Exhibit D AMENDED AND RESTATED SECURITY AGREEMENT
Exhibit
10.4
Exhibit
D
AMENDED
AND RESTATED SECURITY AGREEMENT
1. Identification.
This
Amended and Restated Security Agreement (the “Agreement”), dated as of
December
7,
2006,
is entered into by and between USTelematics,
Inc., a
Delaware corporation (“Parent”), the Subsidiaries of the Parent identified on
Annex I hereto (each, a “Guarantor” and, together with Parent, each, a “Debtor”
and, collectively, the “Debtors”), and Axiom Capital Management, Inc., as
collateral agent acting in the manner and to the extent described in the
Collateral Agent Agreement defined below (the “Collateral Agent”), for the
benefit of the parties identified on Schedule
A
hereto
(collectively, the “Lenders”). This Agreement amends and restates in its
entirety the Security Agreement dated as of April 14, 2006 by and between the
Debtors and the Collateral Agent for the benefit of the Lenders identified
therein.
2. Recitals.
2.1 The
Lenders have made, are making and will be making loans to Parent (the “Loans”).
It is beneficial to each Debtor that the Loans were made and are being
made.
2.2 The
Loans
are and will be evidenced by certain convertible debentures (each a “Debenture”)
issued by Parent on or about the date of and after the date of this Agreement
pursuant to a securities purchase agreement (“Securities Purchase Agreement”) to
which Parent and Lenders are parties. The Debentures are further identified
on
Schedule
A
hereto
and were and will be executed by Parent as “Borrower” or “Debtor” for the
benefit of each Lender as the “Holder” or “Lender” thereof. Schedule
A
hereto
may be amended to include such other Lenders who become parties hereto and
sign
this Agreement, the Collateral Agent Agreement and any other agreement
reasonably requested by the Collateral Agent, who will have purchased Debentures
pursuant to the Securities Purchase Agreement.
2.3 In
consideration of the Loans made and to be made by Lenders to Parent and for
other good and valuable consideration, and as security for the performance
by
Parent of its obligations under the Debentures and as security for the repayment
of the Loans and all other sums due from Debtors to Lenders arising under the
Transaction Documents (as defined in the Securities Purchase Agreement), and
any
other agreement between or among them (collectively, the “Obligations”), each
Debtor, for good and valuable consideration, receipt of which is acknowledged,
has agreed to grant to the Collateral Agent, for the benefit of the Lenders,
a
security interest in the Collateral (as such term is hereinafter defined),
on
the terms and conditions hereinafter set forth.
2.4 The
Lenders have appointed Axiom Capital Management, Inc. as Collateral Agent
pursuant to that certain Collateral Agent Agreement dated at or about December
6, 2006, 2006 (“Collateral Agent Agreement”), among the Lenders and Collateral
Agent.
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2.5 The
following defined terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, General Intangibles,
Instruments, Inventory and Proceeds.
3. Grant
of General Security Interest in Collateral.
3.1
As
security for the Obligations of Debtors, each Debtor hereby grants the
Collateral Agent, for the benefit of the Lenders, a security interest in the
Collateral.
