Exhibit 4.63
SECURITY AGREEMENT
SECURITY AGREEMENT (as amended, restated, supplemented or otherwise
modified from time to time in accordance herewith and including all attachments,
exhibits and schedules hereto, the "Agreement"), dated as of April 14, 2003,
made by SPEEDCOM WIRELESS CORPORATION, a Delaware corporation (the "Grantor"),
in favor of SDS Merchant Fund, L.P. (the "Secured Party").
WHEREAS, the Grantor has issued a secured promissory note to the Secured
Party (the "Note") in the principal amount of $100,000 pursuant to a Letter Loan
Agreement by and between the Grantor and the Secured Party dated the date hereof
(the "Letter Loan Agreement"); and
WHEREAS, it is a condition precedent to the Grantor's making the loan
evidenced by the Letter Loan Agreement to the Secured Party that the Grantor
execute and deliver to the Secured Party a security agreement providing for the
grant to the Secured Party of a continuing security interest in all personal
property and assets of the Grantor, all in substantially the form hereof to
secure all Obligations (hereinafter defined);
NOW, THEREFORE, the parties agree as follows:
ARTICLE I. Definitions
Section 1.1. Definition of Terms Used Herein. All capitalized terms used
herein and not defined herein have the respective meanings provided therefor in
the Letter Loan Agreement. All terms defined in the Uniform Commercial Code
(hereinafter defined) as in effect from time to time and used herein and not
otherwise defined herein (whether or not such terms are capitalized) have the
same definitions herein as specified therein.
Section 1.2. Definition of Certain Terms Used Herein. As used herein, the
following terms have the following meanings:
"Collateral" means all accounts receivable of the Grantor and all personal
and fixture property of every kind and nature, including, without limitation,
all furniture, fixtures, equipment, raw materials, inventory, or other goods,
accounts, contract rights, rights to the payment of money, insurance refund
claims and all other insurance claims and proceeds, tort claims, chattel paper,
documents, instruments, securities and other investment property, deposit
accounts, rights to proceeds of letters of credit and all general intangibles
including, without limitation, all tax refund claims, license fees, patents,
patent licenses, patent applications, trademarks, trademark licenses, trademark
applications, trade names, copyrights, copyright licenses, copyright
applications, rights to ▇▇▇ and recover for past infringement of patents,
trademarks and copyrights, computer programs, computer software, engineering
drawings, service marks, customer lists, goodwill, and all licenses, permits,
agreements of any kind or nature pursuant to which the Grantor possesses, uses
or has authority to possess or use property (whether tangible or intangible) of
others or others possess, use or have authority to possess or
use property (whether tangible or intangible) of the Grantor, and all recorded
data of any kind or nature, regardless of the medium of recording including,
without limitation, all books and records, software, writings, plans,
specifications and schematics; and all proceeds and products of each of the
foregoing.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured, waived, or otherwise remedied
during such time) constitute an Event of Default.
"Event of Default" has the meaning specified in the Letter Loan Agreement.
"Indemnitees" has the meaning specified in Section 7.5(b).
"Lien" means: (i) any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (ii) to the extent not included
under clause (i), any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease or other title exception
or encumbrance affecting property; and (iii) any contingent or other agreement
to provide any of the foregoing.
"Note" has the meaning assigned to such term in the first recital of this
Agreement.
"Obligations" means all indebtedness, liabilities, obligations, covenants
and duties of the Grantor to the Secured Party of every kind, nature and
description, direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, now existing of hereafter arising under or in connection with the
Note, the Letter Loan Agreement, this Agreement or the other Loan Documents.
"Registered Organization" means an entity formed by filing a registration
document with a United States Governmental Authority, such as a corporation,
limited partnership or limited liability company.
"Security Interest" has the meaning specified in Section 2.1 of this
Agreement.
"Uniform Commercial Code" means the Uniform Commercial Code from time to
time in effect in the State of New York.
ARTICLE II. Security Interest
Section 2.1. Security Interest. As security for the payment and
performance, in full of the Obligations, and any extensions, renewals,
modifications or refinancings of the Obligations, the Grantor hereby bargains,
sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and
transfers to the Secured Party, and hereby grants to the Secured Party, its
successors and assigns, a security interest in, all of such Grantor's right,
title and interest in, to and under the Collateral (the "Security Interest").
Section 2.2. No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Secured Party to, or in any way alter
or modify, any obligation or liability of the Grantor with respect to or arising
out of the Collateral.
