Document:

f8k051012ex4v_rvue.htm

Exhibit 4.5

 

SECURITY AGREEMENT

This Security Agreement (this “Agreement”) is made as of May 11, 2012 by and among rVue Holdings, Inc., a Nevada Corporation (the “Company”), Theresa M. Roche, as the collateral agent (the “Collateral Agent”) acting in the manner and to the extent described in the Collateral Agent Agreement (hereinafter defined) for the benefit of the noteholder of the Company identified on Schedule A hereto (the “Noteholder”), as well as the Noteholder.

RECITALS

WHEREAS, the Noteholder identified on Schedule A and the noteholders identified on Schedule B hereto (collectively, the “Noteholders”) have purchased secured convertible promissory notes from the Company (the “Notes”) in connection with the Company’s offering of up to One Million Seven Hundred Seventy Five Thousand Dollars ($1,775,000) in secured convertible promissory notes pursuant to that certain Promissory Note Purchase Agreement dated as of the date hereof and dated as of January 12, 2012 by and among the Company and the Noteholders (the “Purchase Agreement”);

WHEREAS, as a condition to the purchase of the Notes and as security for the performance by the Company of its obligations under the Notes, including the payment of the interest and principal of the Notes, the Company has agreed to grant a security interest in the Collateral (hereinafter defined) in favor of the Noteholders as provided herein; and

WHEREAS, the Noteholders have appointed the Collateral Agent to act on the Noteholders’ behalf with respect to the Collateral, pursuant to the terms and conditions of that certain Collateral Agent Agreement dated as of the date hereof by and among the Collateral Agent and the Noteholders (the “Collateral Agent Agreement”).

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.  Grant of Security Interests.  In order to secure the payment and the performance of all the Obligations (as defined below) of the Company, subject to Section 11 of this Agreement, the Company hereby grants and conveys to the Noteholders a continuing first priority lien security interest in the following:

All of the tangible assets of the Company and its operating subsidiaries, if any, of every kind and nature including, without limitation, all accounts, equipment, accessions, fixtures, inventory, goods, investment property, chattel paper, instruments, documents, rights to proceeds under letters of credit, letter-of-credit rights, supporting obligations, commercial tort claims, deposit accounts (including money, cash and cash equivalents), and all of the intangible assets of the Company and its operating subsidiaries, if any, including, without limitation, general intangibles, payment intangibles and software of the Company and any of its operating subsidiaries and all “Intellectual Property” (as defined below) used in connection with the operation of the Company’s business and any of its operating subsidiaries’ businesses, wherever located, now owned or hereafter acquired (hereinafter collectively called the “Collateral”).

 

  

  

  

 

For the purposes of this Agreement, the term “Obligations” means: (i) all amounts (whether principal, interest or otherwise) at any time due and owing by the Company to the Noteholders under the Notes; (ii) all other debts, liabilities, duties and/or obligations of the Company to the Noteholders arising prior to, on or after the date of this Agreement, that arise under or in connection with the Notes; (iii) all costs and expenses incurred by the Noteholders in the collection of any of the indebtedness described in this sentence or in connection with the enforcement of any of the duties and obligations of the Company to the Noteholders under the Notes, including all court costs and expenses and all reasonable attorneys’ fees and expenses; and (iv) all future advances made by the Noteholders for the maintenance, protection, preservation or enforcement of, or realization upon, the Collateral or any portion of the Collateral.  For purposes of this Agreement, the term “Intellectual Property” means (A) inventions, ideas or conceptions of potentially patentable subject matter, whether or not patentable, whether or not reduced to practice, whether or not yet made the subject of a pending patent application or applications, (B) patents and patent applications (including any continuations, continuations-in-part, divisionals, reissues, renewals and applications for any of the foregoing) ((A) and (B) collectively, “Patents”), (C) trademarks, service marks, trade dress, designs, logos, trade names, corporate names and general intangibles of like nature, whether or not registered, including all common law rights and registrations and applications for registration thereof, together with all goodwill relating to the foregoing (collectively, “Trademarks”), (D) copyrights, whether or not registered, and registrations and applications for registration thereof, and all rights therein provided by multinational treaties or conventions (collectively, “Copyrights”), (E) trade secrets and confidential, technical or business information (including, without limitation, ideas, formulas and compositions), (F) technology (including, without limitation, know-how and show-how), production processes and techniques, research and development information, drawings, specifications, designs, sketches, design archives, plans, proposals, technical data, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, whether or not confidential, whether current or historical, (G) all rights to obtain and apply for Patents, and to register Trademarks and Copyrights, (H) all rights to sue, recover and retain damages (and costs and attorneys’ fees) for present and past infringement of any of the Intellectual Property rights hereinabove set out, and (I) all common law rights with respect to the Intellectual Property hereinabove set out.

