SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of August 30, 2006 (this "AGREEMENT") made by
CHARYS HOLDING COMPANY, INC., a Delaware corporation (the "COMPANY"), and the
undersigned subsidiaries of the Company (each a "GRANTOR" and collectively and
together with the Company the "GRANTORS"), in favor of GOTTBETTER CAPITAL
FINANCE, LLC, a Delaware limited liability company, in its capacity as
collateral agent (in such capacity, the "COLLATERAL AGENT") for the "Buyers" (as
defined below) parties to the Securities Purchase Agreement, dated as of even
date herewith (as amended, restated or otherwise modified from time to time, the
"SECURITIES PURCHASE AGREEMENT").
W I T N E S S E T H:
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WHEREAS, the Company and each party listed as a "Buyer" on the
Schedule of Buyers (collectively, the "Buyers") attached to the Securities
Purchase Agreement have entered into the Securities Purchase Agreement, pursuant
to which the Company shall be required to sell, and the Buyers shall purchase or
have the right to purchase the "Notes" (as defined therein) issued pursuant
thereto (as such Notes may be amended, restated, replaced or otherwise modified
from time to time in accordance with the terms thereof, collectively, the
"Notes"); and
WHEREAS, all capitalized terms used herein shall have the same
meanings ascribed to those terms as defined in the Securities Purchase
Agreement, unless the context provides otherwise; and
WHEREAS, it is a condition precedent to the Buyers purchasing the
Notes pursuant to the Securities Purchase Agreement that the Grantors shall have
executed and delivered to the Collateral Agent this Agreement providing for the
grant to the Collateral Agent for the benefit of the Buyers of a security
interest in certain personal property of each Grantor to secure all of the
Company's obligations under the Securities Purchase Agreement, the Notes, the
"TRANSACTION DOCUMENTS" (as defined in the Securities Purchase Agreement) (the
"Transaction Documents");
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Buyers to perform under the Securities
Purchase Agreement, each Grantor agrees with the Collateral Agent, for the
benefit of the Buyers, as follows:
SECTION 1. Definitions.
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Reference is hereby made to the Securities Purchase Agreement and the
Notes for a statement of the terms thereof. All terms used in this Agreement
and the recitals hereto which are defined in the Securities Purchase Agreement,
the Notes or in Articles 8 or 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York (the "CODE"), and which are not otherwise
defined herein shall have the same meanings herein as set forth therein;
provided that terms used herein which are defined in the Code as in effect in
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the State of New
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York on the date hereof shall continue to have the same meaning notwithstanding
any replacement or amendment of such statute except as the Collateral Agent may
otherwise determine.
The following terms shall have the respective meanings provided for in
the Code: "Accounts", "Cash Proceeds", "Chattel Paper", "Commercial Tort Claim",
"Commodity Account", "Commodity Contracts", "Deposit Account", "Documents",
"Equipment", "Fixtures", "General Intangibles", "Goods", "Instruments",
"Inventory", "Investment Property", "Letter-of-Credit Rights", "Noncash
Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes", "Security",
"Record", "Security Account", "Software", and "Supporting Obligations".
As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:
"COPYRIGHT LICENSES" means all licenses, contracts or other
agreements, whether written or oral, naming any Grantor as licensee or licensor
and providing for the grant of any right to use or sell any works covered by any
copyright (including, without limitation, all Copyright Licenses set forth in
Schedule II hereto).
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"COPYRIGHTS" means all domestic and foreign copyrights, whether
registered or not, including, without limitation, all copyright rights
throughout the universe (whether now or hereafter arising) in any and all media
(whether now or hereafter developed), in and to all original works of authorship
fixed in any tangible medium of expression, acquired or used by any Grantor
(including, without limitation, all copyrights described in Schedule II hereto),
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all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.
"EVENT OF DEFAULT" shall have the meaning set forth in the Notes.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code (Chapter 11 of Title 11 of
the United States Code) or under any other bankruptcy or insolvency law,
assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
"INTELLECTUAL PROPERTY" means the Copyrights, Trademarks and Patents.
"LICENSES" means the Copyright Licenses, the Trademark Licenses and
the Patent Licenses.
"LIEN" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any capitalized lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
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"PATENT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to manufacture, use or sell any invention
covered by any Patent (including, without limitation, all Patent Licenses set
forth in Schedule II hereto).
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"PATENTS" means all domestic and foreign letters patent, design
patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology,
know-how, formulae, rights of publicity and other general intangibles of like
nature, now existing or hereafter acquired (including, without limitation, all
domestic and foreign letters patent, design patents, utility patents, industrial
designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described
in Schedule II hereto), all applications, registrations and recordings thereof
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(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office, or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof.
"TRADEMARK LICENSES" means all licenses, contracts or other
agreements, whether written or oral, naming any Grantor as licensor or licensee
and providing for the grant of any right concerning any Trademark, together with
any goodwill connected with and symbolized by any such trademark licenses,
contracts or agreements and the right to prepare for sale or lease and sell or
lease any and all Inventory now or hereafter owned by any Grantor and now or
hereafter covered by such licenses (including, without limitation, all Trademark
Licenses described in Schedule II hereto).
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"TRADEMARKS" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or hereafter owned,
adopted, acquired or used by any Grantor (including, without limitation, all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, business names, d/b/a's, Internet domain names, trade
styles, designs, logos and other source or business identifiers described in
Schedule II hereto), all applications, registrations and recordings thereof
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(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together
with all goodwill of the business symbolized by such marks and all customer
lists, formulae and other Records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are used.
SECTION 2. Grant of Security Interest. As collateral security for
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all of the "Obligations" (as defined in Section 3 hereof), each Grantor, subject
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to the Permitted Liens, hereby pledges and assigns to the Collateral Agent for
the benefit of the Buyers, and grants to the Collateral Agent for the benefit of
the Buyers a continuing security interest in, all personal property of each
Grantor, wherever located and whether now or hereafter existing and whether
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now owned or hereafter acquired, of every kind and description, tangible or
intangible (collectively, the "COLLATERAL"), including, without limitation, the
following:
(a) all Accounts;
(b) all Chattel Paper (whether tangible or electronic);
(c) the Commercial Tort Claims specified on Schedule VI hereto;
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(d) all Deposit Accounts, all cash and other property from time to
time deposited therein and the monies and property in the possession or under
the control of the Collateral Agent or Buyer or any affiliate, representative,
agent or correspondent of the Collateral Agent or Buyer;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all General Intangibles (including, without limitation, all
Payment Intangibles);
(i) all Goods
(j) all Instruments (including, without limitation, Promissory
Notes and each certificated Security);
(k) all Inventory;
(l) all Investment Property;
(m) all Copyrights, Patents and Trademarks, and all Licenses;
(n) all Letter-of-Credit Rights;
(o) all Supporting Obligations;
(p) all other tangible and intangible personal property of each
Grantor (whether or not subject to the Code), including, without limitation, all
bank and other accounts and all cash and all investments therein, all proceeds,
products, offspring, accessions, rents, profits, income, benefits, substitutions
and replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds
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of insurance thereon and all causes of action, claims and warranties now or
hereafter held by each Grantor in respect of any of the items listed above), and
all books, correspondence, files and other Records, including, without
limitation, all tapes, desks, cards, Software, data and computer programs in the
possession or under the control of any Grantor or any other Person
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from time to time acting for any Grantor, in each case, to the extent of such
Grantor's rights therein, that at any time evidence or contain information
relating to any of the property described in the preceding clauses of this
Section 2 or are otherwise necessary or helpful in the collection or realization
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thereof; and
(q) all Proceeds, including all Cash Proceeds and Noncash
Proceeds, and products of any and all of the foregoing Collateral;
in each case howsoever any Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
SECTION 3. Security for Obligations. The security interest created
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hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred
(collectively, the "Obligations"):
(a) the payment by the Company, as and when due and payable (by
scheduled maturity, required prepayment, acceleration, demand or otherwise), of
all amounts from time to time owing by it in respect of the Securities Purchase
Agreement, the Notes and the other Transaction Documents, including, without
limitation, (A) all principal of and interest on the Notes (including, without
limitation, all interest that accrues after the commencement of any Insolvency
Proceeding of any Grantor, whether or not the payment of such interest is
unenforceable or is not allowable due to the existence of such Insolvency
Proceeding), and (B) all fees, commissions, expense reimbursements,
indemnifications and all other amounts due or to become due under any of the
Transaction Documents (including any Registration Delay Payments (as defined in
the Registration Rights Agreement)); and
(b) for so long as the Notes are outstanding, the due performance
and observance by each Grantor of all of its other obligations from time to time
existing in respect of any of the Transaction Documents, including without
limitation, with respect to any conversion or redemption rights of the Buyers
under the Notes.
