AMENDED AND RESTATED SECURITY AGREEMENT
EXHIBIT
10.38
AMENDED
AND RESTATED SECURITY AGREEMENT
THIS
AMENDED AND RESTATED SECURITY AGREEMENT
(“Agreement”),
dated
as of May 13, 2005, by and among (A) Mobilepro Corp., a Delaware corporation
(“MobilePro”),
(B)
each of the direct and indirect Subsidiaries of MobilePro executing this
Agreement (the “MobilePro
Subsidiaries”)
and
(C) Cornell
Capital Partners, L.P., a Delaware limited partnership (“Cornell
Capital,”“Lender”
or
“Secured
Party”).
MobilePro and the MobilePro Subsidiaries are hereinafter sometimes individually
referred to as a "Debtor"
and
collectively, the "Debtors"). Capitalized
terms used herein shall have the meaning specified in Article IX
herein.
W
I T N E S S E T H:
WHEREAS,
the
Debtors (as Borrowers) and Airlie Master Opportunity Fund, Ltd., (“Airlie”)
entered into a that certain Credit Agreement, dated as of November 15, 2004
(the
"Credit
Agreement"),
providing for the making of the loan as contemplated therein; and
WHEREAS,
Mobilepro desires to pay in full all outstanding obligations relating to the
Credit Agreement; and
WHEREAS,
as
partial consideration for making certain loans to Mobilepro, a portion of the
proceeds of which will be used for the repayment of the obligations outstanding
under the Credit Agreement, Airlie shall assign to Cornell Capital all of its
right, title and interest in and to the Security Documents (as defined in the
Credit Agreement); and
WHEREAS,
certain
of theSecurity Documents will be amended and restated as of even date herewith
in connection with Cornell Capital extending certain financial accommodations
to
MobilePro; and
WHEREAS,
on even
date herewith Cornell Capital will purchase a 7.75% Secured Convertible
Debenture (the “Debenture”) from MobilePro, of which a part of the proceeds will
be used to pay all outstanding obligations to Airlie under the Credit Agreement;
and
WHEREAS,
it is a
condition precedent to Cornell Capital purchasing the Debenture that each Debtor
shall have granted to Cornell Capital a security interest in all of its assets
and properties; and
WHEREAS,
each
Guarantor desires to execute this Agreement to satisfy the conditions described
in the preceding paragraph.
NOW,
THEREFORE,
in
consideration of the benefits accruing to each Debtor, the receipt and
sufficiency of which are hereby acknowledged, each Debtor hereby makes the
following representations and warranties and hereby covenants and agrees as
follows:
ARTICLE
II
SECURITY
INTERESTS
1.1 Grant
of Security Interests. As
security for the prompt and complete payment and performance, when due, of
(i)
all of the Obligations
of the
Debtors to the Lender under the Debenture
and the
other Transaction Documents, each of the Debtors
does
hereby sell, assign and transfer unto Cornell Capital, as Secured
Party,
a first
priority Lien and continuing security interest in all of the right, title and
interest of such Debtor in, to and under:
(a) all
of
the assets and properties, real, personal or mixed, of the Debtors, whether
now
existing or hereafter from time to time acquired, including, without limitation:
(i) each and every Receivable, (ii) all Contracts, together with all Contract
Rights arising thereunder, (iii) all Inventory, (iv) all Equipment, (v) all
Marks, together with the registrations and right to all renewals thereof, and
the goodwill of the business of such Debtor symbolized by the Marks, (vi) all
Patents and Copyrights and all reissues, renewals or extensions thereof, (vii)
all computer programs of such Debtor and all intellectual property rights
therein and all other proprietary information of such Debtor, including, but
not
limited to, Trade Secret Rights, (viii) all insurance policies, (ix) all other
Goods, General Intangibles, Chattel Paper, Documents, Securities and Instruments
and (x) all Proceeds and products of any and all of the foregoing (all of the
above collectively, the "Collateral");
and
(b) Notwithstanding
anything to the contrary contained in Section 1.1(a), the Collateral shall
not
include:
(i) (ii) any
rights, title or interest arising in or under, and any property, tangible or
intangible, acquired under, any agreement (including, without limitation, any
lease or license) to which an Debtor is a party on the date such Debtor becomes
a party hereto and which validly prohibits the creation by such Debtor of a
security interest in such rights or
property;
or
(iii) any
rights or property to the extent that any valid enforceable law or regulation
applicable to such arrangements, rights or property prohibits the creation
of a
security interest herein.
1.2 Power
of Attorney.
Each
Debtor hereby constitutes and appoints the Secured Party its true and lawful
attorney, irrevocably, with full power after the occurrence of and during the
continuance of an Event of Default (in the name of the applicable Debtor or
otherwise) to
act,
require,
demand, receive, compound and give acquittance for any and all monies and claims
for monies due or to become due to such Debtor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Secured Party
may deem
to be necessary or
advisable
in the premises, which appointment as attorney is coupled with an
interest.
ARTICLE
II
GENERAL
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each
Debtor represents, warrants and covenants, which representations, warranties
and
covenants shall survive execution and delivery of this Agreement, as
follows:
2.1 Necessary
Filings.
All
filings, registrations and recordings necessary or appropriate to create,
preserve, protect and perfect the security interest granted by such Debtor
to
the Secured Party hereby in respect of all the Collateral have been taken or
shall have been taken within five (5) Business Days of the Closing Date (or,
in
the case of property acquired after the Closing Date, within five (5) Business
Days after the acquisition thereof) and the security interest granted to the
Secured Party pursuant to this Agreement in and to all the Collateral
constitutes, upon satisfaction of such filings, registrations and recordings,
a
perfected security interest in the Collateral that can be perfected by the
filing of a Uniform Commercial Code Form UCC-1 financing statement, superior
and
prior to the rights of all other Persons therein (other than any such rights
pursuant to Permitted
Liens)
and
subject to no other Liens (other than Permitted Liens) and is entitled to all
the rights, priorities and benefits afforded by the Uniform Commercial Code
or
other relevant law as enacted in any relevant jurisdiction to perfected security
interests.
2.2 No
Liens.
Such
Debtor is, and as to Collateral acquired by it from time to time after the
date
hereof such Debtor will be, the owner of all Collateral free from any Lien,
security interest, encumbrance or other right, title or interest of any Person
(other than Permitted Liens), and such Debtor shall take all reasonable steps
to
defend the Collateral against all claims and demands of all Persons at any
time
claiming the same or any interest therein (other than in connection with
Permitted Liens) adverse to the Secured Party.
2.3 Other
Financing Statements,
As of
the date hereof, no Debtor has signed or authorized to be signed any financing
statement (or similar statement or instrument of registration under the law
of
any jurisdiction) covering or purporting to cover any interest of any kind
in
the Collateral (other than financing statements filed in respect
of Permitted Liens) and so long as the Termination Date has not occurred, such
Debtor will not execute or authorize to be filed in any public office any
financing statement (or similar statement
or
instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed
in
respect of and covering the security interests granted hereby by such Debtor
or
as permitted
by the Debenture.
2.4 Chief
Executive Office; Records.
As of
the date hereof, the chief executive office of such Debtor is located at the
address or addresses indicated on Annex
A
hereto,
Such Debtor will not move its chief executive office except to such new location
as such Debtor may establish in accordance with the last sentence of
this
Section 2.4. The originals of all documents evidencing all Receivables, Contract
Rights and Trade Secret Rights of such Debtor and the only original books of
account and records of such Debtor
relating
thereto are, and will continue to be, kept at such chief executive office and/or
one or more of the locations shown on Annex A, or at such new locations as
such
Debtor may establish in accordance with the last sentence of this Section
2.4.
All
Receivables, Contract Rights and Trade Secret Rights of
such
Debtor are, and will continue to be, maintained at, and controlled and directed
(including, without limitation, for general accounting purposes) from, the
office locations described above, or such new locations as such Debtor may
establish in accordance with the last sentence of this Section 2.4. Such Debtor
shall not establish new locations for such offices until (i) it shall have
given
to the Secured Party not less than fifteen (15) Business Days' prior written
notice (or such lesser notice as shall be acceptable to the Secured Party
in
the
case
of a new record location to be established in connection with newly acquired
Contracts) of its intention to do so, clearly describing such new location
and
providing such other information in connection therewith as the Secured Party
may reasonably request, and (ii) with respect to such new location, it shall
have taken all action, reasonably satisfactory to the Secured Party, to maintain
the security interest of the Secured Party in the Collateral intended to be
granted hereby at all times fully perfected and in full force and
effect.
