights or
any applications or registrations therefor not listed thereon, in which the
Borrower has rights under Section 1 hereof or under this Section 3.
4. ROYALTIES; TERMS. The Borrower hereby agrees that the Bank's rights
in all Copyrights shall be to the full extent of the Grantor's rights therein,
and shall be without any liability for royalties or other related charges from
the Bank to the Borrower. The term of the Bank's security interest in the
Copyrights shall extend until such time as all of the Obligations have been paid
in full.
5. ADDITIONAL COVENANTS. In addition to all covenants and agreements
set forth in the Loan Agreement, the Borrower agrees (a) not to sell or assign
the interest in, or grant any license under, the Copyrights, except in the
ordinary course of business and on commercially reasonable terms, without
obtaining the prior written consent of the Bank (which consent shall not be
unreasonably withheld); (b) to maintain all records with respect to the
Copyrights at its address set forth on the first page hereof and not to change
the location where such records are maintained without giving the Bank prior
written notice thereof; (c) to inform the Bank promptly after it becomes aware
of any event or circumstance materially adversely affecting the Copyrights, the
value thereof or the Borrower's or the Bank's rights therein or thereto; and (d)
to furnish the Bank with current versions of Exhibit A upon request.
6. DUTIES OF THE BORROWER. The Borrower shall have the duty (a) to, in
a commercially reasonable manner, prosecute diligently any application for
Copyrights pending as of the date hereof or thereafter, until the Obligations
have been paid in full, (b) to make application on Copyrights as customary and
appropriate in the operation of the Borrower's business, (c) to file and
prosecute opposition and cancellation proceedings as customary and appropriate
in the operation of the Borrower's business, and (d) to preserve and maintain,
in a commercially reasonable manner, all rights in applications for
registrations of Copyrights. Any expenses incurred in connection with such
applications shall be borne by the Borrower. The Borrower shall not abandon any
right to file an application for a Copyright without the consent of the Bank,
which consent shall not be unreasonably withheld.
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7. THE BANK MAY PERFORM. If the Borrower fails to perform any agreement
contained herein, the Bank, upon written notice to the Borrower, if practicable,
may itself perform, or cause performance of, such agreement, and the reasonable
out of pocket expenses of the Bank incurred in connection therewith shall be
payable by the Borrower under Section 11 hereof.
8. THE BANK'S DUTIES. The powers conferred on the Bank hereunder are
solely to protect its interest in the Copyrights and shall not impose any duty
upon the Bank to exercise any such powers. Except for the accounting for moneys
actually received by it hereunder, the Bank shall have no duty as to any of the
Copyrights or of taking any steps to preserve rights against prior parties or
any other rights pertaining to any of the Copyrights but may do so at its
option, and all expenses incurred in connection therewith shall be for the sole
account of the Borrower and shall be added to the Obligations.
9. REMEDIES; BANK'S RIGHT TO SUE. If any Event of Default shall
have occurred and be continuing:
(a) The Bank may exercise in respect of the Copyrights, in
addition to other rights and remedies provided for herein or in the Loan
Agreement or otherwise available to it, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code as in effect from time to
time in the State of California (the "Code") (whether or not the Code applies to
the affected Copyrights).
(b) The Bank shall have the right, but shall in no way be
obligated, to bring suit in its own name to enforce the Copyrights, and any
licenses thereunder, and, if the Bank shall commence any such suit, the Borrower
shall, at the request of the Bank do any and all lawful acts and execute any and
all proper documents reasonably required by the Bank in aid of such enforcement
and the Borrower shall promptly, upon demand, reimburse and indemnify the Bank
for all out of pocket costs and expenses incurred by the Bank in the exercise of
its rights under this Section 9. The Borrower shall notify the Bank of any suits
it commences to enforce the Copyrights and shall provide the Bank with copies of
any documents reasonably requested by the Bank relating to such suits.
(c) All of the Bank's rights and remedies with respect to the
Copyrights whether established hereby or by the Loan Agreement, or by any other
agreements or by law, shall be cumulative and may be exercised singularly or
concurrently.
