ex10_5.htm


    
      

    

    Exhibit
      10.5

     

    
      EXECUTION
        VERSION

      


      COLLATERAL
        AGENCY
        AGREEMENT

      


      This
        COLLATERAL AGENCY AGREEMENT
        (this “Agreement”),
        dated as
        of December __, 2007, is
        entered into among each of the persons identified as a “Buyer” on the signature
        pages hereof (individually, “Buyer”; collectively,
        the “Buyers”),
        and THEBANK
        OF NEW YORK, as collateral
        agent for
        the Buyers (in such capacity, together with its successors and assigns in
        such
        capacity, “Collateral
        Agent”), and is acknowledged by the Company (as defined
        below).  For good and valuable consideration, the receipt and adequacy
        of which hereby is acknowledged by each party hereto, the parties hereto
        hereby
        agree as follows:

      


      1.           Definitions;
        Construction.

      


      a.           Any
        capitalized terms used but not defined herein shall have the meanings ascribed
        to them in the “Senior Convertible Notes” or the “Securities Purchase Agreement”
(as defined below), as applicable.  As used herein, the following
        terms shall have the meanings respectively set forth after
        each:

      


      “Agreement”
has
        the
        meaning ascribed thereto in the introductory paragraph hereto.

      


      “Affiliate”
means,
        as
        applied to any Person, any other Person who, directly or indirectly, controls,
        is controlled by, or is under common control with, such Person.  For
        purposes of this definition, “control” means the possession, directly or
        indirectly, of the power to direct the management and policies of a Person,
        whether through the ownership of Stock, by contract, or otherwise.

      


      “Buyers”
has
        the
        meaning ascribed thereto in the introductory paragraph to this
        Agreement.

      


      “Buyer
        Claims” means
        any and all “claims” (used in its broadest sense, as contemplated by and defined
        in Section 101(5) of the Bankruptcy Code, but without regard to whether such
        claim would be disallowed under the Bankruptcy Code) now or hereafter arising
        or
        existing under or relating to the Transaction Documents in favor of any
        Buyer.

      


      “Buyer
        Expenses” means all
        (a)  costs or expenses (including taxes, and insurance premiums)
        required to be paid by the Company or any of its Affiliates under any of
        the
        Transaction Documents that are paid or incurred by the Collateral Agent or
        the
        Buyers, (b) actual fees or charges paid or incurred by the Collateral Agent
        in
        connection with transactions between the Collateral Agent or any Buyer, on
        the
        one hand, and the Company or any of its Affiliates, on the other hand,
        including, fees or charges for photocopying, notarization, couriers and
        messengers, telecommunication, public record searches (including tax lien,
        litigation, and UCC searches and including searches with the patent and
        trademark office, the copyright office), filing, recording, publication,
        appraisal (including periodic Collateral appraisals), real estate surveys,
        real
        estate title policies and endorsements, and environmental audits, (c) actual
        costs and expenses incurred by the Collateral Agent in the disbursement of
        funds
        to the Company (by wire
        transfer or otherwise), (d) actual charges paid or incurred by the Collateral
        Agent resulting from the dishonor of checks, (e) reasonable costs and expenses
        paid or incurred by the Collateral Agent or any Buyer to correct any default
        or
        enforce any provision of the Transaction Documents, or in gaining possession
        of,
        maintaining, handling, preserving, storing, shipping, selling, preparing
        for
        sale, or advertising to sell the Collateral, or any portion thereof,
        irrespective of whether a sale is consummated, (f) reasonable costs and expenses
        paid or incurred by the Collateral Agent or any Buyer in examining the
Company’ Books, (g)
        reasonable costs and expenses of third party claims or any other suit paid
        or
        incurred by the Collateral Agent or any Buyer in enforcing or defending the
        Transaction Documents or in connection with the transactions contemplated
        by the
        Transaction Documents or the Collateral Agent’s or any Buyer’s relationship with
        the Company or any guarantor, and (h) the Collateral Agent’s and each of the
        Buyers’ reasonable fees and expenses (including attorneys fees) incurred in
        advising, structuring, drafting, reviewing, administering, amending,
        terminating, enforcing (including attorneys fees and expenses incurred in
        connection with a “workout,” a “restructuring,” or an insolvency proceeding
        concerning the Company or any guarantor of any of the obligations of the
        Company under the
        Transaction Documents), defending, or concerning the Transaction Documents,
        irrespective of whether suit is brought.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      “Buyer
        Obligations”
means any and all obligations of the Company to any one or more of
        the Buyers
        with respect to all or any part of the Buyer Claims, including obligations
        of
        payment and performance, whether fixed or indeterminate, due or not yet due,
        contingent or non-contingent, matured or unmatured, liquidated or unliquidated,
        or disputed or undisputed, and whether arising under contract, in tort, by
        law,
        or otherwise.