2.5 Location
of Inventory and Equipment.
All
Inventory
and Equipment held on
the date
hereof by each Debtor is located at one of the locations shown on Annex
B
attached
hereto. Each Debtor agrees that all Inventory and Equipment now held or
subsequently acquired by it shall be kept at (or shall be in transport to or
from) any one of the locations shown on Annex
B
hereto,
such new location as such Debtor may establish in accordance with the last
sentence of this Section 2.5 or such other locations to the extent such Debtor
(and the Debtors taken as a whole) remains in compliance with this Section
2.5.
Each Debtor may establish a new location for Inventory and Equipment if (i)
it
shall have given to the Secured Party not less than 30 Business Days' prior
written notice of its intention so to do, clearly describing such new location
and providing such other information in connection therewith as the Secured
Party may reasonably request, and (ii) with respect to such new location, such
Debtor shall have taken all action reasonably satisfactory to the Secured Party
to maintain the security interest of the Secured Party in the Collateral
intended to be granted hereby at all times fully perfected and in full force
and
effect.
2.6 Trade
Names; Change of Name.
As of
the date hereof, such Debtor does not have or operate in any jurisdiction under,
or in the preceding 12 months has not had or has not operated in any
jurisdiction under, any trade names, fictitious names or other names (including,
without limitation, any names of divisions or operations) except its legal
name
and such other
trade,
fictitious or other names as are listed on Annex
C
hereto.
Such Debtor has only operated under each name set forth in Annex
C
in the
jurisdiction or jurisdictions set forth opposite each such name on Annex
C.
Such
Debtor shall not change its legal name or assume or operate in any jurisdiction
under any trade, fictitious or other name except those names listed on
Annex
C
hereto
in the jurisdictions listed with respect to such names and new names (including,
without limitation, any names of divisions or operations) and/or jurisdictions
established in accordance with the last sentence of this Section 2.6. Such
Debtor shall not assume or operate in any jurisdiction under any new trade,
fictitious or other name or operate under any existing name in any additional
jurisdiction until (i) it shall have given to the Secured Party not less than
30
Business
Days' prior written notice of its intention to do so, clearly describing such
new name and/or
jurisdiction and, in the case of a new name, the jurisdictions in which such
new
name shall be used and providing such other information in connection therewith
as the Secured Party may reasonably request, and (ii) with respect to such
new
name and/or new jurisdiction, it shall have taken all action necessary, or
in
the reasonable opinion of the Secured Party, desirable to maintain the security
interest of the Secured Party in the Collateral intended to be granted hereby
at
all times fully perfected and in full force and effect.
2.7 Equity
Collateral. Annex
G
hereto
sets forth the names of all Subsidiaries owned by each Debtor, the percentage
of
such capital stock or limited liability company equity ownership interests
in
each Subsidiary owned by each Debtor and the name of the Operating Agreement
governing each such Subsidiary.
2.8 Recourse.
This
Agreement is made with full recourse to such Debtor and pursuant to and upon
all
the warranties, representations, covenants, and agreements on the part
of
such
Debtor contained herein, in the other Transaction
Documents
and
otherwise in writing in connection herewith or therewith.
ARTICLE
III
SPECIAL
PROVISIONS CONCERNING
RECEIVABLES,
CONTRACT RIGHTS, INSTRUMENTS AND
LIMITED
LIABILITY COMPANY COLLATERAL
3.1 Additional
Representations and Warranties.
As of
the time when each of its Receivables arises, each Debtor shall be deemed to
have represented and warranted that such Receivable and all material records,
papers and documents relating thereto (if any) are genuine and in all material
respects what they purport to be, and that all papers and documents (if any)
relating thereto (i) will be the only original writings evidencing and embodying
such obligation of the account debtor named therein (other than copies created
for general accounting purposes) and (ii) will, to the knowledge of such Debtor,
evidence true and valid obligations of the account debtor named
therein.
3.2 Maintenance
of Records.
Each
Debtor will keep and maintain at its own cost and expense satisfactory and
complete records of its Receivables and Contracts, and such Debtor will make
the
same available to the Secured Party for inspection, at such Debtor's own cost
and expense, at any and all reasonable times upon reasonable prior notice to
such Debtor. If requested by the Secured Party upon the occurrence and during
the continuance of an Event of Default, such Debtor shall, at its own cost
and
expense, deliver all tangible evidence of its Receivables and Contract Rights
(including, without limitation, copies of all documents evidencing the
Receivables and all Contracts) and such books and records to the Secured Party
or to its representatives (copies of which evidence and books and records may
be
retained by such Debtor). If the Secured Party so directs, such Debtor shall
legend, in form and manner reasonably satisfactory to the Secured Party, the
Receivables and Contracts, as well as books, records and documents of such
Debtor evidencing or pertaining to such Receivables with an appropriate
reference to the fact that such Receivables and Contracts have been assigned
to
the Secured Party and that the Secured Party has a security interest
therein.
3.3 Modification
of Terms, etc.
No
Debtor shall rescind or cancel any indebtedness evidenced by any Receivable
or
under any Contract, or modify any term thereof or make any adjustment with
respect thereto, or extend or renew the same or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell
any
Receivable or Contract, or interest therein, without the prior written consent
of the Secured Party, except (i) as permitted by Section 3.4 hereof and (ii)
in
accordance with such Debtor's reasonable business practices. Each Debtor will
duly fulfill all material obligations on its part to be fulfilled under or
in
connection with all Receivables and Contracts and will do nothing to
impair
in
any
significant respect the rights of the Secured Party in the Receivables or
Contracts.
3.4 Collection.
Each
Debtor shall endeavor in accordance with reasonable business practices to cause
to be collected from the account debtor named in each of its Receivables or
obligor under any Contract, as and when due (including, without limitation,
amounts which are
delinquent,
such amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable or Contract, and
apply
forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable or under such Contract, except that,
prior to the occurrence and continuance of an Event of Default in respect of
which the Secured Party has given notice that
this
exception is no longer applicable, any Debtor may allow in the ordinary course
of business as adjustments to amounts owing under its Receivables and Contracts
(i) an extension or renewal of the time or times of payment, which such Debtor
finds appropriate in accordance with sound business judgment and (ii) a refund
or credit due as a result of returned or damaged merchandise or improperly
performed services. The reasonable costs and expenses (including, without
limitation, attorneys' fees) of collection, whether incurred by any Debtor
or
the Secured Party, shall be borne by such Debtor.
3.5 Instruments.
If any
Debtor owns or acquires any Instrument,
such
Debtor
will within 10
Business
Days notify the Secured Party thereof, and upon request by the Secured Party
promptly deliver such Instrument (other than checks payable to any Debtor and
processed in
the
ordinary course of business) to the Secured Party appropriately endorsed to
the
order of the Secured Party as further security hereunder.
3.6 Registration
of Pledge.
Each
Debtor agrees, by Notice of Pledge in substantially the form attached to this
Agreement as Annex
H,
to
notify each Subsidiary owned by such Debtor immediately of the pledge,
assignment and security agreement under this Agreement and to request that
such
Subsidiary issue an Initial Transaction Statement in substantially the form
attached to this Agreement as Annex
I.
Each
Debtor hereby authorizes and directs each Subsidiary owned by such Debtor to
register such Debtor's pledge to the Secured Party of the Equity Collateral
on
such Subsidiary’s books and, following written notice to do so by the Secured
Party, to make direct payment to the Secured Party of any amounts due or to
become due to such Debtor with respect to the Equity Collateral.
3.7 Rights
of the Debtor in the Equity Collateral.
(a)
Unless and until an Event of Default shall have occurred and be continuing,
the
Debtors shall be entitled to receive all dividends and other distributions
which
may be paid on the Equity Collateral and which are not otherwise prohibited
by
the Credit Agreement. Any cash dividend or distribution payable in respect
of
the Equity Collateral which represents, in whole or in part a return of capital
in violation of this Agreement shall be received by such Debtor in trust for
the
Secured Party, shall be paid immediately to the Secured Party and shall be
retained by the Secured Party as part of the Equity Collateral.