SECTION 4. Representations and Warranties. Each Grantor represents
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and warrants as of the date of this Agreement as follows:
(a) Schedule I hereto sets forth (i) the exact legal name of each
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Grantor, and (ii) the state of incorporation, organization or formation and the
organizational identification number of each Grantor in such state.
(b) There is no pending or, to its knowledge, written notice
threatening any action, suit, proceeding or claim affecting any Grantor before
any governmental authority or any arbitrator, or any order, judgment or award
issued by any governmental authority or arbitrator, in each case, that may
adversely affect the grant by any Grantor, or the perfection, of the security
interest purported to be created hereby in the Collateral, or the exercise by
the Collateral Agent of any of its rights or remedies hereunder.
(c) Except as disclosed on Schedule 3(bb) of the Securities
Purchase Agreement, all Federal, state and local tax returns and other reports
required by applicable law to
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be filed by any Grantor have been filed, or extensions have been obtained, and
all taxes, assessments and other governmental charges imposed upon any Grantor
or any property of any Grantor (including, without limitation, all federal
income and social security taxes on employees' wages) and which have become due
and payable on or prior to the date hereof have been paid, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof in
accordance with generally accepted accounting principles consistently applied
("GAAP").
(d) All Equipment, Fixtures, Goods and Inventory of each Grantor
now existing are, and all Equipment, Fixtures, Goods and Inventory of each
Grantor hereafter existing will be, located and/or based at the addresses
specified therefor in Schedule III hereto, except that each Grantor will give
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the Collateral Agent written notice of any change in the location of any such
Collateral within 20 days of such change, other than to locations set forth on
Schedule III hereto (or a new Schedule III delivered by Grantors to Collateral
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Agent from time to time) and with respect to which the Collateral Agent has
filed financing statements and otherwise fully perfected its Liens thereon or
will take such actions pursuant to Section 5(n). Each Grantor's chief place of
business and chief executive office, the place where each Grantor keeps its
Records concerning Accounts and all originals of all Chattel Paper are located
at the addresses specified therefor in Schedule III hereto. None of the
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Accounts is evidenced by Promissory Notes or other Instruments. Set forth in
Schedule IV hereto is a complete and accurate list, as of the date of this
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Agreement, of (i) each Promissory Note, Security and other Instrument owned by
each Grantor and (ii) each Deposit Account, Securities Account and Commodities
Account of each Grantor, together with the name and address of each institution
at which each such account is maintained, the account number for each such
account and a description of the purpose of each such account. Set forth in
Schedule II hereto is a complete and correct list of each trade name used by
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each Grantor and the name of, and each trade name used by, each person from
which each Grantor has acquired any substantial part of the Collateral.
(e) Each Grantor has delivered to the Collateral Agent complete
and correct copies of each License described in Schedule II hereto, including
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all schedules and exhibits thereto, which represents all of the Licenses
existing on the date of this Agreement. Each such License sets forth the entire
agreement and understanding of the parties thereto relating to the subject
matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby or the
rights of such Grantor or any of its affiliates in respect thereof. Each
material License now existing is, and any material License entered into in the
future will be, the legal, valid and binding obligation of the parties thereto,
enforceable against such parties in accordance with its terms. No default under
any material License by any such party has occurred, nor does any defense,
offset, deduction or counterclaim exist thereunder in favor of any such party.
(f) Each Grantor owns and controls, or otherwise possesses
adequate rights to use, all Trademarks, Patents and Copyrights, which are the
only trademarks, patents, copyrights, inventions, trade secrets, proprietary
information and technology, know-how, formulae, rights of publicity necessary to
conduct its business in substantially the same manner as conducted as of the
date hereof. Schedule II hereto sets forth a true and complete list of all
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registered copyrights, issued Patents, Trademarks, and Licenses annually owned
or used by each Grantor as of the date
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hereof. To the best knowledge of each Grantor, all such Intellectual Property
of each Grantor is subsisting and in full force and effect, has not been
adjudged invalid or unenforceable, is valid and enforceable and has not been
abandoned in whole or in part. Except as set forth in Schedule II, no such
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Intellectual Property is the subject of any licensing or franchising agreement.
Each Grantor has no knowledge of any conflict with the rights of others to any
such Intellectual Property and, to the best knowledge of each Grantor, each
Grantor is not now infringing or in conflict with any such rights of others in
any material respect, and to the best knowledge of each Grantor, no other Person
is now infringing or in conflict in any material respect with any such
properties, assets and rights owned or used by each Grantor. No Grantor has
received any notice that it is violating or has violated the trademarks,
patents, copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae, rights of publicity or other intellectual
property rights of any third party.
(g) Each Grantor is and will be at all times the sole and
exclusive owner of, or otherwise has and will have adequate rights in, the
Collateral free and clear of any Liens, except for Permitted Liens on any
Collateral. Except for the Permitted Liens described in the Securities Purchase
Agreement, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording or
filing office except such as (i) may have been filed in favor of the Collateral
Agent and/or the Buyers relating to this Agreement or the other Transaction
Documents and (ii) are described on Schedule 4(g) hereto.
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(h) The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting each Grantor or any of its properties and will
not result in or require the creation of any Lien, upon or with respect to any
of its properties.
(i) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body, is
required for (i) the grant by each Grantor, or the perfection, of the security
interest purported to be created hereby in the Collateral, or (ii) the exercise
by the Collateral Agent of any of its rights and remedies hereunder, except
(except (A) for the filing under the Uniform Commercial Code as in effect in the
applicable jurisdiction of the financing statements described in Schedule V
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hereto (or a new Schedule V delivered by Grantors to Collateral Agent from time
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to time), all of which financing statements have been duly filed and are in full
force and effect or will be duly filed and in full force and effect, (B) with
respect to Deposit Accounts, and all cash and other property from time to time
deposited therein, for the execution of a control agreement with the depository
institution with which such account is maintained, as provided in Section 5(i),
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(C) with respect to the perfection of the security interest created hereby in
the United States Intellectual Property and Licenses, for the recording of the
appropriate Assignment for Security, substantially in the form of Exhibit A
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hereto in the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, (D) with respect to the perfection of the
security interest created hereby in foreign Intellectual Property and Licenses,
for registrations and filings in jurisdictions located outside of the United
States and covering rights in such jurisdictions relating to such foreign
Intellectual Property and Licenses, (E) with respect to the perfection of the
security interest created hereby in Titled Collateral, for the submission of an
appropriate application requesting that the Lien of the Collateral Agent be
noted on the Certificate of Title or certificate
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of ownership, completed and authenticated by the applicable Grantor, together
with the Certificate of Title or certificate of ownership, with respect to such
Titled Collateral, to the appropriate governmental authority, (F) with respect
to the perfection of the security interest created hereby in any
Letter-of-Credit Rights, for the consent of the issuer of the applicable letter
of credit to the assignment of proceeds as provided in the Uniform Commercial
Code as in effect in the applicable jurisdiction, (G) with respect to any action
that may be necessary to obtain control of Collateral constituting Deposit
Accounts, Commodity Contracts, Electronic Chattel Paper, Investment Property or
Letter-of-Credit Rights, the taking of such actions, and (H) the Collateral
Agent having possession of all Documents, Chattel Paper, Instruments and cash
constituting Collateral (subclauses (A), (B), (C), (D), (E), (F), G), and (H),
each a "Perfection Requirement" and collectively, the "Perfection
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Requirements").
