Exhibit 10.3

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of February 5, 2007 (this “Agreement”), by and
among LATIN NODE, INC., a Florida corporation (together with its successors and
assigns, “Debtor”), each subsidiary of Debtor listed on the signature pages
hereto (each such subsidiary, individually, a “Subsidiary Grantor” and,
collectively, the “Subsidiary Grantors”; the Subsidiary Grantors and Debtor are
referred to collectively herein as the “Grantors”) and ELANDIA, INC. (“Lender”).

W I T N E S S E T H:

WHEREAS, lender has advanced credit to Debtor as evidenced by a Promissory Note
of even date made and executed by Debtor to and in favor of Lender in the
original principal amount of Three Million ($3,000,000.00) Dollars (together
with any amendments, modifications, extensions, renewals or refinancings
thereof, the “Note”); and

WHEREAS, to secure payment of the Note, the Grantors have agreed to grant to the
Lender, for the benefit of Lender, a security interest in and lien upon the
collateral as hereinafter described;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and in exchange for the mutual promises and
covenants contained herein, the parties hereto, intending to be legally bound,
agree as follows:

1. DEFINITIONS. For purposes of this Agreement, capitalized terms used herein
shall have the following meanings, unless the context otherwise specifically
requires:

(a) “Collateral” means all of the Grantors’ personal assets and personal
property and rights in and to property of any nature whatsoever, tangible and
intangible, presently owned or hereafter acquired, including without limitation
the following:

(i) all equipment, machinery, furniture, furnishings, fixtures, and any and all
other tangible personal property, and all additions, accessions, replacements
and substitutions with respect thereto, presently owned or hereafter acquired by
any Grantor (hereinafter collectively referred to as the “Equipment”);

(ii) all accounts (including, without limitation, cash and cash accounts),
accounts receivable, contracts and contract rights, chattel paper, documents,
instruments, general intangibles, and other forms of obligation and rights to
the payment of money or other property, presently owned or hereafter acquired by
any Grantor (hereinafter collectively referred to as the “Accounts”);

(iii) all inventory, including all goods, merchandise, materials, components,
work in process, finished goods, and other tangible personal property presently
owned or hereafter acquired by any Grantor and held for sale, lease,
consumption, or other use in any Grantor’s business, and all additions,
accessions, replacements and substitutions with respect thereto (hereinafter
collectively referred to as “Inventory”);

(iv) all insurance proceeds, refunds, and premium rebates, whether or not any
lender or the Lender is the loss payee thereof, including, without limitation,
proceeds of fire and credit insurance, to the extent that any such proceeds,
refunds and premiums are related to any of the foregoing;

(v) all claims for tax refunds, whether now existing or hereafter arising, of
any Grantor against any city, county, state or federal government or any agency
or authority or other subdivision thereof, and the proceeds thereof;

(vi) all contract rights, intellectual property, and general intangibles
(“General Intangibles”) of every kind, character and description, both now owned
and hereafter acquired, including, without limitation, goodwill, trademarks,
copyrights, service marks, domain names, codes, scripts, works of authorship
relating any Web site, trade styles, trade names, patents, applications for any
of the foregoing (“Intellectual Property”) and deposit accounts;

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(vii) all liens, guaranties, rights, remedies, and privileges pertaining to any
of the foregoing, including the rights of stoppage in transit;

(viii) all of Grantors’ stock, ownership interest, partnership interest or other
equity interest whatsoever in any subsidiary corporation, limited liability
company, partnership, joint venture, association, entity or other organization
(domestic or foreign); and

(ix) to the extent not otherwise included, all proceeds, products,
substitutions, and accessions of or to any and all of the foregoing and all
collateral security, indemnities, warranties and guaranties given by any person
with respect to any of the foregoing.

(b) “Credit Agreement” means the Credit Agreement, dated as of the date hereof,
among Grantors and the Lender, as the same may be amended or otherwise modified
form time to time.

(c) “Event of Default” has the meaning ascribed thereto in the Note.

(d) “Grant of Security Interest” means the Grant of Security Interest, dated as
of the date hereof, by the Grantors in favor of the Lender, as the same may be
amended or otherwise modified from time to time.

(e) “Permitted Liens” means:

(1) liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of such Grantor in conformity with generally
accepted accounting principles and the lien cannot be legally enforced during
the contest proceedings;

(2) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or that are being diligently contested in good
faith by appropriate proceedings during which the liens cannot be legally
enforced;

(3) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation; and

(4) liens created pursuant to this Agreement.

(f) “Relevant Documents” means this Agreement, the Grant of Security Interest
and the Stock Pledge Agreement.

(g) “Secured Debt” means (i) all amounts payable pursuant to the Note (including
principal and interest) and pursuant to any amendments, modifications, renewals,
extensions or refinancings thereof, (ii) all future advances by a Lender to
Debtor under any other Promissory Notes; (iii) any liabilities or obligations of
the Grantors arising under or in connection with this Agreement or any other
Loan Document (as defined below), whether now existing or hereafter arising,
contingent or otherwise; (iv) any and all other obligations of the Grantors to
the Lender every kind and description, direct or indirect, absolute or
contingent, presently existing or hereafter arising; and (v) all costs and
expenses of collection of the foregoing, or in preserving, protecting or
realizing upon the Collateral, including, without limitation, attorneys’ fees
and other legal expenses.

(h) “Stock Pledge Agreement” means the Stock Pledge Agreement, dated as of the
date hereof, between Debtor and the Lender, as the same may be amended or
otherwise modified from time to time.

 

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(i) “UCC” means the Uniform Commercial Code, as amended, in effect under the
laws of the State of Florida, or such other state as may be appropriate.

