Security Agreement - 1/31/2003



Exhibit 4.59 
 
SECURITY AGREEMENT 
 
SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time in accordance
herewith and including all attachments, exhibits and schedules hereto, the “Agreement”), dated as of January 31, 2003, made by SPEEDCOM WIRELESS CORPORATION, a Delaware corporation (the “Grantor”), in favor of DMG
Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. (collectively, the “Secured Parties”). 
 
WHEREAS, the Grantor has issued separate secured promissory notes to the Secured Parties (the “Notes”) in the aggregate
principal amount of $340,000 pursuant to a Letter Loan Agreement by and among the Grantor and the Secured Parties dated the date hereof (the “Letter Loan Agreement”); and 
 
WHEREAS, it is a condition precedent to the Grantor’s making the loan evidenced by the Letter Loan
Agreement to the Secured Parties that the Grantor execute and deliver to the Secured Parties a security agreement providing for the grant to the Secured Parties of a continuing security interest in all personal property and assets of the Grantor,
all in substantially the form hereof to secure all Obligations (hereinafter defined); 
 
NOW, THEREFORE, the parties agree as follows: 
 
ARTICLE I. Definitions 
 
Section 1.1. Definition of Terms Used Herein. All capitalized terms used herein and not defined herein have the respective meanings provided therefor in the Letter Loan Agreement. All
terms defined in the Uniform Commercial Code (hereinafter defined) as in effect from time to time and used herein and not otherwise defined herein (whether or not such terms are capitalized) have the same definitions herein as specified therein.

 
Section 1.2. Definition of Certain Terms
Used Herein. As used herein, the following terms have the following meanings: 
 
“Collateral” means all accounts receivable of the Grantor and all personal and fixture property of every kind and nature, including, without limitation, all furniture, fixtures,
equipment, raw materials, inventory, or other goods, accounts, contract rights, rights to the payment of money, insurance refund claims and all other insurance claims and proceeds, tort claims, chattel paper, documents, instruments, securities and
other investment property, deposit accounts, rights to proceeds of letters of credit and all general intangibles including, without limitation, all tax refund claims, license fees, patents, patent licenses, patent applications, trademarks, trademark
licenses, trademark applications, trade names, copyrights, copyright licenses, copyright applications, rights to sue and recover for past infringement of patents, trademarks and copyrights, computer programs, computer software, engineering drawings,
service marks, customer lists, goodwill, and all licenses, permits, agreements of any kind or nature pursuant to which the Grantor possesses, uses or has authority to possess or use property (whether tangible or intangible) of others or others
possess, use or have authority to possess or 
 









use property (whether tangible or intangible) of the Grantor, and all recorded data of any kind or nature,
regardless of the medium of recording including, without limitation, all books and records, software, writings, plans, specifications and schematics; and all proceeds and products of each of the foregoing. 
 
“Default” means any event or
circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute an Event of Default. 
 
“Event of Default” has the meaning specified in the Letter Loan Agreement.

 
“Indemnitees” has the
meaning specified in Section 7.5(b). 
 
“Lien” means: (i) any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute, or contract,
and including a security interest, charge, claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (ii) to the extent not included under clause (i), any reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction, lease or other title exception or encumbrance
affecting property; and (iii) any contingent or other agreement to provide any of the foregoing. 
 
“Notes” has the meaning assigned to such term in the first recital of this Agreement. 
 
“Obligations” means all indebtedness, liabilities, obligations, covenants and duties of the Grantor to the Secured
Parties of every kind, nature and description, direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now existing of hereafter arising under or in
connection with the Notes, the Letter Loan Agreement, this Agreement or the other Loan Documents. 
 
“Registered Organization” means an entity formed by filing a registration document with a United States
Governmental Authority, such as a corporation, limited partnership or limited liability company. 
 
“Revised Article 9” has the meaning specified in Section 7.14. 
 
“Security Interest” has the meaning specified in Section 2.1 of this Agreement. 
 
“Uniform Commercial Code” means the
Uniform Commercial Code from time to time in effect in the State of New York. 
 
ARTICLE II. Security Interest 
 
Section 2.1. Security Interest. As security for the payment and performance, in full of the Obligations, and any extensions, renewals, modifications or refinancings of the Obligations,
the Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Secured Parties, and hereby grants to the Secured Parties, their successors 
 

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and assigns, a security interest in, all of such Grantor’s right, title and interest in, to and under
the Collateral (the “Security Interest”). 
 