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(j) This Agreement, subject to the Permitted Liens creates in
favor of the Collateral Agent a legal, valid and enforceable security interest
in the Collateral as security for the Obligations. The Perfection Requirements
result in the perfection of such security interests. Such security interests
are, or in the case of Collateral in which each Grantor obtains rights after the
date hereof, will be, perfected, first priority security interests, subject only
to Permitted Liens and the Perfection Requirements and the financing statements
described in Schedule 4(g). Such recordings and filings and all other action
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necessary to perfect and protect such security interest have been duly taken or
will be taken pursuant to Section 5(n), and, in the case of Collateral in which
each Grantor obtains rights after the date hereof, will be duly taken, except
for the Collateral Agent's having possession of all Documents, Chattel Paper,
Instruments and cash constituting Collateral after the date hereof and the other
actions, filings and recordations described above, including the Perfection
Requirements.
(k) As of the date hereof, no Grantor holds any Commercial Tort
Claims or has knowledge of any pending Commercial Tort Claims, except for such
Commercial Tort Claims described in Schedule VI.
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SECTION 5. Covenants as to the Collateral. So long as any of the
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Obligations shall remain outstanding, unless the Collateral Agent shall
otherwise consent in writing:
(a) Further Assurances. Each Grantor will at its expense, at any
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time and from time to time, promptly execute and deliver all further instruments
and documents and take all further action that the Collateral Agent may
reasonably request in order to: (i) perfect and protect the security interest
purported to be created hereby; (ii) enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder in respect of the Collateral; or (iii)
otherwise effect the purposes of this Agreement, including, without limitation:
(A) marking conspicuously all Chattel Paper and each License and, at the request
of the Collateral Agent, each of its Records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper, License or Collateral is subject to the security
interest created hereby, (B) delivering and pledging to the Collateral Agent
pursuant to the Pledge each Promissory Note, Security, Chattel Paper or other
Instrument, now or hereafter owned by any Grantor, duly endorsed and accompanied
by executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent, (C) executing and filing (to the extent,
if any, that any Grantor's signature is required thereon) or authenticating the
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filing of, such financing or continuation statements, or amendments thereto, as
may be necessary or that the Collateral Agent may reasonably request in order to
perfect and preserve the security interest purported to be created hereby, (D)
furnishing to the Collateral Agent from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral in each case as the Collateral Agent may
reasonably request, all in reasonable detail, (E) if any Collateral shall be in
the possession of a third party, notifying such Person of the Collateral Agent's
security interest created hereby and obtaining a written acknowledgment from
such Person that such Person holds possession of the Collateral for the benefit
of the Collateral Agent, which such written acknowledgement shall be in form and
substance reasonably satisfactory to the Collateral Agent, (F) if at any time
after the date hereof, any Grantor acquires or holds any Commercial Tort Claim,
promptly notifying the Collateral Agent in a writing signed by such Grantor
setting forth a brief description of such Commercial Tort Claim and granting to
the Collateral Agent a security interest therein and in the proceeds thereof,
which writing shall incorporate the provisions hereof and shall be in form and
substance satisfactory to the Collateral Agent, (G) upon the acquisition after
the date hereof by any Grantor of any motor vehicle or other Equipment subject
to a certificate of title or ownership (other than a Motor Vehicle or Equipment
that is subject to a purchase money security interest), causing the Collateral
Agent to be listed as the lienholder on such certificate of title or ownership
and delivering evidence of the same to the Collateral Agent in accordance with
Section 5(j) hereof; and (H) taking all actions required by any earlier versions
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of the Uniform Commercial Code or by other law, as applicable, in any relevant
Uniform Commercial Code jurisdiction, or by other law as applicable in any
foreign jurisdiction.
(b) Location of Equipment and Inventory. Each Grantor will keep
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the Equipment and Inventory (i) at the locations specified therefor on Schedule
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III hereto, or (ii) at such other locations set forth on Schedule III (or a new
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Schedule III delivered by Grantors to Collateral Agent from time to time) and
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with respect to which the Collateral Agent has filed financing statements and
otherwise fully perfected its Liens thereon, or (iii) at such other locations in
the United States, provided that within 20 days following the relocation of
Equipment or Inventory to such other location or the acquisition of Equipment or
Inventory, Grantor shall deliver to the Collateral Agent a new Schedule III
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indicating such new locations.
(c) Condition of Equipment. Each Grantor will maintain or cause
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the Equipment (necessary or useful to its business) to be maintained and
preserved in good condition, repair and working order, ordinary wear and tear
excepted, and will forthwith, or in the case of any loss or damage to any
Equipment of any Grantor within a commercially reasonable time after the
occurrence thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith which are necessary or desirable,
consistent with past practice, or which the Collateral Agent may request to such
end. Any Grantor will promptly furnish to the Collateral Agent a statement
describing in reasonable detail any such loss or damage in excess of $250,000
per occurrence to any Equipment.
(d) Taxes, Etc. Each Grantor agrees to pay promptly when due all
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property and other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including claims for labor, materials and supplies)
against, the Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by proper proceedings which
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stay the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves in accordance with GAAP have
been set aside for the payment thereof.
(e) Insurance.
(i) Each Grantor will, at its own expense, maintain insurance
(including, without limitation, commercial general liability and property
insurance) with respect to the Equipment and Inventory in such amounts, against
such risks, in such form and with responsible and reputable insurance companies
or associations as is required by any governmental authority having jurisdiction
with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated and in
any event, in amount, adequacy and scope reasonably satisfactory to the
Collateral Agent. To the extent requested by the Collateral Agent at any time
and from time to time, each such policy for liability insurance shall provide
for all losses to be paid on behalf of the Collateral Agent and any Grantor as
their respective interests may appear, and each policy for property damage
insurance shall provide for all losses to be adjusted with, and paid directly
to, the Collateral Agent. To the extent requested by the Collateral Agent at
any time and from time to time, each such policy shall in addition (A) name the
Collateral Agent as an additional insured party thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as their
interests may appear, (B) contain an agreement by the insurer that any loss
thereunder shall be payable to the Collateral Agent on its own account
notwithstanding any action, inaction or breach of representation or warranty by
any Grantor, (C) provide that there shall be no recourse against the Collateral
Agent for payment of premiums or other amounts with respect thereto, and (D)
provide that at least 30 days' prior written notice of cancellation, lapse,
expiration or other adverse change shall be given to the Collateral Agent by the
insurer. Any Grantor will, if so requested by the Collateral Agent, deliver to
the Collateral Agent original or duplicate policies of such insurance and, as
often as the Collateral Agent may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Any Grantor will also, at the
request of the Collateral Agent, execute and deliver instruments of assignment
of such insurance policies and cause the respective insurers to acknowledge
notice of such assignment.
(ii) Reimbursement under any liability insurance maintained
by any Grantor pursuant to this Section 5(e) may be paid directly to the Person
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who shall have incurred liability covered by such insurance. In the case of any
loss involving damage to Equipment or Inventory, any proceeds of insurance
maintained by any Grantor pursuant to this Section 5(e) shall be paid to the
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Collateral Agent (except as to which paragraph (iii) of this Section 5(e) is not
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applicable), any Grantor will make or cause to be made the necessary repairs to
or replacements of such Equipment or Inventory, and any proceeds of insurance
maintained by any Grantor pursuant to this Section 5(e) shall be paid by the
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Collateral Agent to any Grantor as reimbursement for the costs of such repairs
or replacements.
(iii) All insurance payments in respect of such Equipment or
Inventory shall be paid to the Collateral Agent and applied as specified in
Section 7(b) hereof.
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(f) Provisions Concerning the Accounts and the Licenses.
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(i) Any Grantor will (A) give the Collateral Agent at least
30 days' prior written notice of any change in such Grantor's name, identity or
organizational structure, (B) maintain its jurisdiction of incorporation,
organization or formation as set forth in Schedule I hereto, (C) immediately
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notify the Collateral Agent upon obtaining an organizational identification
number, if on the date hereof such Grantor did not have such identification
number, and (D) keep adequate records concerning the Accounts and Chattel Paper
and permit representatives of the Collateral Agent during normal business hours
on reasonable notice to such Grantor, to inspect and make abstracts from such
Records and Chattel Paper.