3.2 “Collateral”
shall mean all of the following property of Debtors:
(A) All
now
owned and hereafter acquired right, title and interest of Debtors in, to and
in
respect of all Accounts, Goods, real or personal property, all present and
future books and records relating to the foregoing and all products and Proceeds
of the foregoing, and as set forth below:
(i) All
now
owned and hereafter acquired right, title and interest of Debtors in, to and
in
respect of all: Accounts, interests in goods represented by Accounts, returned,
reclaimed or repossessed goods with respect thereto and rights as an unpaid
vendor; contract rights; Chattel Paper; investment property; General Intangibles
(including but not limited to, tax and duty claims and refunds, registered
and
unregistered patents, trademarks, service marks, certificates, copyrights,
trade
names, applications for the foregoing, trade secrets, goodwill, processes,
drawings, blueprints, customer lists, licenses, whether as licensor or licensee,
choses in action and other claims, and existing and future leasehold interests
in equipment, real estate and fixtures); Documents; Instruments; letters of
credit, bankers’ acceptances or guaranties; cash moneys, deposits; securities,
bank accounts, deposit accounts, credits and other property now or hereafter
owned or held in any capacity by Debtors, as well as agreements or property
securing or relating to any of the items referred to above;
(ii) Goods:
All now
owned and hereafter acquired right, title and interest of Debtors in, to and
in
respect of goods, including, but not limited to:
(a)
All
Inventory, wherever located, whether now owned or hereafter acquired, of
whatever kind, nature or description, including all raw materials,
work-in-process, finished goods, and materials to be used or consumed in
Debtors’ business; finished goods, timber cut or to be cut, oil, gas,
hydrocarbons, and minerals extracted or to be extracted, and all names or marks
affixed to or to be affixed thereto for purposes of selling same by the seller,
manufacturer, lessor or licensor thereof and all Inventory which may be returned
to any Debtor by its customers or repossessed by any Debtor and all of Debtors’
right, title and interest in and to the foregoing (including all of a Debtor’s
rights as a seller of goods);
(b) All
Equipment and fixtures, wherever located, whether now owned or hereafter
acquired, including, without limitation, all machinery, furniture and fixtures,
and any and all additions, substitutions, replacements (including spare parts),
and accessions thereof and thereto (including, but not limited to Debtors’
rights to acquire any of the foregoing, whether by exercise of a purchase option
or otherwise);
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(iii) Property:
All now
owned and hereafter acquired right, title and interests of Debtors in, to and
in
respect of any other personal property in or upon which a Debtor has or may
hereafter have a security interest, lien or right of setoff;
(iv) Books
and Records:
All
present and future books and records relating to any of the above including,
without limitation, all computer programs, printed output and computer readable
data in the possession or control of the Debtors, any computer service bureau
or
other third party; and
(v) Products
and Proceeds:
All
products and Proceeds of the foregoing in whatever form and wherever located,
including, without limitation, all insurance proceeds and all claims against
third parties for loss or destruction of or damage to any of the
foregoing.
(B) All
now
owned and hereafter acquired right, title and interest of Debtors in, to and
in
respect of the following:
(i) the
shares of stock, partnership interests, member interests or other equity
interests at any time and from time to time acquired by Debtors of any and
all
entities now or hereafter existing, (such entities, being hereinafter referred
to collectively as the “Pledged Issuers” and individually as a “Pledged
Issuer”), the certificates representing such shares, partnership interests,
member interests or other interests, all options and other rights, contractual
or otherwise, in respect thereof and all dividends, distributions, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all
of such shares, partnership interests, member interests or other
interests;
(ii) all
additional shares of stock, partnership interests, member interests or other
equity interests from time to time acquired by Debtors, of any Pledged Issuer,
the certificates representing such additional shares, all options and other
rights, contractual or otherwise, in respect thereof and all dividends,
distributions, cash, instruments, investment property and other property from
time to time received, receivable or otherwise distributed in respect of or
in
exchange for any or all of such additional shares, interests or equity;
and
(iii) all
security entitlements of Debtors in, and all Proceeds of any and all of the
foregoing in each case, whether now owned or hereafter acquired by a Debtor
and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, lien, claim or otherwise).
Notwithstanding
anything to the contrary contained herein or any Transaction Document,
Collateral shall not include any personal property which is, or at the time
of a
Debtor’s acquisition thereof shall be subject to a purchase money mortgage or
other purchase money lien or security interest, but only to the extent of the
initial dollar amount such purchase money mortgage or lien.
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3.3 The
Collateral Agent is hereby specifically authorized, after the Maturity Date
(defined in the Debentures) accelerated or otherwise, or after an Event of
Default (as defined herein) and the expiration of any applicable cure period,
to
transfer any Collateral into the name of the Collateral Agent and to take any
and all action deemed advisable to the Collateral Agent to remove any transfer
restrictions affecting the Collateral.
4. Perfection
of Security Interest.
4.1 Each
Debtor shall prepare, execute and deliver to the Collateral Agent UCC-1
Financing Statements. The Collateral Agent is instructed to prepare and file
at
each Debtor’s cost and expense, financing statements in such jurisdictions
deemed advisable to the Collateral Agent, including but not limited to the
State
of Delaware. The Financing Statements are deemed to have been filed for the
benefit of the Collateral Agent and Lenders identified on Schedule
A
hereto.
4.2 The
Parent shall deliver to Collateral Agent promptly stock certificates
representing all of the shares of outstanding capital stock of each Guarantor
(the “Securities”). All such certificates shall be held by or on behalf of
Collateral Agent pursuant hereto and shall be delivered in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments
of
transfer or assignment or undated stock powers executed in blank, all in form
and substance satisfactory to Collateral Agent.
