Exhibit 10.41
SECURITY AGREEMENT
DATED JUNE 13, 2002
FROM
INTERCALLNET, INC.
AND
INTER-CALL-NET TELESERVICES, INC.
AS GRANTOR
TO
STANFORD VENTURE CAPITAL HOLDINGS, INC.
AS LENDER
T A B L E O F C O N T E N T S
Section 1. Grant of Security..................................................................................1
Section 2. Security for Obligations...........................................................................3
Section 3. Grantor Remains Liable.............................................................................3
Section 4. Representations and Warranties.....................................................................3
Section 5. Further Assurances.................................................................................4
Section 6. As to Equipment and Inventory......................................................................5
Section 7. Insurance..........................................................................................5
Section 8. Place of Perfection; Records; Collection of Receivables and Intangibles............................6
Section 9. Transfers and Other Liens..........................................................................7
Section 10. Collateral Agent Appointed Attorney-in-Fact.......................................................7
Section 11. Lender May Perform................................................................................7
Section 12. Lender's Duties...................................................................................8
Section 13. Remedies..........................................................................................8
Section 14. Indemnity and Expenses............................................................................9
Section 15. Amendments; Waivers, Etc..........................................................................9
Section 16. Notices, Etc......................................................................................9
Section 17. Continuing Security Interest; Assignments Under the Loan Agreement...............................10
Section 18. Release; Termination.............................................................................10
Section 19. Security Interest Absolute.......................................................................11
Section 20. Execution in Counterparts........................................................................12
Section 21. Governing Law....................................................................................12
Section 22. Reinstatement....................................................................................12
Section 23. Severability.....................................................................................12
SCHEDULE I:
LOCATIONS OF EQUIPMENT AND INVENTORY .........................................................................15
SCHEDULE II:
Chief Executive Office and Federal Tax Identification Number..................................................16
SCHEDULE 4(b)
Liens
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement") dated as of June 13, 2002 made by
INTERCALLNET, INC., a corporation organized under the laws of Florida, and
INTER-CALL-NET TELESERVICES, INC., a company organized under the laws of Florida
(collectively, "GRANTOR") to STANFORD VENTURE CAPITAL HOLDINGS, INC., a Delaware
corporation ("LENDER").
PRELIMINARY STATEMENTS
(1) Grantor has entered into a Loan Agreement dated as of June 13, 2002
(said agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "LOAN
Agreement") with Lender (as defined therein).
(2) Pursuant to the Loan Agreement, Grantor is entering into this
Agreement in order to grant to Lender a security interest in all of Grantor's
personal property and fixtures now owned or hereafter acquired.
(3) It is a condition precedent to the making of Disbursements and/or
Advances by Lender under the Loan Agreement from time to time that Grantor shall
have granted the assignment and security interest contemplated by this
Agreement.
(4) Grantor will derive substantial direct and indirect benefit from
the transactions contemplated by the Loan Documents.
(5) Terms defined in the Loan Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Loan Agreement.
Further, unless otherwise defined in this Agreement or in the Loan Agreement,
terms defined in Article 8 or 9 of the Florida Uniform Commercial Code in effect
in the State of Florida ("FL. UNIFORM COMMERCIAL CODE") are used in this
Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lender to make Disbursements and/or Advances under the Loan Agreement, Grantor
hereby agrees with Lender as follows:
Section 1. Grant of Security. As security for the prompt and complete
payment and performance of the Obligations under the Loan Agreement, Grantor
hereby assigns and pledges to Lender, and hereby grants to Lender a security
interest in, such Grantor's right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by Grantor, wherever located, and whether now or hereafter
existing or arising (collectively, the "COLLATERAL"):
(a) all equipment in all of its forms, all furniture, and all
fixtures, and all parts thereof and all accessions thereto and substitutions and
replacements therefor (any and all such equipment, furniture, fixtures, parts,
accessions, substitutions and replacements being the "EQUIPMENT");
(b) all inventory in all of its forms, (including, without
limitation, (i) all raw materials and work in process therefor, finished goods
thereof and materials used or consumed in the manufacture, production,
preparation or shipping thereof; (ii) goods in which Grantor has an interest in
mass or a joint or other interest or right of any kind (including, without
limitation, goods in which Grantor has an interest or right as consignee); (iii)
goods intended for sale or lease by Grantor or for display or demonstration, and
(iv) goods that are returned to or repossessed or stopped in transit by
Grantor), and all accessions thereto and products thereof and substitutions,
replacements and documents therefor (any and all such inventory, accessions,
products, substitutions and replacements, and documents being the "INVENTORY");
(c) all Accounts (or other rights to payment of a monetary
obligation), Chattel Paper, Instruments, Deposit Accounts,
Letter-of-Credit-Rights (as each of the foregoing terms are defined in the Fl.