(ii) Each Grantor will, except as otherwise provided in this
subsection (f), continue to collect, at its own expense, all amounts due or to
become due under the Accounts. In connection with such collections, any Grantor
may (and, at the Collateral Agent's direction, will) take such action as any
Grantor or the Collateral Agent may deem necessary or advisable to enforce
collection or performance of the Accounts; provided, however, that the
-------- -------
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default, to notify the account debtors or
obligors under any Accounts of the assignment of such Accounts to the Collateral
Agent and to direct such account debtors or obligors to make payment of all
amounts due or to become due to any Grantor thereunder directly to the
Collateral Agent or its designated agent and, upon such notification and at the
expense of any Grantor and to the extent permitted by law, to enforce collection
of any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as any Grantor might have
done. After receipt by any Grantor of a notice from the Collateral Agent that
the Collateral Agent has notified, intends to notify, or has enforced or intends
to enforce any Grantor's rights against the account debtors or obligors under
any Accounts as referred to in the proviso to the immediately preceding
sentence, (A) all amounts and proceeds (including Instruments) received by any
Grantor in respect of the Accounts shall be received in trust for the benefit of
the Collateral Agent hereunder, shall be segregated from other funds of any
Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary endorsement) to be applied as specified
in Section 7(b) hereof, and (B) no Grantor will adjust, settle or compromise the
------------
amount or payment of any Account or release wholly or partly any account debtor
or obligor thereof or allow any credit or discount thereon. In addition, upon
the occurrence and during the continuance of an Event of Default, the Collateral
Agent may (in its sole and absolute discretion) direct any or all of the banks
and financial institutions with which any Grantor either maintains a Deposit
Account or a lockbox or deposits the proceeds of any Accounts to send
immediately to the Collateral Agent by wire transfer (to such account as the
Collateral Agent shall specify, or in such other manner as the Collateral Agent
shall direct) all or a portion of such securities, cash, investments and other
items held by such institution. Any such securities, cash, investments and
other items so received by the Collateral Agent shall be applied as specified in
accordance with Section 7(b) hereof.
-------------
(iii) Upon the occurrence and during the continuance of any
breach or default under any material License referred to in Schedule II hereto
-----------
by any party thereto other than any Grantor, each Grantor party thereto will,
promptly after obtaining knowledge thereof, give the Collateral Agent written
notice of the nature and duration thereof, specifying what
-11-
action, if any, it has taken and proposes to take with respect thereto and
thereafter will take reasonable steps to protect and preserve its rights and
remedies in respect of such breach or default, or will obtain or acquire an
appropriate substitute License.
(iv) Each Grantor will, at its expense, promptly deliver to
the Collateral Agent a copy of each notice or other communication received by it
by which any other party to any material License referred to in Schedule II
-----------
hereto purports to exercise any of its rights or affect any of its obligations
thereunder, together with a copy of any reply by such Grantor thereto.
(v) Each Grantor will exercise promptly and diligently each
and every right which it may have under each material License (other than any
right of termination) and will duly perform and observe in all respects all of
its obligations under each material License and will take all action reasonably
necessary to maintain such Licenses in full force and effect. No Grantor will,
without the prior written consent of the Collateral Agent, cancel, terminate,
amend or otherwise modify in any respect, or waive any provision of, any
material License referred to in Schedule II hereto.
------------
(g) Transfers and Other Liens.
----------------------------
(i) No Grantor will sell, assign (by operation of law or
otherwise), lease, license, exchange or otherwise transfer or dispose of any of
the Collateral, except such Grantor may (A) sell or dispose of Inventory
(including, without limitation, As-extracted Collateral) in the ordinary course
of business, and (B) sell or dispose of assets such Grantor has determined, in
good faith, not to be useful in the conduct of its business, and (C) sell or
dispose of accounts in the course of collection in the ordinary course of
business consistent with past practice.
(ii) No Grantor will create, suffer to exist or grant any
Lien upon or with respect to any Collateral other than a Permitted Lien.
(h) Intellectual Property.
----------------------
(i) If applicable, any Grantor shall, upon the Collateral
Agent's written request, duly execute and deliver the applicable Assignment for
Security in the form attached hereto as Exhibit A. Each Grantor (either itself
---------
or through licensees) will, and will cause each licensee thereof to, take all
action necessary to maintain all of the Intellectual Property in full force and
effect, including, without limitation, using the proper statutory notices and
markings and using the Trademarks on each applicable trademark class of goods in
order to so maintain the Trademarks in full force and free from any claim of
abandonment for non-use, and each Grantor will not (nor permit any licensee
thereof to) do any act or knowingly omit to do any act whereby any Intellectual
Property may become invalidated; provided, however, that so long as no Event of
-------- -------
Default has occurred and is continuing, no Grantor shall have an obligation to
use or to maintain any Intellectual Property (A) that relates solely to any
product or work, that has been, or is in the process of being, discontinued,
abandoned or terminated, (B) that is being replaced with Intellectual Property
substantially similar to the Intellectual Property that may be abandoned or
otherwise become invalid, so long as the failure to use or maintain such
Intellectual Property does
-12-
not materially adversely affect the validity of such replacement Intellectual
Property and so long as such replacement Intellectual Property is subject to the
Lien created by this Agreement or (C) that is substantially the same as another
Intellectual Property that is in full force, so long the failure to use or
maintain such Intellectual Property does not materially adversely affect the
validity of such replacement Intellectual Property and so long as such other
Intellectual Property is subject to the Lien and security interest created by
this Agreement. Each Grantor will cause to be taken all necessary steps in any
proceeding before the United States Patent and Trademark Office and the United
States Copyright Office or any similar office or agency in any other country or
political subdivision thereof to maintain each registration of the Intellectual
Property (other than the Intellectual Property described in the proviso to the
immediately preceding sentence), including, without limitation, filing of
renewals, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and payment of maintenance fees,
filing fees, taxes or other governmental fees. If any Intellectual Property
(other than Intellectual Property described in the proviso to the first sentence
of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or
otherwise violated in any material respect by a third party, each Grantor shall
(x) upon learning of such infringement, misappropriation, dilution or other
violation, promptly notify the Collateral Agent and (y) to the extent any
Grantor shall deem appropriate under the circumstances, promptly xxx for
infringement, misappropriation, dilution or other violation, seek injunctive
relief where appropriate and recover any and all damages for such infringement,
misappropriation, dilution or other violation, or take such other actions as
such Grantor shall deem appropriate under the circumstances to protect such
Intellectual Property. Each Grantor shall furnish to the Collateral Agent from
time to time upon its request statements and schedules further identifying and
describing the Intellectual Property and Licenses and such other reports in
connection with the Intellectual Property and Licenses as the Collateral Agent
may reasonably request, all in reasonable detail and promptly upon request of
the Collateral Agent, following receipt by the Collateral Agent of any such
statements, schedules or reports, each Grantor shall modify this Agreement by
amending Schedule II hereto, as the case may be, to include any Intellectual
------------
Property and License, as the case may be, which becomes part of the Collateral
under this Agreement and shall execute and authenticate such documents and do
such acts as shall be necessary or, in the reasonable judgment of the Collateral
Agent, desirable to subject such Intellectual Property and Licenses to the Lien
and security interest created by this Agreement. Notwithstanding anything
herein to the contrary, upon the occurrence and during the continuance of an
Event of Default, no Grantor may abandon or otherwise permit any Intellectual
Property to become invalid without the prior written consent of the Collateral
Agent, and if any Intellectual Property is infringed, misappropriated, diluted
or otherwise violated in any material respect by a third party, each Grantor
will take such action as the Collateral Agent shall deem appropriate under the
circumstances to protect such Intellectual Property.
(ii) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for the
registration of any Trademark or Copyright or the issuance of any Patent with
the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, or in any similar office or agency of the United States
or any country or any political subdivision thereof unless it gives the
Collateral Agent prior written notice thereof. Upon request of the Collateral
Agent, any Grantor shall execute, authenticate and deliver any and all
assignments, agreements, instruments, documents and papers as the Collateral
Agent may reasonably request to evidence the Collateral Agent's security
interest hereunder in such Intellectual Property and the General Intangibles of
any Grantor
-13-
relating thereto or represented thereby, and each Grantor hereby appoints the
Collateral Agent its attorney-in-fact to execute and/or authenticate and file
all such writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed, and such power (being coupled with an interest)
shall be irrevocable until the indefeasible payment in full in cash of all of
the Obligations in full.