Section 2.2. No Assumption of Liability. The Security Interest is granted as security only and shall not subject the Secured Parties to, or in any way alter or modify, any obligation or liability of the Grantor with
respect to or arising out of the Collateral. 
 
ARTICLE III. Representations and Warranties 
 
The Grantor represents and warrants to the Secured Parties that: 
 
Section 3.1. Title and Authority. The Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and
has full power and authority to grant to the Secured Parties the Security Interest and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any
consent or approval which has been obtained. 
 
Section 3.2. Filings; Actions to Achieve Perfection. Fully executed Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations
containing a description of the Collateral have been delivered to the Secured Parties for filing in each United States governmental, municipal or other office specified in Schedule A, which are all the filings, recordings and registrations
that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Secured Parties in respect of all Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in
any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements or with respect to the filing of amendments or new filings to reflect the change of the Grantor’s name, location, identity or
corporate structure. The Grantor’s name is listed in the preamble of this Agreement identically to how it appears on its certificate of incorporation or other organizational documents. 
 
Section 3.3. Validity and Priority of Security
Interest. The Security Interest constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Obligations, (b) subject only to the filings described in Section 3.2 above and other
previously perfected security interests in the Collateral listed on Schedule 3.3 to this Agreement (“Existing Liens”), a perfected security interest in all Collateral in which a security interest may be perfected by filing,
recording or registration in the United States pursuant to the Uniform Commercial Code or other applicable law in the United States (or any political subdivision thereof) and its territories and possessions or any other country, state or nation (or
any political subdivision thereof). The Security Interest is and shall be subordinate to any other Existing Lien on any of the Collateral. 
 
Section 3.4. Absence of Other Liens. The Grantor’s Collateral is owned by the Grantor free and clear of any Lien other
than Existing Liens. Without limiting the foregoing and except as set forth on Schedule 3.4 to this Agreement, the Grantor has not filed or consented to any 
 

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filing described in Schedule A in favor of any Person other than the Secured Parties, nor permitted the
granting or assignment of a security interest or permitted perfection of any security interest in the Collateral in favor of any Person other than the Secured Parties. The Grantor’s having possession of all instruments and cash constituting
Collateral from time to time and the filing of financing statements in the offices referred to in Schedule A hereto results in the perfection of such security interest. Such security interest is, or in the case of Collateral in which the
Grantor obtain rights after the date hereof, will be, a perfected, first priority security interest. Such notices, filings and all other action necessary or desirable to perfect and protect such security interest have been duly taken. 
 
Section 3.5. Valid and Binding Obligation. This
Agreement constitutes the legal, valid and binding obligation of the Grantor, enforceable against the Grantor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in this Agreement may be limited by applicable federal or state securities laws. 
 
ARTICLE IV. Covenants 
 
Section 4.1. Change of Name; Location of Collateral; Place of Business, State of Formation or Organization. 
 
(a) The Grantor shall notify the Secured
Parties in writing promptly of any change (i) in its corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to Collateral owned by it (including the establishment of any such new office or facility), (iii) in its identity or corporate structure such that a filed filing made
under the Uniform Commercial Code becomes misleading or (iv) in its Federal Taxpayer Identification Number. In extension of the foregoing, the Grantor shall not effect or permit any change referred to in the preceding sentence unless all filings
have been made under the Uniform Commercial Code or otherwise that are required in order for the Secured Parties to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the
Collateral. 
 
(b) Without limiting
Section 4.1(a), without the prior written consent of the Secured Parties in each instance, the Grantor shall not change its (i) principal residence, if it is an individual, (ii) place of business, if it has only one place of business and is not a
Registered Organization, (iii) principal place of business, if it has more than one place of business and is not a Registered Organization, or (iv) state of incorporation, formation or organization, if it is a Registered Organization. 
 
Section 4.2. Records. The Grantor shall
maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which the Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect 
 

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to any part of the Collateral, and, at such time or times as the Secured Parties may reasonably request,
promptly to prepare and deliver to the Secured Parties a duly certified schedule or schedules in form and detail satisfactory to the Secured Parties showing the identity, amount and location of any and all Collateral. 
 