4.3
All
other certificates and instruments constituting Collateral from time to time
required to be pledged to Collateral Agent pursuant to the terms hereof (the
“Additional Collateral”) shall be delivered to Collateral Agent promptly upon
receipt thereof by or on behalf of Debtors. All such certificates and
instruments shall be held by or on behalf of Collateral Agent pursuant hereto
and shall be delivered in suitable form for transfer by delivery, or shall
be
accompanied by duly executed instruments of transfer or assignment or undated
stock powers executed in blank, all in form and substance satisfactory to
Collateral Agent. If any Collateral consists of uncertificated securities,
unless the immediately following sentence is applicable thereto, Debtors shall
cause Collateral Agent (or its custodian, nominee or other designee) to become
the registered holder thereof, or cause each issuer of such securities to agree
that it will comply with instructions originated by Collateral Agent with
respect to such securities without further consent by Debtors. If any Collateral
consists of security entitlements, Debtors shall transfer such security
entitlements to Collateral Agent (or its custodian, nominee or other designee)
or cause the applicable securities intermediary to agree that it will comply
with entitlement orders by Collateral Agent without further consent by Debtors.
4.4 Within
five (5) days after the receipt by a Debtor of any Additional Collateral, a
Pledge Amendment, duly executed by such Debtor, in substantially the form of
Annex I hereto (a “Pledge Amendment”), shall be delivered to Collateral Agent in
respect of the Additional Collateral to be pledged pursuant to this Agreement.
Each Debtor hereby authorizes Collateral Agent to attach each Pledge Amendment
to this Agreement and agrees that all certificates or instruments listed on
any
Pledge Amendment delivered to Collateral Agent shall for all purposes hereunder
constitute Collateral.
4.5 If
a
Debtor shall receive, by virtue of Debtor being or having been an owner of
any
Collateral, any (i) stock certificate (including, without limitation, any
certificate representing a stock dividend or distribution in connection with
any
increase or reduction of capital, reclassification, merger, consolidation,
sale
of assets, combination of shares, stock split, spin-off or split-off),
promissory note or other instrument, (ii) option or right, whether as an
addition to, substitution for, or in exchange for, any Collateral, or otherwise,
(iii) dividends payable in cash (except such dividends permitted to be retained
by Debtor pursuant to Section 5.1 hereof) or in securities or other property
or
(iv) dividends or other distributions in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, Debtor shall receive such stock certificate,
promissory note, instrument, option, right, payment or distribution in trust
for
the benefit of Collateral Agent, shall segregate it from Debtor’s other property
and shall deliver it forthwith to Collateral Agent, in the exact form received,
with any necessary endorsement and/or appropriate stock powers duly executed
in
blank, to be held by Collateral Agent as Collateral and as further collateral
security for the Obligations.
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5. Distribution.
5.1 So
long
as no Event of Default exists, Debtors shall be entitled to exercise all voting
power and receive payments pertaining to any of the Collateral, provided such
exercise is not contrary to the interests of the Lenders and does not impair
the
Collateral.
5.2. At
any
time an Event of Default exists or has occurred, all rights of Debtors, upon
notice given by Collateral Agent, to exercise the voting power and receive
payments, which it would otherwise be entitled to pursuant to Section 5.1,
shall
cease and all such rights shall thereupon become vested in Collateral Agent,
which shall thereupon have the sole right to exercise such voting power and
receive such payments.
5.3 All
dividends, distributions, interest and other payments which are received by
Debtors contrary to the provisions of Section 5.2 shall be received in trust
for
the benefit of Collateral Agent as security and Collateral for payment of the
Obligations, shall be segregated from other funds of Debtors, and shall be
forthwith paid over to Collateral Agent as Collateral in the exact form received
with any necessary endorsement and/or appropriate stock powers duly executed
in
blank, to be held by Collateral Agent as Collateral and as further collateral
security for the Obligations.
6. Further
Action By Debtors; Covenants and Warranties.
6.1 Collateral
Agent at all times shall have a perfected security interest in the Collateral,
the Securities, and the Additional Collateral (the “Perfected Collateral”). Each
Debtor has and will continue to have full title to the Collateral free from
any
other liens, leases, encumbrances, judgments or other claims. Collateral Agent’s
security interest in the Collateral constitutes and will continue to constitute
a first, prior and indefeasible security interest in favor of Collateral Agent.