2.  Filing; Further Assurances.  The Company will, at its own expense, execute, deliver, file and record (in such manner and form as the Collateral Agent may require), and hereby expressly permits and authorizes the Collateral Agent to file and record, any financing statements (including any amendments and continuations), any photographic or other reproduction of any financing statement (including any amendments and continuations) or this Agreement (which shall be sufficient as a financing statement hereunder), any specific assignments or other paper that may be reasonably necessary or desirable, or that the Collateral Agent may reasonably request, in order to create, preserve, perfect or validate any security interests granted pursuant to Section 1 of this Agreement (the “Security Interests”) or to enable the Collateral Agent to exercise and enforce the Noteholders’ rights hereunder with respect to any of the Collateral.  The Company shall pay all filing costs associated with perfection of interests created under and filings as a result of the issuance of the Notes and this Agreement.

 

  

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3.  Representations and Warranties of the Company.  The Company hereby represents and warrants to the Noteholders that:

(a)           the Company is the owner of the Collateral free from any lien, security interest or encumbrance;

(b)           no financing statement covering the Collateral is on file in any public office, other than the financing statements filed pursuant to this Agreement;

(c)           this Agreement, coupled with the filing of appropriate UCC financing statements, creates in favor of the Noteholders a valid and perfected first priority security interest in all of the Collateral;

(d)           the Company is not subject to any voluntary or involuntary petition under the federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent or similar officer by a court for its business or property;

(e)           there is no action, suit, investigation or proceeding (or any basis therefor) pending against, or to the knowledge of the Company, threatened against or affecting, any of the Collateral, before any court or arbitrator or any governmental body, agency or official; and

(f)            to the knowledge of the Company, there is no material fact directly relating to the business, operations, condition or prospects of the Company (including any competitive developments but other than facts which relate to general economic or industry trends or conditions) that materially adversely affects the same that has not been disclosed to Noteholders.

Section 4.  Covenants of the Company.  The Company hereby covenants and agrees with Noteholders that the Company:

(a)           will defend the Collateral against all claims and demands of all persons at any time claiming any interest therein;

(b)           will promptly pay any and all taxes, assessments, maintenance fees and governmental charges upon the Collateral prior to the date penalties are attached thereto, except to the extent that such taxes, assessments, maintenance fees and charges shall be contested in good faith by the Company;

(c)           will immediately notify the Collateral Agent of any event causing a substantial loss or diminution in the value of all or any material part of the Collateral and the amount or an estimate of the amount of such loss or diminution;

  

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(d)          will keep the Collateral free from any additional lien, security interest or encumbrance and in good order and repair, reasonable wear and tear excepted, and will not waste or destroy the Collateral or any part thereof;

(e)          will not use the Collateral in violation of any law, statute or ordinance;

(f)           will cooperate, cause or assist the Collateral Agent to preserve and perfect the Noteholders’ security interest in any of the Collateral, including but not limited to the Collateral Agent’s execution, filing or recordation of any documents with the United States Patent and Trademark Office that the Collateral Agent deems necessary in order to perfect the Noteholders’ security interest in the Intellectual Property of the Company and the Company’s execution, filing or recordation of any UCC-3’s  or such other instruments and documents promptly terminating any subsequent liens on the Collateral in order to preserve and protect the priority of the Noteholders’ security interest in the Collateral prior to the rights of all third persons and entities; and

(g)          grants to the Collateral Agent on behalf of the Noteholders a power of attorney for the sole and limited purpose of executing any documents on behalf of the Company which the Noteholders deem reasonably necessary to perfect their security interest in the Collateral (such power, coupled with an interest, is irrevocable until such time as the Obligations hereby secured are satisfied in full).

Section 5.  Records Relating to Collateral.  The Company will keep its records concerning the Collateral at the Company’s office located at 100 N.E. 3rd Ave, Suite 200, Ft Lauderdale, FL 33301, or at such other place or places of business or residence as the Collateral Agent may approve in writing, which approval shall not be unreasonably withheld.  The Company will hold and preserve such records and will permit the Collateral Agent, as representative of the Noteholders, at any time during normal business hours to examine and inspect the Collateral and to make abstracts from such records, and will furnish to the Collateral Agent such information and reports regarding the Collateral as the Collateral Agent and/or the Noteholders may from time to time reasonably request.