Uniform Commercial Code), contract rights and other obligations of any kind,
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services and whether or not earned by performance, and all
rights now or hereafter existing in and to all Supporting Obligations (as such
term is defined in the Fl. Uniform Commercial Code), security agreements, leases
and other contracts securing or otherwise relating to any such Accounts (or
other rights to payment), Chattel Paper, Instruments, Deposit Accounts,
Letter-of-Credit-Rights, contract rights or other obligations of any kind (any
and all such Accounts (or other rights to payment), Chattel Paper, Instruments,
Deposit Accounts, Letter-of-Credit-Rights, contract rights and other obligations
of any kind, to the extent not referred to in clause (d) or (e) below, being the
"RECEIVABLES", and any and all such security agreements, leases and other
contracts being the "RELATED CONTRACTS");
(d) all General Intangibles (as such term is defined in the
Fl. Uniform Commercial Code) of any kind in all its forms, including, without
limitation, all chases in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, trademarks, service
marks, trade names, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, tax refund claims, computer programs, all
claims under guaranties, all rights to indemnification and all other intangible
property of every kind and nature (other than the Receivables, the Related
Contracts and Account Collateral) (all of the preceding items of this clause (d)
being collectively referred to as the "INTANGIBLES").
(e) the following (collectively, the "ACCOUNT COLLATERAL"):
(i) all other Deposit Accounts of Grantor from
time to time, all funds held therein and all
certificates and Instruments, if any, from
time to time representing or evidencing such
Deposit Accounts;
(ii) all notes, certificates of deposit, Deposit
Accounts, checks and other Instruments from
time to time delivered to or otherwise
possessed by Lender or bailee of Lender for
or on behalf of Grantor, including, without
limitation, those delivered or possessed in
substitution for or in addition to any or
all of the then existing Account Collateral;
and
-2-
(iii) all interest, dividends, cash, Instruments
and other property from time to time
received, receivable or otherwise
distributed in respect of or in exchange for
any or all of the then existing Account
Collateral.
(f) all proceeds of any and all of the Collateral (including,
without limitation, proceeds that constitute property of the types described in
clauses (a) through (e) of this Section 1 and this clause (f)) and, to the
extent not otherwise included, all (i) payments under insurance (whether or not
Lender 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 and (ii) cash.
Section 2. Security for Obligations. This Agreement secures the payment
of all Obligations of Grantor now or hereafter existing under the Loan
Documents, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations being the "SECURED OBLIGATIONS"). Without limiting the
generality of the foregoing, this Agreement secures, the payment of all amounts
that constitute part of the Secured Obligations and would be owed by Grantor to
Lender under the Loan Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving Lender.
Section 3. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Grantor shall remain liable under the 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 Lender of any of the rights
hereunder shall not release Grantor from any of its duties or obligations under
the contracts and agreements included in the Collateral and (c) Lender shall
have not any obligation or liability under the contracts and agreements included
in the Collateral by reason of this Agreement or any other Loan Document, nor
shall Lender be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
Section 4. Representations and Warranties. Grantor represents and
warrants as follows:
(a) All of the Equipment and Inventory of Grantor is located
at the places specified therefor in Schedule I hereto, as such Schedule I may be
amended from time to time pursuant to Section 6(a). The chief executive office
of and all originals of all Chattel Paper that evidence Receivables or
Intangibles of Grantor, are located at the address specified therefor in
Schedule II hereto, as such Schedule II may be amended from time to time
pursuant to Section 8(a). Grantor's federal tax identification number is set
forth opposite Grantor's name in Schedule II hereto. All originals of all
Chattel Paper that evidence Receivables or Intangibles have been delivered to
Lender. None of the Receivables, Intangibles, or the other Collateral is
evidenced by a promissory note or other instrument that has not been delivered
to Lender.