      


      “Capital
        Lease” means
        a lease that is required to be capitalized for financial reporting purposes
        under GAAP.

      


      “Claims”
means
        the
        Collateral Agent Claims and the Buyer Claims.

      


      “Collateral”
means
        all
        property (real, personal or otherwise) of the Company now or hereafter subject
        to a lien or security interest in favor of the Collateral Agent for the ratable
        benefit of the Buyers, and all Proceeds of such property.

      


      “Collateral
        Agent” has
        the meaning ascribed thereto in the introductory paragraph to this
        Agreement.

      


      “Collateral
        Agent
        Claims” means any and all “claims” (used in its broadest sense, as
        contemplated by and defined in Section 101(5) of the Bankruptcy Code, but
        without regard to whether such claim would be disallowed under the Bankruptcy
        Code) now or hereafter arising or existing under or relating to this Agreement
        or any Transaction Document in favor of the Collateral Agent.

      


      “Collateral
        Agent’s
        Liens” means the Liens granted by the Company to the Collateral Agent
        under the Security Documents.


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      “Collateral
        Agent
        Obligations” means any and all obligations of the Company to the
        Collateral Agent with respect to all or any part of the Collateral Agent
        Claims,
        including obligations of payment and performance, whether fixed or
        indeterminate, due or not yet due, contingent or non-contingent, matured
        or
        unmatured, liquidated or unliquidated, or disputed or undisputed, and whether
        arising under contract, in tort, by law, or otherwise.

      


      “Collections”
means
        any collections of, on, or with respect to Collateral, and any proceeds of
        any
        foreclosure, sale, exchange, disposition of, or other realization upon any
        Collateral, received by the Collateral Agent.

      


      “Company”
means
        EnterConnect Inc., a Nevada corporation.

      


      “Company
        Security
        Agreement” means that certain Pledge and Security Agreement dated as of
        December __, 2007, by and between the Company and the Collateral
        Agent.

      


      “Exchange
        Act” means
        the Securities Exchange Act of 1934, as in effect from time to
        time.

      


      “Event
        of Default”
means any defined event of default under any one or more of the Transaction
        Documents, in each instance, after giving effect to any notice, grace, or
        cure
        periods provided for in the applicable Transaction Documents.

      


      “GAAP”
means
        generally
        accepted accounting principles as in effect from time to time in the United
        States, consistently applied.

      


      “Indebtedness”
means
        (a) all obligations of the
Company for borrowed money,
        (b) all obligations of the Company evidenced by bonds,
        debentures, notes,
        or other similar instruments and all reimbursement or other obligations of
        the
Company in respect of
        letters of credit, bankers acceptances, interest rate swaps, or other similar
        financial products, (c) all obligations of the Company under Capital Leases,
        (d) all
        obligations or liabilities of others secured by a Lien on any property or
        asset
        of the Company,
        irrespective of whether such obligation or liability is assumed, and (e)
        any
        obligation of the Company guaranteeing or intended to guarantee (whether
        guaranteed, endorsed, co-made, discounted, or sold with recourse to the Company)
        any obligation of any other Person.

      


      “Indemnified
        Amount(s)” means any amount(s) payable by any Buyer to the Collateral
        Agent (or recoverable by the Collateral Agent from Collateral or Proceeds
        of
        Collateral or Collections) pursuant to Section 8
        hereof.

      


      “Lien”
means
        any
        interest in property securing an obligation owed to, or a claim by, any Person
        other than the owner of the property, whether such interest shall be based
        on
        the common law, statute, or contract, whether such interest shall be recorded
        or
        perfected, and whether such interest shall be contingent upon the occurrence
        of
        some future event or events or the existence of some future circumstance
        or
        circumstances, including the lien or security interest arising from a mortgage,
        deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
        arrangement, security agreement, conditional sale or trust receipt, or from
        a
        lease, consignment, or bailment for security purposes and also including
        reservations, exceptions, encroachments, easements, rights-of-way, covenants,
        conditions, restrictions, leases, and other title exceptions and encumbrances
        affecting Real Property.


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      “Majority
        Buyers” has
        the meaning ascribed thereto in Section 5
        hereof.

      


      “Obligations”
means,
        collectively, the Collateral Agent Obligations and the Buyer
        Obligations.

      


      “Person”
means
        natural persons, corporations, limited liability companies, limited
        partnerships, general partnerships, limited liability partnerships, joint
        ventures, trusts, land trusts, business trusts, or other organizations,
        irrespective of whether they are legal entities, and governments and agencies
        and political subdivisions thereof.