2. GRANT OF SECURITY INTEREST. As security for the full and timely payment of
all of the Secured Debt, each Grantor hereby assigns and grants to the Lender, a
continuing security interest in and to all such Grantor’s right, title, and
interest in and to the Collateral, to have and to hold unto the Lender, its
successors in interest and assigns forever, or until the earlier full payment,
discharge and satisfaction of all of the Secured Debt. The Lender shall have all
of the rights and remedies of a secured party under the applicable UCC as
non-exclusive rights and remedies.

3. REPRESENTATIONS AND WARRANTIES. The Grantors jointly and severally represent
and warrant as follows (it being understood, for purposes of this Section 3,
that the term “Grantor” refers to each Grantor and its subsidiaries):

(a) Organization and Good Standing. Each Grantor is duly organized, validly
existing and in good standing under the laws of the state or jurisdiction of
organization, with full power and authority to execute, deliver and perform this
Agreement and to own and operate its properties and to carry on its business as
presently conducted and anticipated. Each Grantor is duly qualified as a foreign
corporation or limited liability company, as the case may be, to transact
business, and is in good standing in every state or other jurisdiction where the
character of its properties owned or leased, or the nature of its activities,
makes such qualification necessary under applicable law, except where the
failure to so qualify would not have a Material Adverse Effect (as defined
below). Other than as set forth in Schedule 3(a) hereto, no Grantor has operated
under any legal or fictitious names other the names set forth in Section 3(h).

(b) Authority. Each Grantor has the requisite power and authority to enter into
this Agreement, the Note, the Credit Agreement and the other agreements and
documents contemplated in connection herewith and therewith (collectively, the
“Loan Documents”), to execute and deliver the Loan Documents and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the other Loan Documents by the applicable Grantor and the
consummation by each Grantor of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite corporate or other action on
the part of such Grantor and its partners, directors, managers, or members, as
the case may be, and no other corporate, company or partnership proceedings on
the part of such Grantor are necessary to authorize the execution, delivery and
performance of this Agreement or the other Loan Documents.

(c) Validity. This Agreement and the other Loan Documents have been duly
executed and delivered by each Grantor and constitute the legal, valid, and
binding obligations of such Grantor, enforceable against such Grantor in
accordance with their respective terms, except to the extent such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, and other
similar laws affecting the enforcement of creditors’ rights generally.

(d) No Violations. Except as provided in Schedule 3(d) hereto, neither the
execution and delivery of this Agreement or the other Loan Documents nor the
consummation by each Grantor of the transactions contemplated hereby or thereby,
nor the compliance by each Grantor with any of the provisions hereof or thereof,
will (i) violate, conflict with, or constitute a breach or default under (or an
event which, with notice, lapse of time or both, would constitute a breach or
default), or give rise to any right of termination or acceleration or result in
the creation of any lien, security interest, charge or encumbrance upon any
property of such Grantor (other than in favor of the Lender for the benefit of
the Lender) under (x) such Grantor’s charter (including any certificate of
designation) or other organizational document, by-laws, or any voting agreement,
stockholders’ agreement or similar document to which such Grantor is a party
relating to the rights of stockholders or other owners of such Grantor, (y) any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which such Grantor is a party or by which it
or any of its respective properties or assets may be bound or subject or
(ii) violate any judgment, ruling, order, writ, injunction, decree, statute,
rule or regulation applicable to such Grantor or any of its properties or
assets.

(e) No Consent. Except as provided in Schedule 3(e) hereto, except for filings
under applicable state and federal securities laws, which will be timely made,
no notice to, filing with, or authorization, consent or approval of any
governmental agency or authority, body or agency is necessary or required in
connection with the execution, delivery or performance by such Grantor of this
Agreement or the other Loan Documents to which it is a party.

 

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(f) Title. Except for the security interest granted to the Lender hereunder and
security interests outstanding under the obligations (the “Prior Known
Obligations”) as set forth on Schedule 3(f), each Grantor is the sole owner (or,
in the case of leases or licenses, the sole right holder) of the Collateral and
has good, valid and marketable title thereto, free and clear of any and all
liens, security interests, claims, encumbrances and adverse rights or interests
whatsoever (other than the Permitted Liens). No Grantor has executed any
financing statement with respect to all or any portion of the Collateral except
the financing statements executed in favor of the Lender for the benefit of the
Lender in connection with this Agreement and in connection with Permitted Liens
and in connection with the Prior Known Obligations. Set forth on Exhibit A is a
list of all Intellectual Property for which filings with governmental
authorities have been made by each Grantor or any of its subsidiaries (along
with the type of filing, the filing number and the authority with which it was
filed).

(g) Name and Address. Each Grantor’s current exact name and the address of its
current principal place of business is as set forth on Schedule 3(g). No Grantor
has previously had or transacted business under any other names or addresses.
Each Grantor agrees to give the Lender prior notice of any change in its name
and/or address or any additional names under which it intends to transact
business at least 30 days prior to any such change or the use of any additional
name(s).

(h) Possession and Location of the Collateral. The Collateral is and shall
remain in the exclusive possession and control of each Grantor at the locations
set forth on Schedule 3(h), other than the Collateral located at a co-location
facility as set forth on Schedule 3(h)(A), and no Grantor shall transfer
possession of or relocate all or any portion of the Collateral without the
Lender’s prior written consent.

(i) Litigation. Except as provided in Schedule 3(i) hereto, there is no
litigation, action, suit, proceeding, claim or investigation pending, or to the
knowledge of each Grantor, threatened, against such Grantor or with respect to
all or any portion of the Collateral, or which calls into question the validity
or enforceability of this Agreement, the Note or any other Loan Document or
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect (as defined below).

(j) Books and Records. All books, records and documents relating to the
Collateral are and shall continue to be true, correct and genuine in all
material respects.