-3-
(b) Except as set forth in Schedule 4(b) attached hereto,
Grantor is the legal and beneficial owner of the Collateral free and clear of
any Lien, claim, option or right of others, except for the security interest
created under this Agreement, and Liens permitted under the Loan Agreement.
Except as set forth in Schedule 4(b) attached hereto, no effective financing
statement, security agreement, continuation statement or other instrument
similar in effect covering all or any part of Collateral or listing Grantor or
any trade name of Grantor as debtor is on file in any recording office, except
such as may have been filed in favor of Lender relating to the Loan Documents or
as otherwise permitted under the Loan Agreement.
(c) Grantor has exclusive possession and control of the
Equipment and Inventory.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the grant by Grantor of the assignment,
pledge and security interest granted hereunder or for the execution, delivery or
performance of this Agreement by Grantor, or (ii) the perfection or maintenance
of the assignment, pledge and security interest created hereunder (including the
first priority nature of such assignment, pledge or security interest), except
for filing of financing, termination and continuation statements under the Fl.
Uniform Commercial Code, which financing statements shall be duly filed upon the
execution of this Agreement.
(e) As a result of the filing of appropriate financing
statement, this Agreement is effective to create a valid and continuing Lien on
and perfected security interest in favor of Grantor in the Collateral with
respect to which a security interest may be perfected by filing pursuant to the
Fl. Uniform Commercial Code, which lien and security interest is prior to all
other Liens (except as set forth in Schedule 4(b)), and is enforceable as such
as against creditors of and purchasers from Grantor. All action (including,
without limitation, all filings, registrations and recordings) necessary or
desirable to create, protect and perfect the security interest granted to Lender
hereby in respect of each item of Collateral has been duly accomplished.
Section 5. Further Assurances.
------------------
(a) Grantor agrees that from time to time, at the expense of
Grantor, Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Lender may request in order to perfect and protect any pledge, assignment
or security interest granted or purported to be granted by Grantor hereunder or
to enable Lender to exercise and enforce its rights and remedies hereunder with
respect to Lender. Without limiting the generality of the foregoing, Grantor
will promptly with respect to the Collateral: (i) if any such Collateral shall
be evidenced by a promissory note or other Instrument or Chattel Paper, letter
of credit, deliver and pledge to Lender hereunder such note or instrument or
Chattel Paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Lender; (ii)
take all actions as may be necessary in order to perfect and preserve the
security interest granted or purported to be granted by the Grantor in the
Letter-of Credit-Rights, including, without limitation, (x) the delivery and
pledge to Lender hereunder of any letter of credit accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to Lender, and (y) obtaining the consent of an Issuer or Nominated
Person (as such terms are defined in the Fl. Uniform Commercial Code) to such
transfer or assignment of any letter of credit; (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary in order to perfect and preserve the
security interest granted or purported to be granted by such Grantor hereunder;
and (iv) deliver to Lender evidence that all other action that Lender may deem
reasonably necessary or desirable in order to perfect and protect the security
interest created by Grantor under this Agreement has been taken.
-4-
(b) Grantor hereby authorizes Lender to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of Grantor where permitted by
law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) Grantor will furnish to Lender from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with Collateral as Lender may reasonably
request, all in reasonable detail.
Section 6. As to Equipment and Inventory.
-----------------------------
(a) Grantor will keep the Equipment and Inventory (other than
Inventory sold in the ordinary course of business) at the places therefor
specified in Section 4(a) or, upon 30 days' prior written notice to Lender, at
such other places in a jurisdiction where all action required by Section 5 shall
have been taken with respect to such Equipment and Inventory (and, upon the
taking of such action in such jurisdiction, Schedule I hereto shall be
automatically amended to include such other places).
(b) Grantor will 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 any manufacturer's manual, and
will forthwith, or in the case of any loss or damage to any Equipment as soon as
practicable after the occurrence thereof, make or cause to be made all repairs,
replacements and other improvements in connection therewith that are necessary
or desirable to such end. Grantor will promptly furnish to Lender a statement
respecting any loss or damage exceeding $10,000 to any of the Equipment or
Inventory.