      


      “Proceeds”
means
        all
        present and future “proceeds” (as defined in the UCC) of Collateral, whether or
        not received by the Company, including insurance proceeds arising from or
        relating to Collateral.

      


      “Real
        Property” means
        any estates or interests in real property now owned or hereafter acquired
        by the
        Company.

      


      “Record”
means
        information that is inscribed on a tangible medium or which is stored in
        an
        electronic or other medium and is retrievable in perceivable form.

      


      “Restricted
        Account
        Agreement” means the Restricted (Non-Blocked) Account Agreement, dated as
        of the date hereof, among the Collateral Agent, the Company and Sun Trust
        Bank.

      


      “SEC”
means
        the United
        States Securities Exchange Commission.

      


      “Securities
        Purchase
        Agreement” means that certain Securities Purchase Agreement, dated as of
        the date hereof, by and among the Company and the Buyers.

      


      “Security
        Documents”
means the Company Security Agreement, and any other security agreement,
        stock
        pledge agreement, mortgage, deed of trust, assignment, pledge, and other
        agreement executed and delivered by the Company in favor of Collateral Agent
        for
        the benefit of the Buyers.

      


      “Senior
        Convertible
        Notes” means those several Senior Secured Convertible Notes issued by the
        Company in favor of the Buyers, dated December __, 2007.

      


      “Stock”
means
        all
        shares, options, warrants, interests, participations, or other equivalents
        (regardless of how designated) of or in a Person, whether voting or nonvoting,
        including common stock, preferred stock, or any other “equity security” (as such
        term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
        by the SEC under the Exchange Act).


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      “Transaction
        Documents” means the Securities Purchase Agreement, the Senior
        Convertible Notes, the Security Documents, the Restricted Account Agreement,
        this Agreement and any other agreement, instrument, and other document executed
        and delivered pursuant thereto or otherwise evidencing or securing any of
        the
        Obligations or any other Indebtedness or other obligations owing by the Company
        to the Buyers or the Collateral Agent.

      


      “UCC”
means
        the
        Uniform Commercial Code of the State of New York, as in effect from time
        to
        time.

      


      b.           Construction.  Any
        term used herein that
        is defined in the UCC shall have the meaning ascribed to such term in the
        UCC,
        unless specifically otherwise defined herein.  Unless the context of
        this Agreement clearly requires otherwise, references to the plural include
        the
        singular, references to the singular include the plural, the part includes
        the
        whole, the terms “includes” and “including” are not limiting, and the term “or”
has the inclusive meaning represented by the phrase “and/or”.  The
        words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
        Agreement refer to this Agreement as a whole and not to any particular provision
        of this Agreement.  Section references are to this Agreement unless
        otherwise specified.  Any reference in this Agreement or in any of the
        other Transaction Documents to this Agreement or any of the other Transaction
        Documents shall include all alterations, amendments, restatements, changes,
        extensions, modifications, renewals, replacements, substitutions, and
        supplements, thereto and thereof, as applicable.

      


      2.           Appointment
        of Collateral Agent Each
        Buyer hereby appoints the Collateral Agent as the collateral agent for itself
        with respect to the Collateral, the Security Documents and the other Transaction
        Documents.  Each Buyer agrees that all liens and security interests in
        Collateral securing any of the Obligations shall be held in the name of the
        Collateral Agent and administered by and through the Collateral Agent in
        accordance with the provisions of this Agreement.  If, as of the date
        hereof, or at any time in the future, any Buyer at any time holds a lien
        or
        security interest on Collateral in its own name, it agrees to assign it,
        without
        warranty or recourse, to the Collateral Agent (to be held by the Collateral
        Agent as the collateral agent for each of the Buyers).

      


      3.           Security
        Interest The Collateral
        Agent shall hold its security interests in and liens on the Collateral for
        the
        benefit of the Buyers.

      


      4.           Distribution
        of Collections Any
        Collections shall be distributed pro rata among the Buyers (after recouping,
        offsetting, or deducting any Indemnified Amounts due the Collateral Agent
        that
        are entitled to be recouped, offset, or deducted, pursuant to the Transaction
        Documents).