Section 6.  General Authority.  The Company hereby conditionally appoints the Collateral Agent, or any successor of the Collateral Agent, on behalf of the Noteholders, the Company’s lawful attorney-in-fact, with full power of substitution, in the name of the Company, for the sole use and benefit of the Noteholders, at the Company’s expense, to exercise all of the following powers with respect to the Collateral upon an Event of Default hereunder:

(a)          to demand, sue for, collect, receive and give acquittance for all monies due or to become due;

(b)          to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto;

(c)          to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if the Noteholders were the absolute owner thereof;

 

  

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(d)           to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; and

(e)           to discharge any taxes, liens, security interests or other encumbrances at any time placed thereon.

Section 7.  Events of Default.  The Company shall be in default under this Agreement upon the occurrence of any one of the following events (herein referred to as an “Event of Default”):

(a)           default by the Company in the due observance or performance of any material covenant or agreement contained herein or breach by the Company of any material representation or warranty herein contained; or

(b)           the occurrence of any default by the Company under the provisions of any of the Notes, the Purchase Agreement or any other document now or hereafter evidencing any of the Obligations or securing any of the Obligations.

So long as the Company is not in default under the terms of this Agreement, the Company shall have full right to own, utilize and possess the Collateral free from any interference or exercise of authority over such Collateral by the Noteholders.

Section 8.  Remedies Upon Event of Default.  If any Event of Default shall have occurred and is continuing, the Collateral Agent, on behalf of the Noteholders may exercise all the rights and remedies of a secured party under the Uniform Commercial Code. The Collateral Agent, on behalf of the Noteholders may require the Company to assemble all or any part of the Collateral and make it available to the Noteholders at a place to be designated by the Collateral Agent, on behalf of the Noteholders, which is reasonably convenient.  The Collateral Agent, on behalf of the Noteholders shall give the Company thirty (30) days written notice of its intention to make any public or private sale of Collateral, which notice, in case of a public sale, shall state the time and place fixed for such sale.  At any such sale, the Collateral may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent, on behalf of the Noteholders may determine.  The Collateral Agent, on behalf of the Noteholders, shall not be obligated to make any such sale pursuant to any such notice.  The Collateral Agent, on behalf of the Noteholders may, without 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 the sale, and such sale may be made at any time or place to which the same may be adjourned.  The Collateral Agent, on behalf of the Noteholders, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.

Section 9.  Application of Collateral and Proceeds.  The proceeds of any sale of, or other realization upon, all or any part of the Collateral shall be applied in the following order of priorities:  (a) first, to pay the expenses of such sale or other realization and all expenses, liabilities and advances incurred or made by the Collateral Agent and the Noteholders in connection therewith, and any other un-reimbursed expenses for which the Collateral Agent and the Noteholders are to be reimbursed pursuant to this Agreement; (b) second, to the Noteholders in proportion to their respective interests in the Obligations; and (c) finally, to pay to the Company, or its successors or assigns, or as a court of competent jurisdiction may direct, any surplus then remaining from such proceeds.

  

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Section 10.  Expenses.  The Company will forthwith upon demand pay to the Collateral Agent or the Noteholders, as applicable:

(a)           the amount of any taxes which the Collateral Agent or the Noteholders may have been required to pay by reason of the Security Interests (including any applicable transfer taxes) or to free any of the Collateral from any lien thereon; and

(b)           the amount of any and all reasonable out-of-pocket expenses, including the reasonable fees and disbursements of its counsel and of any agents not regularly in its employ, which the Collateral Agent, on behalf of the Noteholders may incur in connection with (i) the collection, sale or other disposition of any of the Collateral, (ii) the exercise by the Collateral Agent, on behalf of the Noteholders of any of the powers conferred upon it hereunder, or (iii) any default on the Company’s part hereunder.

Section 11. Termination of Security Interests; Release of Collateral.  Upon the repayment of all Notes and the performance in full of all the remaining Obligations, the Obligations hereby secured shall be deemed satisfied for purposes of this Agreement, the Security Interests granted herein shall terminate and all rights to the Collateral shall revert to the Company.  Upon any such termination of the Security Interests and release of Collateral, the Collateral Agent, on behalf of Noteholders will, at the Company’s expense to the extent permitted by law, execute and deliver to the Company such documents as the Company shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may be.