Section 4.3. Periodic Certification; Notice of
Changes. In the event there should at any time be any change in the information represented and warranted herein or in the documents and instruments executed and delivered in connection herewith, the Grantor shall immediately notify the
Secured Parties in writing of such change (this notice requirement shall be in extension of and shall not limit or relieve the Grantor of any other covenants hereunder). 
 
Section 4.4. Protection of Security. The Grantor shall, at its own cost and expense, take any
and all actions necessary to defend title to the Collateral against all persons and to defend the Security Interest of the Secured Parties in the Collateral and the priority thereof against any Lien. 
 
Section 4.5. Inspection and Verification. The
Secured Parties and such persons as the Secured Parties may reasonably designate shall have the right to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantor’s affairs with the officers of the Grantor and its independent accountants and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any
other matter relating to, the Collateral, including, in the case of collateral in the possession of any third Person, by contacting any account debtor or third Person possessing such Collateral for the purpose of making such a verification.
Out-of-pocket expenses in connection with any inspections by representatives of the Secured Parties shall be (a) the obligations of the Grantor with respect to any inspection after the Secured Parties’ demand payment of the Notes or (b) the
obligation of the Secured Parties in any other case. 
 
Section 4.6. Taxes; Encumbrances. At their option, the Secured Parties may discharge, Liens other than Existing Liens at any time levied or placed on the Collateral and may pay for the maintenance and preservation of
the Collateral to the extent the Grantor fails to do so and the Grantor shall reimburse the Secured Parties on demand for any payment made or any expense incurred by the Secured Parties pursuant to the foregoing authorization; provided, however,
that nothing in this Section shall be interpreted as excusing the Grantor from the performance of, or imposing any obligation on the Secured Parties to cure or perform, any covenants or other obligation of the Grantor with respect to any Lien or
maintenance or preservation of Collateral as set forth herein. 
 
Section 4.7. Use and Disposition of Collateral. The Grantor shall not make or permit to be made an assignment, pledge or hypothecation of any Collateral or shall grant any other Lien in respect of the Collateral without
the prior written consent of the Secured Parties. The Grantor shall not make or permit to be made any transfer of any Collateral and the Grantor shall remain at all times in possession of the Collateral owned by it, other than with respect to
Existing Liens and other liens approved by the Secured Parties. 
 
Section 4.8. Insurance/Notice of Loss. Within a reasonable period of time following the date of this Agreement, Grantor, at its own expense, shall maintain or cause to be maintained 
 

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insurance covering physical loss or damage to the Collateral. In extension of the foregoing and without
limitation, such insurance shall be payable to the Secured Parties as loss payee under a “standard” loss payee clause, and the Secured Parties shall be listed as an “additional insured” on Grantor’s general liability
insurance. Such insurance shall not be terminated, cancelled or not renewed for any reason, including non-payment of insurance premiums, unless the insurer shall have provided the Secured Parties at least 30 days prior written notice. Grantor
irrevocably makes, constitutes and appoints the Secured Parties (and all officers, employees or agents designated by the Secured Parties) as its true and lawful agent and attorney-in-fact for the purpose, at any time following the Secured
Parties’ demand for payment of the Notes, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of Grantor on any check, draft, instrument or other item of payment for the proceeds of
such policies of insurance and for making all determinations and decisions with respect thereto. In the event that Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium
in whole or part relating thereto, the Secured Parties may, without waiving or releasing any obligation or liability of Grantor hereunder, in their sole discretion, obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Secured Parties deem advisable. All sums disbursed by the Secured Parties in connection and in accordance with this Section, including reasonable attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable upon demand, by Grantor to the Secured Parties and shall be additional Obligations secured hereby. Grantor shall promptly notify the Secured Parties if any material portion of the Collateral owned or held by
Grantor is damaged or destroyed. The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall (i) so long as the Secured Parties have not demanded payment of the Notes, be disbursed to Grantor for direct
application by Grantor solely to the repair or replacement of Grantor’s property so damaged or destroyed, and (ii) in all other circumstances, be held by the Secured Parties as cash collateral for the Obligations. The Secured Parties may, at
their sole option, disburse from time to time all or any part of such proceeds so held as cash collateral, upon such terms and conditions as the Secured Parties may reasonably prescribe, for direct application by the Secured Parties solely to the
repair or replacement of Grantor’s property so damaged or destroyed, or Grantor may apply all or any part of such proceeds to the Obligations. 
 