(b) Unless
and until an Event of Default shall have occurred and be continuing, each Debtor
shall be entitled to exercise all voting rights attaching to any and all Equity
Collateral owned by it, and to give consents, waivers or ratifications in
respect thereof, provided that no vote shall be cast or any consent, waiver
or
ratification given or any action taken which would violate, result in a breach
of any covenant contained in any of the terms of this Agreement, the Debenture,
any other
Transaction
Document, or which would have the effect of materially impairing the value
of
the Collateral or any part thereof or the position or interests of the Debtor
or
the Secured Party therein.
3.8 Further
Actions.
Each
Debtor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Secured Party from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances
or
instruments and take such further steps relating to its Receivables, Contracts,
Instruments, Equity Collateral and other property or rights covered by the
security interest hereby granted, as the Secured Party may reasonably require
to
give effect to the purposes of this Agreement.
ARTICLE
VI
SPECIAL
PROVISIONS CONCERNING TRADEMARKS
4.1 Additional
Representations and Warranties.
Each
Debtor represents and warrants that it is the true and lawful owner of the
Patent and Trademark Office registrations, and applications for registrations,
of the Marks listed in Annex
D
attached
hereto and that Annex
D lists
all
of the United States Patent and Trademark Office or the equivalent office
thereof in any foreign country at which such Marks are registered and the
correct registration numbers of the Marks that such Debtor now owns or uses
in
connection with its business. Each Debtor represents and warrants that it owns,
is licensed to use or otherwise has the right to use all material Marks that
it
uses. Each Debtor further warrants that it is aware of no third party claim
that
any aspect of such Debtor's present or contemplated business operations
infringes or
will
infringe any material Xxxx. Each Debtor represents and warrants that it is
the
true and lawful
owner of or otherwise has the right to use all U.S. trademark registrations
listed in Annex D hereto and that said registrations are valid, subsisting,
have
not been cancelled and that such Debtor is not aware of any third-party claim
that any of said registrations with respect to a Xxxx is invalid or
unenforceable or is not aware that there is any reason that any of said
registrations with respect to a Xxxx is invalid or unenforceable. Each Debtor
hereby grants to the Secured Party an absolute power of attorney to sign, upon
the occurrence and during the continuance of an Event of Default, any document
which may be required by the United States Patent and Trademark Office in order
to effect an absolute assignment of all right, title and interest in each Xxxx
owned by an Debtor, and record the same,
4.2 Licenses
and Assignments.
Subject
to the provisions of Sections 4.4 and 4.5
each
Debtor hereby agrees not to divest itself of any right under a material Xxxx
other than in
the
ordinary course of business absent prior written approval of the Secured
Party.
4.3 Infringements.
Each
Debtor agrees, promptly upon learning thereof, to notify the Secured Party
in
writing of the name and address of, and to furnish such pertinent information
that may be available with respect to, any party who may be infringing or
otherwise violating in any material respect any of such Debtor's rights in
and
to any material Xxxx or with respect to any party claiming that such Debtor's
use of any material Xxxx violates in any material respect any property right
of
that party. To the extent consistent with its past practice or as reasonably
required by the Secured Party and, in any event, in accordance with reasonable
business practices, each Debtor further agrees, to prosecute any Person
infringing any material Xxxx owned by such Debtor,
4.4 Preservation
of Marks.
Each
Debtor agrees to use or license the use of its Marks in interstate commerce
during the time in which this Agreement is in effect, sufficiently to preserve
such Marks as trademarks or service marks registered under the laws of the
United States or the relevant foreign jurisdiction; provided,
that no
Debtor shall be obligated to preserve any Xxxx in the event such Debtor
determines, in its reasonable business judgment, that the preservation of such
Xxxx is no longer necessary in the conduct of its business.
4.5 Maintenance
of Registration.
Each
Debtor shall, at its own expense, diligently process all documents required
to
maintain trademark registrations, including but not limited to
affidavits
of use and applications for renewals of registration in the United States Patent
and Trademark Office or equivalent governmental agency in any foreign,
jurisdiction for all of its material Marks (excluding unregistered Marks),
and
shall pay all fees and disbursements in connection therewith, and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Secured Party; provided,
that no
Debtor shall be obligated to maintain any Xxxx or prosecute any such application
for registration in the event that such Debtor determines, in its reasonable
business judgment, that such application is no longer necessary in
the
conduct of its business.
4.6 Future
Registered Marks.
If any
Xxxx registration issues hereafter to any Debtor as a result of any application
now or hereafter pending before the United States Patent and Trademark Office
or
equivalent governmental agency in any foreign jurisdiction, within thirty (30)
days of
receipt of such certificate such Debtor shall deliver a copy of such
certificate, and a grant of security in such xxxx to the Secured Party,
confirming the grant thereof hereunder, the form of such confirmatory grant
to
be substantially the same as the form hereof.
4.7 Remedies.
If an
Event of Default shall occur and be continuing, the Secured Party may, by
written notice to the relevant Debtor; take any or all of the following actions
(i) declare the entire right, title and interest of such Debtor in and to each
of the Marks, together with all trademark rights and rights of protection to
the
same, vested, in which event such rights, title and interest shall immediately
vest, in the Secured Party pursuant to a trademark security agreement in form
and substance satisfactory to the Secured Party, executed by such Debtor and
filed on the date hereof, pursuant to which all of such Debtor's rights, title
and interest in and to the Marks are assigned to the Secured Party; (ii) take
and use or sell the Marks and the goodwill of such Debtor's business symbolized
by the Marks and the right to carry on the business and use the assets of such
Debtor in connection with which the Marks have been used; and (iii) direct
such
Debtor to refrain, in which event such Debtor shall refrain, from using the
Marks in any manner whatsoever, directly or indirectly, and, if requested by
the
Secured Party, change such Debtor's corporate name to eliminate therefrom any
use of any Xxxx and execute such other and further documents that the Secured
Party may request to further confirm this and to transfer ownership of the
Marks
and registrations and any pending trademark application in the United States
Patent and Trademark Office or any equivalent governmental agency or office
in
any foreign jurisdiction to the Secured Party.
ARTICLE
V
SPECIAL
PROVISIONS CONCERNING
TRADE
SECRET RIGHTS, PATENTS AND COPYRIGHTS
5.1 Additional
Representations and Warranties.
Each
Debtor represents and warrants that (a) it is the true and lawful owner or
licensee of all rights in all Trade Secret Rights, Patents and Copyrights that,
individually or in the aggregate, are material to the operation of the business
of each Debtor; (b) the Patents of such Debtor listed in Annex
E
attached
hereto, constitute all the patents and applications for patents that such Debtor
now owns and (c) the Copyrights of such Debtor listed in Annex
F
attached
hereto constitute all the registered copyrights and applications for copyright
registrations that such Debtor now owns. Each Debtor further represents and
warrants that it is not aware of any third party claim that any aspect of such
Debtor's present or contemplated business operations infringes or will infringe
any material patent or any material copyright or that such Debtor has
misappropriated any material Trade Secret Rights.
5.2 Licenses
and Assignments.
Subject
to the provisions of Sections 5.4 and 5.5, each Debtor hereby agrees not to
divest itself of any right under a material Patent or Copyright other than
in
the ordinary course of business absent prior written approval of the Secured
Party.
5.3 Infringements.
Each
Debtor agrees, promptly upon learning thereof, to furnish the Secured Party
in
writing with all pertinent information available to such Debtor with respect
to
any infringement or other violation of such Debtor's rights in any Patent or
Copyright, or with respect to any claim that the practice of any Patent or
the
use of any Copyright violates in any material respect any property right of
a
third party or with respect to any misappropriation of any Trade Secret Right
or
any claim that the practice of any Trade Secret Right violates any property
right of a third party. To the extent consistent with its past practice and
in
accordance with reasonable business practices, each Debtor further agrees,
to
prosecute
any Person infringing any Patent or Copyright owned by such Debtor or any Person
misappropriating any Trade Secret Right; to the extent that any such Patent,
Copyright or Trade Secret Right, individually or in the aggregate, is material
to the business of each Debtor.
5.4
Maintenance
of Patents or Copyrights.
At its
own expense, each Debtor shall make timely payment of all post-issuance fees
required to maintain in force rights under each of
its
Patents and registered Copyrights; provided,
that no
Debtor shall be obligated to maintain any Patent in the event such Debtor
determines, in its reasonable business judgment, that the maintenance of such
Patent is. no longer necessary in the conduct of its business.
5.5 Prosecution
of Patent or Copyright Application.