Section 12.  Insurance.  To the extent the same is insurable, the Company shall keep the Collateral insured against direct loss or damage occasioned by theft, fire, extended coverage perils and such other liabilities and hazards as the Noteholders, may reasonably require, through insurers approved by the Collateral Agent, on behalf of the Noteholders, in amounts, without co-insurance, not less than the unpaid balance of the Obligations or the full replacement value, whichever is less, and shall pay the premiums when due.  The policies shall contain the standard mortgagee clause in favor of the Noteholders and a copy of all binders for such policies covering the Collateral shall be deposited with the Collateral Agent.  The Company shall promptly give notice of loss to insurance companies, the Collateral Agent and the Noteholders.  All proceeds from such insurance shall be applied, at the Collateral Agent’s option, to the installments of the Obligations in the inverse order of their maturities (without penalty for prepayment) or to the restoration of the improvements on the Collateral.  In the event of foreclosure of this Agreement or other transfer of title to the Collateral, in extinguishment of the indebtedness secured hereby, all right, title, and interest of the Company in and to any insurance then in force shall pass to the purchaser or grantee.

  

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(a) Section 13.  Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing, by certified or registered mail (postage prepaid), facsimile or personal delivery.  The addresses for such communications shall be as set forth below:

 

(i) If to the Company, at

rVue Holdings, Inc.

100 N.E. 3rd Avenue, Suite 200

Fort Lauderdale, Florida 33301

Attention: Chief Financial Officer

Fax: (954) 525-4245

With a copy to (but which shall not constitute notice to the Company):

Ellenoff Grossman & Schole LLP

150 E. 42nd Street, 11th Floor

New York, New York, 10017

Attention:  Benjamin S. Reichel, Esq.

Fax: (212) 370-7889

(ii) If to the Collateral Agent, at

 

Theresa M. Roche

C/O OAR Management

9746 S. Roberts Road

Palos Hills, IL 60465

(708) 430-1679 fax

or to such other address as any party may designate by notice complying with the terms of this Section 13.

Each such notice shall be deemed delivered:  (a) on the date delivered if by personal delivery; (b) on the date of confirmed transmission if by telex, telecopy or other telegraphic communication; and (c) on the date upon which the return receipt is signed or delivery is refused or the notice if designated by the postal authorities as not deliverable, as the case may be, if mailed.

Section 14. Waivers. No failure on the part of the Collateral Agent or the Noteholders to exercise, and no delay in exercising, and no course of dealing with respect to, any right, power or remedy under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise by the Collateral Agent or the Noteholders of any right, power or remedy under this Agreement preclude any other right, power or remedy.  The remedies in this Agreement are cumulative and are not exclusive of any other remedies provided by law.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally but only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

  

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Section 15. Governing Law; Jurisdiction. Unless otherwise defined herein, or unless the context otherwise requires, all terms used herein which are defined in the Florida Uniform Commercial Code have the meanings therein stated.  This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.  The Company hereby irrevocably consents to the jurisdiction of the United States District Court for the Southern District of Florida and any Florida state court sitting in Palm Beach County, Florida in any action or proceeding arising out of or relating to this Agreement, and hereby irrevocably agrees that all claims and disputes arising out of or relating to this Agreement may be heard and determined in such state court or, to the extent permitted by law, in such federal court.  The choice of forum set forth in this Section 15 shall not be deemed to preclude the bringing of any action by the Collateral Agent or the enforcement by the Collateral Agent of any judgment obtained in such forum in any other appropriate jurisdiction.  Each of the Company, the Noteholders, and the Collateral Agent hereby irrevocably waives, and hereby acknowledges that it is estopped from raising, the claims or defenses of lack of personal jurisdiction, improper venue or inconvenient forum to the maintenance of any such action or proceeding.

Section 16. WAIVER OF JURY TRIAL. EACH THE COMPANY, THE NOTEHOLDERS, AND THE COLLATERAL AGENT, HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THE NOTES OR THIS AGREEMENT AND ANY AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER THE COLLATERAL AGENT, THE NOTEHOLDERS OR THE COMPANY.

Section 17.  Heirs, Personal Representatives, Successors and Assigns.  All of the grants, covenants, terms, provisions and conditions herein shall apply to, bind and inure to the benefit of the heirs, personal representatives, successors and permitted assigns of the Noteholders.  None of the Company’s obligations under this Agreement may be delegated or transferred without the prior written consent of the Collateral Agent; and, any such purported delegation or transfer or attempt to delegate or transfer any of such obligations without the prior written consent of the Collateral Agent will be deemed null, void and of no force or effect.

Section 18.  Severability.  If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction.

Section 19.  Enumeration and Headings.  The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.

  

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Section 20.  Entire Agreement.  This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, relating to said subject matter.