      


      5.           Authority
        of
        Collateral Agent to Act Each Buyer hereby appoints
        and
        authorizes the Collateral Agent to take such action as agent on its behalf
        and
        to exercise such powers and discretion under this Agreement, the Security
        Documents and the other Transaction Documents as are delegated to the Collateral
        Agent by the terms hereof and thereof, together with such powers as are
        reasonably incidental thereto.  As to any matters within the scope of
        the Collateral Agent’s agency and not expressly provided for by this Agreement
        or such other Transaction Documents, the Collateral Agent shall not be required
        to exercise any discretion or take any action, but shall be required to act
        or
        to refrain from acting with respect to the Collateral or with respect to
        the
        provisions of the Transaction Documents relating to same (and shall be fully
        protected in so acting or refraining from acting) upon the instructions of
        the
        Buyers of at least 50.1% of the unpaid principal amount of the Senior
        Convertible Notes then outstanding (the “Majority Buyers”); provided, however,
        that the Collateral Agent shall not be required to take any action that exposes
        the Collateral Agent or any Buyer to personal liability or that is contrary
        to
        this Agreement, the Transaction Documents, or applicable
        law.


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      6.           Collateral
        Agent’s Reliance Without
        limiting any other provision hereof that is protective of the Collateral
        Agent,
        the Collateral Agent shall not be liable for any action taken or omitted
        to be
        taken by it under or in connection with this Agreement or any Transaction
        Document, except for its own gross negligence or willful
        misconduct.  In no event shall the Collateral Agent be responsible or
        liable for special, indirect or consequential loss or damage of any kind
        whatsoever (including, but not limited to, loss of profit) irrespective of
        whether the Collateral Agent has been advised of the likelihood of such loss
        or
        damage and regardless of the form of action.

      


      7.           Rights
        as a
        Buyer With respect to any
        Claims due it, if any, the Person defined herein to be the Collateral Agent
        (and
        any successor Person acting as the Collateral Agent), in its capacity as
        a Buyer
        under the Transaction Documents, shall have the same rights and powers hereunder
        as any other Buyer and may exercise the same as though it were not the
        Collateral Agent, and the term “Buyer” or “Buyers” shall, unless otherwise
        expressly indicated, include such Person (and any successor Person acting
        as the
        Collateral Agent) in its individual capacity.

      


      8.           Indemnification
        of Collateral Agent by Buyers Each Buyer hereby agrees
        to indemnify
        and hold the Collateral Agent harmless (to the extent not reimbursed on demand
        by the Company, except that no such prior demand on the Company need be made
        before enforcing the indemnity contained in this section if the Collateral
        Agent
        is barred from making such prior demand, such as by the operation of the
        automatic stay of any Bankruptcy Law), in accordance with the sharing
        arrangement described below in this section, from and against any and all
        losses, liabilities (including liabilities for penalties), actions, suits,
        judgments, demands, damages, costs, disbursements, or expenses (including
        attorneys fees and expenses) of any kind or nature whatsoever which are imposed
        on, incurred by, or asserted against the Collateral Agent in its capacity
        as
        such in any way relating to or arising out of this Agreement, the Security
        Documents or the other Transaction Documents, or as a result of any action
        taken
        or omitted to be taken by the Collateral Agent pursuant to the provisions
        of
        this Agreement or the Transaction Documents, including (without limitation)
        any
        indemnification by, or interpleader action commenced against, the Collateral
        Agent under the Restricted Account Agreement; provided, however, that no
        Buyer
        shall be liable for any portion of any such losses, liabilities (including
        liabilities for penalties), actions, suits, judgments, demands, damages,
        costs,
        disbursements, or expenses resulting from the gross negligence or willful
        misconduct of the Collateral Agent.  Each Buyer’s obligations under
        this paragraph shall survive the resignation or removal of the Collateral
        Agent
        and the termination of this Agreement and the discharge of the Obligations
        with
        respect to any indemnity claims then existing or thereafter arising that
        are
        based on transactions, events, or occurrences that transpired prior to such
        termination or discharge.  Any Indemnified Amount due to the
        Collateral Agent shall be shared pro rata by the Buyers (to the extent not
        paid
        by the Company).  Any Indemnified Amount paid by any Buyer that the
        Company is obligated to reimburse but that has not yet been reimbursed by
        the
        Company or recouped from Collections shall be added to and shall become a
        part
        of the Claim of such Buyer.  Any other provision of this Agreement
        notwithstanding, and without limiting the generality of the foregoing, if
        such
        Indemnified Amount has not been fully satisfied by the Buyers, then the
        Collateral Agent shall be entitled to recover same (except to the extent
        that
        the Company is not responsible therefor under the Transaction Documents)
        from
        the Collateral or proceeds thereof, or Collections with respect thereto,
        by way
        of recoupment, offset, or deduction, in such order and manner as the Collateral
        Agent deems appropriate or expedient, prior to the application of such
        Collateral, proceeds, or Collections for any other
        purpose.