At its
own expense, each Debtor shall diligently prosecute all applications for (i)
Patents of such Debtor listed on Annex E hereto and (ii) Copyrights listed
on
Annex F hereto, and, in each case, shall not abandon any such application prior
to exhaustion of all administrative and judicial remedies, absent written
consent of the Secured Party, provided
that no
Debtor shall be obligated to maintain any Patent or Copyright in the event
such
Debtor determines it is no longer necessary in the conduct of its
business.
5.6 Other'
Patents and Copyrights.
Within
thirty (30) days of the acquisition or issuance of a Patent or Copyright
registration, or of filing of an application for a Patent or Copyright
registration, the relevant Debtor shall deliver to the Secured Party a copy
of
said Patent or Copyright registration, as the case may be, with a grant of
security as to such Patent or
Copyright,
as the case may be, confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially the same as the form hereof; provided,
that no
Debtor shall be obligated to prosecute any application in the event such Debtor
determines, in its reasonable business judgment, that such application is no
longer necessary in the conduct of its business,
5.7 Remedies.
If an
Event of Default shall occur and be continuing, the Secured Party may, by
written notice to the relevant Debtor, take any or all of the following actions:
(i)
declare
the entire right, title and interest of such Debtor in each of the Patents
and
Copyrights vested, in which event such right, title and interest shall
immediately vest in the Secured Party,
pursuant to a patent security agreement or copyright security agreement, as
the
case may be, in form and substance satisfactory to the Secured Party, executed
by such Debtor and filed on the date hereof, pursuant to which all of such
Debtor's right, title, and interest to such Patents and Copyrights are assigned
to the Secured Party;
(ii)
take and practice, use or sell the Patents and Copyrights; (iii) direct such
Debtor to refrain, in which event such Debtor shall refrain, from practicing
the
Patents and using the Copyrights directly or indirectly, and such Debtor shall
execute such other and further documents as the Secured Party may request
further to confirm this and to transfer ownership of the Patents and Copyrights
to the Secured Party.
ARTICLE
VI
PROVISIONS
CONCERNING ALL COLLATERAL,
6.1 Protection
of Secured Party's Security.
Each
Debtor will at all times keep its Inventory and Equipment insured in favor
of
the Secured Party, at its own expense, to the extent required by the Credit
Agreement; copies of all policies or certificates with respect to such
insurance
(i) shall be endorsed to the Secured Party's reasonable satisfaction for the
benefit of the Secured Party (including, without limitation, by naming the
Secured Party as additional insured or loss payee), (ii) shall state that such
insurance policies shall not be cancelled or
materially revised without at least 30 days' (or at least 10 days' in the case
of nonpayment of premium)
prior written notice thereof by the insurer to the Secured Party and (iii)
certificates evidencing such insurance coverages shall be deposited with the
Secured Party.
6.2 Further
Actions.
Each
Debtor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Secured Party from time to time such lists, descriptions
and designations of its Collateral, warehouse receipts, receipts in the nature
of warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances
or
instruments and take such further steps relating to the Collateral and other
property or rights covered by the security interest hereby granted, which the
Secured Party deems reasonably appropriate or advisable to perfect, preserve
or
protect its
security
interest in the Collateral.
6.3 Financing
Statements.
Each
Debtor agrees to execute and deliver to the Secured Party such financing
statements, in form acceptable to the Secured Party, as the Secured Party may
from time to time reasonably request or as are reasonably necessary or desirable
in the reasonable opinion of the Secured Party to establish and maintain a
valid, enforceable, first priority perfected security interest in the Collateral
(subject to the Permitted Liens) as provided herein and the other rights and
security contemplated hereby all in accordance with the Uniform Commercial
Code
as enacted in any and all relevant jurisdictions or any other relevant law,
Each
Debtor will pay any applicable filing fees, recordation taxes and related
expenses. Each Debtor hereby authorizes the Secured Party to file any such
financing statements without the signature of such Debtor where permitted by
law.
ARTICLE
VII
REMEDIES
UPON OCCURRENCE OF EVENT OF DEFAULT
7.1 Remedies;
Obtaining the Collateral Upon Default.
Each
Debtor agrees that, if an Event of Default shall have occurred and be
continuing, then and in every such case, subject to any mandatory requirements
of applicable law then in effect, the Secured Party, in addition to any rights
now or hereafter existing under applicable law, shall have all rights as a
Secured Party under the Uniform Commercial Code in all relevant jurisdictions
and may:
(i)
personally, or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from such Debtor or any other Person who then
has possession of any part thereof with or without notice or process of law,
and
for that purpose may enter upon such Debtor's premises where any of the
Collateral is located and remove the same and use in connection with such
removal any and all services, supplies, aids and other facilities of such
Debtor;
(ii)
instruct the obligor or obligors on any agreement, instrument or other
obligation (including, without limitation, the Receivables and the Contracts)
constituting the Collateral to make any payment required by the terms of such
instrument or agreement directly to the Secured Party;
(iii)
sell, assign or otherwise liquidate, or direct such Debtor to sell, assign
or
otherwise liquidate, any or all of the Collateral or any part thereof in
accordance with Section 7.2 hereof, and take possession of the proceeds of
any
such sale or liquidation;
(iv)
take
possession of the Collateral or any part thereof, by directing such Debtor
in
writing to deliver the same to the Secured Party at any place or places within
the United States reasonably designated by the Secured Party, in which event
such Debtor shall at its own expense:
(A)
forthwith cause the same to be moved to the place or places so designated by
the
Secured Party and there delivered to the Secured Party,
(B)
store
and keep any Collateral so delivered to the Secured Party at such place or
places pending further action by the Secured Party as provided in Section 7.2,
and
(C)
while
the Collateral shall be so stored and kept, provide such guards and maintenance
services as shall be necessary to protect the same and to preserve and maintain
them in good condition; and
(v)
license or sublicense whether on an exclusive or nonexclusive basis, any Marks,
Patents or Copyrights included in the Collateral for such tern and on such
conditions and in such manner as the Secured Party shall in its sole judgment
determine (taking into account such provisions as may be necessary to preserve
such Marks, Patents or Copyrights);
it
being
understood that such Debtor's obligation so to deliver the Collateral is of
the
essence of
this
Agreement and that, accordingly, upon application to a court of equity having
jurisdiction, the Secured Party shall be entitled to a decree requiring specific
performance by such Debtor of said obligation. The
Debtors
agrees
that this Agreement may be enforced by
the
action of the Secured
Party; provided that the
Secured
Party shall have the right to employ an agent or representative or
the
Secured
Party, as such
Secured
Party shall determine in its sole judgment.
7.2 Remedies;
Disposition of the Collateral.
Upon the
occurrence and continuance of a Event of Default, any Collateral repossessed
by
the Secured
Party under or pursuant to Section 7.1 and any other Collateral whether or
not
so repossessed by such Secured Party, may be sold, assigned, leased or otherwise
disposed of under one or more contracts or as an entirety, and without the
necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and
on
such terms as the applicable
Secured
Party may, in compliance with any mandatory requirements of applicable law,
determine to be commercially reasonable. Any of the Collateral may be sold,
leased or otherwise disposed of, in the condition in which the same existed
when
taken by the Secured
Party or after any overhaul or repair which such Secured Party shall determine
to be commercially reasonable. Any such disposition which shall be a private
sale or other private proceedings permitted by such requirements shall be made
upon not less than ten (10) Business Days' written notice to the relevant Debtor
specifying the time at which such disposition is to be made and the intended
sale price or other consideration therefor, and shall be subject, for the ten
(10) Business Days after the giving of such notice, to the right of the relevant
Debtor or any nominee of such Debtor to acquire the Collateral involved at
a
price or for such other consideration at least equal to the intended sale price
or other consideration so specified. Any such disposition which shall be a
public sale permitted by such requirements shall be made upon not less than
ten
(10) Business Days' written notice to the relevant Debtor specifying the time
and place of such sale and, in the absence of applicable requirements of law,
shall be by public auction (which may, at
the
Secured Party’s option,
be subject to reserve), after publication of notice of such auction not less
than 10 days prior thereto in two newspapers in general circulation in New
Jersey. To the extent permitted by any such requirement of law, the Secured
Party
on
behalf of itself
may bid
for and become the purchaser (by bidding in the Obligations (as to the
Collateral), or otherwise) of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the relevant
Debtor (except to the extent of surplus money received as provided in Section
7.4). If, under mandatory requirements of applicable law, the Secured
Party
shall be
required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the relevant Debtor as hereinabove
specified, the Secured Party
need
give such Debtor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of applicable
law.