(i) Deposit, Commodities and Securities Accounts. Upon the
------------------------------------------------
Collateral Agent's written request, each Grantor shall cause each bank and other
financial institution with an account referred to in Schedule IV hereto to
-----------
execute and deliver to the Collateral Agent a control agreement, in form and
substance reasonably satisfactory to the Collateral Agent, duly executed by each
Grantor and such bank or financial institution, or enter into other arrangements
in form and substance satisfactory to the Collateral Agent, pursuant to which
such institution shall irrevocably agree, inter alia, that (i) it will comply at
----- ----
any time with the instructions originated by the Collateral Agent to such bank
or financial institution directing the disposition of cash, Commodity Contracts,
securities, Investment Property and other items from time to time credited to
such account, without further consent of each Grantor, which instructions the
Collateral Agent will not give to such bank or other financial institution in
the absence of a continuing Event of Default, (ii) all Commodity Contracts,
securities, Investment Property and other items of each Grantor deposited with
such institution shall be subject to a perfected, first priority security
interest in favor of the Collateral Agent, (iii) any right of set off (other
than recoupment of standard fees), banker's Lien or other similar Lien, security
interest or encumbrance shall be fully waived as against the Collateral Agent,
and (iv) upon receipt of written notice from the Collateral Agent during the
continuance of an Event of Default, such bank or financial institution shall
immediately send to the Collateral Agent by wire transfer (to such account as
the Collateral Agent shall specify, or in such other manner as the Collateral
Agent shall direct) all such cash, the value of any Commodity Contracts,
securities, Investment Property and other items held by it. Without the prior
written consent of the Collateral Agent, each Grantor shall not make or maintain
any Deposit Account, Commodity Account or Securities Account except for the
accounts set forth in Schedule IV hereto. The provisions of this paragraph 5(i)
-----------
shall not apply to (i) Deposit Accounts for which the Collateral Agent is the
depositary and (ii) Deposit Accounts specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of each Grantor's salaried or hourly employees.
(j) Motor Vehicles. To the extent that there are no Permitted
---------------
Liens thereon:
(i) Upon the Collateral Agent's written request, each Grantor
shall deliver to the Collateral Agent originals of the certificates of title or
ownership for all motor vehicles with a value in excess of $50,000, owned by it
with the Collateral Agent listed as lienholder, for the benefit of the Buyers.
(ii) Each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact, effective the date hereof and terminating upon the termination
of this Agreement, for the purpose of (A) executing on behalf of such Grantor
title or ownership applications for filing with appropriate state agencies to
enable motor vehicles now owned or hereafter acquired by such Grantor to be
retitled and the Collateral Agent listed as lienholder thereof, (B) filing such
applications with such state agencies, and (C) executing such other documents
and instruments
-14-
on behalf of, and taking such other action in the name of, such Grantor as the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof (including, without limitation, for the purpose of creating in favor of
the Collateral Agent a perfected Lien on the motor vehicles and exercising the
rights and remedies of the Collateral Agent hereunder). This appointment as
attorney-in-fact is coupled with an interest and is irrevocable until all of the
Obligations are indefeasibly paid in full in cash and after all Transaction
Documents have been terminated.
(iii) Any certificates of title or ownership delivered
pursuant to the terms hereof shall be accompanied by odometer statements for
each motor vehicle covered thereby.
(iv) So long as no Event of Default shall have occurred and
be continuing, upon the request of any Grantor, the Collateral Agent shall
execute and deliver to any Grantor such instruments as any Grantor shall
reasonably request to remove the notation of the Collateral Agent as lienholder
on any certificate of title for any motor vehicle; provided, however, that any
-------- -------
such instruments shall be delivered, and the release effective, only upon
receipt by the Collateral Agent of a certificate from any Grantor stating that
such motor vehicle is to be sold or has suffered a casualty loss (with title
thereto in such case passing to the casualty insurance company therefor in
settlement of the claim for such loss) and the amount that any Grantor will
receive as sale proceeds or insurance proceeds. Any proceeds of such sale or
casualty loss shall be paid to the Collateral Agent hereunder immediately upon
receipt, to be applied to the Obligations then outstanding.
(k) Control. Each Grantor hereby agrees to take any or all action
-------
that may be necessary, desirable or that the Collateral Agent may reasonably
request in order for the Collateral Agent to obtain control in accordance with
Sections 9-105 - 9-107 of the Code with respect to the following Collateral: (i)
Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit
Rights.
(l) Inspection and Reporting. Each Grantor shall permit the
--------------------------
Collateral Agent, or any agent or representatives thereof or such professionals
or other Persons as the Collateral Agent may designate, during normal business
hours, after reasonable notice in the absence of an Event of Default and not
more than once a year in the absence of an Event of Default, (i) to examine and
make copies of and abstracts from any Grantor's records and books of account,
(ii) to visit and inspect its properties, (iii) to verify materials, leases,
Instruments, Accounts, Inventory and other assets of any Grantor from time to
time, and (iv) to conduct audits, physical counts, appraisals and/or valuations,
examinations at the locations of any Grantor. Each Grantor shall also permit
the Collateral Agent, or any agent or representatives thereof or such
professionals or other Persons as the Collateral Agent may designate to discuss
such Grantor's affairs, finances and accounts with any of its directors,
officers, managerial employees, independent accountants or any of its other
representatives.
(m) Future Subsidiaries. If any Grantor shall hereafter create or
-------------------
acquire any Subsidiary, simultaneously with the creation or acquisition of such
Subsidiary, such Grantor shall (i) cause such Subsidiary to become a party to
this Agreement as an additional "Grantor" hereunder, (ii) such Grantor shall
deliver to Collateral Agent revised Schedules to this
-15-
Agreement, as appropriate, (iii) shall duly execute and deliver a guaranty of
the Obligations in favor of the Collateral Agent in form and substance
reasonably acceptable to the Collateral Agent, and (iv) shall duly execute
and/or deliver such opinions of counsel and other documents, in form and
substance reasonably acceptable to the Collateral Agent, as the Collateral Agent
shall reasonably request with respect thereto, provided that any Grantor that
acquires a subsidiary on or within two days after the Closing Date shall have 10
Business Days in which to satisfy the requirements of this Section 5(m).
------------
(n) Fixture Filings. Within 10 Business Days after the Closing
----------------
Date, Grantors shall cause financing statements to be filed in the appropriate
county clerk's offices in order to perfect the security interest of the
Collateral Agent in and to all Fixtures and As-extracted Collateral constituting
Collateral on the Closing Date or within two Business Days after the Closing
Date.
SECTION 6. Additional Provisions Concerning the Collateral.
---------------------------------------------------
(a) Each Grantor hereby (i) authorizes the Collateral Agent to
file one or more Uniform Commercial Code financing or continuation statements,
and amendments thereto, relating to the Collateral and (ii) ratifies such
authorization to the extent that the Collateral Agent has filed any such
financing or continuation statements, or amendments thereto, prior to the date
hereof. 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.
(b) Each Grantor hereby irrevocably appoints the Collateral Agent
as its attorney-in-fact and proxy, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, from time to time in
the Collateral Agent's discretion, so long as an Event of Default shall have
occurred and is continuing, to take any action and to execute any instrument
which the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement (subject to the rights of each Grantor
under Section 5 hereof), including, without limitation, (i) to obtain and adjust
---------
insurance required to be paid to the Collateral Agent pursuant to Section 5(e)
------------
hereof, (ii) to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper in connection with clause (i) or
(ii) above, (iv) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the
Collateral Agent and the Buyers with respect to any Collateral, and (v) to
execute assignments, licenses and other documents to enforce the rights of the
Collateral Agent and the Buyers with respect to any Collateral. This power is
coupled with an interest and is irrevocable until all of the Obligations are
indefeasibly paid in full in cash.
(c) For the purpose of enabling the Collateral Agent to exercise
rights and remedies hereunder, at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Grantor hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to any Grantor) to use, assign, license or
sublicense
-16-
any Intellectual Property now owned or hereafter acquired by such Grantor,
wherever the same may be located, including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof.
Notwithstanding anything contained herein to the contrary, but subject to the
provisions of the Securities Purchase Agreement that limit the right of any
Grantor to dispose of its property, and Section 5(g) and Section 5(h) hereof, so
------------ ------------
long as no Event of Default shall have occurred and be continuing, any Grantor
may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of
or take other actions with respect to the Intellectual Property in the ordinary
course of its business. In furtherance of the foregoing, unless an Event of
Default shall have occurred and be continuing, the Collateral Agent shall from
time to time, upon the request of any Grantor, execute and deliver any
instruments, certificates or other documents, in the form so requested, which
such Grantor shall have certified are appropriate (in such Grantor's judgment)
to allow it to take any action permitted above (including relinquishment of the
license provided pursuant to this clause (c) as to any Intellectual Property).