(k) Permits. Except for exceptions that would not have a Material Adverse
Effect, no Grantor is in violation of or in default under any applicable
statute, rule, order, decree, writ, injunction or regulation of any governmental
body (including any court). Except for exceptions that would not have a Material
Adverse Effect, each Grantor has all permits and licenses to operate its
business.

(l) Taxes. No Grantor is delinquent in the payment of any taxes which have been
levied or assessed by any governmental authority against it or its assets. Each
Grantor has timely filed all tax returns which are required by law to be filed,
and has paid all taxes and all other assessments or fees levied upon such
Grantor or upon its properties to the extent that such taxes, assessments or
fees have become due. Except for exceptions that would not have a Material
Adverse Effect, no controversy in respect of income taxes is pending or, to the
knowledge of such Grantor, threatened.

(m) Event of Default. No event has occurred and is continuing which constitutes
an Event of Default (as defined in the Note) or would constitute an Event of
Default after notice or lapse of time or both. No event has occurred and is
continuing which constitutes an event of default or would constitute an event of
default after notice or lapse of time or both under any of the Prior Known
Obligations.

(n) Full Disclosure. None of the Loan Documents, nor any statements furnished by
or on behalf of any Grantor to any Lender in connection with the Loan Documents,
contains or will contain any untrue statement of a material fact or omits or
will omit a material fact necessary to make the statements contained therein or
herein not misleading, in light of the circumstances when made.

 

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To each Grantor’s knowledge, there is no fact which such Grantor has not
disclosed to each Lender which materially and adversely affects or, to such
Grantor’s knowledge, will materially and adversely affect, the Collateral, the
Lender’s liens in the Collateral or the priority thereof, the other assets,
business, liabilities, operations, prospects, profits or condition (financial or
otherwise) of such Grantor or the ability of such Grantor to perform its
obligations under this Agreement, the Note or the other Loan Documents, as the
case may be (a “Material Adverse Effect”).

(o) Compliance With Laws. Except for exceptions that would not have a Material
Adverse Effect, each Grantor has duly complied with, and the Collateral and its
business operations and leaseholds are in compliance in all material respects
with, the provisions of all federal, state and local laws, rules and regulations
applicable to such Grantor, the Collateral or the conduct of its business.

(p) Corporate Structure. Each Grantor’s corporate structure as of the date
hereof, including any direct or indirect subsidiaries, is as set forth in
Schedule 3(p) hereto.

(q) Pledged Collateral.

(i) The collateral set forth in Section 1(a)(viii) of this Agreement (the
“Pledged Collateral”) pledged by the Grantor hereunder (a) is listed on Schedule
3(q) and constitutes that percentage of the issued and outstanding equity of all
classes of each issuer thereof as set forth on Schedule 3(q), (b) has been duly
authorized, validly issued and is fully paid and nonassessable (other than
equity interests in limited liability companies and partnerships) and
(c) constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms.

(ii) As of the date of this Agreement, all Pledged Collateral consisting of
instruments and certificates has been delivered to Lender.

(iii) Upon the occurrence and during the continuance of an Event of Default,
Lender shall be entitled to exercise all of the rights of Grantor granting the
security interest in any Pledged Collateral, and a transferee or assignee of
such Pledged Collateral shall become a holder of such Pledged Collateral to the
same extent as Grantor and be entitled to participate in the management of the
issuer of such Pledged Collateral and, upon the transfer of the entire interest
of Grantor, Grantor shall, by operation of law, cease to be a holder of such
Pledged Collateral.

4. COVENANTS. Each Grantor covenants and agrees that, from and after the date of
this Agreement until all of the Secured Debt shall have been paid in full (it
being understood, for purposes of this Section 4, that the term “Grantor” refers
to each Grantor and its subsidiaries):

(a) Covenants. Each Grantor shall take, or shall refrain from taking, as the
case may be, each action that is necessary to be taken or not taken, as the case
may be, so that no Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Grantor.

(b) Insurance.

(i) Each Grantor will, and will cause each of its subsidiaries to, maintain,
with financially sound and reputable insurance companies, adequate insurance for
its insurable properties, all to such extent and against such risks, including
fire, casualty and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses operating in the same
or similar locations. Each Grantor will furnish to the Lender, upon the request
of the Lender, information in reasonable detail as to the insurance so
maintained.

(ii) Each Grantor irrevocably makes, constitutes and appoints the Lender (and
all officers, employees or agents designated by the Lender) as such Grantor’s
true and lawful agent (and attorney-in-fact) for the purpose of making, settling
and adjusting claims in respect of Collateral under policies of insurance,
endorsing the name of such 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

 

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decisions with respect thereto. In the event that any 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 in part relating thereto, the Lender
may, without waiving or releasing any obligation or liability of the Grantors
hereunder or any Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions with
respect thereto as the Lender deems advisable. All sums disbursed by the Lender
in connection with this Section, including attorneys’ fees, court costs,
expenses and other charges relating thereto, shall be payable, upon demand, by
the Grantors to the Lender and shall be additional Secured Debt secured hereby.

(iii) Each Grantor shall cause each insurance policy maintained by it to provide
that no cancellation, reduction in amount or change in coverage thereof shall be
effective until at least 30 days after receipt by the Lender of written notice
thereof, and to name the Lender, for the benefit of the Lender, as an additional
insured party and as the loss payee.

(c) Maintenance of Perfected Security Interest; Further Documentation.

(i) Except as provided in Schedule 3(f) hereto, each Grantor shall maintain the
security interest created by this Agreement as a perfected first priority
security interest and shall defend such security interest against the claims and
demands of all persons whomsoever. Grantor shall not use or permit any
Collateral to be used unlawfully or in violation of the Loan Documents or any
requirement of law or any insurance policy covering the Collateral and not enter
into any contractual obligation or undertaking restricting the right or ability
of Grantor or Lender to sell any Collateral if such restriction would have a
material adverse effect.