7.3 Waiver
of Claims.
Except
as otherwise provided in this Agreement, EACH DEBTOR HEREBY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE APPICABLE SECURED PARTY'S TAKING POSSESSION OR SUCH SECURED PARTY’S
DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL
PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT WHICH SUCH DEBTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY
STATUTE OF THE UNITED STATES OR OF ANY STATE, and such Debtor hereby further
waives, to the extent permitted by law:
(i)
all
damages occasioned by such taking of possession except any damages which are
the
direct result of the Secured
Party’s
gross
negligence or willful misconduct;
(ii)
all
other requirements as to the time, place and terms of sale or other requirements
with respect to the enforcement of the Secured Party’s
tights
hereunder; and
(iii)
all
rights of redemption, appraisement, valuation, stay, extension or moratorium
now
or hereafter in force under any applicable law in order to prevent or delay
the
enforcement of this Agreement or the absolute sale of the Collateral or any
portion thereof, and each Debtor, for itself and all who may claim under it,
insofar as it
or
they now or hereafter lawfully may, hereby waives the benefit of all such
laws.
Any
sale
of, or the grant of options to purchase, or any other realization upon, any
Collateral shall
operate to divest all right, title, interest, claim and demand, either at law
or
in equity, of
the
relevant
Debtor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Debtor and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through and under such
Debtor.
7.4 Application
of Proceeds.
(a) All
monies collected by the Secured Party
upon any
sale or other disposition of the Collateral, together with all other moneys
received by the Secured Party, shall be applied as follows:
(i) As
to
the Collateral:
(A) first;
to
the payment of all Obligations owing to Secured Party
of the
type described in clauses (iii) and (iv) of the definition of "Obligations"
contained in Article IX hereof; and
(B) second;
to the relevant Debtor or, to the extent directed by such Debtor or a court
of
competent jurisdiction, to whomever may be lawfully entitled to receive such
surplus.
(b) For
purposes of applying payments received in accordance with this Section 7.4,
the
Secured Party
shall be
entitled to rely upon its own determination of the outstanding Obligations.
Unless it has actual knowledge to the contrary, the Secured Party
in
acting hereunder, shall be entitled to assume that no Obligations other than
principal, interest and regularly accruing fees are owing to any other
party,
(c) It
is
understood that each Debtor shall remain liable to the extent of any deficiency
between (x) the amount of the obligations for which it is liable directly or
as
a Guarantor that are satisfied with proceeds of the Collateral and (y) the
aggregate outstanding amount of such Obligations.
7.5 Remedies
Cumulative.
Each and
every right, power and remedy hereby specifically given to the Secured Party
shall be in addition to every other right, power and remedy specifically given
under this Agreement or the other Transaction Documents or now or hereafter
existing at law or in equity, or by statute and each and every right, power
and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time or simultaneously and as often and in such order as may be
deemed expedient by the Secured Party. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of exercise of one shall
not be deemed a waiver of the right to exercise any other or others. No delay
or
omission of the Secured Party in the exercise of any such right, power or remedy
and no renewal or extension of any of the Obligations shall impair any such
right, power or remedy or shall be construed to be a waiver of any Default
or
Event of Default or an acquiescence therein. In the event that the Secured
Party
shall bring any suit to enforce any
of its
rights hereunder and shall be entitled to judgment, then in such suit the
Secured Party may recover expenses, including attorneys' fees, and the amounts
thereof shall be included in such
judgment.
7.6 Discontinuance
of Proceedings.
In case
the Secured Party shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Secured
Party, then and in every such case
the
relevant Debtor, the Secured Party and each holder of any of the Obligations
shall be restored to their former positions and rights hereunder with respect
to
the Collateral subject to the security interest created under this Agreement,
and all rights, remedies and powers of the Secured Party shall continue as
if no
such proceeding had been instituted (except to the extent of a determination
adverse to the Secured Party in such a proceeding).
ARTICLE
VIII
INDEMNITY
8.1 Indemnity.
(a) Each
Debtor jointly and severally agrees to indemnify, reimburse and hold the Secured
Party, and each of its respective successors, permitted assigns, employees,
agents and servants (hereinafter in this Section 8.1 referred to individually
as
"Indemnitee,"
and
collectively as "Indemnitees")
harmless from any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, suits, judgments and any and all reasonable costs
and
expenses (including reasonable attorneys' fees and expenses) (for the purposes
of this Section 8.1 the foregoing are collectively called "expenses") of
whatsoever kind and nature imposed on, asserted against or incurred by any
of
the Indemnitees in any way arising out of, or resulting from, this Agreement,
any other Transaction Document or the documents executed in connection herewith
and therewith or in connection with the enforcement of any of the terms of,
or
the preservation of any rights hereunder or thereunder, or in any way relating
to or arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the
violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine
of
strict liability, or
for or
on account of injury to or
the
death
of any Person (including any Indemnitee), or property damage),
or contract claim; provided that no Indemnitee shall be indemnified pursuant
to
this Section 8.1 (a) for expenses, losses, damages, obligations, penalties,
claims, demands, actions, suits, judgments, costs or liabilities to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. Each
Debtor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, loss, damage, penalty, claim, demand, action,
judgment or suit, such Debtor shall assume all responsibility for the defense
thereof. Each Indemnitee agrees to use its best efforts to promptly notify
such
Debtor of any such assertion of which such Indemnitee has
knowledge.
(b) Without
limiting the application of Section 8.1(a), each Debtor agrees, jointly and
severally, to pay, or reimburse-the Secured Party for any and all reasonable
fees, costs and expenses of whatever kind or nature incurred in connection
with
the creation, preservation or protection of the Secured Party's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon
or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other reasonable fees, costs and expenses in connection
with
protecting, maintaining or preserving the Collateral and the Secured Party's
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral,
(c) Without
limiting the application of Section 8.1 (a) or (b), each Debtor jointly and
severally agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation by
an
Debtor in this Agreement, or in any statement or writing contemplated by or
made
or delivered pursuant to or in connection with this Agreement.
(d) If
and to
the extent that the obligations of any Debtor under this Section 8.1 are
unenforceable for any reason, each Debtor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
8.2 Indemnity
Obligations Secured by Collateral; Survival.
Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Debtor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, and the payment of all of the other
Obligations and notwithstanding the discharge thereof.
ARTICLE
IX
DEFINITIONS
9.1 Definitions,
The
following terms shall have the meanings herein specified unless the context
otherwise requires. Such definitions shall be equally applicable to the singular
and plural forms of the terms defined.
"Agreement"
shall mean this Amended and Restated Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Debtor"
or “Debtors” shall have the meaning specified in the first paragraph of this
Agreement.
"Business
Day" means any day excluding Saturday, Sunday and any day which shall be in
New
Jersey a legal holiday or a day on which banking institutions are authorized
by
law
to
close.
"Chattel
Paper" shall have the meaning assigned that term under the Uniform Commercial
Code as in effect on the date hereof in the State of Delaware.
"Collateral"
shall have the meaning provided in Section 1.1 (c) of this
Agreement.
"Contract
Rights" shall mean all rights of an Debtor (including, without limitation,
all
rights
to
payment) under each Contract.
"Contracts"
shall mean all contracts between an Debtor and one or more additional parties
to
the extent the grant by an Debtor of a security interest pursuant to this
Agreement in
its
right, title and interest in any such contract is not prohibited by such
contract without the consent of any other party thereto or would not give any
other party to such contract the right to terminate its obligations thereunder;
provided,
that the
foregoing limitation shall not affect, limit, restrict or impair the grant
by an
Debtor of a security interest pursuant to this Agreement in any account or
any
money or other amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Copyrights"
shall mean any United States or foreign copyright owned by any Debtor now or
hereafter, and registered in the United States Copyright Office or the
equivalent thereof in any foreign country, as well as any application for a
United States or foreign copyright registration now or hereafter made with
the
United States Copyright Office or the equivalent thereof in any foreign
jurisdiction by any Debtor.
"Documents"
shall have the meaning assigned that term under the Uniform Commercial Code
as
in effect on the date hereof in the State of New Jersey.