Further, upon the indefeasible payment in full in cash of all of the
Obligations, the Collateral Agent (subject to Section 10(e) hereof) shall
--------------
release and reassign to any Grantor all of the Collateral Agent's right, title
and interest in and to the Intellectual Property, and the Licenses, all without
recourse, representation or warranty whatsoever. The exercise of rights and
remedies hereunder by the Collateral Agent shall not terminate the rights of the
holders of any licenses or sublicenses theretofore granted by each Grantor in
accordance with the second sentence of this clause (c). Each Grantor hereby
releases the Collateral Agent from any claims, causes of action and demands at
any time arising out of or with respect to any actions taken or omitted to be
taken by the Collateral Agent under the powers of attorney granted herein other
than actions taken or omitted to be taken through the Collateral Agent's gross
negligence or willful misconduct, as determined by a final determination of a
court of competent jurisdiction.
(d) If any Grantor fails to perform any agreement or obligation
contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Grantor or the Collateral
Agent, and the expenses of the Collateral Agent incurred in connection therewith
shall be payable by such Grantor pursuant to Section 8 hereof and shall be
---------
secured by the Collateral.
(e) The powers conferred on the Collateral Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.
(f) Anything herein to the contrary notwithstanding (i) each
Grantor shall remain liable under the Licenses and otherwise with respect to any
of the Collateral to the extent set forth therein to perform all of its
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Collateral Agent of any of its rights
hereunder shall not release any Grantor from any of its obligations under the
Licenses or otherwise in respect of the Collateral, and (iii) the Collateral
Agent shall not have any obligation or liability by reason of this Agreement
under the Licenses or with respect to any of the other
-17-
Collateral, nor shall the Collateral Agent be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
SECTION 7. Remedies Upon Event of Default. If any Event of Default
-------------------------------
shall have occurred and be continuing, subject to the Permitted Liens:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to any other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the Code (whether or not the Code applies to the affected
Collateral), and also may (i) take absolute control of the Collateral,
including, without limitation, transfer into the Collateral Agent's name or into
the name of its nominee or nominees (to the extent the Collateral Agent has not
theretofore done so) and thereafter receive, for the benefit of the Collateral
Agent, all payments made thereon, give all consents, waivers and ratifications
in respect thereof and otherwise act with respect thereto as though it were the
outright owner thereof, (ii) require each Grantor to, and each Grantor hereby
agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of its respective Collateral as directed by the
Collateral Agent and make it available to the Collateral Agent at a place or
places to be designated by the Collateral Agent that is reasonably convenient to
both parties, and the Collateral Agent may enter into and occupy any premises
owned or leased by any Grantor where the Collateral or any part thereof is
located or assembled for a reasonable period in order to effectuate the
Collateral Agent's rights and remedies hereunder or under law, without
obligation to any Grantor in respect of such occupation, and (iii) without
notice except as specified below and without any obligation to prepare or
process the Collateral for sale, (A) sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable and/or (B) lease, license or dispose of the Collateral
or any part thereof upon such terms as the Collateral Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of sale
or any other disposition of its respective Collateral shall be required by law,
at least ten (10) days' notice to any Grantor of the time and place of any
public sale or the time after which any private sale or other disposition of its
respective Collateral is to be made shall constitute reasonable notification.
The Collateral Agent shall not be obligated to make any sale or other
disposition of any Collateral regardless of notice of sale having been given.
The Collateral Agent 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.
Each Grantor hereby waives any claims against the Collateral Agent and the
Buyers arising by reason of the fact that the price at which its respective
Collateral may have been sold at a private sale was less than the price which
might have been obtained at a public sale or was less than the aggregate amount
of the Obligations, even if the Collateral Agent accepts the first offer
received and does not offer such Collateral to more than one offeree, and waives
all rights that any Grantor may have to require that all or any part of such
Collateral be marshaled upon any sale (public or private) thereof. Each Grantor
hereby acknowledges that (i) any such sale of its respective Collateral by the
Collateral Agent shall be made without warranty, (ii) the Collateral Agent may
specifically disclaim any warranties of title, possession, quiet enjoyment or
the like, and (iii) such actions set
-18-
forth in clauses (i) and (ii) above shall not adversely affect the commercial
reasonableness of any such sale of Collateral. In addition to the foregoing,
(1) upon written notice to any Grantor from the Collateral Agent after and
during the continuance of an Event of Default, such Grantor shall cease any use
of the Intellectual Property or any trademark, patent or copyright similar
thereto for any purpose described in such notice; (2) the Collateral Agent may,
at any time and from time to time after and during the continuance of an Event
of Default, upon 10 days' prior notice to such Grantor, license, whether
general, special or otherwise, and whether on an exclusive or non-exclusive
basis, any of the Intellectual Property, throughout the universe for such term
or terms, on such conditions, and in such manner, as the Collateral Agent shall
in its sole discretion determine; and (3) the Collateral Agent may, at any time,
pursuant to the authority granted in Section 6 hereof (such authority being
---------
effective upon the occurrence and during the continuance of an Event of
Default), execute and deliver on behalf of such Grantor, one or more instruments
of assignment of the Intellectual Property (or any application or registration
thereof), in form suitable for filing, recording or registration in any country.
(b) Any cash held by the Collateral Agent as Collateral and all
Cash Proceeds received by the Collateral Agent in respect of any sale of or
collection from, or other realization upon, all or any part of the Collateral
shall be applied (after payment of any amounts payable to the Collateral Agent
pursuant to Section 8 hereof) by the Collateral Agent against, all or any part
---------
of the Obligations in such order as the Collateral Agent shall elect, consistent
with the provisions of the Securities Purchase Agreement. Any surplus of such
cash or Cash Proceeds held by the Collateral Agent and remaining after the
indefeasible payment in full in cash of all of the Obligations shall be paid
over to whomsoever shall be lawfully entitled to receive the same or as a court
of competent jurisdiction shall direct.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Collateral Agent
and the Buyers are legally entitled, each Grantor shall be liable for the
deficiency, together with interest thereon at the highest rate specified in the
Notes for interest on overdue principal thereof or such other rate as shall be
fixed by applicable law, together with the costs of collection and the
reasonable fees, costs, expenses and other client charges of any attorneys
employed by the Collateral Agent to collect such deficiency.
(d) Each Grantor hereby acknowledges that if the Collateral Agent
complies with any applicable state, provincial or federal law requirements in
connection with a disposition of the Collateral, such compliance will not
adversely affect the commercial reasonableness of any sale or other disposition
of the Collateral.
(e) The Collateral Agent shall not be required to marshal any
present or future collateral security (including, but not limited to, this
Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the Collateral Agent's
rights hereunder and in respect of such collateral security and other assurances
of payment shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that any Grantor lawfully may agree, each
Grantor hereby agrees that it will not invoke any law relating to the marshaling
of collateral which might cause delay in or impede the enforcement of the
-19-
Collateral Agent's rights under this Agreement or under any other instrument
creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
each Grantor hereby irrevocably waives the benefits of all such laws.
SECTION 8. Indemnity and Expenses.
------------------------
(a) Each Grantor agrees, jointly and severally, to defend,
protect, indemnify and hold the Collateral Agent and each of the Buyers, jointly
and severally, harmless from and against any and all claims, damages, losses,
liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, reasonable legal fees, costs, expenses, and disbursements of
such Person's counsel) to the extent that they arise out of or otherwise result
from this Agreement (including, without limitation, enforcement of this
Agreement), except to the extent resulting from such Person's gross negligence
or willful misconduct, as determined by a final judgment of a court of competent
jurisdiction.
(b) Each Grantor agrees, jointly and severally, to pay to the
Collateral Agent upon demand the amount of any and all costs and expenses,
including the reasonable fees, costs, expenses and disbursements of counsel for
the Collateral Agent and of any experts and agents (including, without
limitation, any collateral trustee which may act as agent of the Collateral
Agent), which the Collateral Agent may incur in connection with (i) the
preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement, (ii)
the custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder, or (iv) the failure by any
Grantor to perform or observe any of the provisions hereof.