(c) Grantor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory. In producing its Inventory, Grantor will
comply with all requirements of applicable law, including, without limitation,
the Fair Labor Standards Act.
Section 7. Insurance.
---------
(a) Grantor will, at its own expense, maintain or procure that
there is maintained, insurance with respect to the Collateral as required
pursuant to Section 6.17 of the Loan Agreement. Grantor will, if so requested by
Lender, deliver to Lender original or duplicate policies of such insurance and,
as often as Lender may reasonably request, a report of a reputable insurance
broker with respect to such insurance. Further, Grantor will, at the request of
Lender, duly execute and deliver instruments of assignment of such insurance
policies described in Section 6.17 of the Loan Agreement and cause the insurers
to acknowledge notice of such assignment.
-5-
(b) Reimbursement under any liability insurance maintained by
Grantor pursuant to this Section 7 may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to the Collateral when subsection (c) of this Section 7 is not
applicable, Grantor will make or cause to be made the necessary repairs to or
replacements of such Collateral, and any proceeds of insurance properly received
by or released to Grantor shall be used by Grantor, except as otherwise required
hereunder or by the Loan Agreement, to pay or as reimbursement for the costs of
such repairs or replacements.
(c) So long as no Enforcement Event shall have occurred and be
continuing, all insurance payments received by Lender in connection with any
loss, damage or destruction of any Collateral, will be released by Lender to
Grantor for the repair, replacement or restoration thereof, subject to such
terms and conditions with respect to the release thereof as Lender may
reasonably require. To the extent that (i) the amount of any such insurance
payments exceeds the cost of any such repair, replacement or restoration, or
(ii) such insurance payments are not otherwise required by Grantor to complete
any such repair, replacement or restoration required hereunder, Lender will not
be required to release the amount thereof to Grantor and may hold or continue to
hold such amount as additional security for the Secured Obligations. Upon the
occurrence and during the continuance of any Enforcement Event or the actual or
constructive total loss (in excess of $10,000 per occurrence) of any Collateral,
all insurance payments in respect of such Collateral shall be paid to Lender and
shall, in Lender's sole discretion, (i) be released to Grantor to be applied as
set forth in the first sentence of this subsection (c) or (ii) be held as
additional Collateral hereunder or applied as specified in Section 13(b).
Section 8. Place of Perfection; Records; Collection of Receivables and
Intangibles.
(a) Grantor will keep its chief executive office at the
location specified in Section 4(a) or, upon 30 days' prior written notice to
Lender, at such other location in a jurisdiction where all actions required by
Section 5 shall have been taken with respect to the Collateral (and, upon the
taking of such action in such jurisdiction, Schedule II hereto shall be
automatically amended to include such other location). Grantor will hold and
preserve its records relating to the Collateral and will permit representatives
of Lender upon prior notice to Grantor during normal business hours to inspect
and make abstracts from such records and other documents.
(b) Except as otherwise provided in this subsection (b),
Grantor will continue to collect, at its own expense, all amounts due or to
become due Grantor under the Receivables, the Related Contracts and the
Intangibles. In connection with such collections, Grantor may take (and, at
Lender's direction, will take) such action as Grantor or Lender may deem
necessary or advisable to enforce collection of the Receivables, the Related
Contracts; and the Intangibles; provided, however, that Lender shall have the
right at any time, upon the occurrence of any Enforcement Event and written
notice to Grantor of its intention to do so, to notify the obligors under any
Receivables, Related Contracts, or Intangibles of the assignment of such
Receivables, Related Contracts, or Intangibles to Lender and to direct such
obligors to make payment of all amounts due or to become due to Grantor
thereunder directly to Lender and, upon such notification and at the expense of
-6-
Grantor, to enforce collection of any such Receivables, Related Contracts, or
Intangibles and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as Grantor might have done. After
receipt by Grantor of the notice from Lender referred to in the proviso to the
preceding sentence, (i) all amounts and proceeds (including Instruments)
received by Grantor in respect of the Receivables, the Related Contracts and the
Intangibles shall be received in trust for the benefit of Lender hereunder,
shall be segregated from other funds of Grantor and shall be forthwith paid over
to Lender in the same form as so received (with any necessary endorsement) if
any Enforcement Event shall have occurred and be continuing, applied as provided
in Section 13(b) and (ii) Grantor will not adjust, settle or compromise the
amount or payment of any Receivable, Related Contracts, or Intangibles, release
wholly or partly any obligors thereof, or allow any credit or discount thereon.
