EXHIBIT 10.6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated as of June 30, 1999,
is made and entered into by and among eGLOBE, INC., a Delaware corporation
("Parent"), and IDX INTERNATIONAL, INC., a Virginia corporation and a wholly
owned subsidiary of Parent (collectively, the "Companies"), and EXTL INVESTORS,
LLC, a limited liability company organized under the laws of Nevada (the
"Investor").
WITNESSETH:
WHEREAS, eGlobe Financing Corporation, a Delaware corporation and a
wholly owned subsidiary of the Parent ("eGlobe Financing"), IDX Financing
Corporation, a Delaware corporation and a wholly owned subsidiary of IDX ("IDX
Financing"), and Telekey Financing Corporation, a Delaware corporation and a
wholly owned subsidiary of Telekey, Inc., a wholly owned subsidiary of the
Parent ("Telekey Financing" and together with eGlobe Financing and IDX
Financing, the "Financing Companies"), are issuing and selling to the Investor
on the date hereof, and the Investor is purchasing from the Financing Companies,
the Financing Companies' 5% Secured Notes (the "Secured Notes") and the
Financing Companies are executing and delivering a revolving note based on the
balance of accounts receivable (the "A/R Note" and collectively with the Secured
Notes, the "Notes"), pursuant to the terms and conditions of the Loan and Note
Purchase Agreement dated April 9, 1999 by and among eGlobe Financing, the
Parent, and the Investor, as amended by Amendment No. 1 to the Loan and Note
Purchase Agreement dated as of the date hereof (as amended, the "Loan and Note
Purchase Agreement"); and
WHEREAS, the Companies are guaranteeing the payment and performance by
the Financing Companies of obligations under the Loan and Note Purchase
Agreement as more fully set forth in the Guaranty, dated as of June _, 1999 for
the benefit of the Investor (the "Guaranty"); and
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings given such terms in the Loan and Note
Purchase Agreement; and
WHEREAS, in connection with the purchase and guaranty of the Secured
Notes and the issuance of the A/R Note, the Investor desires to obtain from the
Companies and the Companies desire to grant to the Investor a security interest
in the collateral more particularly described below.
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NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF SECURITY INTEREST. For the purpose of securing the
Obligations (as defined below), each Company hereby grants to the Investor
(subject to Section 4(a) hereof) a security interest in all accounts of any
Company now or hereafter acquired, including without limitation all present or
future accounts receivable, all rights to payment for goods sold or leased or to
be sold or leased or for services rendered or to be rendered, whether or not
earned by performance, all rights in any merchandise or goods which any of the
same may represent, all notes receivables, book debts, notes, bills, drafts,
acceptances, choses in action, contract rights, instruments and documents and
all sums of money due or to become due thereon and all proceeds thereof and all
rights, title, security interests and guarantees with respect to each of the
foregoing, in each case only to the extent that the grant by such Company of a
security interest pursuant to this Agreement would not violate any Material
Contract (as defined in the Loan and Note Purchase Agreement) (collectively, the
"Collateral").
2. THE OBLIGATIONS. The obligations secured hereby shall include (a)
the due and punctual payment of all obligations under the Guaranty, (b) all
attorney's fees, court costs and expenses of whatever kind incident to the
collection of any of said obligations and the enforcement and protection of the
security interest created hereby and (c) the performance of all obligations
under the Guaranty where the failure to perform would constitute an event of
default thereunder (collectively, the "Obligations").
3. REPRESENTATIONS AND WARRANTIES. Each Company represents and warrants
as follows:
(a) Except as set forth on Schedule 1 hereto, such Company is
the owner of the applicable portion of the Collateral and has good and
marketable title to such Collateral free and clear of any liens,
security interests, claims and encumbrances except for those in favor
of the Investor and those previously disclosed in writing to the
Investor, contingent or otherwise.
(b) The addresses set forth on Schedule 2 hereto are all of
the locations of all of the books and records regarding the Collateral.
(c) The execution and delivery of this Agreement and the
financing statements delivered in connection herewith by the Companies
do not conflict with or violate any Law (including, without limitation,
any judgment or injunction) applicable to any Company or its assets or
properties or any
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Material Contract or security agreement to which any Company is a party
or by which its assets or properties are encumbered.
4. COVENANTS. Each Company covenants and agrees as follows:
(a) Except with the prior written consent of the Investor,
such Company will not grant or permit to exist any liens or security
interests other than (i) those created by this Agreement, and (ii)
items described in clauses (ii), (iii) or (iv) of the definition of
Permitted Liens in the Loan and Note Purchase Agreement.
(b) No Company will change the location of its chief executive
office unless it shall have given the Investor prior written notice
thereof.
(c) Except as contemplated by the Loan and Note Purchase
Agreement, no Company will sell, exchange or otherwise dispose of any
of the Collateral or any interest therein without the prior written
consent of the Investor, unless such sale, exchange or other
disposition is on an arm's length basis for fair value and in the
ordinary course of business.
(d) Such Company will defend the applicable portion of the
Collateral against the claims and demands of all persons.
(e) Such Company will pay to the Investor all amounts secured
hereby as and when the same shall be due and payable, whether at
maturity, by acceleration or otherwise, and such payments shall be made
in accordance with the terms of the Guaranty.
(f) Such Company will file, and pay all costs of filing, such
financing, continuation and termination statements with respect to the
security interests created hereby as the Investor may reasonably
request, and the Investor is authorized to do all things that it deems
necessary to perfect and continue perfection of the security interests
created hereby.