Section 4.9. Legend. Grantor shall legend, in form and manner satisfactory to the Secured Parties, its accounts and its
books, records and documents evidencing or pertaining thereto with an appropriate reference to the fact that such accounts have been assigned to the Secured Parties and that the Secured Parties have a security interest therein. 
 
ARTICLE V. Further Assurances; Power of Attorney

 
Section 5.1. Further
Assurances. Grantor shall, at its own expense, execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Secured Parties may from time to time reasonably request to
better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the
Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by
any promissory note or other instrument, such note or instrument shall be 
 

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immediately pledged and delivered to the Secured Parties, duly endorsed in a manner satisfactory to the
Secured Parties. 
 
Section 5.2. Power of
Attorney. 
 
(a) Grantor
hereby irrevocably (as a power coupled with an interest) constitutes and appoints the Secured Parties (and all officers, employees or agents designated by the Secured Parties), its attorney-in-fact with full power of substitution, for the benefit of
the Secured Parties, 
 
(i) to take
all appropriate action and to execute all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement, and without limiting the generality of the foregoing, Grantor hereby grants the power to file one or
more financing statements (including fixture filings), continuation statements, filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) or
other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by Grantor, without the signature of Grantor, and naming Grantor as debtor and the Secured Parties as secured party; and

 
(ii) at any time following the
Secured Parties’ demand for payment of the Notes (i) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (ii) to
demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (iii) to sign the name of Grantor on any invoice or bill of lading relating to any of the Collateral; (iv) to send verifications
of accounts to any account debtor or any other Person liable for an account; (v) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or
any of the Collateral or to enforce any rights in respect of any Collateral; (vi) to settle, compromise, compound, adjust or defend any actions, suits or proceeding relating to all or any of the Collateral; and (vii) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Secured Parties were the
absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained shall be construed as requiring or obligating the Secured Parties to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Secured Parties, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property
covered thereby, and no action taken or omitted to be taken by the Secured Parties with respect to the Collateral or any part thereof shall give rise to any defense, counterclaim or offset in favor of Grantor or to any claim or action against the
Secured Parties. 
 
(b) The
provisions of this Article shall in no event relieve Grantor of any of its obligations hereunder with respect to the Collateral or any part thereof or impose any obligation on the Secured Parties to proceed in any particular manner with respect to
the Collateral or any part thereof, or in any way limit the exercise by the Secured Parties of any other or further right 
 

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which it may have on the date of this Agreement or hereafter, whether
hereunder, by law or otherwise. 
 
ARTICLE VI.
Remedies 
 
Section 6.1. Remedies
upon Default. 
 
(a) Upon
the occurrence and during the continuance of an Event of Default, Grantor agrees to deliver each item of its Collateral to the Secured Parties on demand, and it is agreed that the Secured Parties shall have the right to take any of or all the
following actions at the same or different times (but at all times subject to any Existing Liens): with or without legal process and with or without prior notice or demand for performance, to take possession of the Collateral and without liability
for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, exercise Grantor’s right to bill and receive payment for completed work and, generally, to exercise any
and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, Grantor agrees that the Secured Parties shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Secured
Parties shall deem appropriate. The Secured Parties shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Secured Parties shall have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Grantor, and Grantor hereby waives (to the extent permitted by law) all rights of redemption,
stay and appraisal which Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. 
 
(b) The Secured Parties shall give Grantor ten (10) days’ written notice (which Grantor agrees is reasonable notice
within the meaning of Section 9-504(3) of the Uniform Commercial Code) of the Secured Parties’ intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of
a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any
such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Secured Parties may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be
sold may be sold in one lot as an entirety or in separate parcels, as the Secured Parties may (in their sole and absolute discretion) determine. The Secured Parties shall not be obligated to make any sale of any Collateral if it shall determine not
to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Secured Parties may, without 
 

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notice or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is
made on credit or for future delivery, the Collateral so sold may be retained by the Secured Parties until the sale price is paid by the purchaser or purchasers thereof, but the Secured Parties shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to
this Section, the Secured Parties may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of Grantor (all said rights being also hereby waived and released to the extent
permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to the Secured Parties from Grantor as a credit against the purchase price, and the Secured
Parties may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Secured Parties shall be free to carry out such sale pursuant to such agreement and Grantor shall not be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Secured Parties shall have entered into such an agreement all Obligations have been paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Secured Parties may proceed by a suit or suits at law or in
equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. 
 