"Equipment"
shall mean any "equipment," as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New Jersey, now or
hereafter owned by any Debtor and, in any event, shall include, but shall not
be
limited to, all machinery, , equipment, furnishings, fixtures now or hereafter
owned by such Debtor and any and all additions, substitutions and replacements
of any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.
"Equity
Collateral" shall mean (a) all interests in any Subsidiary owned by any Debtor;
(b) all rights under the certificate of incorporation or other organizational
agreement of any Subsidiary owned by any Debtor; (c) all rights to receive
cash
distributions, profits, losses and capital contributions (including, but not
limited to, distributions in kind and liquidating dividends) and any other
rights and property interests arising out of or relating to any Subsidiary;
and
(d) all other additional capital stock, other securities or property (including
cash) paid or distributed in respect of any Subsidiary by way of spin-off,
merger, consolidation, dissolution, reclassification, combination or exchange
of
limited liability company interests, asset sales, or similar rearrangement
or
reorganization
"Event
of
Default" shall mean any Event of Default under the Debenture.
"General
Intangibles" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of New Jersey,
and
shall include, without limitation, all equity and other ownership interests
in
limited liability companies.
"Goods"
shall have the meaning assigned that term under the Uniform Commercial Code
as
in effect on the date hereof in the State of New Jersey.
"Indemnitee"
shall have the meaning provided in Section 8.1 of this Agreement.
"Instrument"
shall have the meaning assigned that term under the Uniform Commercial Code
as
in effect on the date hereof in the State of New Jersey.
"Inventory"
shall mean merchandise,
inventory
and goods, and all additions, substitutions and replacements thereof, wherever
located, together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production - from
raw
materials through work-in-process to finished goods- and all products and
proceeds of whatever sort and wherever located and any portion thereof which
may
be returned, rejected, reclaimed or repossessed by the Secured Party from an
Debtor's customers, and shall specifically include all "inventory" as such
term
is defined in the Uniform Commercial Code as in effect on the date hereof in
the
State of New Jersey, now or hereafter owned by an Debtor.
"Liens"
shall mean any security interest, mortgage, pledge, lien, claim, charge,
encumbrance, title retention agreement, lessor's interest in a financing lease
or analogous instrument, in, of, or on a Debtor's property.
"Marks"
shall mean all right, title and interest in and to any United States or foreign
trademarks, service marks and trade names now held or hereafter acquired by
any
Debtor, including any registration of any trademarks and service marks now
held
or hereafter acquired by
an
Debtor, which are registered in the United States Patent and Trademark Office
or
the equivalent thereof in any State of the United States or in any foreign
country, as well as any unregistered marks used by any Debtor, and any trade
dress including logos, designs, company names, business names, fictitious
business names and other business identifiers used by any Debtor in the United
States or any foreign country.
"Obligations"
shall mean (i) the full and prompt payment when due (whether at stated maturity,
by acceleration or otherwise) of all obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities of each Debtor, now existing or hereafter incurred
under, arising out of or in connection with the Transaction Documents to which
it is a party and the due performance and compliance by such Debtor with the
terms of each such Transaction Document; (ii) any and all sums advanced by
the
Secured Party
in order
to preserve the Collateral or preserve its security interest in the Collateral;
(iii) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of each Debtor referred to in clauses
(i), (ii) and (iii), after an Event of Default shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing for sale
or
lease, selling or otherwise disposing of or realizing on the Collateral, or
of
any exercise by the Secured Party
of its
rights hereunder, together with reasonable attorneys' fees and court costs;
and
(iv) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 8.1
of this
Agreement.
"Patents"
shall mean any United States or foreign patent to which any Debtor now or
hereafter has title and any divisions or continuations thereof, as well as
any
application for a United States or foreign patent now or hereafter made by
such
Debtor.
“Permitted
Liens” shall mean, collectively, the following:
(a) Liens
for
taxes, assessments and other governmental charges or levies not yet due or
Liens
for taxes, assessments and other governmental charges or levies being contested
in good faith and by appropriate proceedings for which adequate reserves (in
the
good faith judgment of the management of MobilePro) have been
established;
(b) Liens
in
respect of property or assets of MobilePro or any MobilePro Subsidiary imposed
by law which were incurred in the ordinary course of business, such as
carriers', warehousemen's and mechanics' Liens, statutory landlords' Liens,
and
other similar Liens arising in the ordinary course of business, and (x) which
do
not individually or in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of
the
business of MobilePro or any MobilePro Subsidiary or (y) which are being
contested in good faith by appropriate proceedings, which proceedings have
the
effect of preventing the forfeiture or sale of the property or asset subject
to
such Lien;
(c) Liens
created by or pursuant to the Airlie Collateral Documents or any of the other
Airlie Loan Documents,
(d) Liens
in
favor of Cornell;
(e) Liens
created pursuant to capital leases not prohibited by any of the Transaction
Documents;
(f) Liens
arising from judgments, decrees or attachments and Liens securing appeal bonds
arising from judgments, in each case in circumstances not constituting an Event
of Default under any of the Transaction Documents;
(g) Liens
(other than any Lien imposed by ERISA) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, governmental insurance or
government benefits or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred
in
the ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);
(h) Easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with
the
ordinary conduct of the business of MobilePro or any of the MobilePro
Subsidiaries;
(i) Purchase
money Liens securing payables arising from the purchases by MobilePro or any
of
the MobilePro Subsidiaries of any equipment or goods in the normal course of
business, provided
that
such payables do not constitute Indebtedness;
(j) Any
interest or title of a lessor under any lease not prohibited by any of the
Transaction Documents;
(k) Liens
arising pursuant to purchase money mortgages or security interests securing
indebtedness representing the purchase price of assets acquired by MobilePro
or
any of the MobilePro Subsidiaries after the date hereof, provided
that any
such Liens attach only to the assets so acquired and that all indebtedness
secured by Liens created pursuant to this clause (k) shall not exceed, at any
time, an amount equal to $50,000 less the aggregate obligations under capital
leases then outstanding; and
(l) other
Liens existing on the date hereof which are set forth on Annex J attached
hereto.
"Proceeds"
shall have the meaning assigned that term under the Uniform Commercial Code
as
in effect in the State of New Jersey on the date hereof or under other relevant
law and, in any event, shall include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or an Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due
and
payable to an Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color
of
governmental authority), (iii) any and all other amounts from time to time
paid
or payable under or in connection with any of the Collateral and (iv) all tax
refunds,
"Receivables"
shall mean any "account" as such term is defined in the Uniform Commercial
Code
as in effect on the date hereof in the State of New Jersey, now or hereafter
owned by an Debtor and, in any event, shall include, but shall not be limited
to, all of such Debtor's rights to payment for goods sold or leased or services
performed by such Debtor, whether now in existence or arising from time to
time
hereafter, including, without limitation, rights evidenced by an account, note,
contract, security agreement, chattel paper, or other evidence of indebtedness
or security, together with (a) all security pledged, assigned, hypothecated
or
granted to or held by such Debtor to secure the foregoing, (b) all of such
Debtor's right, title and interest in and to any goods, the sale of which gave
rise thereto, (c) all guarantees, endorsements and indemnifications on, or
of,
any of the foregoing, (d) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(e) all books, records, ledger cards, and invoices relating thereto, (f)
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, all notices to other creditors or secured parties, and certificates
from filing or other registration officers, (g) all credit information, reports
and memoranda relating thereto, and (h) all other writings related in any way
to
the foregoing.
“Security
Documents” shall mean (i) the
Assignment of Security Interests of even date herewith given by Airlie
Opportunity Master Fund, Ltd. to Cornell Capital and acknowledged by MobilePro,
(ii) this Agreement, (iii) the Amended and Restated Collateral Assignment of
Intellectual Property Rights.
"Securities"
shall have the meaning assigned that term under the Uniform Commercial Code
as
in effect on the date hereof in the State of New Jersey.
“Subsidiary"
shall mean any entity organized under the laws of its jurisdiction of formation,
more than 50% of the shares of capital stock, members interest or other equity
is owned directly by a Debtor or indirectly through one or more other
Subsidiaries of a Debtor.
"Termination
Date" shall have the meaning provided in Section 10.9(a) of this
Agreement.
"Trade
Secret Rights" shall mean the rights of an Debtor in any Trade Secret it
holds.
"Trade
Secrets" means any secretly held existing or proprietary existing engineering
and other data, information, production procedures and other know-how relating
to the design, manufacture, assembly, installation, use, operation, marketing,
sale and servicing of any products or business of an Debtor worldwide whether
written or not written.