(ii) Each Grantor will furnish to each Lender from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as such Lender may request, all in
such detail as such Lender may request.

(iii) At any time and from time to time, upon the written request of the Lender,
and at the sole expense of the Grantors, each Grantor will promptly and duly
execute, deliver and/or have recorded with appropriate agencies such further
instruments and documents and take such further actions as such Lender may
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby and to the filing of any documents necessary
to obtain and preserve the rights and powers in the Intellectual Property.

(d) Changes in Locations, Name, etc. No Grantor will, except upon 30 days’ prior
written notice to Lender and delivery to Lender promptly thereafter of all
additional executed financing statements and other documents requested by the
Lender to maintain the validity, perfection and priority of the security
interests provided for herein:

(i) change the location of its chief executive office or principal place of
business from that referred to in Section 3(h) (provided, however that no such
prior written notice shall be required with respect to any change in the
location of any Grantor’s chief executive office or principal place of business
occurring within 30 days after the date hereof so long as such Grantor provides
to the Lender written notice of such change within 15 days after the date
thereof); or

(ii) change its name, identity or corporate structure to such an extent that any
financing statement filed by the Lender in connection with this Agreement would
become materially misleading.

(e) Notices. Each Grantor will advise each Lender promptly in writing, in
reasonable detail, of any lien (other than security interests created hereby or
Permitted Liens) on any of the Collateral which would adversely affect the
ability of the Lender to exercise any of its remedies hereunder and will take
any and all actions reasonably requested by the Lender for the release and/or
satisfaction of such liens.

 

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(f) Receivables Collateral. No Grantor will sell or pledge any interest in any
receivables collateral (except for Permitted Liens and securities under Prior
Known Obligations), other than in the ordinary course of business consistent
with past practices.

(g) Inventory.

(i) Grantor shall not use of any of the Inventory in breach of any provision of
this Agreement.

(ii) All Inventory now owned or hereafter acquired by each Grantor is and will
be of good and merchantable quality and free from defects (other than defects
within customary trade tolerances).

(h) Accounts. The amount of each Account shown on the books, records, and
invoices each Grantor represented as owing by each account debtor is and will be
the correct amount actually owing by such account debtor and shall have been
fully earned by performance of such Grantor, except as otherwise permitted by
generally accepted accounting principles.

(i) Notification to Account Debtors. The Lender shall have the right at any time
following an Event of Default and at anytime thereafter to notify any of the
Grantor’s account debtors to make payments directly to the Lender and to collect
all amounts due on account of the Collateral, subject to Prior Known
Obligations.

(j) Corporate Existence and Maintenance of Properties. Each Grantor shall
maintain and preserve its corporate existence and all rights, privileges and
franchises now enjoyed; and each Grantor shall conduct its business in an
orderly, efficient and customary manner, keep its properties in good working
order and condition, and from time to time make all needed repairs to, renewals
or replacements of its properties (except to the extent that any of such
properties is obsolete or is being replaced) so that the efficiency of such
property shall be maintained and preserved. Each Grantor shall file or cause to
be filed in a timely manner all reports, applications, estimates and licenses
which shall be required by any governmental authority and which, if not timely
filed, would have a Material Adverse Effect.

5. RIGHTS OF LENDER UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. Upon the
occurrence of an Event of Default and at any time thereafter, the Lender may
exercise any rights under applicable law or the Loan Documents, including, but
not limited to, any one or more of the following rights and remedies:

(a) Upon the occurrence of an Event of Default, and at any time thereafter, the
Lender may, at its option, declare all of the Secured Debt immediately due and
payable (and, upon an Event of Default arising by virtue of any Grantor’s
bankruptcy, all of the Secured Debt shall automatically and immediately be
deemed declared due and payable), notwithstanding any of the terms thereof and
exercise any rights and remedies available to a secured party under this
Agreement, under the UCC, or otherwise available at law or in equity, including
without limitation the right to enter upon any of the premises of any Grantor,
with or without process of law, and take immediate possession of and remove the
Collateral or any part thereof and collect and receive all income, revenues,
payments and proceeds therefrom. The Grantors shall, upon the Lender’s request,
assemble the Collateral (and all records and documents relating thereto) and
make such items available to the Lender at a place designated by the Lender
which is reasonably convenient to the parties. Without removal, the Lender may
render any Equipment unusable and may dispose of such items of Collateral at any
Grantor’s business premises as provided under the UCC.

(b) The Lender may sell, lease, or otherwise dispose of all or any portion of
the Collateral in any commercially reasonable manner. Disposition of the
Collateral may be made by any one or more public or private proceedings upon any
one or more contracts. Any such sale or disposition may be made in whole, in
part, in units, or in parcels, and at any time and place designated by the
Lender. Any such sale or disposition may be for cash, upon credit, or upon such
other terms and conditions as the Lender may determine, in its sole discretion.

 

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(c) Unless the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, reasonable
notification of the time and place of any public sale or reasonable notification
of the time after which any private sale or other intended disposition is to be
made shall be sent by the Lender to each Grantor unless such Grantor after the
occurrence of an Event of Default shall have signed a statement renouncing or
modifying its right to notification of sale. The requirements of a reasonable
notice hereunder shall be met if such notice is mailed by ordinary mail, postage
prepaid, addressed to such Grantor at its business address described herein, at
least ten days before the time of such sale or disposition.

(d) The Lender shall have the right to buy all of any portion of the Collateral
at any public or private sale.