SECTION 9. Notices, Etc. All notices and other communications
--------------
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied, e-mailed or
delivered, if to any Grantor at its address specified below and if to the
Collateral Agent to it, at its address specified on the signature pages below;
or as to any such Person, at such other address as shall be designated by such
Person in a written notice to all other parties hereto complying as to delivery
with the terms of this Section 9. All such notices and other communications
---------
shall be effective (a) if sent by certified mail, return receipt requested, when
received or three days after deposited in the mails, whichever occurs first, (b)
if telecopied or e-mailed, when transmitted (during normal business hours) and
confirmation is received, and otherwise, the day after the notice or
communication was transmitted and confirmation is received, or (c) if delivered
in person, upon delivery.
SECTION 10. Miscellaneous.
---------------
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by each Grantor, the Required
Holders (as defined in the Note) and the Collateral Agent, and no waiver of any
provision of this Agreement, and no consent to any departure by each Grantor
therefrom, shall be effective unless it is in writing and signed by each Grantor
and the Collateral Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
-20-
(b) No failure on the part of the Collateral Agent to exercise,
and no delay in exercising, any right hereunder or under any of the other
Transaction Documents 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. The rights and remedies of the
Collateral Agent or any Buyer provided herein and in the other Transaction
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Collateral Agent or any
Buyer under any of the other Transaction Documents against any party thereto are
not conditional or contingent on any attempt by such Person to exercise any of
its rights under any of the other Transaction Documents against such party or
against any other Person, including but not limited to, any Grantor.
(c) Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement, subject to the Permitted Liens, shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect until the indefeasible payment in full in cash of the
Obligations, and (ii) be binding on each Grantor and all other Persons who
become bound as debtor to this Agreement in accordance with Section 9-203(d) of
the Code and shall inure, together with all rights and remedies of the
Collateral Agent and the Buyers hereunder, to the benefit of the Collateral
Agent and the Buyers and their respective permitted successors, transferees and
assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, without notice to any Grantor, the Collateral Agent and the
Buyers may assign or otherwise transfer their rights and obligations under this
Agreement and any of the other Transaction Documents, to any other Person and
such other Person shall thereupon become vested with all of the benefits in
respect thereof granted to the Collateral Agent and the Buyers herein or
otherwise. Upon any such assignment or transfer, all references in this
Agreement to the Collateral Agent or any such Buyer shall mean the assignee of
the Collateral Agent or such Buyer. None of the rights or obligations of any
Grantor hereunder may be assigned or otherwise transferred without the prior
written consent of the Collateral Agent, and any such assignment or transfer
without the consent of the Collateral Agent shall be null and void.
(e) Upon the indefeasible payment in full in cash of the
Obligations, (i) this Agreement and the security interests created hereby shall
terminate and all rights to the Collateral shall revert to the respective
Grantor that granted such security interests hereunder, and (ii) the Collateral
Agent will, upon any Grantor's request and at such Grantor's expense, (A) return
to such Grantor such of the Collateral as shall not have been sold or otherwise
disposed of or applied pursuant to the terms hereof, and (B) execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination, all without any representation, warranty or recourse
whatsoever.
(f) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND
PERFECTION OR THE PERFECTION AND
-21-
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(g) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN XXX XXXXXX XX XXX
XXXXX XX XXX XXXX IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
- --- ----------
SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT.
(h) EACH GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS
AGREEMENT) THE COLLATERAL AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, ORAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE
PARTIES HERETO.
(i) Each Grantor irrevocably consents to the service of process of
any of the aforesaid courts in any such action, suit or proceeding by the
mailing of copies thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to any Grantor at its address provided
herein, such service to become effective 10 days after such mailing.
(j) Nothing contained herein shall affect the right of the
Collateral Agent to serve process in any other manner permitted by law or
commence legal proceedings or otherwise proceed against any Grantor or any
property of any Grantor in any other jurisdiction.
(k) Each Grantor irrevocably and unconditionally waives any right
it may have to claim or recover in any legal action, suit or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
(l) Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
-22-
(m) This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together constitute one in the
same Agreement.
(n) In the event of any conflict between the terms of this
Agreement, the Securities Purchase Agreement, or any of the other Transaction
Documents or exhibits referred to herein or therein, the terms of the Securities
Purchase Agreement shall control.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-23-
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.
CHARYS HOLDING COMPANY, INC.
By:
------------------------------------------------
Name: Xxxxx X. Xxx, Xx.
Title: Chief Executive Officer
Address: 0000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx X000,
Xxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: xxxx@xxxxxx.xxx
PERSONNEL RESOURCES OF GEORGIA, INC.
By:
------------------------------------------------
Name: Xxx Xxxxxxxxxx
Title: President
Address: 000 Xxxxx Xxxxxxxxxxxx Xxxxx, Xxxxx 0X,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
CCI TELECOM, INC.
By:
------------------------------------------------
Name: Xxxxx Xxxxx
Title: President
Address: 00000 Xxx Xxxx Xxxx, Xxx Xxxxxxx,
Xxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
METHOD IQ, INC.
By:
------------------------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
Address: 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
VIASYS SERVICES, INC.
By:
------------------------------------------------
Name: Xxxxx Xxxx
Title: President
Address: 00 Xxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx
00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
VIASYS NETWORK SERVICES, INC.
By:
------------------------------------------------
Name: Xxxxx Xxxx
Title: President
Address: 00 Xxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx
00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
CROCHET AND BOREL SERVICES. INC.
By:
------------------------------------------------
Name: Xxxx Crochet
Title: Chief Executive Officer
Address: 000 Xxxx Xxxx Xxxxxxx, Xxxx Xxxxxx,
Xxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
DIGITAL COMMUNICATION SERVICES, INC.
By:
------------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Co-President
Address: 00 Xxxxx 0xx Xxxxxx, Xxxxxx Xxxxx,
Xxxxxxx 00000
ACCEPTED BY:
-----------
GOTTBETTER CAPITAL FINANCE, LLC
as Collateral Agent
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: 212.400.6999
Email: xxx@xxxxxxxxxxxxxxxxx.xxx
SCHEDULE I
----------
LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OR JURISDICTION OF
-----------------------------------------------------------------------------
ORGANIZATION
------------
GRANTOR'S NAME STATE OF FEDERAL ORGANIZATIONAL I.D.
ORGANIZATION EMPLOYER I.D.
------------------------------------ ------------ ------------- --------------------
Charys Holding Company, Inc. DE 00-0000000 3791748
Personnel Resources of Georgia, Inc. GA 00-0000000 0104816
CCI Telecom, Inc. NV 00-0000000 C-25002-2000
Method IQ, Inc. GA 80-005704 0153426
Viasys Services, Inc. FL 00-0000000 G09210
Viasys Network Services, Inc. FL 00-0000000 P05000012213
Crochet & Borel Services, Inc. TX 00-0000000 138054100
Digital Communication Services, Inc. KY 00-0000000 0416787
SCHEDULE II
-----------
INTELLECTUAL PROPERTY
---------------------
None.
