NY706194.6211813-10001

P. Gregory Schwed (PS-0861)Barry I. Slotnick (BS-9796)Jason Blumberg (JB-1033)LOEB & LOEB LLP345 Park AvenueNew York, New York 10154-1895(212) 407-4000Hearing Date: March 7, 2008 at 11:00 a.m.UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK

---------------------------------------------------------XIn re:TEEVEE TOONS, INC., d/b/a TVTRECORDS,Debtor,::::::::Chapter No. 11Case No. 08-10562 (ALG)---------------------------------------------------------X

LIMITED OBJECTION OF THE HARRY FOXAGENCY TO CASH COLLATERAL MOTION

TO THE HONORABLE ALAN L. GROPPER:The Harry Fox Agency, Inc. (“HFA”), on behalf of its nearly 35,000 music publisher-principals, asserts a limited objection to the above-captioned debtor’s (“TVT” or the “Debtor”)proposed cash collateral order, and states as follows:

Summary of Argument

1. TVT seeks the unrestricted use of cash generated under the proposed cash collateralorder, to continue the operation of its business. However, TVT ignores inconvenient but criticalfacts: HFA terminated for cause TVT’s licenses to use copyrighted musical compositions andTVT never bothered to obtain licenses to use hundreds of other copyrighted musicalcompositions in the first place. As a result, TVT has no legal authority to manufacture anddistribute much of its musical catalog, which it is apparently still exploiting as a debtor-in-

NY706194.6211813-10001

2possession. Without valid copyright licenses, TVT cannot continue to manufacture or distributerecordings of these musical compositions. TVT is therefore implicitly asking this Court to giveits official imprimatur to TVT’s continuing and illegal post-petition copyright infringement. Asshown below, the law prohibits this result, and the cash collateral order must be modified toprotect the rights of the copyright owners.2. While HFA has no desire to derail TVT’s reorganization or sale efforts, HFA intendsto protect the copyright ownership rights of its principals, the music publishers, and thesongwriters they represent. The Debtor’s first day orders go to great pains to attempt to givebroad protection to recording artists and certain lienors and producers. But TVT makes noattempt to even address, let alone safeguard, the interests of music publishers and songwriterswho provide the irreplaceable foundation for TVT or any record company. TVT’sreorganization presumably depends upon its continuing ability to sell CDs in its inventory,record and press new CDs and otherwise exploit the sound recordings in its catalog. However, tothe extent TVT is infringing copyrights – which it is presumably doing at this very moment –TVT is essentially operating a renegade business, as illegal its own way as if the Debtor soughtpermission to operate an auto “chop shop” with stolen cars.3. Accordingly, HFA (1) objects to the cash collateral order to the extent it permits theDebtor’s use of cash for continued infringement of copyrights held by music publishersrepresented by HFA; and (2) reserves the right to seek damages and/or injunctive relief under theCopyright Act with respect to such post-petition infringing use, against both the Debtor and anynon-debtor parties complicit in such willful infringement.4. This Objection is supported by Declarations of (1) Christos P. Badavas, VicePresident and Senior Counsel of HFA (“Badavas Decl.”), and (2) Barry Slotnick, HFA’s outside

NY706194.6211813-10001

3counsel (“Slotnick Decl.”), and documents attached thereto, to which references are madepassim.

Background.

5. HFA is the leading “mechanical” licensing and collection agency in the United States,representing about 35,000 music publishers with nearly 1.9 million songs in their repertoire.Licenses that permit the recording and distribution of musical compositions embodied in CDs,records, tapes and certain digital configurations are commonly referred to as “mechanical”licenses. Badavas Decl. ¶ 2.6. HFA is the agent for these thousands of music publishers and serves as a “one stopshop” for most mechanical licensing in the United States. Id. ¶ 3.

HFA Licenses are Compulsory Licenses, Entitling theCopyright Owners to the Full Protection of the Copyright Act.

7. The Copyright Act of 1976, 17 U.S.C. § 101 et seq. (the “Copyright Act”), extendscopyright protection to, among other things, musical works and sound recordings. Id. § 102.The Copyright Act grants a copyright owner the exclusive right to reproduce copyrighted works“in copies or phonorecords

“ and to “distribute copies or phonorecords of the copyrighted work to the public by sale.” § 106. This exclusive right is qualified by Section 115 of the CopyrightAct (“Section 115”), which provides that once phonorecords of a non-dramatic musical work have been publicly distributed in the United States with the copyright owner’s consent, anyone

“Phonorecords” are defined in Section 101 of the Copyright Act as:“[m]aterial objects in which sounds, other than those accompanying a motion picture or otheraudiovisual work, are fixed by any method now known or later developed, and from which thesounds can be perceived, reproduced, or otherwise communicated, either directly or with the aidof a machine or device. The term phonorecords includes the material object in which the soundsare first fixed.”