ARTICLE III. Representations and Warranties
The Grantor represents and warrants to the Secured Party that:
Section 3.1. Title and Authority. The Grantor has good and valid rights in
and title to the Collateral with respect to which it has purported to grant a
security interest hereunder and has full power and authority to grant to the
Secured Party the Security Interest and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval which has
been obtained.
Section 3.2. Filings; Actions to Achieve Perfection. Fully executed Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations containing a
description of the Collateral have been delivered to the Secured Party for
filing in each United States governmental, municipal or other office specified
in Schedule A, which are all the filings, recordings and registrations that are
necessary to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Secured Party in
respect of all Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or with
respect to the filing of amendments or new filings to reflect the change of the
Grantor's name, location, identity or corporate structure. The Grantor's name is
listed in the preamble of this Agreement identically to how it appears on its
certificate of incorporation or other organizational documents.
Section 3.3. Validity and Priority of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations, (b) subject
only to the filings described in Section 3.2 above and other previously
perfected security interests in the Collateral listed on Schedule 3.3 to this
Agreement ("Existing Liens"), a perfected security interest in all Collateral in
which a security interest may be perfected by filing, recording or registration
in the United States pursuant to the Uniform Commercial Code or other applicable
law in the United States (or any political subdivision thereof) and its
territories and possessions or any other country, state or nation (or any
political subdivision thereof). The Security Interest is and shall be
subordinate to any other Existing Lien on any of the Collateral.
Section 3.4. Absence of Other Liens. The Grantor's Collateral is owned by
the Grantor free and clear of any Lien other than Existing Liens. Without
limiting the foregoing and except as set forth on Schedule 3.4 to this
Agreement, the Grantor has not filed or consented to any filing described in
Schedule A in favor of any Person other than the Secured Party, nor permitted
the granting or assignment of a security interest or permitted perfection of any
security interest in the Collateral in favor of any Person other than the
Secured Party. The Grantor's having possession of all instruments and cash
constituting Collateral from time to time and the filing of
financing statements in the offices referred to in Schedule A hereto results in
the perfection of such security interest. Such security interest is, or in the
case of Collateral in which the Grantor obtain rights after the date hereof,
will be, a perfected, first priority security interest. Such notices, filings
and all other action necessary or desirable to perfect and protect such security
interest have been duly taken.
Section 3.5. Valid and Binding Obligation. This Agreement constitutes the
legal, valid and binding obligation of the Grantor, enforceable against the
Grantor in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in this Agreement may be limited by applicable federal or
state securities laws.
ARTICLE IV. Covenants
Section 4.1. Change of Name; Location of Collateral; Place of Business,
State of Formation or Organization.
(a) The Grantor shall notify the Secured Party in writing promptly of
any change (i) in its corporate name or in any trade name used to identify
it in the conduct of its business or in the ownership of its properties,
(ii) in the location of its chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it (including the establishment of any such new office
or facility), (iii) in its identity or corporate structure such that a
filed filing made under the Uniform Commercial Code becomes misleading or
(iv) in its Federal Taxpayer Identification Number. In extension of the
foregoing, the Grantor shall not effect or permit any change referred to in
the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Secured
Party to continue at all times following such change to have a valid, legal
and perfected first priority security interest in all the Collateral.
(b) Without limiting Section 4.1(a), without the prior written consent
of the Secured Party in each instance, the Grantor shall not change its (i)
principal residence, if it is an individual, (ii) place of business, if it
has only one place of business and is not a Registered Organization, (iii)
principal place of business, if it has more than one place of business and
is not a Registered Organization, or (iv) state of incorporation, formation
or organization, if it is a Registered Organization.
Section 4.2. Records. The Grantor shall maintain, at its own cost and
expense, such complete and accurate records with respect to the Collateral owned
by it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which the Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Collateral, and, at such time or times as the Secured
Party may reasonably request, promptly to prepare and deliver to the Secured
Party a duly certified schedule or schedules in form and detail satisfactory to
the Secured Party showing the identity, amount and location of any and all
Collateral.
Section 4.3. Periodic Certification; Notice of Changes. In the event there
should at any time be any change in the information represented and warranted
herein or in the documents and instruments executed and delivered in connection
herewith, the Grantor shall immediately notify the Secured Party in writing of
such change (this notice requirement shall be in extension of and shall not
limit or relieve the Grantor of any other covenants hereunder).
Section 4.4. Protection of Security. The Grantor shall, at its own cost and
expense, take any and all actions necessary to defend title to the Collateral
against all persons and to defend the Security Interest of the Secured Party in
the Collateral and the priority thereof against any Lien.