Grantor will not permit or consent to the subordination of its right to payment
under any of the Receivables, Related Contracts or Intangibles to any other
indebtedness or obligations of the obligors thereof.
Section 9. Transfers and Other Liens. Grantor agrees that it will not
(i) sell, assign or otherwise dispose of, or grant any option with respect to,
any of the Collateral, other than sales, assignments and other dispositions of
Collateral, and options relating to Collateral, permitted under the terms of
this Agreement, or (ii) create or suffer to exist any Lien upon or with respect
to any of the Collateral of Grantor except for (a) the pledge, assignment,
security interest created under this Agreement, (b) those Liens listed in
Schedule 4(b), and (c) Liens permitted under the Loan Agreement.
Section 10. Collateral Agent Appointed Attorney-in-Fact. Grantor hereby
irrevocably appoints Lender Grantor's attorney-in-fact, with full authority in
the place and stead of Grantor and in the name of Grantor or otherwise, from
time to time in Lender's discretion, to take any action and to execute any
instrument that Lender may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to
Lender pursuant to Section 7;
(b) to ask for, demand, collect, xxx for, recover, compromise,
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, indorse and collect any drafts or other
Instruments, documents and Chattel Paper, in connection with clause (a) or (b)
above; and
(d) to file any claims or take any action or institute any
proceedings that Lender may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of Lender with respect
to any of the Collateral.
Section 11. Lender May Perform. If Grantor fails to perform any
agreement contained herein, Lender may, as Lender deems necessary to protect the
security interest granted hereunder in the Collateral or to protect the value
thereof, but without any obligation to do so and without notice, itself perform,
or cause performance of, such agreement, and the expenses of Lender incurred in
connection therewith shall be payable pursuant to Section 14(b).
-7-
Section 12. Lender's Duties. The powers conferred on Lender hereunder
are solely to protect Lender's interest in the Collateral and shall not impose
any duty upon it to exercise any such powers. Except for the safe custody and
reasonable care of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, Lender shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not Lender has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. Lender shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own property of a similar
nature.
Section 13. Remedies. If any Enforcement Event shall have occurred and
be continuing:
(a) Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the Fl.
Uniform Commercial Code (whether or not the Fl. Uniform Commercial Code applies
to the affected Collateral) and also may: (i) require Grantor to, and Grantor
hereby agrees that it will at its expense and upon request of Lender forthwith,
assemble all or part of the Collateral as directed by Lender and make it
available to Lender at a place and time to be designated by Lender that is
reasonably convenient to both parties; (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Lender's offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as Lender may deem commercially
reasonable; (iii) occupy any premises owned or leased by Grantor where the
Collateral or any part thereof is assembled or located for a reasonable period
in order to effectuate its rights and remedies hereunder or under law, without
obligation to Grantor in respect of such occupation; and (iv) exercise any and
all rights and remedies of any of Grantor under or in connection with the
Receivables, the Related Contracts, the Intangibles, or otherwise in respect of
the Collateral, including, without limitation, any and all rights of Grantor to
demand or otherwise require payment of any amount under, or performance of any
provision of, the Receivables, the Related Contracts and the Intangibles. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to 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. Lender shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Lender 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.
(b) Any cash held by or on behalf of Lender and all cash
proceeds received by or on behalf of Lender in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Lender, be held by Lender as collateral for, and/or
then or at any time thereafter applied (after payment of any amounts payable to
Lender pursuant to Section 14) in whole or in part by Lender against, all or any
part of the Secured Obligations. Any surplus of such cash or cash proceeds held
by or on the behalf of Lender and remaining after payment in full of all the
Secured Obligations shall be paid over to Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
-8-
(c) All payments received by Grantor under or in connection
with any or otherwise in respect of the Collateral shall be received in trust
for the benefit of Lender, shall be segregated from other funds of Grantor and
shall be forthwith paid over to Lender in the same form as so received (with any
necessary endorsement).