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      9.           Non-Reliance
        by BuyersEach Buyer hereby
        acknowledges that it has, independently of and without reliance upon the
        Collateral Agent or any other Buyer, and based upon such documents and
        information as it has deemed appropriate, made its own credit analysis and
        decision to enter into the transactions evidenced by the Transaction Documents
        and this Agreement.  Each Buyer also acknowledges that it will,
        independently of and without reliance upon the Collateral Agent or any other
        Buyer, and based on such documents and information as it shall deem appropriate
        at the time, continue to make its own independent credit decisions in taking
        or
        omitting to take action under or in connection with the Claims.  The
        Collateral Agent shall not be required to keep itself informed as to the
        performance or observance by the Company or any other Persons of their
        obligations to any Buyer, or to inspect the Collateral or books and records
        of
        the Company, of any of its Affiliates, or of any other Person.  The
        Collateral Agent shall not have any duty or responsibility to provide any
        Buyer
        with any credit or other information concerning the affairs, financial
        condition, or business of the Company or its Affiliates that may come into
        the
        possession of the Collateral Agent or any of its Affiliates.  Except
        as provided in the following sentence, the Collateral Agent shall not be
        a
        trustee for, and shall not have any fiduciary or quasi-fiduciary duty to,
        the
        Buyers and shall not be liable to any Buyer except for gross negligence or
        willful misconduct in the performance of its undertakings
        hereunder.  The preceding sentence notwithstanding, for the limited
        purpose of holding and distributing or applying Collections, the Collateral
        Agent shall hold such Collections in trust for the benefit of all Buyers,
        and
        shall act as a fiduciary of the Buyers with respect to such
        Collections.

      


      10.           Failure
        to
        Act Except for action
        expressly required of the Collateral Agent hereunder, the Collateral Agent
        shall
        in all cases be fully justified in failing or refusing to act hereunder unless
        it shall be indemnified to its reasonable satisfaction by the Buyers against
        any
        and all liability and expense which may be incurred by it by reason of taking
        or
        continuing to take any such action.

      


      11.           No
        Joint
        Venture Nothing contained
        in this Agreement, and no action taken by any Buyer or the Collateral Agent
        pursuant hereto or in connection herewith or pursuant to or in connection
        with
        the Security Documents or the other Transaction Documents shall be deemed
        to
        constitute the Buyers, together or with or without the Collateral Agent,
        a
        partnership, association, joint venture, or other entity.

      


      12.           Resignation
        by or Removal of Collateral Agent The Collateral Agent
        may resign at any
        time as the Collateral Agent under this Agreement, the Security Documents
        and
        the other Transaction Documents by giving written notice thereof to the Buyers
        and the Company, and may be removed at any time by vote of the Majority
        Buyers.  Upon any such resignation or removal, the Majority Buyers
        shall have the right to appoint a successor Collateral Agent.  If no
        successor Collateral Agent shall have been so appointed by the Majority Buyers,
        acting in unison, or a successor Collateral Agent appointed by the Majority
        Buyers, acting in unison, shall not have accepted such appointment, in either
        case within thirty (30) days after the retiring Collateral Agent’s giving of
        notice of resignation or the Majority Buyers’ removal of the retiring Collateral
        Agent, then the retiring Collateral Agent may at the expense of the Company,
        on
        behalf of the Buyers, appoint (or petition a court of competent jurisdiction
        to
        appoint) a successor Collateral Agent, which shall be a Buyer, an Affiliate
        of a
        Buyer or a commercial bank organized under the laws of the United States
        of
        America or of any state thereof having a combined capital and surplus of
        at
        least Two Hundred Fifty Million Dollars ($250,000,000).  Upon
        acceptance of any appointment as the Collateral Agent hereunder by a successor
        Collateral Agent, such successor Collateral Agent shall thereupon succeed
        to and
        become vested with all of the obligations, rights, powers, privileges, and
        duties of the retiring Collateral Agent, and the retiring Collateral Agent
        shall
        assign to the successor Collateral Agent, without warranty or recourse, all
        its
        rights hereunder and under the Transaction Documents, including all rights
        with
        respect to liens on or security interests in Collateral, and including all
        documentation necessary or appropriate to reflect such assignment of record
        in
        all appropriate filing offices and jurisdictions, and thereupon shall be
        discharged from its duties and obligations under this Agreement and the
        Transaction Documents.


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      13.           Notices.
Unless
        otherwise specifically provided
        herein, any notice or communication herein required or permitted to be given
        shall be in writing and shall be delivered to the Collateral Agent and the
        applicable Buyer in the manner set forth in the applicable Senior Convertible
        Notes.