Each Debtor will do all acts and things, and will execute and file all
instruments (including, but not limited to, security agreements, financing
statements, continuation statements, etc.) reasonably requested by Collateral
Agent to establish, maintain and continue the perfected security interest of
Collateral Agent in the Perfected Collateral, and will promptly on demand,
pay
all costs and expenses of filing and recording, including the costs of any
searches reasonably deemed necessary by Collateral Agent from time to time
to
establish and determine the validity and the continuing priority of the security
interest of Collateral Agent, and also pay all other claims and charges that,
in
the opinion of Collateral Agent, exercised in good faith, are reasonably likely
to materially prejudice, imperil or otherwise affect the Collateral or
Collateral Agent’s or Lenders’ security interests therein.
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6.2 Other
than in the ordinary course of business, for fair value and in cash, and except
for Collateral which is substituted by assets of identical or greater value
(with the consent of the Collateral Agent) or which has become obsolete or
is of
inconsequential value, each Debtor will not sell, transfer, assign or pledge
those items of Collateral (or allow any such items to be sold, transferred,
assigned or pledged), without the prior written consent of Collateral Agent
other than a transfer of the Collateral to a wholly-owned subsidiary or to
another Debtor on prior notice to Collateral Agent, and provided the Collateral
remains subject to the security interest herein described. Although Proceeds
of
Collateral are covered by this Agreement, this shall not be construed to mean
that Collateral Agent consents to any sale of the Collateral, except as provided
herein. Sales of Collateral in the ordinary course of business shall be free
of
the security interest of Lenders and Collateral Agent and Lenders and Collateral
Agent shall promptly execute such documents (including without limitation
releases and termination statements) as may be required by Debtors to evidence
or effectuate the same.
6.3 Each
Debtor will, at all reasonable times during regular business hours and upon
reasonable notice, allow Collateral Agent or its representatives free and
complete access to the Collateral and all of such Debtor’s records which in any
way relate to the Collateral, for such inspection and examination as Collateral
Agent reasonably deems necessary.
6.4 Each
Debtor, at its sole cost and expense, will protect and defend this Security
Agreement, all of the rights of Collateral Agent and Lenders hereunder, and
the
Collateral against the claims and demands of all other persons.
6.5 Debtors
will promptly notify Collateral Agent of any levy, distraint or other seizure
by
legal process or otherwise of any part of the Collateral, and of any threatened
or filed claims or proceedings that are reasonably likely to affect or impair
any of the rights of Collateral Agent under this Security Agreement in any
material respect.
6.6 Each
Debtor, at its own expense, will obtain and maintain in force insurance policies
covering losses or damage to those items of Collateral which constitute physical
personal property, which insurance shall be of the types customarily insured
against by companies in the same or similar business, similarly situated, in
such amounts (with such deductible amounts) as is customary for such companies
under the same or similar circumstances, similarly situated. Debtors shall
make
the Collateral Agent a loss payee thereon to the extent of its interest in
the
Collateral. Collateral Agent is hereby irrevocably (until the Obligations are
paid in full) appointed each Debtor’s attorney-in-fact to endorse any check or
draft that may be payable to such Debtor as proceeds of such insurance so that
Collateral Agent may collect the proceeds payable for any loss under such
insurance. The proceeds of such insurance, less any costs and expenses incurred
or paid by Collateral Agent in the collection thereof, shall be applied either
toward the cost of the repair or replacement of the items damaged or destroyed,
or on account of any sums secured hereby, whether or not then due or
payable.
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6.7 Collateral
Agent may, at its option, and without any obligation to do so, pay, perform
and
discharge any and all amounts, costs, expenses and liabilities herein agreed
to
be paid or performed by Debtor. Upon
Debtor’s failure
to do
so, all amounts expended by Collateral Agent in so doing shall become part
of
the Obligations secured hereby, and shall be immediately due and payable by
Debtor to Collateral Agent upon demand
and
shall
bear interest at the lesser of 15% per annum or the highest legal amount from
the dates of such expenditures until paid.
