Exhibit 4.11.3
EPIXTAR CORP. AND CERTAIN OF ITS SUBSIDIARIES
MASTER SECURITY AGREEMENT
To: Laurus Master Fund, Ltd.
c/o Ironshore Corporate Services, Ltd.
P.O. Box 1234 G.T
Queensgate House
South Church Street
Grand Cayman, Cayman Islands
Date: May 14, 2004
To Whom It May Concern:
1. To secure the payment of all Obligations (as hereafter defined),
Epixtar Corp., a Florida corporation (the "Company"), each of the other
undersigned parties (other than Laurus Master Fund, Ltd, "Laurus")) and each
other entity that is required to enter into this Master Security Agreement (each
an "Assignor" and, collectively, the "Assignors") hereby assigns and grants to
Laurus a continuing security interest in all of the following property now owned
or at any time hereafter acquired by any Assignor, or in which any Assignor now
have or at any time in the future may acquire any right, title or interest (the
"Collateral"): all cash, cash equivalents, accounts, deposit accounts
(including, without limitation, (x) the Restricted Account (the "Laurus
Restricted Account") maintained at North Fork Bank (Account Name: Epixtar Corp.,
Account Number: 2704051586) referred to in the Laurus Restricted Account
Agreement and (y) (x) the Restricted Account (the "Reserve Restricted Account")
maintained at North Fork Bank (Account Name: Epixtar Corp., Account Number:
2704051594)), inventory, equipment, goods, documents, instruments (including,
without limitation, promissory notes), contract rights, general intangibles
(including, without limitation, payment intangibles and an absolute right to
license on terms no less favorable than those current in effect among our
affiliates), chattel paper, supporting obligations, investment property
(including, without limitation, all equity interests owned by any Assignor),
letter-of-credit rights, trademarks, trademark applications, patents, patent
applications, copyrights, copyright applications and tradestyles, in each case,
in which any Assignor now have or hereafter may acquire any right, title or
interest, all proceeds and products thereof (including, without limitation,
proceeds of insurance) and all additions, accessions and substitutions thereto
or therefore. In the event any Assignor wishes to finance the acquisition in the
ordinary course of business of any hereafter acquired equipment and have
obtained a commitment from a financing source to finance such equipment from an
unrelated third party, Laurus agrees to release its security interest on such
hereafter acquired equipment so financed by such third party financing source.
Except as otherwise defined herein, all capitalized terms used herein shall have
the meaning provided such terms in the Securities Purchase Agreement referred to
below.
2. The term "Obligations" as used herein shall mean and include all
debts, liabilities and obligations owing by each Assignor to Laurus arising
under, out of, or in connection with: (i) that certain Securities Purchase
Agreement dated as of the date hereof by and between the Company and Laurus (the
"Securities Purchase Agreement") and (ii) the Related Agreements referred to in
the Securities Purchase Agreement (the Securities Purchase Agreement and each
Related Agreement, as each may be amended, modified, restated or supplemented
from time to time, are collectively referred to herein as the "Documents"), and
in connection with any documents, instruments or agreements relating to or
executed in connection with the Documents or any documents, instruments or
agreements referred to therein or otherwise, and in connection with any other
indebtedness, obligations or liabilities of any Assignor to Laurus, whether now
existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent, due or not due and whether under, pursuant to or
evidenced by a note, agreement, guaranty, instrument or otherwise, in each case,
irrespective of the genuineness, validity, regularity or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all of the
Obligations in any case commenced by or against any Assignor under Title 11,
United States Code, including, without limitation, obligations or indebtedness
of each Assignor for post-petition interest, fees, costs and charges that would
have accrued or been added to the Obligations but for the commencement of such
case, irrespective of the allowability, allowance or disallowance of such
post-petition interest, fees, costs and charges.