(e) Each Grantor acknowledges that when all or any portion of the Collateral is
disposed of by the Lender after the occurrence of an Event of Default such
disposition shall transfer to any purchaser for value all of such Grantor’s
rights and interests therein and any such purchaser shall take free of all
rights and interests of such Grantor in such property.

(f) Upon the occurrence of an Event of Default, the Lender shall have the right
to notify persons obligated to any Grantor on any Accounts to make payment
thereof directly to the Lender and the Lender may take control of all the
proceeds of the Accounts. After the occurrence of an Event of Default, no
Grantor will, without the prior written consent of the Lender, grant any
extension of the time for payment of any of the Accounts, compromise or settle
any accounts for less than the full amount thereof, or release wholly or partly
any person liable for the payment thereof or allow any credit or discount
whatsoever thereon.

6. APPLICATION OF PROCEEDS AND DEFICIENCY. The proceeds of any disposition of
all or any portion of the Collateral following an Event of Default shall be
applied in the following order:

(a) First, to the payment of all reasonable expenses of retaking, holding,
preparing the Collateral for sale or lease, and selling, leasing, or otherwise
disposing of the Collateral, including without limitation reasonable attorneys’
fees and other costs incurred by the Lender in connection therewith;

(b) Second, to the full and complete satisfaction of all of the Secured Debt;
and

(c) Third, any surplus shall be remitted by the Lender to the Grantors promptly
after payment of all of the foregoing. In the event there is a surplus and any
other person makes a claim to the surplus amount, the Lender may hold said sum
(without liability for interest or otherwise) or institute an interpleader
action and deposit said sum with an appropriate court of competent jurisdiction
until such time as the rights in such surplus are fully and finally determined
by a final nonappealable decision of a court of competent jurisdiction or by
agreement of all interested parties.

To the extent the proceeds from the disposition of the Collateral are
insufficient to satisfy Sections 6(a) and (b) above, Debtor shall remain liable
to the Lender for the payment of such deficiency, with interest at the highest
lawful rate.

7. POWER OF ATTORNEY. Each Grantor hereby makes, constitutes and appoints the
Lender as its true and lawful agent and attorney in fact, with full power of
substitution, and in such Grantor’s name, place and stead after the occurrence
of an Event of Default (i) to collect, pursue collection of, and receive payment
for any and all income, proceeds or payments with respect to any Collateral;
(ii) to endorse the name of such Grantor upon any notes, checks, acceptances,
drafts, money orders, instruments or other documents relating to the Collateral,
or the income, proceeds, or payments with respect thereto so as to affect the
deposit and collection thereof, (iii) to waive, sue for, settle, adjust, or
compromise any claims or right with respect to the Collateral; and (iv) to take
any action in the name and on behalf of such Grantor to fulfill any
representation, warranty, covenant or agreement of such Grantor contained herein
or as may be necessary or appropriate to carry out the purposes and intent of
this Agreement and to perfect and protect the Lender’s security interest in the
Collateral and its rights therein. Each Grantor agrees that neither the Lender
nor any of its agents, designees, officers or employees will be liable for any
acts of commission or omission, or for any error of judgment or mistake of facts
or law with respect to the exercise of said power of attorney save and except
fraud, gross misconduct, or a knowing violation of law. The power of attorney
granted hereunder is coupled with an interest and shall be irrevocable during
the term of this Agreement.

 

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8. DURATION. This Agreement shall continue in full force and effect, and the
security interest granted hereby and the representations, warranties, covenants
and obligations of each Grantor hereunder and all the terms, conditions and
provisions hereof shall continue to be fully operative until the Debtor shall
have fully paid and discharged all of the Secured Debt. Each Grantor agrees that
to the extent a payment or payments to a Lender are subsequently invalidated,
set aside or otherwise required to be repaid, the obligation or part thereof
intended to be satisfied, and the security interest in the collateral granted
hereby, shall be revived and continued in full force and effect as if said
payment had not been made.

9. MISCELLANEOUS.

(a) Assignment. This Agreement and the rights, obligations and duties of the
Grantors hereunder shall not be assignable or otherwise transferable by the
Grantors. The Lender may, upon notice to the Grantors, transfer, participate or
assign any or all of its rights and obligations under this Agreement.

(b) Fees of Legal Counsel. In the event the Lender shall employ legal counsel to
protect its rights hereunder or to enforce any term or provision hereof or to
protect its interest in the Collateral, such attorneys’ fees and other legal
expenses shall become part of the Secured Debt and shall be payable by the
Grantors to the Lender upon demand. The Grantors shall pay all fees and expenses
of the Lender, including attorneys’ fees and expenses, in connection with the
negotiation and consummation of this Agreement and other the Loan Documents.

(c) Further Assurances. Each Grantor agrees that from time to time hereafter,
upon request, it will, at its sole expense, execute, acknowledge and deliver
such other instruments and documents and take such further action as may be
reasonably necessary to carry out the intent of this Agreement and the other
Loan Documents, specifically including, but not limited to, the delivery of
executed stock powers and stock certificates or other evidences of ownership
necessary to perfect the pledge of any such securities granted hereunder and the
execution and delivery of patent and other intellectual property assignments.
Each Grantor shall make appropriate entries upon its financial statements and
its books and records disclosing the Lender’s liens and security interests in
the Collateral.

(d) Amendments, etc. Neither this Agreement nor any other Relevant Document nor
any other provision hereof or thereof may be waived, amended or modified except,
in the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Grantors, the Lender or, in the case of any other Relevant
Document, pursuant to an agreement or agreements in writing entered into by the
Lender and the Grantor or Grantors that are parties thereto.

(e) Effect and Benefit. This Agreement shall inure to the benefit of, and shall
be binding upon, the parties hereto, their heirs, executors, administrators,
personal representatives, successors in interest and permitted assigns.