SCHEDULE III
------------
LOCATIONS
---------
GRANTOR CHIEF PLACE OF BUSINESS BOOKS AND RECORDS EQUIPMENT, FIXTURES,
AND CHIEF EXECUTIVE OFFICE GOODS AND INVENTORY
------------------------- -------------------------- ------------------------ ----------------------------
Charys Holding Company, 1117 Perimeter Center West 1117 Perimeter Center 1117 Perimeter Center West
Inc. Suite N415 West; Suite N415 Suite N415
Atlanta, GA 30338 Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Crochet & Borel Services, 000 Xxxx Xxxx Xxxxxxx 000 Xxxx Xxxx Xxxxxxx 346 Twin City Highway
Inc. Xxxx Xxxxxx, XX 00000 Xxxx Xxxxxx, XX 00000 Xxxx Xxxxxx, XX 00000
CCI Telecom, Inc. 00000 Xxx Xxxx Xx 19240 Red Land Rd 00000 Xxx Xxxx Xx
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Method IQ, Inc. 0000 Xxxxxxxx Xxxx 0000 Xxxxxxxx Xxxx 0000 Xxxxxxxx Xxxx
Xxxxx 000 Xxxxx 000 Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Personnel Resources of 000 Xxxxx Xxxxxxxxxxxx 000 Xxxxx Xxxxxxxxxxxx 000 Xxxxx Xxxxxxxxxxxx
Xxxxxxx, Inc. Drive; Xxxxx 0X Xxxxx; Xxxxx 0X Xxxxx; Xxxxx 0X
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Viasys Services, Inc. 26 Lake Wire Dr 26 Lake Wire Dr 00 Xxxx Xxxx Xx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Viasys Network Services, 26 Lake Wire Dr 26 Lake Wire Dr 26 Lake Wire Dr
Inc. Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Digital Communication 00 Xxxxx 0xx Xxxxxx 00 Xxxxx 0xx Avenue 96 North 5th Avenue
Services, Inc. Xxxxxx Xxxxx, XX 00000 Xxxxxx Xxxxx, XX 00000 Xxxxxx Xxxxx, XX 00000
SCHEDULE IV
-----------
PROMISSORY NOTES, SECURITIES, DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND
-----------------------------------------------------------------------
COMMODITIES ACCOUNTS
--------------------
SECURITIES
----------
GRANTOR NAME OF ISSUER NUMBER OF CLASS CERTIFICATE
SHARES NO.(S)
-------------------- -------------- --------- ------ ------------
Berkshire Wireless, Optasite, Inc. 18,844 Common C3
a wholly owned
subsidiary
of CCI Telecom, Inc.
DEPOSIT ACCOUNTS
----------------
GRANTOR NAME AND PURPOSE OF ACCOUNT #
ADDRESS OF INSTITUTION ACCOUNT
---------------- -------------------------- -------------------- -----------------
CHC BB&T Operating 5147412004
00000 Xxxxxxxxxx Xxx
Xxxxxxx, XX 00000
C & B Wachovia Credit Card Machine 10003347
0000 Xxxx Xxxx Xxx
Xxxxxx, XX 00000
C & B Xxxxx Fargo CAT Account 7962077793
0000 Xxxx Xx.
Xxxx Xxxxxx, XX 00000 Branch Acct for 9712191734
Houston office
Branch Acct for 9712191726
Austin office
C & B Texas State Bank Operating 160034211
0000 Xxxx Xx
Xxxx Xxxxxx, XX 00000 Money Market 51223562
Flex Spending 51224046
C & B Capital One CAT Account 3620176787
0000 Xxxxxx Xxx
Xxx Xxxxxxx, XX 00000
C & B Xxxxxx Xxxxx Money Market 000-00000-00
0000 X 00xx Xx
Xxxxxx, XX 00000
DCI Wachovia Operations 2000014575257
0000 Xxxxxx Xx
Xxxxx 000
Xxxxxx, XX 00000
VSI Bank of America Misc Expenses 005486004748
XX Xxx 00000 Xxxxxxxxx
Xxxxx, XX 00000-0000
Misc Expenses 005486004735
Tampa
Misc Expenses 005486004751
Virginia
Misc Expenses 005493630406
Albany
Misc Expenses 005491549065
Raleigh
VSI Suntrust Operations 0417006228435
000 X Xxx Xxxx Xxxx
Xx. Xxxxxxxxxx, XX 00000
VSI TSC Suntrust Payroll 1000044161601
XX Xxx 000000
Xxxxxxx, XX 00000-0000
MIQ Carolina First Bank Primary Operating 7100450390
000 Xxxxx Xxxx Xx
Xxxxxxxxxx, XX 00000
MIQ BB&T Local Operating 5147158779
00000 Xxxxxxxxxx Xxx
Xxxxxxx, XX 00000
PRG Wachovia Deposits/ Transfers 2000014791934
XX Xxx 000
Xxxxxxxxxx, XX 00000
Accounts Payable 2000014791947
Payroll 2000014791950
Payroll 2000004070597
PRG Regions Bank Payroll 00-0000-0000
XX Xxx 00000
Xxxxxxxxxx, XX 00000
PRG PRMorgan Chase Payroll 000001592250680
XX Xxx 000000
Xxxxx Xxxxx, XX 00000-0000
PRG GrandSouth Bank Money Market 2012656
000 Xxxxxx Xx
Xxxxxxxxxx, XX 00000
CCI Frost National Bank Operating 292016346
000 X Xxxxxxx Xx
Xxx Xxxxxxx, XX 00000
BWI Acct. 610187720
ISI Sys. Serv 015932696
CCI Integ. Sol. 610188921
CCI Corp. 015932688
Payroll 010384518
CCI Xxxxx Fargo Lockbox 4121170708
XX Xxx 000000
Xxxxxxx, XX 00000-0000
LEGEND:
CHC - Charys Holding Company, Inc.
C & B - Crochet and Borel Services Inc.
DCI - Digital Communications Services Inc.
VSI - Viasys Services Inc. and Viasys Network Services Inc
MIQ - Method IQ Inc
PRG - Personnel Resources of GA
CCI - CCI Telecom Inc.
SCHEDULE V
----------
FINANCING STATEMENTS
--------------------
JURISDICTIONS FOR FILING
GRANTORS FINANCING STATEMENTS
Charys Holding Company, Inc. Georgia
Personnel Resources of Georgia, Inc. South Carolina
CCI Telecom, Inc. Texas
Method IQ, Inc. Georgia
Viasys Services, Inc. Florida
Viasys Network Services, Inc. Florida
Crochet & Borel Services, Inc. Texas
Digital Communication Services, Inc. Florida
SCHEDULE VI
-----------
COMMERCIAL TORT CLAIMS
----------------------
None.
EXHIBIT A
---------
ASSIGNMENT FOR SECURITY
-----------------------
[TRADEMARKS] [PATENTS] [COPYRIGHTS]
-----------------------------------
WHEREAS, ______________________________ (the "Assignor") [has adopted,
--------
used and is using, and holds all right, title and interest in and to, the
trademarks and service marks listed on the annexed Schedule 1A, which trademarks
-----------
and service marks are registered or applied for in the United States Patent and
Trademark Office (the "Trademarks")] [holds all right, title and interest in the
----------
letter patents, design patents and utility patents listed on the annexed
Schedule 1A, which patents are issued or applied for in the United States Patent
-----------
and Trademark Office (the "Patents")] [holds all right, title and interest in
-------
the copyrights listed on the annexed Schedule 1A, which copyrights are
------------
registered in the United States Copyright Office (the "Copyrights")];
----------
WHEREAS, the Assignor has entered into a Security Agreement, dated as
of August 17, 2006 (as amended, restated or otherwise modified from time to time
the "Security Agreement"), in favor GOTTBETTER CAPITAL FINANCE, LLC, as
-------------------
collateral agent for certain purchasers (the "Assignee");
--------
WHEREAS, pursuant to the Security Agreement, the Assignor has assigned
to the Assignee and granted to the Assignee for the benefit of the Buyers (as
defined in the Security Agreement) a continuing security interest in all right,
title and interest of the Assignor in, to and under the [Trademarks, together
with, among other things, the good-will of the business symbolized by the
Trademarks] [Patents] [Copyrights] and the applications and registrations
thereof, and all proceeds thereof, including, without limitation, any and all
causes of action which may exist by reason of infringement thereof and any and
all damages arising from past, present and future violations thereof (the
"Collateral"), to secure the payment, performance and observance of the
----------
"Obligations" (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor does hereby pledge,
convey, sell, assign, transfer and set over unto the Assignee and grants to the
Assignee for the benefit of the Buyers a continuing security interest in the
Collateral to secure the prompt payment, performance and for the benefit of the
Buyers observance of the Obligations.
The Assignor does hereby further acknowledge and affirm that the
rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed
by its officer thereunto duly authorized as of _____________, 20__
[GRANTORS]
By:
-------------------------------
Name:
Title:
STATE OF
------------
ss.:
COUNTY OF
-----------
On this ____ day of _______________, 20__, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that s/he is the
________________ of _______________________________________, a
____________________, and that s/he executed the foregoing instrument in the
firm name of _______________________________________, and that s/he had
authority to sign the same, and s/he acknowledged to me that he executed the
same as the act and deed of said firm for the uses and purposes therein
mentioned.
SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
--------------------------------------
[Trademarks and Trademark Applications]
[Patent and Patent Applications]
[Copyright and Copyright Applications]
Owned by
------------------------------
Schedule 4(g)
Effective Financing Statements
------------------------------
None.
-----