10. POWER OF ATTORNEY; EFFECT ON THE LOAN AGREEMENT. The Borrower
hereby authorizes and empowers the Bank to make, constitute and appoint any
officer or agent of the Bank as the Borrower's true and lawful attorney-in-fact,
with power (but not the obligation) after the occurrence and during the
continuance of an Event of Default (a) to endorse the Borrower's name on all
applications, documents, papers and instruments reasonably necessary or
desirable for the Bank in the use and protection of the Copyrights, (b) to grant
or issue any commercially reasonable exclusive or nonexclusive license under the
Copyrights to anyone, (c) to assign, pledge, convey or otherwise transfer title
in or dispose of, in a commercially reasonable manner, the Copyrights to anyone,
and (d) to file any claims or take any action or institute any proceedings which
the Bank may deem necessary or desirable for the protection or enforcement of
any of the rights of the Bank with respect to any of the Copyrights. This power
of attorney, being coupled with an interest, is irrevocable until the
Obligations have been paid in full. The Borrower hereby acknowledges and agrees
that this Agreement is not intended to limit or restrict in any way the rights
and remedies of the Bank under the Loan Agreement but rather is intended to
facilitate the exercise of such rights and remedies.
11. EXPENSES.
(a) The Borrower agrees to indemnify the Bank from and against
any and all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting solely from the Bank's gross negligence
or willful misconduct. Such agreement of the Borrower shall survive the payment
in full of the Obligations.
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(b) The Borrower will, upon written demand, pay to the Bank
the amount of any and all out of pocket costs and expenses, including reasonable
attorneys fees and costs and reasonable disbursements of any experts and agents.
12. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Borrower herefrom shall in any
event be effective unless the same shall be in writing and signed by the Bank,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
13. SEVERABILITY. The provisions of this Agreement are severable, and
if any clause or provision shall be held invalid and unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision of this Agreement in any
other jurisdiction.
14. NOTICES. All notices and other communications provided for
hereunder shall be given in the manner and to the addresses set forth in the
Loan Agreement.
15. CONTINUING SECURITY INTEREST; TERMINATION.
(a) The Bank's security interest in the Copyrights shall (a)
remain in full force and effect until payment in full of the Obligations, (b) be
binding upon the Borrower, its successors and assigns, and (c) inure, together
with the rights and remedies of the Bank hereunder, to the benefit of the Bank
and its successors and assigns, subject to the terms and conditions of the Loan
Agreement. The Borrower's successors and assigns shall include, without
limitation, a receiver, trustee or debtor-in-possession thereof or therefor.
(b) Upon the payment in full of the Obligations, the Bank's
security interest in the Copyrights shall terminate and all rights to the
Copyrights shall revert to the Borrower. The Bank will, at the Borrower's
expense, execute and deliver to the Borrower such documents as the Borrower
shall reasonably request to evidence such termination.
16. RELATIONSHIP TO LOAN AGREEMENT. The Copyrights shall constitute
Collateral for all purposes of the Loan Agreement and the Bank shall have all
rights, powers and remedies with respect to the Copyrights that it has with
respect to other Collateral. Reference is hereby made to the Loan Agreement, the
terms and conditions of which are incorporated herein by this reference,
including, without limitation, the provisions relating to the priority of the
Bank's security interest in Collateral, choice of law, consent to jurisdiction,
waiver of jury trial and dispute resolution.
EXECUTED as of the date first written above.
DOVE ENTERTAINMENT, INC.,
a California corporation
By: /s/ MICHAEL VINER
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Name: Michael Viner
Title: President and CEO
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SANWA BANK CALIFORNIA,
a California bank
By: /s/ E. LEIGH IRWIN
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Name: E. Leigh Irwin
Title: Vice President
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Each of the undersigned, in its capacity as Guarantor under a Guaranty
dated August 16, 1996, in favor of Sanwa Bank California, hereby consents to the
foregoing Supplemental Loan Agreement (Copyrights) and confirms that its
Guaranty remains in full force and effect.
Guarantor:
/s/ MICHAEL VINER
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Michael Viner
Guarantor:
/s/ DEBORAH RAFFIN
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Deborah Raffin
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SUPPLEMENTAL LOAN AGREEMENT
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(COPYRIGHTS)
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STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On April 28, 1997 before me, Victoria Kaye, personally
appeared Deborah Raffin, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted executed the instrument.
WITNESS my hand and official seal.
/s/ VICTORIA KAYE
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SIGNATURE
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On 4/28, 1997 before me, Victoria Kaye, personally appeared
Michael Viner, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that she executed the same in her authorized
capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which the person acted executed the instrument.
WITNESS my hand and official seal.
/s/ VICTORIA KAYE
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SIGNATURE