(f) Headings and Captions. Subject headings and captions are included for
convenience purposes only and shall not affect the interpretation of this
Agreement.

(g) Notice. All notices, requests, demands and other communications permitted or
required hereunder shall be in writing, and either (i) delivered in person,
(ii) sent by express mail or other overnight delivery service providing receipt
of delivery, (iii) mailed by certified or registered mail, postage prepaid,
return receipt requested or (iv) sent by telex, telegraph or other facsimile
transmission as follows:

If to the Grantors, addressed or delivered in person to:

Latin Node, Inc.

9800 NW 41St Street, #200

Miami, FL 33178

 

9

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Telephone: (305) 592-4848

Facsimile: (305) 592-4949

Attention: Jorge Granados

With a copy to:

Alfred G. Smith

Shutts & Bowen LLP

1500 Miami Center

201 South Biscayne Boulevard

Miami, Florida 33131

Telephone: (305) 347-7364

Facsimile: (305) 347-7764

If to the Lender, addressed or delivered in person to:

Elandia, Inc.

1500 Cordova Road, Suite 312

Ft. Lauderdale, Florida 33316

Telephone: (954) 728-9090

Facsimile: (954) 728-9080

Attention: Harry Hobbs

With a copy to:

Carlton Fields, P.A.

100 SE 2nd Street, Suite 4000

Miami, Florida 33131-9101

Attn: Seth Joseph, Esq.

Facsimile: (305) 530-0055

or to such other address as either party may designate by notice in accordance
with this Section.

Any such notice or communication, if given or made by prepaid, registered or
certified mail or by recorded express delivery, shall be deemed to have been
made when actually received, but not later than three (3) business days after
the same was properly posted or given to such express delivery service and if
made properly by telex, telecopy or other facsimile transmission such notice or
communication shall be deemed to have been made at the time of dispatch.

(h) Severability. If any portion of this Agreement is held invalid, illegal or
unenforceable, such determination shall not impair the enforceability of the
remaining terms and provisions herein, which may remain effective, and to this
end this Agreement is declared to be severable.

(i) Time for Performance. Time is of the essence in this Agreement.

(j) Waiver. No waiver of a default, breach or other violation of any provision
of this Agreement shall operate or be construed as a waiver of any subsequent
default, breach or other violation or limit or restrict any right or remedy
otherwise available. No delay or omission on the part of the Lender to exercise
any right or power arising by reason of a default shall impair any such right or
power or prevent its exercise at any time during the continuance thereof.

 

10

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(k) Gender and Pronouns. Throughout this Agreement, the masculine shall include
the feminine and neuter and the singular shall include the plural and vice versa
as the context requires.

(l) Entire Agreement. This Agreement and the other Loan Documents constitute the
entire agreement of the parties with respect to the subject matter thereof and
supersede any and all other prior agreements, oral or written, with respect to
the subject matter contained herein.

(m) Governing Law; Waiver of Jury Trial. THIS AGREEMENT SHALL BE INTERPRETED,
AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE
OF FLORIDA. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, EACH
GRANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN MIAMI-DADE COUNTY, FLORIDA. EACH OF THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT OR PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH
GRANTOR WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED ON LACK OF JURISDICTION OR
IMPROPER VENUE OR FORUM NON CONVENIENS TO ANY SUIT OR PROCEEDING INSTITUTED BY
LENDER UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN ANY STATE OR FEDERAL
COURT LOCATED WITHIN MIAMI-DADE COUNTY, FLORIDA AND CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT OF THE LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY GRANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH HAS JURISDICTION OVER SUCH GRANTOR OR ITS PROPERTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, MAKE THE LOANS AND EXTEND THE OTHER FINANCIAL
ACCOMMODATIONS CONTEMPLATED HEREUNDER AND THEREUNDER.

(n) Incorporation by Reference. All exhibits and documents referred to in this
Agreement shall be deemed incorporated herein by any reference thereto as if
fully set out.

(o) Counterparts. This Agreement may be executed in one or more counterparts
(all counterparts together reflecting the signature of all parties), each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.

(p) Consent to Jurisdiction and Service of Process. Each Grantor hereby
irrevocably (i) consents to the jurisdiction of the courts of the State of
Florida and of any federal court located in Florida in connection with any
action or proceeding arising out of or relating to this Agreement, or any other
document or exhibit relating hereto or delivered in connection therewith and
(ii) consents that service of legal process in any such action or proceeding may
be made in any manner permitted by the rules of practice and procedure
applicable to such courts.

(q) Authority. Each individual signing this Agreement in a representative
capacity acknowledges and represents that he/she is duly authorized to execute
this Agreement in such capacity in the name of, and on behalf of, the designated
corporation, partnership, trust, or other entity.

(r) Failure to Pay Costs or Expenses. If any Grantor fails to pay any cost or
expense required hereunder to be paid by such Grantor (including, without
limitation, insurance and taxes), the Lender may, at its option, pay such cost
or expense on behalf of such Grantor, and in such event the amount so paid by
such party shall become part of the Secured Debt hereunder and shall be payable
by such Grantor, with interest, to Lender upon demand.