(g) The Company shall deliver to the Investor, on a monthly
basis, within 20 days after the end of each month, reports certified by
its chief financial officer or treasurer (1) indicating the aggregate
amount of accounts receivable of the Companies and the amount of the
Collateral as of such month, and (2) confirming that there are no liens
or security interests outstanding with respect to the Collateral (or if
there are any, indicating the type of lien or security interest and
describing the obligation secured). Such reports shall be in a form
requested by the Investor and reasonably acceptable to the Companies.
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(h) Such Company shall take or cause to be taken such further
actions, shall execute, deliver, and file or cause to be executed,
delivered, and filed such further documents and instruments, and shall
obtain such consents as may be necessary or as the Investor may
reasonably request to effectuate the purposes, terms, and conditions of
this Agreement, whether before, at or after the closing of transactions
contemplated hereby or the occurrence of an Event of Default (as
defined in the Loan and Note Purchase Agreement).
5. EVENT OF DEFAULT. The occurrence of an Event of Default under the
Loan and Note Purchase Agreement shall constitute an Event of Default hereunder.
6. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence and during the
continuation of an Event of Default, the Investor may exercise any and all
rights and remedies provided by the Uniform Commercial Code (Texas) or other
applicable law, as well as all other rights and remedies possessed by the
Investor pursuant to the Guaranty, all of which shall (to the extent permitted
by law) be cumulative. Any notice of sale or other intended disposition of the
Collateral by the Investor sent to the Companies at the address hereinafter set
forth, at least ten (10) days prior to such action, shall constitute reasonable
notice to the Companies.
The Investor may waive any Event of Default before or after the same
has been declared without impairing its right to declare a subsequent Event of
Default hereunder.
7. RELEASE OF SECURITY INTEREST. Upon payment in full of all
Obligations, the Investor shall release the security interest created hereby and
shall execute and deliver to the Companies such termination statements and other
agreements and documents as any Company may reasonably request to evidence such
payment and release.
8. POWER OF ATTORNEY. The Companies hereby constitute the Investor as
the Companies' attorney-in-fact with power, upon the occurrence and during the
continuance of an Event of Default, to do all acts and things necessary or
desirable to enforce the Investor's rights under this Agreement. This power of
attorney is coupled with an interest and is irrevocable until all of the
Obligations are paid in full.
9. NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
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(a) If to the Companies:
c/o eGlobe, Inc.
2000 Pennsylvania Avenue, NW
Suite 4800
Washington, DC 20006
Telecopier No.: 202-882-8984
Attention: Chairman
(b) If to the Investor:
EXTL Investors, LLC
850 Cannon, Suite 200
Hurst, TX 76054
Telecopier No.: 817-428-3899
Attention: Ronald Jensen
10. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
12. ENTIRE AGREEMENT. This Agreement (together with the Schedules
delivered pursuant hereto, the Guaranty and the Loan and Note Purchase
Agreement, as referred to or incorporated herein) constitutes the entire
agreement of the parties and supersedes all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to the
subject matter hereof, except as otherwise expressly provided herein, are not
intended to confer upon any other person any rights or remedies hereunder.
13. SPECIFIC PERFORMANCE. The transactions contemplated by this
Agreement are unique. Accordingly, each of the parties acknowledges and agrees
that, in addition to all other remedies to which it may be entitled, each of the
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parties hereto is entitled to a decree of specific performance, provided such
party is not in material default hereunder.
14. ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
15. THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
16. FEES AND EXPENSES. Except as otherwise provided for in this
Agreement, each party hereto shall pay its own fees, costs and expenses incurred
in connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein.
17. AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
18. CONSENT REQUIRED. Any term, covenant, agreement or condition of
this Agreement may, with the consent of the Companies, be amended or compliance
therewith may be waived (either generally or in particular instance and either
retroactively or prospectively), if the Companies shall have obtained the
consent in writing of the Investor.
19. GOVERNING LAW. All corporate law matters arising under this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, and all other matters arising under this Agreement shall be
governed by and construed in accordance with the laws of the State of Texas, in
each case regardless of the laws that might otherwise govern under applicable
principles of conflicts of law. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the State of Texas
or the state courts of the State of Texas in connection with any dispute arising
under this Agreement and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.
Notwithstanding the foregoing, it is the intention of the parties that,
to the extent local law would govern with respect to Collateral located in a
particular jurisdiction, this Agreement shall create a security interest,
floating charge or similar grant of rights under such local law with respect to
Collateral located in such jurisdiction.
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20. COUNTERPARTS. This Agreement may be executed and delivered in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Companies and the Investor have caused this
Agreement to be executed as of the date first above written.
EGLOBE, INC.
By:
--------------------------------
Title:
--------------------------------
Address: 2000 Pennsylvania Avenue, NW
Suite 4800
Washington, DC 20006
IDX FINANCING CORPORATION
By:
--------------------------------
Title:
--------------------------------
Address: 11410 Issac Newton Square North
Suite 101
Reston, Virginia 20190
EXTL INVESTORS, LLC
By:
--------------------------------
Title:
--------------------------------
Address: 850 Cannon, Suite 200
Hurst, TX 76054
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SCHEDULE 1
Title Exceptions
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Parent has granted a security interest in a certain account maintained
at Norwest Bank Colorado in connection with a Letter of Credit relating to IDX
International, Inc.
SCHEDULE 2
Location of Books and Records
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The books and records of the Parent are located at:
4260 E. Evans Avenue
Denver, Colorado 80222
The books and records of the IDX International, Inc. are located at:
11410 Issac Newton Square North, Suite 101
Reston, Virginia 20190