Section 6.2. Application of Proceeds. The
Secured Parties shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: 
 
(a) FIRST, to the payment of all costs and expenses incurred by the Secured Parties in connection with such collection or
sale or otherwise in connection with this Agreement or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel, and any other costs or expenses incurred in connection with the exercise of any right
or remedy hereunder, under the Letter Loan Agreement, the Notes and the other Loan Documents; 
 
(b) SECOND, to the payment in full of the Obligations; and 
 
(c) THIRD, to Grantor, its successors or assigns, or to whomsoever may be lawfully entitled
to receive the same, or as a court of competent jurisdiction may otherwise direct. 
 
Subject to the foregoing, the Secured Parties shall have absolute discretion as to the time of application of such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the
Collateral by the Secured Parties (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of any such proceeds, moneys or balances by the Secured Parties or of the officer making the sale shall be a
sufficient discharge to the 
 

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purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated
to see to the application of any part of the purchase money paid over to the Secured Parties or such officer or be answerable in any way for the misapplication thereof. 
 
Section 6.3. Grant of License to Use Intellectual Property. For the purpose of enabling the
Secured Parties to exercise rights and remedies under this Article at such time as the Secured Parties shall be lawfully entitled to exercise such rights and remedies, Grantor hereby grants to the Secured Parties an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to Grantor) to use, license or sub-license any of the Collateral consisting of intellectual property now owned or hereafter acquired by Grantor, and wherever the same may be
located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the
Secured Parties may be exercised, at the option of the Secured Parties, only following the Secured Parties’ demand for payment of the Notes. 
 
ARTICLE VII. Miscellaneous 
 
Section 7.1. Notices. All communications and notices hereunder to the Grantor and to the Secured Parties shall (except as
otherwise expressly permitted herein) be in writing and delivered to the Grantor or the Secured Parties, as the case may be, as provided in the Letter Loan Agreement. 
 
Section 7.2. Security Interest Absolute. All rights of the Secured Parties hereunder, the
Security Interest and all obligations of Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Letter Loan Agreement, the Notes, any Loan Document or any agreement with respect to any
of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Letter Loan Agreement, the Notes, any Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, Grantor in respect of the Obligations or
this Agreement. 
 
Section 7.3. Survival of
Agreement. All covenants, agreements, representations and warranties made by Grantor herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been
relied upon by the Secured Parties and shall survive the making of the loan and the execution and delivery to the Secured Parties of the Notes, regardless of any investigation made by the Secured Parties or on their behalf; and shall continue in
full force and effect until this Agreement shall terminate. 
 
Section 7.4. Binding Effect; Several Agreement; Successors and Assigns. This Agreement shall become effective as to Grantor when a counterpart hereof executed on behalf of Grantor shall have been delivered to the
Secured Parties and a counterpart hereof shall have been executed on behalf of the Secured Parties, and thereafter shall be binding upon Grantor and the 
 

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Secured Parties and their respective successors and assigns, and shall inure to the benefit of Grantor,
the Secured Parties and their respective successors and assigns, except that Grantor shall not have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents. 
 
Section 7.5. Secured Parties’ Fees and Expense; Indemnification. 
 
(a) Grantor agrees to pay upon demand to the
Secured Parties the amount of any and all reasonable expenses, including all reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Secured Parties may incur in connection with (i) the administration
of this Agreement (including the customary fees and charges of the Secured Parties for any audits conducted by them or on their behalf with respect to the accounts inventory), (ii) the custody or preservation of, or the sale of, collection from or
other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Secured Parties hereunder or (iv) the failure of Grantor to perform or observe any of the provisions hereof. 
 
(b) Grantor agrees to indemnify the Secured
Parties and the agent, contractors and employees of the Secured Parties (collectively, the “Indemnitees”) against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery, or performance of this Agreement or any
agreement or instrument contemplated hereby or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. 
 
(c) Any such
amounts payable as provided hereunder shall be additional Obligations secured hereby. The provisions of this Section shall remain operative and in full force and effect regardless of the termination of this Agreement, the Letter Loan Agreement, the
Notes or the other Loan Documents, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement, the Letter Loan Agreement, the Notes
or the other Loan Documents, or any investigation made by or on behalf of the Secured Parties. All amounts due under this Section shall be payable on written demand therefor. 
 