Section 21.  Amendment.  This Agreement may not be amended or modified in any manner except by a written agreement executed by the Company, the Collateral Agent and the holders of a majority of the aggregate outstanding principal of the Notes.

Section 22.  Joinder.  Additional parties who acquire Notes may be added to this Agreement by execution and delivery of a counterpart signature page by such new party and the Company.  The execution and delivery of such signature page and the revision of Schedule A or Schedule B in connection therewith shall not constitute an amendment or waiver under this Agreement.  Such parties will constitute Noteholders under this Agreement.

Section 23.  Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement. This Agreement may be executed by facsimile or other electronic signatures.

[Signatures on Next Page]

 

  

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IN WITNESS WHEREOF, this Security Agreement has been executed by the parties hereto all as of the day and year first above written.

 

 

	 	
COMPANY:

	 
	 	 	 
	 	
rVue Holdings, Inc

	 
	 	 	 	 
	
 

	
By: 

	/s/Michael Mullarkey 	 
	 	Name:	Michael Mullarkey	 
	 	Title:	Chief Executive Officer	 

 

 

	 	
COLLATERAL AGENT:

	 
	 	 	 	 
	
 

	
By: 

	/s/Theresa M. Roche  	 
	 	 	Theresa M. Roche	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	NOTEHOLDER:	 
	 	 	 
	 	
[See attached Counterpart Signature Pages]

	 

 

  

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COUNTERPART SIGNATURE PAGE

TO SECURITY AGREEMENT

by and among

rVue Holdings, Inc,

Theresa M. Roche as collateral agent,

and

the Noteholder who execute this

Counterpart Signature Page

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

By execution of this Counterpart Signature Page, the undersigned hereby agrees to become a party to the Security Agreement, and the undersigned shall be a “Noteholder” under the Security Agreement.

	
[Individuals]

	
[Entities]

	  	
Acorn Composite Corporation

	__________________________________________ 	____________________________________ 
	
Signature

	
Name of Entity

	  	
 

By:           /s/ Robert Roche                                                                                 

	
Name:  ____________________________________                                                     

	
Name:      Robert W. Roche                                     

	  	
Title:        President                                                     

  

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SCHEDULE A

 

Noteholder

 

	
Name of Noteholder

	
Total Principal

Amount of Notes

	
Acorn Composite Corp.

	
$    300,000.00

 

  

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SCHEDULE B

 

Schedule of Noteholders who purchased Notes on January 27, 2012 and February 3, 2012

 

	
  Name of Noteholder

	
Total Principal

Amount of Notes

	
  iVue Holdings, LLC

	
$    650,000.00 

	
  Rodney D. and June A. Baber

	
$    151,775.34

	
  Rodney D. Baber IRA

	
$      50,591.78

	
  David Loppert

	
$      50,476.71

	
  Jason Kates

	
$      10,095.34

	
  Scott Nisula

	
$      75,127.40

	
  London Family Trust

	
$    200,000.00

	
  Gregory E. McGowan

	
$      35,000.00

	  	  
	
     Total

	
   $ 1,223,066.57

13f8k051012ex4vi_rvue.htm

Exhibit 4.6

 

COLLATERAL AGENT AGREEMENT

This Collateral Agent Agreement (this “Agreement”) is made as May 11, 2012, by and among Theresa M. Roche, as the collateral agent (the “Collateral Agent”), and the secured noteholder of rVue Holdings, Inc., a Nevada corporation (the “Company”), identified on Schedule A hereto (the “Noteholder”).

RECITALS

WHEREAS, the Noteholder identified on Schedule A and the noteholders identified on Schedule B hereto (collectively, the “Noteholders”) have purchased secured convertible promissory notes from the Company (the “Notes”) in connection with the Company’s offering of up to One Million Seven Hundred Seventy Five Thousand Dollars ($1,775,000) in secured convertible promissory notes pursuant to that certain Promissory Note Purchase Agreement dated as of the date hereof and dated as of January 12, 2012 by and among the Company and the Noteholders (the “Purchase Agreement”);

WHEREAS, as a condition to the purchase of the Notes and as security for the performance by the Company of its obligations under the Notes, the Company, the Collateral Agent and the Noteholders have entered into a Security Agreement dated as of the date hereof (the “Security Agreement”) whereby the Company agreed to grant a security interest in the Collateral (as defined in the Security Agreement) in favor of the Noteholders; and