(d) Lender may, without notice to Grantor except as required
by law and at any time or from time to time, charge, set-off and otherwise apply
all or any part of the Secured Obligations against any funds held in any Deposit
Account.
Section 14. Indemnity and Expenses.
----------------------
(a) Grantor agrees to indemnify, defend and save and hold
harmless Lender and its Affiliates and officers, directors, employees, agents
and advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense results from such
Indemnified Party's gross negligence or willful misconduct.
(b) Grantor will upon demand pay to Lender the amount of any
and all reasonable expenses, including, without limitation, the reasonable fees
and expenses of its counsel and of any experts and agents, that Lender may incur
in connection with (i) the administration of this Agreement; (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral of Grantor; (iii) the exercise or
enforcement of any of the rights of Lender hereunder; or (iv) the failure by
Grantor to perform or observe any of the provisions hereof.
Section 15. Amendments; Waivers, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Lender, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of Lender to exercise, and no delay in exercising any right
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
Section 16. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopier or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to
Grantor or Lender, addressed to it at its address specified in the Loan
Agreement; or, as to any party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and other
communications shall, when mailed, telegraphed, telecopied or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
telecopied or confirmed by telex answerback, respectively, addressed as
aforesaid; except that notices and other communications to Lender shall not be
effective until received by Lender. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or
Schedules hereto shall be effective as delivery of an original executed
counterpart thereof.
-9-
Section 17. Continuing Security Interest; Assignments Under the Loan
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of the Secured Obligations, or (ii) the Maturity
Date, (b) be binding upon Grantor, its successors and assigns and (c) inure,
together with the rights and remedies of Lender hereunder, to the benefit of
Lender, and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), Lender may assign or otherwise transfer
all or any portion of its rights and obligations under the Loan Agreement
(including, without limitation, all or any portion of its Commitments, the
Disbursements and/or Advances owing to it and the Note, if any, held by it) to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lender herein or otherwise, in each
case as provided in Section 11.1 of the Loan Agreement.
Section 18. Release; Termination.
--------------------
(a) Upon any sale, lease, transfer or other disposition of any item of
Collateral of Grantor in accordance with the terms of the Loan Documents (other
than sales of Inventory in the ordinary course of business), Lender will, at
Grantor's expense, execute and deliver to Grantor such documents as Grantor
shall reasonably request to evidence the release of such item of Collateral from
the assignment and security interest granted hereby; provided, however, that (i)
at the time of such request and such release no Enforcement Event shall have
occurred and be continuing, (ii) Grantor shall have delivered to Lender, at
least 10 business days prior to the date of the proposed release, a written
request for release describing the item of Collateral and the terms of the sale,
lease, transfer or other disposition in reasonable detail, including, without
limitation, the price thereof and any expenses in connection therewith, together
with a form of release for execution by Lender and a certificate of Grantor to
the effect that the transaction is in compliance with the Loan Documents and as
to such other matters as Lender may request and (iii) the proceeds of any such
sale, lease, transfer or other disposition required to be applied, or any
payment to be made in connection therewith, in accordance with Article II of the
Loan Agreement shall, to the extent so required, be paid or made to, or in
accordance with the instructions of, Lender when and as required under Article
II of the Loan Agreement.
(b) Upon any sale or transfer of Collateral permitted by the terms of
the Loan Agreement and the transfer and sale of Inventory in the ordinary course
of business, the security interest created hereunder in such Collateral (but not
the proceeds thereof) shall be released and the Lender will, at the Grantor's
sole expense, execute and deliver to the Grantor such documents as the Grantor
shall reasonably request to evidence such release.
(c) Upon the latest of (i) the payment in full in cash of the Secured
Obligations, or (ii) the Maturity Date, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantor. Upon any such termination, Lender will, at Grantor's expense,
execute and deliver to Grantor such documents as Grantor shall reasonably
request to evidence such termination.