6.8 Upon
the
request of Collateral Agent, Debtors will furnish to Collateral Agent within
five (5) business days thereafter, or to any proposed assignee of this Security
Agreement, a written statement in form reasonably satisfactory to Collateral
Agent, duly acknowledged, certifying the amount of the principal and interest
and any other sum then owing under the Obligations, whether to its knowledge
any
claims, offsets or defenses exist against the Obligations or against this
Security Agreement, or any of the terms and provisions of any other agreement
of
Debtors securing the Obligations. In connection with any assignment by
Collateral Agent of this Security Agreement, each Debtor hereby agrees to cause
the insurance policies required hereby to be carried by such Debtor, if any,
to
be endorsed in form satisfactory to Collateral Agent or to such assignee, with
loss payable clauses in favor of such assignee, and to cause such endorsements
to be delivered to Collateral Agent within ten (10) calendar days after request
therefor by Collateral Agent.
6.9 Each
Debtor will, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports
and
other reasonable assurances or instruments and take further steps relating
to
the Collateral and other property or rights covered by the security interest
hereby granted, as the Collateral Agent may reasonably require to perfect its
security interest hereunder.
6.10 Debtors
represent and warrant that they are the true and lawful exclusive owners of
the
Collateral, free and clear of any liens and encumbrances.
6.11 Each
Debtor hereby agrees not to divest itself of any right under the Collateral
except as permitted herein absent prior written approval of the Collateral
Agent, except to a subsidiary organized and located in the United States on
prior notice to Collateral Agent provided the Collateral remains subject to
the
security interest herein described.
6.12 Each
Debtor shall cause each Subsidiary of such Debtor in existence on the date
hereof and each Subsidiary not in existence on the date hereof to execute and
deliver to Collateral Agent promptly and in any event within 10 days after
the
formation, acquisition or change in status thereof (A) a guaranty guaranteeing
the Obligations and (B) if requested by Collateral Agent, a security and pledge
agreement substantially in the form of this Agreement together with (x)
certificates evidencing all of the capital stock of each Subsidiary of and
any
entity owned by such Subsidiary, (y) undated stock powers executed in blank
with
signatures guaranteed, and (z) such opinion of counsel and such approving
certificate of such Subsidiary as Collateral Agent may reasonably request in
respect of complying with any legend on any such certificate or any other matter
relating to such shares and (C) such other agreements, instruments, approvals,
legal opinions or other documents reasonably requested by Collateral Agent
in
order to create, perfect, establish the first priority of or otherwise protect
any lien purported to be covered by any such pledge and security agreement
or
otherwise to effect the intent that all property and assets of such Subsidiary
shall become Collateral for the Obligations. For purposes of this Agreement,
“Subsidiary”
means,
with respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity) of which more than 50% of (A) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (C) in the case of a trust, estate, association, joint
venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned
or
controlled directly or indirectly through one or more intermediaries, by such
entity. Annex
I annexed hereto contains a list of all Subsidiaries of the Debtors as of the
date of this Agreement.
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6.13
Without limiting the generality of the other obligations of the
Borrower hereunder, the Borrower shall promptly (i) cause
to be registered at the United States Copyright Office all of its material
copyrights, (ii) cause the security interest contemplated hereby with respect
to
all intellectual property registered at the United States Copyright Office
or
United States Patent and Trademark Office to be duly recorded at the applicable
office, and (iii) give the Collateral Agent notice whenever it acquires (whether
absolutely or by license) or creates any additional material intellectual
property.
7. Power
of Attorney.
At
any
time an Event of Default exists or has occurred, each Debtor hereby irrevocably
constitutes and appoints the Collateral Agent as the true and lawful attorney
of
such Debtor, with full power of substitution, in the place and stead of such
Debtor and in the name of such Debtor or otherwise, at any time or times, in
the
discretion of the Collateral Agent, to take any action and to execute any
instrument or document which the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Agreement. This power of attorney
is coupled with an interest and is irrevocable until the Obligations are
satisfied.
8. Performance
By The Collateral Agent.
If
a
Debtor fails to perform any material covenant, agreement, duty or obligation
of
such Debtor under this Agreement, the Collateral Agent may, after any applicable
cure period, at any time or times in its discretion, take action to effect
performance of such obligation. All reasonable expenses of the Collateral Agent
incurred in connection with the foregoing authorization shall be payable by
Debtors as provided in Paragraph 12.1 hereof. No discretionary right, remedy
or
power granted to the Collateral Agent under any part of this Agreement shall
be
deemed to impose any obligation whatsoever on the Collateral Agent with respect
thereto, such rights, remedies and powers being solely for the protection of
the
Collateral Agent.