Section 4.5. Inspection and Verification. The Secured Party and such
persons as the Secured Party may reasonably designate shall have the right to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Collateral is
located, to discuss the Grantor's affairs with the officers of the Grantor and
its independent accountants and to verify under reasonable procedures the
validity, amount, quality, quantity, value, condition and status of, or any
other matter relating to, the Collateral, including, in the case of collateral
in the possession of any third Person, by contacting any account debtor or third
Person possessing such Collateral for the purpose of making such a verification.
Out-of-pocket expenses in connection with any inspections by representatives of
the Secured Party shall be (a) the obligations of the Grantor with respect to
any inspection after the Secured Party's demand payment of the Note or (b) the
obligation of the Secured Party in any other case.
Section 4.6. Taxes; Encumbrances. At its option, the Secured Party may
discharge, Liens other than Existing Liens at any time levied or placed on the
Collateral and may pay for the maintenance and preservation of the Collateral to
the extent the Grantor fails to do so and the Grantor shall reimburse the
Secured Party on demand for any payment made or any expense incurred by the
Secured Party pursuant to the foregoing authorization; provided, however, that
nothing in this Section shall be interpreted as excusing the Grantor from the
performance of, or imposing any obligation on the Secured Party to cure or
perform, any covenants or other obligation of the Grantor with respect to any
Lien or maintenance or preservation of Collateral as set forth herein.
Section 4.7. Use and Disposition of Collateral. The Grantor shall not make
or permit to be made an assignment, pledge or hypothecation of any Collateral or
shall grant any other Lien in respect of the Collateral without the prior
written consent of the Secured Party. The Grantor shall not make or permit to be
made any transfer of any Collateral and the Grantor shall remain at all times in
possession of the Collateral owned by it, other than with respect to Existing
Liens and other liens approved by the Secured Party.
Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time
following the date of this Agreement, Grantor, at its own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Collateral. In extension of the foregoing and without limitation, such
insurance shall be payable to the Secured Party as loss payee under a "standard"
loss payee clause, and the Secured Party shall be listed as an "additional
insured" on Grantor's general liability insurance. Such insurance shall not be
terminated, cancelled or not renewed for any reason, including non-payment of
insurance premiums, unless the insurer shall
have provided the Secured Party at least 30 days prior written notice. Grantor
irrevocably makes, constitutes and appoints the Secured Party (and all officers,
employees or agents designated by the Secured Party) as its true and lawful
agent and attorney-in-fact for the purpose, at any time following the Secured
Party's demand for payment of the Note, of making, settling and adjusting claims
in respect of Collateral under policies of insurance, endorsing the name of
Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that Grantor at any time or times
shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the Secured
Party may, without waiving or releasing any obligation or liability of Grantor
hereunder, in their sole discretion, obtain and maintain such policies of
insurance and pay such premium and take any other actions with respect thereto
as the Secured Party deems advisable. All sums disbursed by the Secured Party in
connection and in accordance with this Section, including reasonable attorneys'
fees, court costs, expenses and other charges relating thereto, shall be payable
upon demand, by Grantor to the Secured Party and shall be additional Obligations
secured hereby. Grantor shall promptly notify the Secured Party if any material
portion of the Collateral owned or held by Grantor is damaged or destroyed. The
proceeds of any casualty insurance in respect of any casualty loss of any of the
Collateral shall (i) so long as the Secured Party has not demanded payment of
the Note, be disbursed to Grantor for direct application by Grantor solely to
the repair or replacement of Grantor's property so damaged or destroyed, and
(ii) in all other circumstances, be held by the Secured Party as cash collateral
for the Obligations. The Secured Party may, at its sole option, disburse from
time to time all or any part of such proceeds so held as cash collateral, upon
such terms and conditions as the Secured Party may reasonably prescribe, for
direct application by the Secured Party solely to the repair or replacement of
Grantor's property so damaged or destroyed, or Grantor may apply all or any part
of such proceeds to the Obligations.
Section 4.9. Legend. Grantor shall legend, in form and manner satisfactory
to the Secured Party, its accounts and its books, records and documents
evidencing or pertaining thereto with an appropriate reference to the fact that
such accounts have been assigned to the Secured Party and that the Secured Party
has a security interest therein.
ARTICLE V. Further Assurances; Power of Attorney
Section 5.1. Further Assurances. Grantor shall, at its own expense,
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Secured Party may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Secured Party, duly endorsed in a
manner satisfactory to the Secured Party.