3. Each Assignor hereby jointly and severally represents, warrants and
covenants to Laurus that:
(a) it is a corporation, partnership or limited liability
company, as the case may be, validly existing, in good standing and
organized under the respective laws of its jurisdiction of organization
set forth on Schedule A, and each Assignor will provide Laurus thirty
(30) days' prior written notice of any change in any of its respective
jurisdiction of organization;
(b) its legal name is as set forth in its respective
Certificate of Incorporation or other organizational document (as
applicable) as amended through the date hereof and as set forth on
Schedule A, and it will provide Laurus thirty (30) days' prior written
notice of any change in its legal name;
(c) its organizational identification number (if applicable)
is as set forth on Schedule A hereto, and it will provide Laurus thirty
(30) days' prior written notice of any change in any of its
organizational identification number;
(d) it is the lawful owner of the respective Collateral and it
has the sole right to grant a security interest therein and will defend
the Collateral against all claims and demands of all persons and
entities;
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(e) it will keep its respective Collateral free and clear of
all attachments, levies, taxes, liens, security interests and
encumbrances of every kind and nature ("Encumbrances"), except (i)
Encumbrances securing the Obligations and the obligations under the
Bridge Loan Documents, (ii) to the extent said Encumbrance does not
secure indebtedness in excess of $100,000 and such Encumbrance is
removed or otherwise released within thirty (30) days of the creation
thereof, (iii) liens of warehousemen, mechanics, materialmen, workers,
repairmen, common carriers, or landlords, liens for taxes, assessments
or other governmental charges, and other similar liens arising by
operation of law, in each case arising in the ordinary course of
business and for amounts that are not yet due and payable or which are
being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and for which an adequate reserve
or other appropriate provision shall have been made to the extent
required by generally accepted accounting principals, (iv) pledges or
deposits in connection with workers' compensation, unemployment
insurance and other social security legislation and (v) the
Encumbrances set forth on Schedule B hereto (the preceding clauses (i)
through (iv), collectively, the "Permitted Encumbrances");
(f) it will, at its and the other Assignors joint and several
cost and expense keep the Collateral in good state of repair (ordinary
wear and tear excepted) and will not waste or destroy the same or any
part thereof other than ordinary course discarding of items no longer
used or useful in its or such other Assignors' business;
(g) it will not without Laurus' prior written consent, sell,
exchange, lease or otherwise dispose of the Collateral, whether by
sale, lease or otherwise, except (I) as set forth in the accounts
receivable factoring documents described on Schedule B hereto (as such
documents are in effect on the date hereof) and (II) for the sale of
inventory in the ordinary course of business and for the disposition or
transfer in the ordinary course of business during any fiscal year of
obsolete and worn-out equipment or equipment no longer necessary for
its ongoing needs, having an aggregate fair market value of not more
than $50,000 and only to the extent that:
(i) the proceeds of any such disposition are used to
acquire replacement Collateral which is subject to Laurus'
first priority perfected security interest, or are used to
repay Obligations or to pay general corporate expenses; and
(ii) following the occurrence of an Event of Default
which continues to exist the proceeds of which are remitted to
Laurus to be held as cash collateral for the Obligations;
(h) it will insure or cause the Collateral to be insured in
Laurus' name against loss or damage by fire, theft, burglary,
pilferage, loss in transit and such other hazards as Laurus shall
specify in amounts and under policies by insurers acceptable to Laurus
and all premiums thereon shall be paid by such Assignor and the
policies delivered to Laurus. If any such Assignor fails to do so,
Laurus may procure such insurance and the cost thereof shall be
promptly reimbursed by the Assignors, jointly and severally, and shall
constitute Obligations;
(i) it will at all reasonable times, upon reasonable notice
and in a reasonable manner, allow Laurus or Laurus' representatives
free access to and the right of inspection of the Collateral;
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(j) such Assignor (jointly and severally with each other
Assignor) hereby indemnifies and saves Laurus harmless from all loss,
costs, damage, liability and/or expense, including reasonable
attorneys' fees, that Laurus may sustain or incur to enforce payment,
performance or fulfillment of any of the Obligations and/or in the
enforcement of this Master Security Agreement or in the prosecution or
defense of any action or proceeding either against Laurus or any
Assignor concerning any matter growing out of or in connection with
this Master Security Agreement, and/or any of the Obligations and/or
any of the Collateral except to the extent caused by Laurus' own gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and nonappealable decision).
4. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Master Security Agreement:
(a) Breach of any covenant, warranty, representation or
statement made or furnished to Laurus by any Assignor or on any
Assignor's benefit was false or misleading in any material respect when
made or furnished, and if subject to cure, shall not be cured for a
period of thirty (30) days;
(b) the loss, theft, substantial damage, destruction, sale or
encumbrance to or of any of the Collateral or the making of any levy,
seizure or attachment thereof or thereon except to the extent:
(i) such loss is covered by insurance proceeds which
are used to replace the item or repay Laurus; or
(ii) said levy, seizure or attachment does not secure
indebtedness in excess of $100,000 and such levy, seizure or
attachment has not been removed or otherwise released within
thirty (30) days of the creation or the assertion thereof;
(b) any Assignor shall become insolvent, cease operations,
dissolve, terminate our business existence, make an assignment for the
benefit of creditors, suffer the appointment of a receiver, trustee,
liquidator or custodian of all or any part of Assignors' property;
(c) any proceedings under any bankruptcy or insolvency law
shall be commenced by or against any Assignor and if commenced against
any Assignor shall not be dismissed within forty-five (45) days;
(d) the Company shall repudiate, purport to revoke or fail to
perform any or all of its obligations under the Note (after passage of
applicable cure period, if any); or
(e) an Event of Default shall have occurred under and as
defined in any Document.
