Exhibit 10.7
 
PATENT, TRADEMARK
AND COPYRIGHT SECURITY AGREEMENT
 
THIS PATENT, TRADEMARK AND COPYRIGHT SECURITY AGREEMENT (together with all
amendments, restatements, supplements and modifications, if any, from time to
time hereto, this "Agreement"), dated as of July 31, 2009 is made by X-FACTOR
COMMUNICATIONS, LLC, having an address at 3 Empire Blvd., South Hackensack, New
Jersey, 07606, a New York limited liability company ("Grantor"), in favor of NEW
JERSEY ECONOMIC DEVELOPMENT AUTHORITY, having an address at 36 West State
Street, PO Box 990, Trenton, New Jersey 08625-0990 ("Lender").
 
INTRODUCTION
 
Pursuant to that certain Convertible Loan Agreement dated as of the date hereof
by and among Grantor and Lender (including all annexes, exhibits and schedules
thereto, as from time to time amended, restated, supplemented or otherwise
modified, the "Agreement"), the Lender has, subject to certain terms and
conditions, agreed to make certain loans (the "Loans") to Grantor. To induce
Lender enter into the Agreement and other Transaction Documents (as defined in
the Agreement) and to induce Lender to make the Loans as provided for in the
Agreement, Grantor has agreed to grant a continuing security interest in the
Collateral to secure the Obligations pursuant to the terms of the Security
Agreement of this date between Grantor and Lender (including all annexes,
exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Security Agreement") and certain other
Transaction Documents, including, without limitation, this Agreement. The
parties now desire to grant to Lender a continuing security interest in the
Intellectual Property Collateral (as defined below) owned by Grantor to secure
the Obligations. This Introduction shall be construed as part of this Agreement.
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor and Lender hereby agree as
follows:
 
1.            Definitions. Unless otherwise defined herein, capitalized terms or
matters of construction defined or established in the Security Agreement shall
be applied herein as defined or established therein. All other undefined terms
contained in this Agreement, unless the context indicates otherwise, shall have
the meanings provided for by the UCC to the extent the same are used or defined
therein.
 
2.            Grant of Security Interest in Intellectual Property Collateral. To
secure the prompt and complete payment, performance and observance of all of the
Obligations, Grantor hereby grants, assigns, conveys, mortgages, pledges,
hypothecates and transfers to Lender a Lien upon all its right, title and
interest in, to and under the following property, whether now owned by or owing
to, or hereafter acquired by or arising in favor of, Grantor (including under
any trade names, styles or divisions of Grantor), and regardless of where
located (collectively, the "Intellectual Property Collateral"):
 
 
 

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(a) all of Grantor's Patents and Patent Licenses to which it is a party,
including those referred to in Part A to Schedule I hereto;
 
(b) all of Grantor's Trademarks, including those referred to in Part B to
Schedule I hereto;
 
(c) all of Grantor's Copyrights and Copyright Licenses to which it is a party,
including those referred to in Part C to Schedule I hereto;
 
(d) all registrations for any of the foregoing, and all reissues, continuations
or extensions of the foregoing, together with all rights to register and record
all of the foregoing;
 
(e) all goodwill, trade secrets, proprietary or confidential information,
technical information, procedures, formulae, quality control standards, designs,
operating and training manuals, customer lists, and other General Intangibles
with respect to the foregoing; and
 
(f) all Proceeds of the foregoing, including (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to any Person (as defined in
the Security Agreement) from time to time with respect to any of the foregoing,
(ii) any and all payments (in any form whatsoever) made or due and payable to
any Person from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the foregoing by any
governmental authority (or any Person acting under color of governmental
authority), (iii) any claim of any Person against third parties for (A) past,
present or future infringement of any Patent or Patent License, (B) past,
present or future infringement of any Copyright or Copyright License, (C) past,
present or future infringement or dilution of any Trademark, or (D) injury to
the goodwill associated with any Trademark, (iv) any recoveries by any Person
against third parties with respect to any litigation or dispute concerning any
of the foregoing, and (v) any and all other amounts from time to time paid or
payable under or in connection with any of the foregoing, upon disposition or
otherwise.
 
3.            Security Agreement. The Lien granted pursuant to this Agreement is
granted in conjunction with the Liens granted to Lender pursuant to the Security
Agreement. Grantor hereby acknowledges and affirms that the rights and remedies
of Lender with respect to the Liens granted under this Agreement are more fully
set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
 
4.            Remedies Upon Default. (a) Anything herein contained to the
contrary notwithstanding, if and while Grantor shall be in default hereunder or
an Event of Default exists under the Security Agreement, Grantor hereby
covenants and agrees that the Lender, as the holder of a security interest under
the UCC, may take such action permitted under the Security Agreement or
permitted by law, in its absolute discretion, to foreclose upon the Intellectual
Property Collateral covered hereby.
 
 
 

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5.   Acknowledgment. Grantor expressly acknowledges that, upon an event of
default under the Transaction Documents, this Agreement shall be recorded with
the United States Patent and Trademark Office.
 
IN WITNESS WHEREOF, the parties hereto have executed this Patent, Trademark and
Copyright Security Agreement as of the date first written above.
 

  Grantor          
X-FACTOR COMMUNICATIONS, LLC,
a New York limited liability company
         
 
By:
      Name: Charles Sar ino     Title: President & EO             Lender        
 
NEW JERSEY ECONOMIC
DEVELOPMENT AUTHORITY
            By:        Name: Teri Dunlop    
Title: Director-Closing Services
 

 
 
 

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ACKNOWLEDGMENT
 
STATE OF NEW JERSEY :
 
COUNTY OF ge-OE 41 7'.
 
BE IT REMEMBERED, that on this 31st day of          , 2I109, before me, the
subscriber, an Attorney-at-Law of the State of New Jersey, personally appeared
CHARLES SARACINO of X-FACTOR COMMUNICATIONS, LLC , a limited liability company,
who, I am satisfied is the person who executed the foregoing Instrument on
behalf of said limited liability company, and who thereupon acknowledged that he
signed and delivered said Instrument as member, and that said Instrument is the
voluntary act and deed of said limited liability company.
 
 
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M E„DEAL.
   
i47-TOgNEY 14T- MIA)
 

 
 

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ACKNOWLEDGMENT
 
STATE OF NEW JERSEY :
ss.:
COUNTY OF MERCER
 
BE IT REMEMBERED, that on this 31st day of July, 2009, before me, the
subscriber, personally appeared TERI DUNLOP, who, being by me duly sworn, did
depose and make proof to my satisfaction that she is the DIRECTOR — CLOSING
SERVICES of the NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY, the authority
mentioned in the within Instrument; that the execution, as well as the making of
this Instrument, has been duly authorized by a proper resolution of the Board of
Members of said authority; and said Instrument was signed and delivered by said
officer as and for the voluntary act and deed of said authority.
 
                      _______________________________
 
 
 

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SCHEDULE I
 
to
 
PATENT,
 
TRADEMARK AND COPYRIGHT SECURITY AGREEMENT
 
PART A: PATENTS
 
Application No. 12/326,034 filed on December 1, 2008 for DYNAMIC DIGITAL
SIGNMAGE,
CUSTOMER CONTENT CONTROL PORTAL & MANAGEMENT SYSTEM (Provisional
 
Application Number 60/991,648
 
PART B: TRADEMARKS/SERVICE MARK
 
DSCP (serial number 77467712)
 
DSCP://DIGITAL SIGNAGE CONTROL PORTAL & DESIGN (serial number 77468035)
 
PART C: COPYRIGHTS
 
 

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