(s) Inspection. The Lender (by any of its respective officers, employees and
agents) shall have the right, at any reasonable time or times during each
Grantor’s usual business hours, to inspect the Collateral, all records related
thereto (and to make extracts from such records), and the premises upon which
any of the Collateral is located, and after an Event of Default, to request
information relating to such Grantor from any person and to verify the amount,
quality, quantity, value and condition of, or any other matter relating to, the
Collateral. The Lender may, at any time upon and after the occurrence of a
default or an Event of Default and during the continuance thereof, employ and
maintain in each Grantor’s premises custodians selected by the Lender who shall
have full

 

11

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authority to do all acts necessary to protect the Lender’s interest. All
expenses incurred by the Lender by reason of the employment of such custodians
shall be paid by the Grantors, added to the Secured Debt and secured by the
Collateral. Each Grantor irrevocably waives the right to direct the application
of any and all payments and collections at any time or times hereafter received
by the Lender from or on behalf of the Grantors, and each Grantor does hereby
irrevocably agree that the Lender shall have the continuing exclusive right to
apply and to reapply any and all such payments and collections received at any
time or times hereafter by the Lender or its agents against the Secured Debt
which are due and payable at the time of such application, in such manner as
provided herein.

(t) Non-Cumulative Remedies. The enumeration of the Lender’s rights and remedies
set forth in this Agreement is not intended to be exhaustive and the exercise by
them of any right or remedy shall not preclude the exercise of any other rights
or remedies, all of which shall be cumulative, and shall be in addition to any
other right or remedy given hereunder, under the Loan Documents or under any
other agreement to which the Grantors and the Lender may be parties or which may
now or hereafter exist in law or in equity or by suit or otherwise. No delay or
failure to take action on the part of the Lender in exercising any right, power
or privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Grantors and any other party hereto or its employees shall be
effective to change, modify or discharge any provision of this Agreement or to
constitute a waiver of any Event of Default. The Lender shall not, under any
circumstances or in any event whatsoever, have any liability for any error,
omission or delay of any kind occurring in the liquidation of the Collateral or
for any damages resulting therefrom except damages directly attributable to such
party’s (or its officers’, employees’ or agents’) gross negligence or willful
misconduct.

(u) Survival of Agreements. All agreements, covenants, representations and
warranties - contained herein or made in writing by or on behalf of the Grantors
in connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the other Loan Documents.

(v) Indemnification of the Lender. From and at all times after the date of this
Agreement, and in addition to all of the Lender’s other rights and remedies
against the Grantors, each Grantor agrees to hold the Lender and each of their
respective directors, officers, employees, attorneys and agents harmless from,
and to indemnify each of them against, all losses, damages, costs and expenses
(including, but not limited to, attorneys’ fees, costs and expenses) incurred by
any of them from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or relating to any suit, action or
proceeding by any person, whether threatened or initiated, asserting a claim for
any legal or equitable remedy against any person under any statute or
regulation, including, but not limited to, any federal or state securities laws,
or under any common law or equitable cause or other-wise, arising from or in
connection with the negotiation, preparation, execution or performance of this
Agreement and the other Loan Documents; provided, however, that the foregoing
indemnification shall not protect any party from loss, damage, cost or expense
directly attributable to its willful misconduct or gross negligence. All of the
foregoing losses, damages, costs and expenses shall be payable by the Grantors
upon demand upon any of them, and shall be additional Secured Debt hereunder
secured by the Collateral.

[Signatures follow]

 

12

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

DEBTOR: LATIN NODE, INC. By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   President SUBSIDIARY GRANTORS: Latin Node, LLC,
a Florida limited liability company By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   Manager Latinode Communications Corporation, a
Florida corporation By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   President NSite Software, LLC, a Florida limited
liability company By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   Manager Tropical Star Communications, Inc., a
Florida corporation By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   President TS Telecommunications, Inc., a Florida
corporation By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   President Total Solutions Telecom, Inc., a
Florida corporation By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   President

 

13

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Latin Node Europe, GmBH, a German corporation By:  

/s/ Victor Ias P. Rizza

Name:   Victor Ias P. Rizza Title:   Managing Director Crossfone Honduras S.A.
By:  

/s/ Jorge Granados

Name:   Jorge Granados Title:   President LENDER: ELANDIA, INC., as Lender By:  

/s/ Harley L. Rollins

Name:   Harley L. Rollins Title:   Chief Financial Officer

 

14

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EXHIBIT A

Intellectual Property

Service Mark applications for the following marks in the United States:

LatiNode

CrossFone

VipFone

RapiFone

CrossMedia

Registered Domain names:

Pending

--------------------------------------------------------------------------------

Schedule 3(a)

Other Legal or Fictitious Names

Latinode Communications (LatinNode, Inc.)

CrossFone (TS Telecommunications, Inc.)

TS Prepaid (Total Solutions Telecom Inc.)

TST (Total Solutions Telecom Inc.)

--------------------------------------------------------------------------------

Schedule 3(d)

No Violations

 

(A) Almiron Finance Corporation Loan

Loan Agreement, dated June 9, 2006, between Retail Americas VoIP, LLC
(“Borrower”) and Almiron Finance Corporation, a Venezuelan corporation
(“Lender”)

Collateral:

Borrower has pledged to Lender 50% of the membership interests of Borrower and
50% of the outstanding common stock of Latin Node (the “Collateral”)

 

  •  

Collateral is held pursuant to an escrow agreement (described below)

 

  •  

Security and Pledge Agreement provide that, upon an event of default and without
prior notice to Borrower, Lender may transfer to or register in its name any of
the Collateral

 

  •  

Events of Default include a breach or default under the terms of the Security
and Pledge Agreement, Loan Agreement or Promissory Note

 

(B) Expocredit Corporation Loan

Loan Agreement, dated June 9, 2006, between Retail Americas VoIP, LLC, a
Delaware limited liability company (“Borrower”) and Expocredit Corporation, a
Florida corporation (“Lender”)

Collateral:

Borrower has pledged to Lender 50% of the membership interests of Borrower and
50% of the outstanding common stock of Latin Node (the “Collateral”)

 

  •  

Collateral is held pursuant to an escrow agreement (described below)

 

  •  

Security and Pledge Agreement provide that, upon an event of default and without
prior notice to Borrower, Lender may transfer to or register in its name any of
the Collateral

 

  •  

Events of Default include a breach or default under the terms of the Security
and Pledge Agreement, Loan Agreement or Promissory Note

--------------------------------------------------------------------------------

Schedule 3(e)

Required Consents

Possible required authorization from the Federal Communications Commission for
transfer of control of Latin Node, Inc. (holder of 214 license), TS
Telecommunications Inc. (holder of 214 license), and Total Solutions Telecom
Inc. (pending 214 application) in the event of foreclosure by Lender.