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5. Upon the occurrence of any Event of Default and at any time
thereafter, Laurus may declare all Obligations immediately due and payable and
Laurus shall have the remedies of a secured party provided in the Uniform
Commercial Code as in effect in the State of New York, this Agreement and other
applicable law. Upon the occurrence of any Event of Default and at any time
thereafter, Laurus will have the right to take possession of the Collateral and
to maintain such possession on our premises or to remove the Collateral or any
part thereof to such other premises as Laurus may desire. Upon Laurus' request,
each of the Assignors shall assemble or cause the Collateral to be assembled and
make it available to Laurus at a place designated by Laurus. If any notification
of intended disposition of any Collateral is required by law, such notification,
if mailed, shall be deemed properly and reasonably given if mailed at least ten
(10) days before such disposition, postage prepaid, addressed to any Assignor
either at such Assignor's address shown herein or at any address appearing on
Laurus' records for such Assignor. Any proceeds of any disposition of any of the
Collateral shall be applied by Laurus to the payment of all expenses in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other legal expenses and disbursements and the reasonable expense of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such proceeds may be applied by Laurus toward the payment of the Obligations in
such order of application as Laurus may elect, and each Assignor shall be liable
for any deficiency. For the avoidance of doubt, following the occurrence and
during the continuance of an Event of Default, Laurus shall have the immediate
right to withdraw any and all monies contained in (x) the Laurus Restricted
Account and apply same to the repayment of the Obligations (in such order of
application as Laurus may elect) and (y) the Reserve Restricted Account and
apply same to the repayment of the Obligations in accordance with the terms of
the Intercreditor Agreement. Notwithstanding anything to the contrary contained
in this Master Security Agreement, the Purchase Agreement or any Related
Agreement, in the event that Laurus exercises the remedies provided for in this
Section 5, Laurus agrees to apply the amounts (if any) set forth in each of the
Laurus Restricted Account and the Reserve Restricted Account prior to exercising
its other remedies provided for in this Section 5.
6. If any Assignor defaults in the performance or fulfillment of any of
the terms, conditions, promises, covenants, provisions or warranties on such
Assignor's part to be performed or fulfilled under or pursuant to this Master
Security Agreement (following any applicable grace period), Laurus may, at its
option without waiving its right to enforce this Master Security Agreement
according to its terms, immediately or at any time thereafter and without notice
to any Assignor, perform or fulfill the same or cause the performance or
fulfillment of the same for each Assignor's joint and several account and at
each Assignor's joint and several cost and expense, and the cost and expense
thereof (including reasonable attorneys' fees) shall be added to the Obligations
and shall be payable on demand with interest thereon at the highest rate
permitted by law.
7. Each Assignor appoints Laurus, any of Laurus' officers, employees or
any other person or entity whom Laurus may designate as our attorney, with power
to execute such documents in each of our behalf and to supply any omitted
information and correct patent errors in any documents executed by any Assignor
or on any Assignor's behalf; to file financing statements against us covering
the Collateral (and, in connection with the filing of any such financing
statements, describe the Collateral as "all assets and all personal property,
whether now owned and/or hereafter acquired" (or any substantially similar
variation thereof)); following any Event of Default and any applicable period of
grace, to sign our name on public records; and to do all other things Laurus
deem necessary to carry out this Master Security Agreement. Each Assignor hereby
ratifies and approves all acts of the attorney and neither Laurus nor the
attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision). This power being coupled with an interest,
is irrevocable so long as any Obligations remains unpaid.
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8. No delay or failure on Laurus' part in exercising any right,
privilege or option hereunder shall operate as a waiver of such or of any other
right, privilege, remedy or option, and no waiver whatever shall be valid unless
in writing, signed by Laurus and then only to the extent therein set forth, and
no waiver by Laurus of any default shall operate as a waiver of any other
default or of the same default on a future occasion. Laurus' books and records
containing entries with respect to the Obligations shall be admissible in
evidence in any action or proceeding, shall be binding upon each Assignor for
the purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof (in the absence of manifest error or fraud). Laurus
shall have the right to enforce any one or more of the remedies available to
Laurus, successively, alternately or concurrently. Each Assignor agrees to join
with Laurus in executing financing statements or other instruments to the extent
required by the Uniform Commercial Code in form satisfactory to Laurus and in
executing such other documents or instruments as may be required or deemed
necessary by Laurus for purposes of affecting or continuing Laurus' security
interest in the Collateral.