Section 5.2. Power of Attorney.
(a) Grantor hereby irrevocably (as a power coupled with an interest)
constitutes and appoints the Secured Party (and all officers, employees or
agents designated by the Secured Party), its attorney-in-fact with full power of
substitution, for the benefit of the Secured Party,
(i) to take all appropriate action and to execute all documents
and instruments that may be necessary or desirable to accomplish the
purposes of this Agreement, and without limiting the generality of the
foregoing, Grantor hereby grants the power to file one or more financing
statements (including fixture filings), continuation statements, filings
with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest
granted by Grantor, without the signature of Grantor, and naming Grantor as
debtor and the Secured Party as secured party; and
(ii) at any time following the Secured Party's demand for payment
of the Note (i) to receive, endorse, assign and/or deliver any and all
notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Collateral or any part thereof; (ii) to demand,
collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (iii) to sign the name of Grantor
on any invoice or ▇▇▇▇ of lading relating to any of the Collateral; (iv) to
send verifications of accounts to any account debtor or any other Person
liable for an account; (v) to commence and prosecute any and all suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (vi) to
settle, compromise, compound, adjust or defend any actions, suits or
proceeding relating to all or any of the Collateral; and (vii) to use,
sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and to do all other acts
and things necessary to carry out the purposes of this Agreement, as fully
and completely as though the Secured Party was the absolute owner of the
Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Secured Party
to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Secured Party, or to present or
file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in
respect thereof or any property covered thereby, and no action taken or
omitted to be taken by the Secured Party with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset in
favor of Grantor or to any claim or action against the Secured Party.
(b) The provisions of this Article shall in no event relieve Grantor
of any of its obligations hereunder with respect to the Collateral or any part
thereof or impose any obligation on the Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Secured Party of any other or further right which
it may have on the date of this Agreement or hereafter, whether hereunder, by
law or otherwise.
ARTICLE VI. Remedies
Section 6.1. Remedies upon Default.
(a) Upon the occurrence and during the continuance of an Event of
Default, Grantor agrees to deliver each item of its Collateral to the
Secured Party on demand, and it is agreed that the Secured Party shall have
the right to take any of or all the following actions at the same or
different times (but at all times subject to any Existing Liens): with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral, exercise
Grantor's right to ▇▇▇▇ and receive payment for completed work and,
generally, to exercise any and all rights afforded to a secured party under
the Uniform Commercial Code or other applicable law. Without limiting the
generality of the foregoing, Grantor agrees that the Secured Party shall
have the right, subject to the mandatory requirements of applicable law, to
sell or otherwise dispose of all or any part of the Collateral, at public
or private sale or at any broker's board or on any securities exchange, for
cash, upon credit or for future delivery as the Secured Party shall deem
appropriate. The Secured Party shall be authorized at any such sale (if it
deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing
the Collateral for their own account for investment and not with a view to
the distribution or sale thereof, and upon consummation of any such sale
the Secured Party shall have the right to assign, transfer and deliver to
the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free
from any claim or right on the part of Grantor, and Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and
appraisal which Grantor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
(b) The Secured Party shall give Grantor ten (10) days' written notice
(which Grantor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code) of the Secured Party's intention
to make any sale of Collateral. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such
board or exchange. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Secured
Party may fix and state in the notice (if any) of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one lot
as an entirety or in separate parcels, as the Secured Party may (in their
sole and absolute discretion) determine. The Secured Party shall not be
obligated to make any sale of any Collateral if it shall determine not to
do so, regardless of the fact that notice of sale of such Collateral shall
have been given. The Secured Party may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place to which
the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Secured Party until the sale price is paid by the
purchaser or purchasers thereof, but the Secured Party shall not incur
any liability in case any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. At any public (or, to
the extent permitted by law, private) sale made pursuant to this Section,
the Secured Party may bid for or purchase, free (to the extent permitted by
law) from any right of redemption, stay, valuation or appraisal on the part
of Grantor (all said rights being also hereby waived and released to the
extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due
and payable to the Secured Party from Grantor as a credit against the
purchase price, and the Secured Party may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Secured Party shall be free to carry out
such sale pursuant to such agreement and Grantor shall not be entitled to
the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Secured Party shall have entered
into such an agreement all Obligations have been paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Secured Party may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
Section 6.2. Application of Proceeds. The Secured Party shall apply the
proceeds of any collection or sale of the Collateral, as well as any Collateral
consisting of cash, as follows:
(a) FIRST, to the payment of all costs and expenses incurred by the
Secured Party in connection with such collection or sale or otherwise in
connection with this Agreement or any of the Obligations, including all court
costs and the fees and expenses of its agents and legal counsel, and any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder, under the Letter Loan Agreement, the Note and the other Loan
Documents;
(b) SECOND, to the payment in full of the Obligations; and
(c) THIRD, to Grantor, its successors or assigns, or to whomsoever may
be lawfully entitled to receive the same, or as a court of competent
jurisdiction may otherwise direct.