Section 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK. 
 
Section
7.7. Waivers; Amendment. 
 

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(a) No failure or delay of the Secured Parties in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Secured Parties hereunder and under the Letter Loan Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents or consent to any departure by Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such
waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances.

 
(b) Neither this Agreement nor
any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements, in writing entered into by the Secured Parties and Grantor. 
 
Section 7.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE LETTER LOAN AGREEMENT OR THE NOTES. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LETTER LOAN AGREEMENT AND THE NOTES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 
Section 7.9. Severability. In the event any one
or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 
 
Section 7.10. Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. Each party shall be entitled to rely on a facsimile signature of any other party hereunder as
if it were an original. 
 
Section 7.11.
Jurisdiction; Consent to Service of Process. 
 
(a) Grantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of 
 

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the United States of America sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Agreement, the Letter Loan Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Secured Parties may otherwise have to bring
any action or proceeding relating to this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents against Grantor or its properties in the courts of any jurisdiction. 
 
(b) Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, the Letter Loan Agreement, the Notes or the other Loan Documents
in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 
(c) Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in Section 7.1. Nothing in this Agreement will affect the right of any party to this Agreement to process in any other manner permitted by law. 
 
Section 7.12. Termination. This Agreement and
the Security Interest shall terminate when all the Obligations have been paid in full, at which time the Secured Parties shall execute and deliver to Grantor, at Grantor’s expense, all Uniform Commercial Code termination statements and similar
documents which Grantor shall reasonably request to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section shall be without recourse to or warranty by the Secured Parties. 
 
Section 7.13. Prejudgment Remedy Waiver. Grantor
acknowledges that this Agreement, the Letter Loan Agreement, the Notes and the other Loan Documents evidence a commercial transaction and that it could, under certain circumstances have the right, to notice of and hearing on the right of the Secured
Parties to obtain a prejudgment remedy, such as attachment, garnishment and/or replevin, upon commencing any litigation against Grantor. Notwithstanding, Grantor hereby waives all rights to notice, judicial hearing or prior court order to which it
might otherwise have the right under any state or federal statute or constitution in connection with the obtaining by the Secured Parties of any prejudgment remedy by reason of this Agreement, the Letter Loan Agreement, the Notes, the other Loan
Documents or by reason of the Obligations or any renewals or extensions of the same. Grantor also waives any and all objection which it might otherwise assert, now or in the future, to the exercise or use by the Secured Parties of any right of
setoff, repossession or self help as may presently exist under statute or common law. 
 
Section 7.14. Concerning Revised Article 9 of the Uniform Commercial Code. The parties acknowledge and agree to the following provisions of this Agreement in anticipation of the possible
application, in one or more jurisdictions to the transactions contemplated hereby, of 
 

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the revised Article 9 of the Uniform Commercial Code in the form or substantially in the form approved in
1998 by the American Law Institute and the National Conference of Commissioners on Uniform State Law (“Revised Article 9”). 
 
(a) In applying the law of any jurisdiction in which Revised Article 9 is in effect, the Collateral is all assets of
Grantor, whether or not within the scope of Revised Article 9. The Collateral shall also include, without limitation, the following categories of assets as defined in Revised Article 9: goods (including inventory, equipment and any accessions
thereto), instruments (including promissory notes), documents, accounts (including health-care-insurance receivables), chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), commercial tort claims, securities and all other investment property, general intangibles (including payment intangibles and software), supporting obligations and any and all proceeds of any thereof, wherever located,
whether now owned and hereafter acquired. If Grantor shall at any time, whether or not Revised Article 9 is in effect in any particular jurisdiction, acquire a commercial tort claim, as defined in Revised Article 9, Grantor shall immediately notify
the Secured Parties in a writing signed by Grantor of the brief details thereof and grant to the Secured Parties in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to the Secured Parties. The Secured Parties may at any time and from time to time, pursuant to the provisions of Article V, file financing statements, continuation statements and amendments thereto that describe
the Collateral as all assets of Grantor or words of similar effect and which contain any other information required by Part 5 of Revised Article 9 for the sufficiency or filing office acceptance of any financing statement, continuation statement or
amendment, including whether Grantor is an organization, the type of organization and any organization identification number issued to Grantor. Grantor shall furnish any such information to the Secured Parties promptly upon request. Any such
financing statements, continuation statements or amendments may be signed by the Secured Parties on behalf of Grantor, as provided in Article V, and may be filed at any time in any jurisdiction whether or not Revised Article 9 is then in effect in
that jurisdiction. 
 