“Transaction
Documents”, wherever
used herein, means any one of the following items: Securities Purchase Agreement
of even date herewith between MobilePro and Cornell Capital, the Debenture,
the
Registration Rights Agreement of even date herewith between MobilePro and
Cornell Capital, the Escrow Agreement of even date herewith between MobilePro
and Cornell Capital, the Warrant of even date herewith given by MobilePro to
Cornell Capital, the Security Documents, the Guaranty Agreement of even date
herewith given by the MobilePro Subsidiaries to Cornell Capital and all other
instruments, documents, contracts, agreements, promissory notes and evidences
of
indebtedness now or hereafter existing between MobilePro and/or its subsidiaries
and Cornell Capital, whether or not related to the indebtedness evidenced by
the
Debenture.
ARTICLE
X
MISCELLANEOUS
10.1
Notices.
Except
as otherwise expressly provided herein, all notices and other communications
hereunder shall be in writing (including telegraphic, telex, telecopier,
facsimile
(i)
or
cable communication) and shall be mailed, telegraphed, telexed, telecopied,
faxed, cabled or
delivered to the parties hereto at the respective address set forth below and
shall be effective when
received: if to any Debtor, at its address contained in any Transaction
Agreement (for MobilePro);
(ii)
if
to the
Secured Party, at:
Cornell
Capital Partners, LP
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Fax:
(000) 000-0000
Attn:
Xxxx Xxxxxx, President
With
a
copy to:
Cornell
Capital Partners, LP
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Fax:
(000) 000-0000
Attn:
Xxxx X. Xxxxx, Esquire
or
at
such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2
Waiver;
Amendment.
(a)
None
of the terms and conditions of this Agreement may be amended, changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed
by
the
Secured Party and each Debtor affected
thereby (it being understood that the addition or release of any Debtor
hereunder shall not constitute an amendment, change, waiver, modification or
variance affecting any Debtor other than the Debtor so added or released)
provided that (i) no such amendment, change, waiver, modification or variance
shall be made to Section 7.4 or this Section 10.2(a) without the consent of
the
Secured Party.
(b)
No
delay on the part of the Secured Party
in
exercising any of its rights, remedies, powers and privileges hereunder or
partial or single exercise thereof, shall constitute
a waiver thereof. No notice to or demand on any Debtor shall constitute a waiver
of any of the rights
of
the Secured Party
to any
other or further action without notice or demand to the extent such action
is
permitted to be taken by the Secured Party
without
notice or demand under the terms of this Agreement.
10.3
Obligations
Absolute.
The
obligations of each Debtor hereunder shall remain in full force and effect
without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the
like
of
any Debtor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement or any other
Transaction Document except as specifically set forth in a waiver granted
pursuant to the restrictions of Section 10.2
hereof;
or (c) any amendment to or modification of any other Transaction Document or
any
security for any of the Obligations; whether or not any Debtor shall have notice
or knowledge of any of the foregoing, The rights and remedies of the
Secured
Party
herein
provided are cumulative and not exclusive of any rights or remedies which the
Secured Party
would
otherwise have.
10.4 Successors
and Assigns.
This
Agreement shall be binding upon each Debtor and its successors and assigns
and
shall inure to the benefit of the Secured Party
and its
successors and assigns. All agreements, statements, representations and
warranties made by such Debtor herein or in any certificate or other instrument
delivered by each Debtor or on its behalf under this Agreement shall be
considered to have been relied upon by the Secured Party
and
shall survive the execution and delivery of this Agreement, the other
Transaction Documents regardless of any investigation made by the Secured
Party.
10.5 Headings
Descriptive.
The
headings of the several sections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
10.6 Severability,
Any
provision of this Agreement which 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 provisions
hereof, and any such
prohibition or unenforceability in any, jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.7
Governing
Law. This
Agreement shall be deemed to be made under and shall be construed in accordance
with the laws of the State of New Jersey without giving effect to the principals
of conflict of laws thereof. Each of the parties consents to the jurisdiction
of
the U.S. District Court sitting in the District of the State of New
Jersey
or the state courts of the State of New Jersey sitting in Xxxxxx County, New
Jersey in connection with any dispute arising under this Debenture and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens
to the
bringing of any such proceeding in such jurisdictions.
10.8
Debtors'
Duties.
It is
expressly agreed, anything herein contained to the contrary notwithstanding,
that each Debtor shall remain liable to perform all of the obligations, if
any,
assumed by it with respect to the Collateral and the Secured Party shall not
have any obligations or liabilities with respect to any Collateral by reason
of
or arising out of this Agreement, nor shall the Secured Party be required or
obligated in any manner to perform or
fulfill
any of the obligations of any Debtor under or with respect to any
Collateral.
10.9
Termination;
Release.
(a) After
the
Termination Date, this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 8.1 hereof shall
survive such termination), and the Secured Party,
at the
request and expense of the relevant Debtor, will execute and deliver to such
Debtor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Debtor (without recourse and without any representation or warranty) such
of the Collateral as may be in the possession of the Secured Party
and as
has not theretofore been sold or otherwise applied or released pursuant to
this
Agreement, As used in this Agreement, "Termination
Date"
shall
mean the date upon which all of the Obligations to the Lender under the
Debenture and related Transaction Documents, or any amendments, modifications
or
restatements thereof have
been
indefeasibly paid and performed in full
(other
than any indemnities described in Section 8.1 hereof or arising in connection
with the Warrants or Common Stock issued thereunder which are not then to be
performed).
(b) So
long
as no Event of Default in respect of any
of
the Obligations is in existence
or would exist after the application of proceeds as provided below, the Secured
Party may,
at the
request of the relevant Debtor, release any or all of the Collateral,
provided
that
(i)
such
release is permitted by the terms of the Debenture and the other Transaction
Documents, or
otherwise
has been approved in writing by the Secured Party,
and
(ii)
the
proceeds of
such
Collateral are applied as
required pursuant to the Debenture
and other Transaction Documents or any consent or waiver with respect thereto,
if applicable.
(c) At
any
time that the relevant Debtor desires that the Secured Party
take any
action to give effect to any release of Collateral pursuant to the foregoing
Section 10.9(b), it shall deliver to the Secured Party
a
certificate signed by an Authorized Officer describing the Collateral to be
sold. In the event that any part of the Collateral is
to
be
released as provided in the preceding paragraph (b), the Secured
Party,
at the
request and expense of such Debtor, will release
such Collateral and assign, transfer and deliver to such Debtor or its designee
(without recourse and without any representation or warranty) such
of
the
Collateral as is then being (or has been) so sold and as may be in the
possession of the Secured Party
and has
not theretofore been released pursuant to this Agreement.
10.10
Counterparts.
This
Agreement maybe executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute
one
and the same instrument. A set of counterparts executed by all the parties
hereto shall be lodged with the Debtor
and the Secured Party.
10.11
Additional
Debtors.
It is
understood and agreed that any Subsidiary of any Debtor
that is
required to execute a counterpart of this Agreement after the date hereof shall
become a Debtor hereunder by executing a counterpart hereof and delivering
the
same to the Secured Party.
[the
balance of this page intentionally left blank]
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be executed and delivered by their
duly authorized officers as of the date first above written.
DEBTORS:
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
NEOREACH,
INC.
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
NEOREACH
WIRELESS, INC.
By__________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
CLOSECALL
AMERICA, INC.
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
AFFINITY
TELECOM,
INC.
By________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
US
ONE ACQUISITION CORP.
By________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
DAVEL
ACQUISITION CORP.
By:_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
DAVEL
COMMUNICATIONS, INC.
By:_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
DAVEL
FINANCING COMPANY, LLC
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PHONETEL
TECHNOLOGIES, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
CHEROKEE
COMMUNICATIONS, INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
DAVEL
COMMUNICATIONS GROUP, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
ADTEC
COMMUNICATIONS, INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
CENTRAL
PAYPHONE SERVICES, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
COMMUNICATIONS
CENTRAL INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
COMMUNICATIONS
CENTRAL OF GEORGIA, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
DAVEL
MEDIA, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
DAVEL
MEXICO, LTD.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
DAVELTEL,
INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
INTERSTATE
COMMUNICATIONS, INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
INVISION
TELECOM, INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PEOPLES
ACQUISITION CORPORATION
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PEOPLES
COLLECTORS, INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PEOPLES
TELEPHONE COMPANY, INC.
a
New York corporation
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PEOPLES
TELEPHONE COMPANY, INC.
a
New Hampshire corporation
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PTC
CELLULAR, INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
PTC
SECURITY SYSTEMS, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
SILVERADO
COMMUNICATIONS CORP.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
TELALEASING
ENTERPRISES, INC.