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9. This Master Security Agreement shall be governed by and construed in
accordance with the laws of the State of New York and cannot be terminated
orally. All of the rights, remedies, options, privileges and elections given to
Laurus hereunder shall inure to the benefit of Laurus' successors and assigns.
The term "Laurus" as herein used shall include Laurus, individually and in its
capacity as collateral agent pursuant to the Intercreditor Agreement, any parent
of Laurus', any of Laurus' subsidiaries and any co-subsidiaries of Laurus'
parent, whether now existing or hereafter created or acquired, and all of the
terms, conditions, promises, covenants, provisions and warranties of this
Agreement shall inure to the benefit of each of the foregoing, and shall bind
the representatives, successors and assigns of each Assignor. Except as set
forth below in this Section 9, any and all disputes, controversies and claims
that any Assignor may assert against Laurus arising out of or relating to this
Master Security Agreement or any other Document shall be determined exclusively
by arbitration (each such arbitration, an "Arbitration") in New York City before
a panel of three neutral arbitrators agreed to by Laurus and the Company
(collectively, the "Arbitrators") in accordance with and pursuant to the then
existing commercial arbitration rules of the American Arbitration Association.
Each Assignor hereby irrevocably waives any right to assert such claims in any
other forum. The Arbitrators shall have the power in their discretion to award
specific performance or injunctive relief (but shall not have the power to
render any incidental, special or punitive damages) and reasonable attorneys'
fees and expenses to any party in any arbitration. The Arbitrators may not
change, modify or alter any express condition, term or provision of this Master
Security Agreement or of any other Document nor shall they have the power to
render any award against Laurus that would have such effect. Each Arbitration
award shall be final and binding upon the parties subject thereto and judgment
may be entered thereon in any court of competent jurisdiction. The service of
any notice, process, motion or other document in connection with an Arbitration
or for the enforcement of any Arbitration award may be made in the same manner
as communications may be given under Section 10 hereof. Notwithstanding the
foregoing, the provisions of this Section 9 nor any other provision contained in
this Master Security Agreement or in any other Document shall limit in any
manner whatsoever the Laurus' right to commence an action against or in
connection with any Assignor or their respective properties in any court of
competent jurisdiction or otherwise utilize judicial process in connection with
or arising out of Laurus' rights and remedies under this Master Security
Agreement and/or any other Document or otherwise (any such action, a "Court
Action"). Court Actions may be brought by Laurus in any state or federal court
of competent jurisdiction and each Assignor irrevocably submits to the
jurisdiction of such state and federal courts and irrevocably waives any claim
or defense of inconvenient forum or lack of personal jurisdiction in such forum
or right of removal or right to jury trial under any applicable law or decision
or otherwise. Service of any notice, process, motion or other document in
connection with a Court Action may be made in the same manner as communications
may be given under Section 10. In addition, Laurus may serve process in any
other manner permitted under applicable law.
10. All notices from Laurus to any Assignor shall be sufficiently given
if mailed or delivered to such Assignor's address set forth below.
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Very truly yours,
EPIXTAR CORP.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
NOL GROUP, INC.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
NATIONAL ONLINE SERVICES, INC.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
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LIBERTY ONLINE SERVICES, INC.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
AMERIPAGES, INC.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
B2B ADVANTAGE, INC.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
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EPIXTAR BPO SERVICES CORP.
By: ____________________________
Name:
Title:
Address: 11900 Biscayne Boulevard
Suite 262
Miami, Florida 33181
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ACKNOWLEDGED:
LAURUS MASTER FUND, LTD.
By:_____________________________
Name:
Title
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SCHEDULE A
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Entity Jurisdiction of Organization Identification
Organization Number
- --------------------------------------------------------------------------------
Epixtar Corp. Florida P94000045741
- --------------------------------------------------------------------------------
Ameripages, Inc. Delaware F03000004893 / 3683679
- --------------------------------------------------------------------------------
B2B Advantage, Inc. Delaware F03000004892 / 3683674
- --------------------------------------------------------------------------------
Epixtar BPO Services Corp. Delaware F03000004904 / 3685112
- --------------------------------------------------------------------------------
Liberty Online Services, Inc. Delaware F03000004905 / 3683675
- --------------------------------------------------------------------------------
NOL Group, Inc. Delaware F03000004895 / 3685115
- --------------------------------------------------------------------------------
National Online Services, Inc. Delaware F03000004903 / 3683677
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SCHEDULE B
Permitted Liens
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