9. Event
of Default.
An
event
of default (“Event of Default”) shall be deemed to have occurred hereunder upon
the occurrence of any event of default as defined and described in this
Agreement, in the Debentures, the Securities Purchase Agreement, and any other
agreement to which Debtor and a Lender are parties. Upon and after any Event
of
Default, after the applicable cure period, if any, any or all of the Obligations
shall become immediately due and payable at the option of the Collateral Agent,
for the benefit of the Lenders, and the Collateral Agent may dispose of
Collateral as provided below. A default by Debtor of any of its material
obligations pursuant to this Agreement and any of the Transaction Documents
(as
defined in the Securities Purchase Agreement) shall be an Event of Default
hereunder and an “Event of Default” as defined in the Debentures, and Securities
Purchase Agreement.
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10. Disposition
of Collateral.
Upon
and
after any Event of Default which is then continuing,
10.1 The
Collateral Agent may exercise its rights with respect to each and every
component of the Collateral, without regard to the existence of any other
security or source of payment for the Obligations. In addition to other rights
and remedies provided for herein or otherwise available to it, the Collateral
Agent shall have all of the rights and remedies of a lender on default under
the
Uniform Commercial Code then in effect in the State of New York.
10.2 If
any
notice to Debtors of the sale or other disposition of Collateral is required
by
then applicable law, five business (5) days prior written notice (which Debtors
agree is reasonable notice within the meaning of Section 9.612(a) of the Uniform
Commercial Code) shall be given to Debtors of the time and place of any sale
of
Collateral which Debtors hereby agree may be by private sale. The rights granted
in this Section are in addition to any and all rights available to Collateral
Agent under the Uniform Commercial Code.
10.3 The
Collateral Agent is authorized, at any such sale, if the Collateral Agent deems
it advisable to do so, in order to comply with any applicable securities laws,
to restrict the prospective bidders or purchasers to persons who will represent
and agree, among other things, that they are purchasing the Collateral for
their
own account for investment, and not with a view to the distribution or resale
thereof, or otherwise to restrict such sale in such other manner as the
Collateral Agent deems advisable to ensure such compliance. Sales made subject
to such restrictions shall be deemed to have been made in a commercially
reasonable manner.
10.4 All
proceeds received by the Collateral Agent for the benefit of the Lenders in
respect of any sale, collection or other enforcement or disposition of
Collateral, shall be applied (after deduction of any amounts payable to the
Collateral Agent pursuant to Paragraph 12.1 hereof) against the Obligations
pro
rata among the Lenders in proportion to their interests in the Obligations.
Upon
payment in full of all Obligations, Debtors shall be entitled to the return
of
all Collateral, including cash, which has not been used or applied toward the
payment of Obligations or used or applied to any and all costs or expenses
of
the Collateral Agent incurred in connection with the liquidation of the
Collateral (unless another person is legally entitled thereto). Any assignment
of Collateral by the Collateral Agent to Debtors shall be without representation
or warranty of any nature whatsoever and wholly without recourse. To the extent
allowed by law, each Lender may purchase the Collateral and pay for such
purchase by offsetting up to such Lender’s pro rata portion of the purchase
price with sums owed to such Lender by Debtors arising under the Obligations
or
any other source.
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11. Waiver
of Automatic Stay.
Debtor
acknowledges and agrees that should a proceeding under any bankruptcy or
insolvency law be commenced by or against Debtor, or if any of the Collateral
should become the subject of any bankruptcy or insolvency proceeding, then
the
Collateral Agent should be entitled to, among other relief to which the
Collateral Agent or Lenders may be entitled under the Debentures, Securities
Purchase Agreement and any other agreement to which the Debtor, Lenders or
Collateral Agent are parties, (collectively “Loan Documents”) and/or applicable
law, an order from the court granting immediate relief from the automatic stay
pursuant to 11 U.S.C. Section 362 to permit the Collateral Agent to exercise
all
of its rights and remedies pursuant to the Loan Documents and/or applicable
law.
DEBTOR EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C.