-10-
Section 19. Security Interest Absolute. The obligations of Grantor
under this Agreement are independent of the Secured Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan Documents,
and a separate action or actions may be brought and prosecuted against Grantor
to enforce this Agreement. All rights of Lender and the pledge, assignment and
security interest hereunder, and all obligations of Grantor hereunder, shall be
irrevocable, absolute and unconditional irrespective of, and Grantor hereby
irrevocably waives (to the maximum extent permitted by applicable law) any
defenses it may now have or may hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any other
Obligations of Grantor under or in respect of the Loan Documents or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Secured Obligations resulting
from the extension of additional credit to Grantor or any of its Affiliates or
otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Obligations;
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations, or
any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other Obligations of
Grantor under or in respect of the Loan Documents or any other assets of Grantor
or any of its Affiliates;
(e) any change, restructuring or termination of the corporate
structure or existence of Grantor or any of its Affiliates;
(f) any failure of Lender to disclose to Grantor any
information relating to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities or prospects of
Grantor now or hereafter known to Lender (Grantor waiving any duty on the part
of Lender to disclose such information);
(g) the failure of any other Person to execute this Agreement
or any other Security Document, guaranty or agreement or the release or
reduction of liability of Grantor or other grantor or surety with respect to the
Secured Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
Lender that might otherwise constitute a defense available to, or a discharge
of, Grantor or a third party grantor of a security interest.
-11-
This Agreement shall continue to be effective or be reinstated to the
maximum extent permitted by law, as the case may be, if at any time any payment
of any of the Secured Obligations is rescinded or must otherwise be returned by
Lender or by any other Person upon the insolvency, bankruptcy or reorganization
of Grantor or otherwise, all as though such payment had not been made.
Section 20. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
Section 21. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida, without regard
to conflict or choice of law principles.
Section 22. Reinstatement. To the maximum extent permitted by law, this
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against Grantor for liquidation or
reorganization, should Grantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of Grantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee of the Secured Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
Section 23. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be invalid to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
[SIGNATURES ON FOLLOWING PAGE]
-12-
IN WITNESS WHEREOF, Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
INTERCALLNET, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
INTER-CALL-NET TELESERVICES, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
Address for Notices:
-------------------
-------------------
-------------------
-13-
SCHEDULE I
LOCATIONS OF EQUIPMENT AND INVENTORY
In accordance with Section 4 of this Security Agreement, Representations and
Warranties, subparagraph (a) all of the Equipment and Inventory of Grantor is
located at:
0000 XX 0xx Xxx, Xxxx Xxxxxxxxxx, Xxxxxxx, 00000
-14-
SCHEDULE II
CHIEF EXECUTIVE OFFICE AND FEDERAL TAX IDENTIFICATION NUMBER
In accordance with Section 4 of this Security Agreement, Representations and
Warranties, subparagraph (a) the chief executive office of and all originals of
all Chattel Paper that evidence Receivables or Intangibles of Grantor are
located at :
0000 XX 0xx Xxx, Xxxx Xxxxxxxxxx, Xxxxxxx, 00000
In further accordance with Section 4 of this Security Agreement, Representations
and Warranties, subparagraph (a) Grantor's federal tax identification numbers
are set forth opposite Grantor's name as follows:
Intercallnet, Inc. 00-0000000
Intercallnet Teleservices, Inc. 00-0000000
-15-
SCHEDULE 4(B)
In accordance with Section 4 of this Security Agreement, Representations and
Warranties, subparagraph (b) Grantor is the legal and beneficial owner of the
Collateral free and clear of any Lien, claim, option or right of others, except
for the security interest created under this Agreement, and Liens permitted
under the Loan Agreement, except as set forth below:
Document No. Secured Parties Date Filed Security Interest
----------------------- ------------------------------------ ------------------------- ---------------------------------
200200545858 Aya Partners, Ltd. March 7, 2002 Davox Dialer
200200545866 Xxxxxxx, Xxx March 7, 2002 NEC~BNS Equipment
200190110048 Sunrise Leasing Corp October 12, 2001 Cisco Systems Equipment
200100023485 Sunrise Leasing Corp February 1, 2001 Cisco Systems Equipment
200000232777 Sunrise Leasing Corp October 11, 2000 Cisco Systems Equipment
200000223186 Sunrise Leasing Corp September 28, 2000 Cisco Systems Equipment
200000187610 Hewlett-Packard Company August 15, 2000 Computer Equipment
200000166174 Sunrise Leasing Corp July 19, 2000 Cisco Systems Equipment
200000151961 NEC America, Inc. June 30, 2000 Telephone System
-16-