By:_____________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
T.R.C.A.,
INC.,
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
TELINK,
INC.
By:______________________________________
Xxxxxxxx
X. Xxxxx, Executive Vice President
DFW
INTERNET SERVICES, INC.
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
THE
RIVER INTERNET ACCESS CO.
By________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
WORLD
TRADE NETWORK, INC.
By________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
XXXXX.XXX,
INC.
By________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
INTERNET
EXPRESS, INC.
By________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
SHREVENET,
INC.
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
CLOVER
COMPUTER CORPORATION
By__________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
XXXXXX.XXX
SERVICES, INC.
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
SENSE
NETWORKING, INC.
By_________________________________
Xxx
X.
Xxxxxx, Chief Executive Officer
SECURED
PARTY:
CORNELL
CAPITAL PARTNERS, L.P.
By: ______________________________
[Annex
A through Annex G to be attached]
ANNEX
H
NOTICE
OF PLEDGE
(Pledge
by______________ (the
"Debtor")
TO:
________________,
Subsidiary, a ___ _________ limited
liability company (the "Subsidiary")
Notice
is
hereby given that, pursuant to an Amended and Restated Security Agreement (an
unexecuted copy of which is attached hereto), dated May __, 2005 (the "Security
Agreement"), from ___________(the "Debtor") to Cornell Capital Partners, LP
(the
"Secured Party"), the Debtor has pledged and assigned to the Secured Party,
and
granted to the Secured Party a continuing first priority security interest
in,
all of its right, title and interest, whether now existing or hereafter arising
or acquired, in, to, and under the following (the "Equity
Collateral"):
(a)
all
limited liability company interests in the Subsidiary;
(b)
all
rights under the Subsidiary 's Limited Liability Company Agreement
dated ,
____ ,
(as amended, modified, restated, substituted, extended and renewed at any time
and from time to time, the "Operating Agreement");
(c)
all
rights to receive cash distributions, profits, losses and capital distributions
(including, but not limited to, distributions in kind and liquidating dividends)
and any other rights and property interests arising out of or relating to the
Subsidiary and/or the Operating Agreement;
(d)
all
other or additional limited liability company interests, other securities or
property (including cash) paid or distributed in respect of the Subsidiary
by
way of spin-off, merger, consolidation, dissolution, reclassification,
combination or exchange of limited liability company interests, asset sales,
or
similar rearrangement or reorganization; and
(e)
all
proceeds (both cash and non-cash) of the foregoing, whether now or hereafter
arising under the foregoing.
Pursuant
to the Security Agreement, the Subsidiary is hereby authorized and directed
to:
(i)
register on the Subsidiary's books the Debtor's pledge to the Secured Party
of
the Debtor's interests in the Subsidiary; and
(ii)
make
direct payment to the Secured Party of any amounts due or to become due to
the
Debtor under the Operating Agreement, if so notified by the Secured
Party.
The
Debtor hereby requests the Subsidiary to indicate the Subsidiary's acceptance
of
this Notice and consent to and confirmation of its terms and provisions by
signing a copy hereof where indicated below and returning the same to the
Secured Party along with an Initial Transaction Statement in the form also
attached hereto.
Dated
as
of
_______________________________
Debtor
By:____________________________
THE
Subsidiary
ANNEX
I
SECURITY
AGREEMENT
INITIAL
TRANSACTION STATEMENT
(Pursuant
to Section 8-408 of the Uniform Commercial Code of the State of_ )
(Pledge
by _
(the
"Debtor")
TO:
Cornell Capital Partners LP (the ".Secured Party")
RE:
Limited Liability Company Interests in a
__________ limited
liability company (the "Subsidiary")
1, Registration
of Pledge. This is to confirm registration by the Subsidiary of the pledge
to
the Secured Party of the entire right, title and interest in and to the
Subsidiary
(the "Interest") owned of record by _ __,
as
member of the Subsidiary (being
a percent
(_%) membership
interest in the Subsidiary).
Such
pledge was registered on
The
address of the registered owner of the Interest is:
2.
Liens,
Adverse Claims and Restrictions. The Interest is not subject to any liens or
restrictions of the Subsidiary or adverse claims (as to which the Subsidiary
has
a duty under Section 8-403(4) of the Uniform Commercial Code of the State
of________________________________________________________________).
(a) The
Interest is subject to all of the terms of the limited liability company
agreement of the Subsidiary and of applicable laws.
(b)
The
Interest may not be transferred without compliance with the provisions of the
limited liability company agreement of the Subsidiary and compliance with
applicable federal and state securities laws.
(c) At
the
time of registration of the pledge described above, the Interest was not subject
to any liens or restrictions of the Subsidiary (except as set
forth
above or in the limited liability company agreement), or any adverse claims
as
to
which the Subsidiary has a duty pursuant to Section 8-403(4) of the Uniform
Commercial Code of the State of
This
Statement is a record of the rights of the Secured Party as of the time of
its
issuance, and is neither a negotiable instrument nor a security.
Dated
as
of__________________
[THE
Subsidiary]
By:______________________
ANNEX
J
SECURITY
AGREEMENT
ADDITIONAL
LIENS
1.
Notes
in the aggregate principal amount of $530,000 by DFW Internet Services, Inc.
and
Security Agreement by DFW Internet Services, Inc. and Augustnet Services, LLC
in
favor of Xxxxx X. Fansak, Xxxxxx X. Xxxxxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxx X. Fonsak and Fiayane Xxxxx; and dated as of April 21, 2004.
2.
Liens
securing the Notes in the original aggregate principal amount of $250,000 by
Mobilepro Corp. and DFW Internet Services, Inc. pursuant to that certain
Security Agreement by Mobilepro Corp.. and DFW Internet Services, Inc. in favor
of Xxxxx Xxxxx, Xxxxxxxx Xxxxx and Xxxxx Xxxxx dated as of July 14,
2004.
3.
Liens
securing the Notes in the original aggregate principal amount of $250,000 by
Mobilepro Corp. and DFW Internet Services, Inc. pursuant to that certain
Security Agreement in favor of Crescent Communications, Inc., a Nevada
Corporation dated as of June 21, 2004.
4.
Liens
securing the Notes in the original aggregate principal amount of $300,000 by
Mobilepro Corp. and DFW Internet Services, Inc. pursuant to that certain
Security Agreement by DFW Internet Services, Inc. in favor of Xxxxx Xxxxxx
and
Xxxxxxx Xxxxxx dated as of March 1, 2004
5.
Liens
securing a Consulting Agreement with DFW Internet Services, Inc. pursuant to
that certain Security Agreement by Mobilepro Corp. in favor of Beech Holdings,
Inc., a Nevada corporation dated as of January 19, 2004.
6.
JPMorgan/Chase Manhattan Bank. Davel Communications, Inc. ("Davel") maintains
a
money market investment account at XX Xxxxxx Account 025-125038. At May 12,
2005, the balance in the account was approximately $50,000. The funds maintained
therein are pledged as collateral to secure a letter of credit issued to a
leasing company. Davel is in the process of negotiating the elimination of
the
letter of credit in consideration of a cash security deposit of $10,000. At
such
time the investment account balance will no longer be encumbered.
7.
Liens
securing an agreement by CloseCall America, Inc. pursuant to that certain
Security Agreement by CloseCall America, Inc. in favor of Cellco Partnership
d/b/a Verizon.
8.
Liens
securing an agreement by CloseCall America, Inc. pursuant to that certain
Security Agreement by CloseCall America, Inc. in favor of Global Crossing
Bandwith, Inc.
9.
Liens
securing an agreement by CloseCall America, Inc. pursuant to that certain
Security Agreement by CloseCall America, Inc. in favor of Qwest Communications
Corp.
10.
Liens
securing a rental contract by CloseCall America, Inc. pursuant to that certain
Security Agreement by CloseCall America, Inc. in favor of Inter-Tel Leasing,
Inc.
11.
Liens
securing a an overdraft protection account by CloseCall America, Inc. pursuant
to that certain Security Agreement by CloseCall America, Inc. in favor of
Centreville National Bank.