SECTION 362. FURTHERMORE, DEBTOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER
11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER
STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL
STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE
COLLATERAL AGENT TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN
DOCUMENTS AND/OR APPLICABLE LAW. Debtor hereby consents to any motion for relief
from stay which may be filed by the Collateral Agent in any bankruptcy or
insolvency proceeding initiated by or against Debtor, and further agrees not
to
file any opposition to any motion for relief from stay filed by the Collateral
Agent. Debtor represents, acknowledges and agrees that this provision is a
specific and material aspect of this Agreement, and that the Collateral Agent
would not agree to the terms of this Agreement if this waiver were not a part
of
this Agreement. Debtor further represents, acknowledges and agrees that this
waiver is knowingly, intelligently and voluntarily made, that neither the
Collateral Agent nor any person acting on behalf of the Collateral Agent has
made any representations to induce this waiver, that Debtor has been represented
(or has had the opportunity to be represented) in the signing of this Agreement
and in the making of this waiver by independent legal counsel selected by Debtor
and that Debtor has had the opportunity to discuss this waiver with counsel.
Debtor further agrees that any bankruptcy or insolvency proceeding initiated
by
Debtor will only be brought in the Federal Court within the Southern District
of
New York.
12. Miscellaneous.
12.1 Expenses.
Debtors
shall pay to the Collateral Agent, on demand, the amount of any and all
reasonable expenses, including, without limitation, attorneys’ fees, legal
expenses and brokers’ fees, which the Collateral Agent may incur in connection
with (a) sale, collection or other enforcement or disposition of Collateral;
(b)
exercise or enforcement of any of the rights, remedies or powers of the
Collateral Agent hereunder or with respect to any or all of the Obligations
upon
breach or threatened breach; or (c) failure by Debtors to perform and observe
any agreements of Debtors contained herein which are performed by the Collateral
Agent.
12.2 Waivers,
Amendment and Remedies.
No
course of dealing by the Collateral Agent and no failure by the Collateral
Agent
to exercise, or delay by the Collateral Agent in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right, remedy or power of the Collateral Agent. No
amendment, modification or waiver of any provision of this Agreement and no
consent to any departure by Debtors therefrom, shall, in any event, be effective
unless contained in a writing signed by the Collateral Agent, and then such
waiver or consent shall be effective only in the specific instance and for
the
specific purpose for which given. The rights, remedies and powers of the
Collateral Agent, not only hereunder, but also under any instruments and
agreements evidencing or securing the Obligations and under applicable law
are
cumulative, and may be exercised by the Collateral Agent from time to time
in
such order as the Collateral Agent may elect.
10
12.3 Notices.
All
notices or other communications given or made hereunder shall be in writing
and
shall be personally delivered or deemed delivered the first business day after
being faxed (provided that a copy is delivered by first class mail) to the
party
to receive the same at its address set forth below or to such other address
as
either party shall hereafter give to the other by notice duly made under this
Section:
|
To
Debtors:
|
USTelematics,
Inc.
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CEO & President
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
With
a copy by telecopier
|
|
|
only
to:
|
▇▇▇▇
▇. ▇▇▇▇▇▇, LLC
|
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
To
Lenders:
|
To
the addresses and telecopier numbers set forth
|
|
on
Schedule A
|
|
|
To
the Collateral Agent:
|
Axiom
Capital Management, Inc.
|
|
________________________________
|
|
|
________________________________
|
|
|
________________________________
|
Any
party
may change its address by written notice in accordance with this
paragraph.
12.4 Term;
Binding Effect.
This
Agreement shall (a) remain in full force and effect until payment and
satisfaction in full of all of the Obligations; (b) be binding upon each Debtor,
and its successors and permitted assigns; and (c) inure to the benefit of the
Collateral Agent, for the benefit of the Lenders and their respective successors
and assigns.
11
12.5 Captions.
The
captions of Paragraphs, Articles and Sections in this Agreement have been
included for convenience of reference only, and shall not define or limit the
provisions hereof and have no legal or other significance
whatsoever.
12.6 Governing
Law; Venue; Severability.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without
regard to conflicts
of laws principles
that
would result in the application of the substantive laws of another
jurisdiction,
except
to the extent that the perfection of the security interest granted hereby in
respect of any item of Collateral may be governed by the law of another
jurisdiction. Any legal action or proceeding against a Debtor with respect
to
this Agreement may be brought in the courts in the State of New York or of
the
United
States for the Southern District of New York, and, by execution and delivery
of
this Agreement, each Debtor hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each Debtor hereby irrevocably waives any objection which
they
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement brought
in
the aforesaid courts and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought
in
any such court has been brought in an inconvenient forum. If any provision
of
this Agreement, or the application thereof to any person or circumstance, is
held invalid, such invalidity shall not affect any other provisions which can
be
given effect without the invalid provision or application, and to this end
the
provisions hereof shall be severable and the remaining, valid provisions shall
remain of full force and effect.