      


      14.           Bailee
        for
        Perfection of Liens and Security Interests by Possession or Control For the limited purpose
        of perfecting
        liens or security interests in those types or items of Collateral in which
        a
        lien or security interest may be perfected by possession or control, each
        Buyer
        hereby appoints the Collateral Agent, and the Collateral Agent and each Buyer
        hereby appoints each other Buyer, as its respective bailee and agent for
        the
        limited purpose of possessing on its behalf, or controlling on its behalf,
        any
        such Collateral that may come into the possession or control (as applicable)
        of
        the Collateral Agent or such other Buyer from time to time, and the Collateral
        Agent and each Buyer agrees to act as each other Buyer’s bailee and agent, and
        each Buyer agrees to act as the Collateral Agent’s bailee and agent, for such
        limited purpose of perfecting the other’s lien or security interest in any
        Collateral by possession or control (as applicable) through a bailee or agent,
        provided, that, each party hereto hereby waives and releases each of the
        other
        parties hereto from any and all claims and liabilities arising from such
        other
        party’s actions or omissions in its role as bailee and agent with respect to
        possession or control of any Collateral, except for any claims arising from
        such
        other party’s gross negligence or willful misconduct.  Unless there is
        an express written agreement to the contrary in effect between the Collateral
        Agent and the affected Buyer, no Buyer shall relinquish such possession or
        control (as applicable) of any Collateral without the prior written consent
        of
        the Collateral Agent.  Not withstanding anything to the contrary
        contained herein, the Collateral Agent shall have no responsibility for
        preparing, recording, filing, re-recording, or re-filing of any financing
        statement, continuation statement, mortgage or other instrument in any public
        office with respect to any Collateral or otherwise.


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      15.           Termination
        This Agreement is a
        continuing agreement, and, unless the Collateral Agent and each Buyer have
        specifically consented in writing to its earlier termination, this Agreement
        shall remain in full force and effect in all respects until such time as
        (a) all
        Claims (other than contingent indemnification obligations that survive the
        termination of the Transaction Documents) are fully and finally paid in cash
        or
        otherwise satisfied in full in accordance with the terms of the Transaction
        Documents, (b) none of the Buyers has any further commitment to extend further
        financial accommodations to the Company under the Transaction Documents,
        and (c)
        each Buyer has instructed the Collateral Agent to release or terminate the
        security interests and liens in favor of the Collateral Agent to the extent
        that
        they secure Claims of such Buyer (and each Buyer hereby agrees promptly to
        do so
        after the conditions in clauses (a) and (b) are satisfied).

      


      16.           Modifications
        in Writing No amendment,
        modification, supplement, termination, consent, or waiver of or to any provision
        of this Agreement nor any consent to any departure therefrom shall in any
        event
        be effective unless the same shall be in writing and signed by or on behalf
        of
        the parties to be bound thereby.  Any waiver of any provision of this
        Agreement, or any consent to any departure from the terms of any provisions
        of
        this Agreement, shall be effective only in the specific instance and for
        the
        specific purpose for which given.  Anything herein to the contrary
        notwithstanding, any amendment, modification, supplement, termination, consent,
        or waiver of or to any provision of this Agreement, or any consent to any
        departure therefrom, that relates only to the relationship between or among
        any
        one or more of the Collateral Agent and the Buyers, and that does not adversely
        affect the obligations of the Company hereunder, shall not require consent
        by or
        the agreement of the Company.

      


      17.           Headings
        Section headings used
        in
        this Agreement are for convenience of reference only and shall not constitute
        a
        part of this Agreement for any purpose or affect the construction of this
        Agreement.

      


      18.           GOVERNING
        LAW, CONSENT TO JURISDICTION, ANDWAIVER
        OF
        RIGHT TO JURY TRIAL THIS
        AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK ANDTHE
        VALIDITY OF THIS AGREEMENT,
ANDTHE
        CONSTRUCTION, INTERPRETATION,
ANDENFORCEMENT
        HEREOF, ANDTHE
        RIGHTS OF THE PARTIES HERETO, SHALL
        BE DETERMINED UNDER, GOVERNED BY, ANDCONSTRUED
        IN ACCORDANCE WITH THE
LAWSOF
        THE STATE OF NEW YORK.  THE
        PARTIES HERETO CONSENT
        TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN
        THE
        COUNTY OF NEW YORK ANDTHE
        STATE OF NEW YORK,
        TO ADJUDICATE ANY LEGAL PROCEEDING
        THAT RELATES TO THIS AGREEMENT, THE INTERPRETATION HEREOF, ANY DISPUTE ARISING
        HEREUNDER, OR ANY CONTENTION THAT ANY PARTY HERETO HASBREACHED
        ANY PROVISION HEREOF
ANDWAIVES
        ANY DEFENSE BASED ON DOCTRINES OF
        VENUE OR FORUM NON CONVENIENS, OR SIMILAR RULES OR DOCTRINES.  THE
        PARTIES HERETO EXPRESSLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY LEGAL
        PROCEEDING THAT RELATES TO THIS AGREEMENT, THE INTERPRETATION HEREOF, ANY
        DISPUTE ARISING HEREUNDER, OR ANY CONTENTION THAT ANY PARTY HERETO HASBREACHED
        ANY PROVISION HEREOF, EVEN IF
        SUCH LEGAL PROCEEDING INCLUDES OTHER CLAIMS THAT DO NOT RELATE TO THIS
        AGREEMENT.