WHEREAS, in order to provide for the orderly administration of such Collateral, the Noteholders have appointed the Collateral Agent to act on the Noteholders’ behalf with respect to the Collateral, and the Collateral Agent has agreed to accept such appointment, upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Appointment of the Collateral Agent. The Noteholders hereby appoint the Collateral Agent (and the Collateral Agent hereby accepts such appointment) to take any action including, without limitation, the registration of any Collateral in the name of the Collateral Agent or its nominees upon and during the continuance of an Event of Default (as defined in the Security Agreement), the exercise of voting rights, if any, upon the occurrence and during the continuance of an Event of Default, the application of any cash Collateral received by the Collateral Agent to the payment of the Obligations, the making of any demand under the Security Agreement, the exercise of any remedies given to the Collateral Agent pursuant to the Security Agreement and the exercise of any authority pursuant to the appointment of the Collateral Agent as an attorney-in-fact of the Company pursuant to the Security Agreement that the Collateral Agent deems necessary or proper for the administration of the Collateral.  Upon disposition of the Collateral in accordance with the Security Agreement, the Collateral Agent shall promptly distribute any cash or Collateral in accordance with the Security Agreement.  The Collateral Agent will not be required to act hereunder in connection with the Notes, other than as specified in this Agreement and the Security Agreement.

 

  

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2.           Collateral. The Collateral Agent hereby acknowledges that any Collateral held by the Collateral Agent is held for the benefit of the Noteholders in accordance with this Agreement and the Security Agreement. The Collateral Agent is to distribute any proceeds received from the Collateral, which are distributable to the Noteholders in proportion to their respective interests in the Obligations as defined in the Security Agreement, in accordance with the Security Agreement.

3.           Action by the Majority in Interest.

(a)           Certain Actions.  Each of the Noteholders hereby covenants and agrees that only a “Majority in Interest” (as hereinafter defined) shall have the right, but not the obligation, to undertake the following actions (it being expressly understood that less than a Majority in Interest hereby expressly waive the following rights that they may otherwise have under the Notes or the Security Agreement):

(i)           Acceleration.  If an Event of Default occurs, after the applicable cure period, if any, a Majority in Interest may, on behalf of all of the Noteholders, instruct the Collateral Agent to provide to the Company notice to cure such default and/or declare the unpaid principal amount of the Notes to be due and payable, together with any and all accrued interest thereon and all costs payable pursuant to such Notes;

(ii)           Enforcement.  Upon the occurrence of any Event of Default after the applicable cure period, if any, a Majority in Interest may instruct the Collateral Agent to proceed to protect, exercise and enforce, on behalf of all of the Noteholders, their rights and remedies under the Security Agreement against the Company, and such other rights and remedies as are provided by law or equity; and

(iii)           Waiver of Past Defaults.  A Majority in Interest may instruct the Collateral Agent to waive any Event of Default by written notice to the Company, and the other Noteholders, but not waive damages or default interest accrued until the effective date of such waiver.

(b)           Permitted Subordination.  A Majority in Interest may instruct the Collateral Agent to agree to subordinate any Collateral to any claim and may enter into any agreement with the Company to evidence such subordination; provided, however, that subsequent to any such subordination, each Note shall remain pari passu with the other Notes held by the Noteholders.

(c)           Further Actions.  A Majority in Interest may instruct the Collateral Agent to take any action that it may take under this Agreement by instructing the Collateral Agent in writing to take such action on behalf of all of the Noteholders.

 

  

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(d)           Majority in Interest.  For so long as any obligations remain outstanding on the Notes, “Majority in Interest” for the purposes of this Agreement shall mean the Noteholders who hold more than fifty percent (50%) of the aggregate outstanding principal amount of the Notes at the time that a particular event occurs.

4.           Power of Attorney.

(a)           To effectuate the terms and provisions hereof, the Noteholders hereby appoint the Collateral Agent as their attorney-in-fact (and the Collateral Agent hereby accepts such appointment) for the purpose of carrying out the provisions of this Agreement including, without limitation, taking any action on behalf of, or at the instruction of, the Majority in Interest at the written direction of the Majority in Interest and executing any consent authorized pursuant to this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable (and lawful) to accomplish the purposes hereof.

(b)           All acts done under the foregoing authorization are hereby ratified and approved and neither the Collateral Agent nor any designee nor agent thereof shall be liable for any acts of commission or omission, for any error of judgment, for any mistake of fact or law except for acts of gross negligence or willful or wanton misconduct.

(c)           This power of attorney, being coupled with an interest, is irrevocable while the Security Agreement remains in effect.