12.7 Entire
Agreement.
This
Agreement contains the entire agreement of the parties and supersedes all other
agreements and understandings, oral or written, with respect to the matters
contained herein.
12.8 Counterparts/Execution.
This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile signature
and delivered by facsimile transmission.
13. Intercreditor
Terms.
As
between the Lenders, any distribution under paragraph 10.4 shall be made
proportionately based upon the remaining principal amount (plus accrued and
unpaid interest) to each as to the total amount then owed to the Lenders as
a
whole. The rights of each Lender hereunder are pari
passu
to the
rights of the other Lenders hereunder. Any recovery hereunder shall be shared
ratably among the Lenders according to the then remaining principal amount
owed
to each (plus accrued and unpaid interest) as to the total amount then owed
to
the Lenders as a whole.
14. Termination;
Release.
When
the Obligations have been indefeasibly paid and performed in full or
all
outstanding Debentures have been converted to common stock pursuant to the
terms
of the Debentures and the Securities Purchase Agreements,
this
Agreement shall terminate, and the Collateral Agent, at the request and sole
expense of the Debtors, will execute and deliver to the Debtors the proper
instruments (including UCC termination statements) acknowledging the termination
of the Security Agreement, and duly assign, transfer and deliver to the Debtors,
without recourse, representation or warranty of any kind whatsoever, such of
the
Collateral, including, without limitation, Securities and any Additional
Collateral, as may be in the possession of the Collateral Agent.
12
15. Collateral
Agent.
15.1 Collateral
Agent Powers.
The
powers conferred on the Collateral Agent hereunder are solely to protect its
interest (on behalf of the Lenders) in the Collateral and shall not impose
any
duty on it to exercise any such powers.
15.2 Reasonable
Care.
The
Collateral Agent is required to exercise reasonable care in the custody and
preservation of any Collateral in its possession; provided, however, that the
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any of the Collateral if it takes such action for
that purposes as any owner thereof reasonably requests in writing at times
other
than upon the occurrence and during the continuance of any Event of Default,
but
failure of the Collateral Agent, to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable
care.
[THIS
SPACE INTENTIONALLY LEFT BLANK]
13
IN
WITNESS WHEREOF, the
undersigned have executed and delivered this Security Agreement, as of the
date
first written above.
| “DEBTOR” | “THE COLLATERAL AGENT” | ||
|
USTELEMATICS, INC.
a Delaware corporation
|
Axiom Capital Management, Inc.
|
||
| By: | By: | ||
|
|
|
||
|
|
|
|
“SUBSIDIARY”
|
“SUBSIDIARY” | ||
| By: | By: | ||
|
|
|
||
|
|
|
APPROVED
BY “LENDERS”:
|
|
|
|
|
|
|
This
Security Agreement may be signed by facsimile signature
and
delivered
by confirmed facsimile transmission.
14
SCHEDULE
A TO SECURITY AGREEMENT
|
LENDER
|
PRINCIPAL
AMOUNT OF DEBENTURE
|
|||
|
TOTALS
|
||||
15
ANNEX
I
TO
SECURITY
AGREEMENT
PLEDGE
AMENDMENT
This
Pledge Amendment, dated December __ 2006, is delivered pursuant to Section
4.3
of the Amended and Restated Security Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Amended and Restated Security Agreement, dated December ___, 2006, as it may
heretofore have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time and that the shares listed on this Pledge
Amendment shall be hereby pledged and assigned to Collateral Agent and become
part of the Collateral referred to in such Security Agreement and shall secure
all of the Obligations referred to in such Security Agreement.
|
NAME
OF ISSUER
|
|
JURISDICTION
OF INCORPORATION
|
|
PERCENT
OWNED BY PARENT
|
|
NUMBER
OF SHARES
|
|
CLASS
|
|
CERTIFICATE
NUMBER(S)
|
| USTELEMATICS, INC. | ||
| |
|
|
| By: | ||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
Chief
Executive Officer, President
|
||
16