(b) Grantor
shall at any time and from time to time, whether or not Revised Article 9 is in effect in any particular jurisdiction, take such steps as the Secured Parties may reasonably request for the Secured Parties (i) to obtain an acknowledgement, in form
and substance satisfactory to the Secured Parties, of any bailee having possession of any of the Collateral that the bailee holds such Collateral for the Secured Parties, (ii) to obtain “control” of any investment property, deposit
accounts, letter-of-credit rights or electronic chattel paper (as such terms are defined in Revised Article 9 with corresponding provisions in §§ 9-104, 9-105, 9-106 and 9-107 relating to what constitutes “control” for such items
of Collateral), with any agreements establishing control to be in form and substance satisfactory to the Secured Parties, and (iii) otherwise to insure the continued perfection and priority of the Secured Parties’ security interest in any of
the Collateral and of the preservation of its rights therein, whether in anticipation and following the effectiveness of Revised Article 9 in any jurisdiction. 
 
(c) Nothing contained in this Section shall be construed to narrow the scope of the security interest granted hereby in
any of the Collateral or the perfection or priority thereof or to impair or otherwise limit any of the rights, powers, privileges or remedies of the Secured Parties hereunder except as (and then only to the extent) specifically mandated by Revised
Article 9 to the extent then applicable. 
 

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[Signature page follows] 
 
 

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

	 SPEEDCOM WIRELESS CORPORATION

	
	 By:
	 	 
	 	

	 	 	 Name:

	 	 	 Title:

	
	 DMG LEGACY FUND LLC

	
	 By:
	 	 
	 	

	 	 	 Name:

	 	 	 Title:

	
	 DMG LEGACY INSTITUTIONAL FUND LLC

	
	 By:
	 	 
	 	

	 	 	 Name:

	 	 	 Title:

	
	 DMG LEGACY INTERNATIONAL LTD.

	
	 By:
	 	 
	 	

	 	 	 Name:

	 	 	 Title:



 
 
 

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SCHEDULE A 
 
Places of Business; Chief Executive Office; Filing Locations 
 
State of Incorporation: 
Delaware 
 
Chief Executive Office: 
7020 Professional Parkway East 
Sarasota, Florida 34240 
 
Filing Locations: 
Secretary of State
of the State of Delaware 
 

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SCHEDULE 3.3 
Existing Liens 
 
Tax Lien held by the State of Florida Department of Revenue for approximately $15,000. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s
accounts receivable and personal property pursuant to the Security Agreement dated April 26, 2002 among the parties. 
 
SDS Merchant Fund, L.P., DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG International Ltd. hold a blanket security interest in all of the
Company’s accounts receivable and personal property pursuant to the Security Agreement dated June 10, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s
accounts receivable and personal property pursuant to the Security Agreement dated August 8, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s
accounts receivable and personal property pursuant to the Security Agreement dated September 18, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s
accounts receivable and personal property pursuant to the Security Agreement dated November 11, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s
accounts receivable and personal property pursuant to the Security Agreement dated December 24, 2002 among the parties. 
 

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SCHEDULE 3.4 
Absence of Other Liens 
 
Tax Lien held by the State of Florida Department of Revenue for approximately $15,000. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s
accounts receivable and personal property pursuant to the Security Agreement dated April 26, 2002 among the parties. 
 
SDS Merchant Fund, L.P., DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG International Ltd. hold a blanket security interest in all of the
Company’s accounts receivable and personal property pursuant to the Security Agreement dated June 10, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG International Ltd. hold a blanket security interest in all of the Company’s accounts
receivable and personal property pursuant to the Security Agreement dated August 8, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s accounts receivable and personal property pursuant
to the Security Agreement dated September 18, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s accounts receivable and personal property pursuant to the Security Agreement dated
November 11, 2002 among the parties. 
 
DMG Legacy Fund LLC, DMG
Legacy Institutional Fund LLC and DMG Legacy International Ltd. hold a blanket security interest in all of the Company’s accounts receivable and personal property pursuant to the Security Agreement dated December 24, 2002 among the parties.

 

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