5.           Expenses of the Collateral Agent.  The Noteholders shall pay any and all reasonable costs and expenses incurred by the Collateral Agent, including, without limitation, reasonable costs and expenses relating to all waivers, releases, discharges, satisfactions, modifications and amendments of this Agreement, the administration and holding of the Collateral, insurance expenses, and the enforcement, protection and adjudication of the parties' rights hereunder by the Collateral Agent, including, without limitation, the reasonable disbursements, expenses and fees of the attorneys the Collateral Agent may retain, if any, in proportion to their holdings of the Notes.

6.           Reliance on Documents and Experts.  The Collateral Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, statement, paper, document, writing or communication (which may be by telegram, cable, telex, telecopier, email, or telephone) reasonably believed by it to be genuine and to have been signed, sent or made by the proper person or persons, and upon opinions and advice of its own legal counsel, independent public accountants and other experts selected by the Collateral Agent.

7.           Duties of the Collateral Agent; Standard of Care.

(a)           The Collateral Agent's duties are those expressly set forth in this Agreement and the Security Agreement, and the Collateral Agent hereby is authorized to perform those duties in accordance with commercially reasonable practices.  The Collateral Agent may exercise or otherwise enforce any of its rights, powers, privileges, remedies and interests under this Agreement, the Security Agreement and applicable law or perform any of its duties under this Agreement and the Security Agreement by or through its attorneys, advisors or agents.

 

  

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(b)           The Collateral Agent shall act in good faith and with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances.

(c)           Any funds held by the Collateral Agent hereunder need not be segregated from other funds except to the extent required by law.  The Collateral Agent shall be under no liability for interest on any funds received by it hereunder.

8.           Resignation.  The Collateral Agent may resign and be discharged of its duties hereunder at any time by giving written notice of such resignation to the other parties hereto, stating the date such resignation is to take effect.  Within thirty (30) days of the giving of such notice, a successor collateral agent shall be appointed by the Majority in Interest; provided, however, that if the Noteholders are unable to agree upon a successor within such time period, and notify the Collateral Agent during such period of the inability of the Noteholders to appoint a successor collateral agent, the successor collateral agent may be a person designated by the Collateral Agent, and any and all fees of such successor collateral agent shall be the joint and several obligation of the Noteholders.  The Collateral Agent shall continue to serve until the effective date of the resignation or until his successor accepts the appointment and receives the Collateral held by the Collateral Agent but shall not be obligated to take any action hereunder during such period.

9.           Exculpation.  The Collateral Agent and his attorneys, advisors and agents, shall not incur any liability whatsoever for the holding or delivering documents or for taking any other action in accordance with the terms and provisions of this Agreement, for any mistake or error in judgment, for compliance with any applicable law or any attachment, order or other directive of any court or other authority (irrespective of any conflicting term or provision of this Agreement), or for any act or omission of any other person engaged by the Collateral Agent in connection with this Agreement, unless occasioned by the exculpated person’s own gross negligence or willful or wanton misconduct; and each party hereto hereby waives any and all claims and actions whatsoever against the Collateral Agent and its officers, employees, attorneys and agents, arising out of or related directly or indirectly to any or all of the foregoing acts, omissions and circumstances.

10.           Indemnification.  The Noteholders hereby agree to indemnify, reimburse and hold harmless the Collateral Agent and his attorneys, advisors and agents, in proportion to their holdings of the Notes, from and against any and all claims, liabilities, losses and expenses that may be imposed upon, incurred by, or asserted against any of them, arising out of or related directly or indirectly to this Agreement or the Collateral, except such as are occasioned by the indemnified person’s own gross negligence or willful or wanton misconduct.

11.   Notices.  All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing (including telex, telecopy and telegraphic communication) and shall be (as elected by the person giving such notice) hand delivered by messenger or courier service (including overnight courier such as Fed Ex), telecommunicated, or mailed (airmail if international) by registered or certified mail (postage prepaid), return receipt requested, addressed to the parties as specified below:

 

  

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As to the Collateral Agent:

	
Theresa M. Roche

	 	
C/O OAR Management

	 	
9746 S. Roberts Road

	 	
Palos Hills, IL 60465

	 	
(708) 430-1679 fax

 

As to the Noteholders, to the address provided on the counterpart signature page executed by each Noteholder, or to such other address as any party may designate by notice complying with the terms of this Section 11.

Each such notice shall be deemed delivered:  (a) on the date delivered if by personal delivery; (b) on the date of confirmed transmission if by telex, telecopy or other telegraphic communication; and (c) on the date upon which the return receipt is signed or delivery is refused or the notice if designated by the postal authorities as not deliverable, as the case may be, if mailed.

