Collateral, Patent, Trademark, Copyright And License Agreement

EXHIBIT 10.3


COLLATERAL PATENT,
TRADEMARK, COPYRIGHT AND LICENSE AGREEMENT


COLLATERAL PATENT, TRADEMARK, COPYRIGHT AND LICENSE ASSIGNMENT, dated as of August 25, 2003, among Monitronics International, Inc., a Texas corporation (the "Assignor"), to Fleet National Bank, as Administrative Agent for the Lenders from time to time party to the credit agreement referred to below (in such capacity, the "Assignee").


W I T N E S S E T H:


WHEREAS, the Assignor, the Assignee, Bank of America, N.A., as Syndication Agent, and the Lenders from time to time party thereto have entered into a Credit Agreement dated as of August 25, 2003 (as amended, modified, supplemented and/or extended from time to time, the "Credit Agreement"; capitalized terms used herein and not otherwise defined shall have the same meanings herein as in the Credit Agreement); and


WHEREAS, it is a condition to the effectiveness of the Credit Agreement that, among other things, Assignor execute and deliver to the Assignee this Agreement.


NOW, THEREFORE, in consideration of the willingness of the Lenders to enter into the Credit Agreement and to agree, subject to the terms and conditions set forth therein, to make the Loans to the Assignor pursuant thereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor agrees as follows:


1. Incorporation of Loan Documents. The Loan Documents and the terms and provisions therein are hereby incorporated herein in their entirety by this reference thereto.


2. Collateral Assignment of Patents, Trademarks, Copyrights and Licenses. To secure the complete and timely satisfaction of all of the obligations of Assignor to the Assignee under the Credit Agreement, the Notes and all other documents, instruments and agreements delivered by Assignor in connection therewith (collectively, the "Obligations"), the Assignor hereby mortgages, pledges and assigns to the Assignee, for and on behalf of the Lenders, as and by way of a mortgage and security interest having priority over all other security interests, with power of sale upon the occurrence of an Event of Default, and grants the Assignee, for and on behalf of the Lenders, a security interest in, all of Assignor's right, title and interest in and to all of the following, whether now existing or hereafter arising:


(i) patents and patent applications, including, without limitation, the
inventions and improvements described and claimed therein, and those
patents and patent applications listed on Schedule A attached hereto and
made a part hereof, and (a) the reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof, (b) all income,
royalties, damages and payments now and hereafter due and/or payable under
and with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (c) the right to sue for
past, present and future infringements thereof, and (d) all rights
corresponding thereto throughout the world (all of the foregoing patents
and applications, together with the items described in clauses (a)


through (d), inclusive, in which Assignor now or hereafter has any right,
title or interest are sometimes hereinafter individually and/or
collectively referred to as the "Patents");


(ii) all service marks, trademarks, trademark or service mark
registrations, trademark or service mark applications, trade names,
copyrights, copyright registrations and copyright applications including,
without limitation, the trademarks, service marks, copyrights and
applications listed on Schedule B attached hereto and made a part hereof,
and (a) renewals thereof, (b) all income, royalties, damages and payments
now and hereafter due and/or payable with respect thereto, including,
without limitation, damages and payments for past or future infringements
thereof, (c) the right to sue for past, present and future infringements
thereof, and (d) all rights corresponding thereto throughout the world (all
of the foregoing service marks, trademarks, registrations, applications and
trade names, together with the items described in clauses (a) through (d),
inclusive, with respect thereto in which Assignor now or hereafter has any
right, title or interest are sometimes hereinafter individually and/or
collectively referred to as the "Marks" and all of the foregoing
copyrights, copyright registrations and copyright applications, together
with the items described in clauses (a) through (d), inclusive, in which
Assignor now or hereafter has any right, title or interest are sometimes
hereinafter individually and/or collectively referred to as the
"Copyrights");


(iii) all Assignor's rights and obligations pursuant to its license
agreements with any other Person or Persons with respect to any Patents,
Marks and Copyrights, whether Assignor is a licensor or licensee under any
such license agreements, including, without limitation, the licenses listed
on Schedule C attached hereto and made a part hereof, and, subject to the
terms of such licenses, the right to prepare for sale, sell and advertise
for sale, all Inventory now or hereafter owned by the Assignor and now or
hereafter covered by such licenses (all of the foregoing is hereinafter
referred to collectively as the "Licenses"); and


(iv) the goodwill of Assignor's business connected with and symbolized
by the Marks;


provided, however, that there shall be excluded from the foregoing collateral assignment and grant of a security interest any of the existing Licenses to which Assignor is a licensee (and any Patents, Marks and Copyrights currently licensed by others to Assignor pursuant to such Licenses), in each case to the extent (but only to the extent) that the applicable License lawfully prohibits such collateral assignment or grant of a security interest; provided further, however, that, upon the Assignee's request, Assignor will use its best efforts to obtain any consent needed to subject any such property to this collateral assignment and grant of a security interest.


3. Restrictions on Future Agreements. Assignor agrees and covenants that, until the Obligations shall have been satisfied in full and the Credit Agreement shall have been terminated, Assignor will not, without the Assignee's prior written consent, take any action or enter into any agreement, including, without limitation, entering into any license agreement, which is inconsistent with Assignor's obligations under this Agreement, and Assignor further agrees and covenants that without the Assignee's prior written consent it will not take any action, or permit any action to be taken by others subject to its control, including its licensees, or fail to


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take any action which would affect the validity or enforcement or nature of the rights transferred to the Assignee, for and on behalf of the Lenders under this Agreement. Assignor agrees and covenants not to sell or assign its interest in, or grant any license under, the Patents, Marks, Copyrights or Licenses without receiving the prior written consent of the Assignee thereto.


4. Certain Covenants, Representations and Warranties of Assignor. Assignor covenants, represents and warrants (to the best of Assignor's knowledge with respect to any Patents, Marks and Copyrights which are licensed by third parties to Assignor) that: (i) the Patents, Marks, Copyrights and Licenses are subsisting, have not been adjudged invalid or unenforceable in whole or in part, and, to the best of Assignor's knowledge, are not currently being challenged in any way; (ii) none of the Patents, Marks, Copyrights and Licenses have lapsed or expired or have been abandoned, whether due to any failure to pay any maintenance or other fees or make any filin ...