Subject to the foregoing, the Secured Party shall have absolute discretion
as to the time of application of such proceeds, moneys or balances in accordance
with this Agreement. Upon any sale of the Collateral by the Secured Party
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of any such proceeds, moneys or balances by the Secured
Party or of the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Secured Party or such officer or be answerable
in any way for the misapplication thereof.
Section 6.3. Grant of License to Use Intellectual Property. For the purpose
of enabling the Secured Party to exercise rights and remedies under this Article
at such time as the Secured
Party shall be lawfully entitled to exercise such rights and remedies, Grantor
hereby grants to the Secured Party an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to Grantor) to
use, license or sub-license any of the Collateral consisting of intellectual
property now owned or hereafter acquired by Grantor, and wherever the same may
be located, and 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
software and programs used for the compilation or printout thereof. The use of
such license by the Secured Party may be exercised, at the option of the Secured
Party, only following the Secured Party's demand for payment of the Note.
ARTICLE VII. Miscellaneous
Section 7.1. Notices. All communications and notices hereunder to the
Grantor and to the Secured Party shall (except as otherwise expressly permitted
herein) be in writing and delivered to the Grantor or the Secured Party, as the
case may be, as provided in the Letter Loan Agreement.
Section 7.2. Security Interest Absolute. All rights of the Secured Party
hereunder, the Security Interest and all obligations of Grantor hereunder shall
be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Letter Loan Agreement, the Note, any Loan Document or any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Letter Loan Agreement, the Note, any Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Grantor in respect of the Obligations
or this Agreement.
Section 7.3. Survival of Agreement. All covenants, agreements,
representations and warranties made by Grantor herein and in the certificates or
other instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Secured Party and
shall survive the making of the loan and the execution and delivery to the
Secured Party of the Note, regardless of any investigation made by the Secured
Party or on its behalf; and shall continue in full force and effect until this
Agreement shall terminate.
Section 7.4. Binding Effect; Several Agreement; Successors and Assigns.
This Agreement shall become effective as to Grantor when a counterpart hereof
executed on behalf of Grantor shall have been delivered to the Secured Party and
a counterpart hereof shall have been executed on behalf of the Secured Party,
and thereafter shall be binding upon Grantor and the Secured Party and their
respective successors and assigns, and shall inure to the benefit of Grantor,
the Secured Party and their respective successors and assigns, except that
Grantor shall not have the right to assign or transfer its rights or obligations
hereunder or any interest herein or in the Collateral (and any such assignment
or transfer shall be void) except as expressly contemplated by this Agreement,
the Letter Loan Agreement, the Note or the other Loan
Documents.
Section 7.5. Secured Party's Fees and Expense; Indemnification.
(a) Grantor agrees to pay upon demand to the Secured Party the amount
of any and all reasonable expenses, including all reasonable fees,
disbursements and other charges of its counsel and of any experts or
agents, which the Secured Party may incur in connection with (i) the
administration of this Agreement (including the customary fees and charges
of the Secured Party for any audits conducted by it or on its behalf with
respect to the accounts inventory), (ii) the custody or preservation of, or
the sale of, collection from or other realization upon any of the
Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Secured Party hereunder or (iv) the failure of Grantor to
perform or observe any of the provisions hereof.
(b) Grantor agrees to indemnify the Secured Party and the agent,
contractors and employees of the Secured Party (collectively, the
"Indemnitees") against, and hold each of them harmless from, any and all
losses, claims, damages, liabilities and related expenses, including
reasonable fees, disbursements and other charges of counsel, incurred by or
asserted against any of them arising out of, in any way connected with, or
as a result of, the execution, delivery, or performance of this Agreement
or any agreement or instrument contemplated hereby or any claim,
litigation, investigation or proceeding relating hereto or to the
Collateral, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby. The provisions of this Section shall remain
operative and in full force and effect regardless of the termination of
this Agreement, the Letter Loan Agreement, the Note or the other Loan
Documents, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of
any term or provision of this Agreement, the Letter Loan Agreement, the
Note or the other Loan Documents, or any investigation made by or on behalf
of the Secured Party. All amounts due under this Section shall be payable
on written demand therefor.