12.           Waivers. No act, omission or delay by the Collateral Agent shall constitute a waiver of the Collateral Agent's rights and remedies hereunder or otherwise.  No single or partial waiver by the Collateral Agent of any default hereunder or right or remedy that it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion.

13.           Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.  The Collateral Agent and the Noteholders hereby irrevocably consent to the jurisdiction of the United States District Court for the Southern District of Florida and any Florida state court sitting in Palm Beach County, Florida in any action or proceeding arising out of or relating to this Agreement, and hereby irrevocably agree that all claims and disputes arising out of or relating to this Agreement may be heard and determined in such state court or, to the extent permitted by law, in such federal court.  The Collateral Agent and the Noteholders hereby irrevocably waive, and hereby acknowledge that they are estopped from raising, the claims or defenses of lack of personal jurisdiction, improper venue or inconvenient forum to the maintenance of any such action or proceeding.

14.   WAIVER OF JURY TRIAL. THE COLLATERAL AGENT AND THE NOTEHOLDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER THE COLLATERAL AGENT OR THE NOTEHOLDERS.

 

  

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15.   Successors and Assigns.  Whenever in this Agreement reference is made to any party, such reference shall be deemed to include the successors, assigns, heirs and legal representatives of such party.  No party hereto may transfer any rights under this Agreement, unless the transferee agrees to be bound by, and comply with all of the terms and provisions of this Agreement, as if an original signatory hereto on the date hereof.

 

16.           Severability.  If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction.

17.           Enumeration and Headings.  The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.

18.           Entire Agreement.  This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, relating to said subject matter.

19.           Amendment.  This Agreement may not be amended or modified in any manner except by a written agreement executed by the Collateral Agent and the Majority in Interest.

20.           Joinder.  Additional parties who acquire Notes may be added to this Agreement by execution and delivery of a counterpart signature page by such new party and the Collateral Agent.  The execution and delivery of such signature page and the revision of Schedule A and or Schedule B in connection therewith shall not constitute an amendment or waiver under this Agreement.  Such parties will constitute Noteholders under this Agreement.

21.           Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement. This Agreement may be executed by facsimile or other electronic signatures.

[Signatures on Next Page]

  

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IN WITNESS WHEREOF, this Collateral Agent Agreement has been executed by the parties hereto all as of the day and year first above written.

 

 

	 	COLLATERAL AGENT:	 
	 	 	 
	 	/s/ Theresa M. Roche	 
	 	Theresa M. Roche	 
	 	 	 
	 	 	 
	 	NOTEHOLDER:	 
	 	 	 
	 	[See attached Counterpart Signature Pages]	 

  

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COUNTERPART SIGNATURE PAGE

TO COLLATERAL AGENT AGREEMENT

by and among

 Theresa M. Roche, as collateral agent,

and

the Noteholders who execute this

Counterpart Signature Page

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

By execution of this Counterpart Signature Page, the undersigned hereby agrees to become a party to the Collateral Agent Agreement, and the undersigned shall be a “Noteholder” under the Collateral Agent Agreement.

 

	[Individuals]	 	[Entities]	 
	 	 	Acorn Composite Corporation	 
	 	 	 	 
	Signature	 	Name of Entity	 
	 	 	 	 	 	 
	 	 	 	
By: 

	/s/ Robert Roche	 
	Name:	 	 	Name:	Robert W. Roche	 
	 	 	 	Title:	President 	 
	 	 	 	 	 	 

 

  

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SCHEDULE A

 

Noteholder

 

	
Name of Noteholder

	 	
Total Principal

Amount of Notes

	 
	
Acorn Composite Corp.

	 	$	300,000.00	 

 

  

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SCHEDULE B

 

Schedule of Noteholders who purchased Notes on January 27, 2012 and February 3, 2012

 

	
Name of Noteholder

	 	
Total Principal

Amount of Notes

	 
	
iVue Holdings, LLC

	 	$	650,000.00	 
	
Rodney D. and June A. Baber

	 	$	151,775.34	 
	
Rodney D. Baber IRA

	 	$	50,591.78	 
	
David Loppert

	 	$	50,476.71	 
	
Jason Kates

	 	$	10,095.34	 
	
Scott Nisula

	 	$	75,127.40	 
	
London Family Trust

	 	$	200,000.00	 
	
Gregory E. McGowan

	 	$	35,000.00	 
	  	 	 	 	 
	
     Total

	 	$	1,223,066.57	 

 

 

 

 

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