--------------------------------------------------------------------------------

Schedule 3(f)

Outstanding Security Interests

 

(A) Almiron Finance Corporation Loan

Loan Agreement, dated June 9, 2006, between Retail Americas VoIP, LLC
(“Borrower”) and Almiron Finance Corporation, a Venezuelan corporation
(“Lender”)

Collateral:

Borrower has pledged to Lender 50% of the membership interests of Borrower and
50% of the outstanding common stock of Latin Node (the “Collateral”)

 

  •  

Collateral is held pursuant to an escrow agreement (described below)

 

  •  

Security and Pledge Agreement provide that, upon an event of default and without
prior notice to Borrower, Lender may transfer to or register in its name any of
the Collateral

 

  •  

Events of Default include a breach or default under the terms of the Security
and Pledge Agreement, Loan Agreement or Promissory Note

 

(B) Expocredit Corporation Loan

Loan Agreement, dated June 9, 2006, between Retail Americas VoIP, LLC, a
Delaware limited liability company (“Borrower”) and Expocredit Corporation, a
Florida corporation (“Lender”)

Collateral:

Borrower has pledged to Lender 50% of the membership interests of Borrower and
50% of the outstanding common stock of Latin Node (the “Collateral”)

 

  •  

Collateral is held pursuant to an escrow agreement (described below)

 

  •  

Security and Pledge Agreement provide that, upon an event of default and without
prior notice to Borrower, Lender may transfer to or register in its name any of
the Collateral

 

  •  

Events of Default include a breach or default under the terms of the Security
and Pledge Agreement, Loan Agreement or Promissory Note

 

(C) Factoring Agreement

Amended and Restated Factoring Agreement, dated June 8, 2006, between Latin Node
and Expocredit Corporation

Collateral:

Expocredit has a blanket lien on all of the assets of Latin Node including all
accounts receivable and all inventory.

--------------------------------------------------------------------------------

(D) Capital Leases (see attachment)

 

(E) Deposits (see attachment)

--------------------------------------------------------------------------------

Schedule 3(g)

Grantors’ Names and Addresses

Latin Node, Inc.

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

Latin Node LLC

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

Latinode Communications Corporation

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

NSite Software, LLC

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

TS Telecommunications, Inc.

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

Tropical Star Communications, Inc.

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

Total Solutions Telecom, Inc.

9800 NW 41st St. Ste. 200

Miami, FL 33178

--------------------------------------------------------------------------------

Latin Node Europe, GmbH

Hanauer Landstr 300-A 60314 Frankfurt am Main

Germany

--------------------------------------------------------------------------------

Crossfone Europe, GmbH

Hanauer Landstr 300-A 60314 Frankfurt am Main

Germany

--------------------------------------------------------------------------------

CrossFone Honduras S.A.

Edificio Copemh

3er Nivel No. 301

Blvd. Centro America

Tegucigalpa, Honduras (no office in Honduras)

--------------------------------------------------------------------------------

LN Comunicaciones S.A.

15 Calle 3-20 Zona 10

Edificio Centro Ejecutivo

Guatemala City

Guatemala

--------------------------------------------------------------------------------

DSR Comunicaciones, S.A

Carlos Pellegrini 1075, C1009ABU

Ciudad Autónoma de Buenos Aires, Argentina

--------------------------------------------------------------------------------

Bantel , S.A.

Carlos Pellegrini 1075, C1009ABU

Ciudad Autónoma de Buenos Aires, Argentina

--------------------------------------------------------------------------------

CrossFone Colombia S.A., E.S.P.

Avenida 19, #131-04, Apto. 502, Torres del Country, Santa Fe de Bogota, Colombia

--------------------------------------------------------------------------------

Donimar, S.A.

Montevideo, Uruguay

No office in Uruguay

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

CrossFone Nicaragua S.A.

Managua, Nicaragua

No office in Nicaragua

--------------------------------------------------------------------------------

Crossfone Mexico S.A. de C.V.

Río Guadalquivir No. 75, Col. Cuauhtémoc, CP 06500, México D.F.

--------------------------------------------------------------------------------

Previous address for US Companies: 7131 NW 31st Street, Miami, FL 33122

--------------------------------------------------------------------------------

Schedule 3(h)

Collateral Locations

See attachment

--------------------------------------------------------------------------------

Schedule 3(h)(A)

Co-Location Facilities

See attachment

--------------------------------------------------------------------------------

Schedule 3(i)

Litigation

 

1. Latin Node Europe GmbH v. Regina Schaening

 

2. Latin Node, Inc. v. CitiBank, N.A.; CitiBank, FSB; CitiCorp North America,
Inc; Francisco Estupinan Heredia, as General Asignee of Empresa Nacional de
Telecommunicaciones – Telecom in Liquidation; and Colombia Telecommunicaciones,
S.A. E.S.P. (Case No. 03-8669)

--------------------------------------------------------------------------------

Schedule 3(p)

Corporate Structure

LOGO [g55044image001.jpg]

--------------------------------------------------------------------------------

Schedule 3(q)

Pledged Collateral

100% of the issued and outstanding equity interests of each Subsidiary Grantor.