Section 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 7.7. Waivers; Amendment.
(a) No failure or delay of the Secured Party in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Secured Party hereunder and under the Letter Loan
Agreement are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provisions of this Agreement, the
Letter Loan Agreement, the Note or the other Loan Documents or consent to any
departure by Grantor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice to or demand on Grantor in any case shall entitle Grantor to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements, in writing
entered into by the Secured Party and Grantor.
Section 7.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, THE LETTER LOAN AGREEMENT OR THE NOTE.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT, THE LETTER LOAN AGREEMENT AND THE NOTE, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 7.9. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
Section 7.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract. Each party shall be entitled
to rely on a facsimile signature of any other party hereunder as if it were an
original.
Section 7.11. Jurisdiction; Consent to Service of Process.
(a) Grantor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, the Letter Loan Agreement or
the Note, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that the Secured
Party may otherwise have to bring any action or proceeding relating to this
Agreement, the Letter Loan Agreement, the Note or the other Loan Documents
against Grantor or its properties in the courts of any jurisdiction.
(b) Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement, the Letter Loan
Agreement, the Note or the other Loan Documents in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.1. Nothing in this
Agreement will affect the right of any party to this Agreement to process
in any other manner permitted by law.
Section 7.12. Termination. This Agreement and the Security Interest shall
terminate when all the Obligations have been paid in full, at which time the
Secured Party shall execute and deliver to Grantor, at Grantor's expense, all
Uniform Commercial Code termination statements and similar documents which
Grantor shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section shall
be without recourse to or warranty by the Secured Party.
Section 7.13. Prejudgment Remedy Waiver. Grantor acknowledges that this
Agreement, the Letter Loan Agreement, the Note and the other Loan Documents
evidence a commercial transaction and that it could, under certain circumstances
have the right, to notice of and hearing on the right of the Secured Party to
obtain a prejudgment remedy, such as attachment, garnishment and/or replevin,
upon commencing any litigation against Grantor. Notwithstanding, Grantor hereby
waives all rights to notice, judicial hearing or prior court order to which it
might otherwise have the right under any state or federal statute or
constitution in connection with the obtaining by the Secured Party of any
prejudgment remedy by reason of this Agreement, the Letter Loan Agreement, the
Note, the other Loan Documents or by reason of the Obligations or any renewals
or extensions of the same. Grantor also waives any and all objection which it
might otherwise assert, now or in the future, to the exercise or use by the
Secured Party of any right of setoff, repossession or self help as may presently
exist under statute or common law.
[Signature page follows]
IN WITNESS WHEREOF, the parties have duly executed this Security Agreement
as of the day and year first written above.
SPEEDCOM WIRELESS CORPORATION
By:
-------------------------------
Name:
Title:
SDS MERCHANT FUND, L.P.
By:
-------------------------------
Name:
Title:
SCHEDULE A
Places of Business; Chief Executive Office; Filing Locations
State of Incorporation:
Delaware
Chief Executive Office:
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Filing Locations:
Secretary of State of the State of Delaware
SCHEDULE 3.3
Existing Liens
Tax Lien held by the State of Florida Department of Revenue for approximately
$15,000.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated April 26, 2002 among the parties.
SDS Merchant Fund, L.P., DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC
and DMG International Ltd. hold a blanket security interest in all of the
Company's accounts receivable and personal property pursuant to the Security
Agreement dated June 10, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated August 8, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated September 18, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated November 11, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated December 24, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated January 31, 2003 among the parties.
SCHEDULE 3.4
Absence of Other Liens
Tax Lien held by the State of Florida Department of Revenue for approximately
$15,000.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated April 26, 2002 among the parties.
SDS Merchant Fund, L.P., DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC
and DMG International Ltd. hold a blanket security interest in all of the
Company's accounts receivable and personal property pursuant to the Security
Agreement dated June 10, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG International
Ltd. hold a blanket security interest in all of the Company's accounts
receivable and personal property pursuant to the Security Agreement dated August
8, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated September 18, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated November 11, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated December 24, 2002 among the parties.
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy
International Ltd. hold a blanket security interest in all of the Company's
accounts receivable and personal property pursuant to the Security Agreement
dated January 31, 2003 among the parties.