      
        
          
          

        

        
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      19.           Severability
        of Provisions Any provision
        of this Agreement which is illegal, invalid, prohibited, or unenforceable
        in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such illegality, invalidity, prohibition, or unenforceability without
        invalidating or impairing the remaining provisions hereof or affecting the
        validity or enforceability of such provision in any other
        jurisdiction.

      


      20.           Complete
        Agreement This Agreement is
        intended by the parties as a final expression of their agreement regarding
        the
        subject matter hereof and is intended as a complete statement of the terms
        and
        conditions of their agreement regarding the subject matter
        hereof.

      


      21.           Successors
        and Assigns This Agreement
        is binding upon and inures to the benefit of the successors and assigns of
        the
        parties hereto.  Any corporation or association into which the
        Collateral Agent may be merged or converted or with which it may be
        consolidated, or any corporation or association resulting from any merger,
        conversion or consolidation to which the Collateral Agent shall be a party,
        or
        any corporation or association to which all or substantially all of the
        corporate trust business of the Collateral Agent may be sold or otherwise
        transferred, shall be the successor collateral agent hereunder without any
        further act.

      


      22.           Attorneys
        Fees and Disbursements In
        the event of any dispute concerning the meaning or interpretation of this
        Agreement that results in litigation, or in the event of any litigation by
        a
        party to enforce the provisions hereof, the prevailing party shall be entitled
        to recover from the non-prevailing party or parties its reasonable attorneys
        fees and disbursements, and any actual court costs incurred.

      


      23.           Counterparts;
        Telefacsimile Execution This Agreement may
        be executed and
        delivered in counterparts and shall be effective when each party has delivered
        its counterpart signature, but all counterparts taken together shall be deemed
        a
        single original agreement.  Delivery of an executed counterpart of the
        signature pages to this Agreement by telefacsimile shall be equally as effective
        as delivery of a manually executed counterpart of the signature pages to
        this
        Agreement.  Any party delivering an executed counterpart of the
        signature pages to this Agreement by telefacsimile shall thereafter also
        promptly deliver a manually executed counterpart of this Agreement but the
        failure to deliver such manually executed counterpart shall not affect the
        validity, enforceability, and binding effect of this
        Agreement.

      


      24.           Expenses
        of
        Collateral Agent The
        Company hereby agrees to reimburse the Collateral Agent on demand for any
        reasonable out-of-pocket costs and expenses incurred by the Collateral Agent
        in
        connection with the execution, delivery, performance, amendment, or enforcement
        of this Agreement or any of the Transaction Documents, or in connection with
        the
        creation, attachment, perfection, release, termination, enforcement, or
        foreclosure of any lien or security interest on any of the Collateral, including
        any costs and expenses incurred in connection with any aspect of any bankruptcy
        or insolvency proceeding affecting the Company, and including reasonable
        fees
        and disbursements of attorneys, accountants, consultants, and outside advisors
        and experts, and other out-of-pocket expenditures made pursuant to or permitted
        by this Agreement or the Transaction Documents.


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      25.           Indemnification
        of Collateral Agent by the Company In addition to the
        payment of expenses
        pursuant to the preceding section of this Agreement, the Company agrees to
        indemnify, defend, and hold harmless the Collateral Agent and the officers,
        directors, employees and agents of the Collateral Agent (collectively the
        “Indemnitees” and individually an “Indemnitee”) from and against any and all
        actions, causes of action, suits, losses, liabilities, and damages, and expenses
        (including reasonable attorneys fees and disbursements) in connection therewith
        which may be imposed on, incurred by, or asserted against such Indemnitee,
        in
        any manner relating to or arising out of the actions or inactions of the
        Collateral Agent with respect to this Agreement or the Transaction Documents,
        or
        the consummation of the transactions contemplated hereby and thereby (the
        “Indemnified Liabilities”); provided, however, that the Company shall not have
        any obligation hereunder with respect to Indemnified Liabilities of any
        Indemnitee arising from the gross negligence or willful misconduct of such
        Indemnitee.  In connection with any matter as to which any Indemnitee
        is entitled to be indemnified hereunder, such Indemnitee will endeavor to
        give
        written notice thereof in reasonable detail to the Company as soon as
        practicable, provided that any failure to give such notice shall not vitiate
        or
        void the indemnities provided for herein.  If any investigative,
        judicial, or administrative proceeding arising from any of the foregoing
        is
        brought against any Indemnitee indemnified pursuant to this section, the
        Company, to the extent and in the manner directed by the Indemnitee or intended
        Indemnitee, will resist and defend such action, suit, or proceeding or cause
        the
        same to be resisted and defended by counsel designated by the Company (which
        counsel shall be reasonably satisfactory to the
        Indemnitee).  Alternatively, the Collateral Agent may at its option
        have separate counsel of its own choosing and the Company shall pay the
        reasonable fees and expenses of such counsel; provided
        that the Company shall
        not
        be required to pay such fees and expenses if it assumes the Collateral Agent’s
        defense and there is no conflict of interest between or alternative defenses
        between the Company and the Collateral Agent in connection with such defense
        as
        reasonably determined by the Collateral Agent.  Each Indemnitee will
        use its best efforts to cooperate in the defense of any such action, writ,
        or
        proceeding.  To the extent that the undertaking to indemnify, pay, and
        hold harmless set forth in this section may be unenforceable because it is
        violative of any law or public policy, the Company shall make the maximum
        contribution to the payment and satisfaction of each of the Indemnified
        Liabilities that is permissible under the applicable law.  The
        obligations of the Company under this section shall survive the resignation
        and
        removal of the Collateral Agent and the termination of this Agreement and
        the
        Transaction Documents and the discharge of the Company’s other obligations
        hereunder and thereunder.  The indemnities set forth herein are
        intended to include indemnification against the stated matters notwithstanding
        the fact that such matters resulted from the negligence (other than gross
        negligence) of an Indemnitee.

      


      Collateral
        may be released from the Lien and security interest created by the Security
        Documents at any time or from time to time in accordance with the provisions
        of
        the Transaction Documents and as provided hereby.


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      Collateral
        may be released from the Lien and security interest created by the Security
        Documents at any time or from time to time upon the request of the Company
        in
        accordance with, and subject to the terms of, the Security Documents (including,
        without limitation, any required consent of the Buyers). Any such Company
        request to release Collateral will be accompanied by a certificate by an
        officer
        of the Company, upon which the Collateral Agent may conclusively rely,
        certifying that all conditions under the Security Documents have been met
        and
        such release of Collateral does not violate any provisions of the Security
        Documents.

      


      


      


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      IN
        WITNESS WHEREOF, the
        parties hereto have entered into this Agreement as of the date first set
        forth
        above, intending to be legally bound hereby.

      


      
        	 	
                COLLATERAL
                  AGENT

              	 
	 	 	 	 
	 	
                THE
                  BANK OF NEW YORK, as Collateral Agent

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 	 
	 	
                Title:

              	 	 
	 	 	 	 
	 	 	 	 
	 	
                BUYER

              	 
	 	 	 	 
	 	
                HIGHBRIDGE
                  INTERNATIONAL LLC,

              	 
	 	
                as
                  a Buyer

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 	 
	 	
                Title:

              	 	 


      


      
        
          
          

        

        
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      ACKNOWLEDGMENT,
        CONSENT, AND
        AGREEMENT TO BE BOUND

      


      By
        executing this Acknowledgement, Consent, and Agreement to be Bound, the
        undersigned acknowledges and consents to the foregoing Collateral Agency
        Agreement (the “Agreement”) and
        agrees to be bound by the provisions thereof.  All initially
        capitalized terms used herein but not defined herein shall have the respective
        meanings ascribed thereto in the Agreement.  The undersigned hereby
        agrees that the terms of the Agreement shall not give it any substantive
        rights
        vis-a-vis the Collateral Agent or any Buyer.  If any one or more of
        the Collateral Agent or any Buyer shall enforce its rights or remedies in
        violation of the terms of the Agreement, the undersigned shall not have the
        right to assert such violation as a defense against the Collateral Agent
        or any
        Buyer, as the case may be, or assert such violation as a counterclaim or
        basis
        for set-off or recoupment.

      


      


      
        	 	
                ENTERCONNECT
                  INC.,

              	 
	 	
                a
                  Nevada corporation

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 	 
	 	 	 	 
	 	
                Title:

              	 	 


      

       

       

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