Document:

Exhibit 10.02

 

ESCROW AND PLEDGE SECURITY AGREEMENT

 

ESCROW AND

PLEDGE SECURITY AGREEMENT dated as of November 4, 2002 among Zamba Corporation,

a Delaware corporation (“Debtor”), Entrx Corporation, a Delaware corporation

(“Secured Party”) and Wells Fargo Bank Minnesota, N.A., as collateral agent

(“Collateral Agent”).

 

Debtor hereby grants to Secured

Party a Security Interest in the following described property (hereinafter

referred to as “Collateral”):

 

833,333 shares

(the “Shares”) of Series A Preferred Stock of NextNet Wireless, Inc., a

Delaware corporation, and any cash, additional shares, or securities or other

property at any time and from time to time receivable or distributable in

respect of, in exchange for, in addition to, or in substitution of, such

securities, including all dividends, stock splits, stock dividends, and

distributions on or other rights in connection with such property,

 

to secure obligations to the

Secured Party pursuant to the Loan Agreement and that Secured Convertible

Promissory Note in the amount of $2,500,000 (including delivery of Shares upon

conversion of the Secured Convertible Promissory Note into Shares) of even date

herewith made by Debtor payable to Secured Party, and all renewals,

replacement, extensions, amendments and refinancings thereof (hereinafter

called “Secured Obligations”).

 

The parties hereto further

agree as follows:

 

1.             Debtor hereby represents, warrants

and agrees that it has title to the Collateral, free of all liens and

encumbrances, except the Security Interest created hereby, and has full power

and authority to execute this Escrow and Pledge Security Agreement, to perform

Debtor’s obligations hereunder, under the Loan Agreement and the Secured

Convertible Promissory Note and to subject the Collateral to the Security

Interest created hereby.  There is no

financing statement, security agreement, pledge agreement, control agreement,

option agreement, right of refusal to purchase agreement or other agreement

relating to the Collateral which grants any right in or restriction upon the

Collateral.  Debtor will not assign,

pledge, or otherwise transfer any interest in the Collateral to any party other

than the Secured Party.

 

2.             The Collateral Agent shall exercise

reasonable care in the custody and preservation of the Collateral.

 

3.             So long as no Event of Default by

Borrower under the Loan Agreement shall have occurred or no  Delivery Notice (as hereinafter defined)

shall have been received by Collateral Agent, Debtor shall be entitled to exercise

any and all voting or consensual rights and powers accruing to ownership of the

Collateral for any purpose not inconsistent with the terms of this Escrow and

Pledge Security Agreement or any agreement giving rise to any of the Secured

Obligations; provided however, any and all cash dividends paid on the

Collateral, and any and all stock or liquidating dividends, other distributions

in property, return of capital or other distributions made on or in respect of

Collateral shall be and become part of the Collateral pledged hereunder and, if

received by the Debtor, shall forthwith be delivered to the Collateral

 

 

Agent to be held as Collateral

subject to the terms of this Escrow and Pledge Security Agreement.

 

4.             No delay or failure by the Secured

Party in the exercise of any right or remedy shall constitute a waiver thereof,

and no single or partial exercise by the Secured Party of any right or remedy

shall preclude other or further exercise thereof or the exercise of any other

right or remedy.

 

5.             Debtor shall contemporaneously  deliver to the Collateral Agent, and grants

Secured Party a security interest in, all certificates, duly endorsed in blank

or accompanied by a duly executed Assignment Separate From Certificate for each

such certificate,  representing the

Collateral and any other property hereafter acquired by Debtor which represents

Collateral, to be held by the Collateral Agent as Collateral under the terms of

this Agreement.

 

6.             Debtor and Secured Party hereby

appoint                  as

Collateral Agent to hold and possess the Collateral subject to the terms hereof

and Debtor is delivering the Shares to the Collateral Agent on the date hereof,

to be held pursuant to the terms of this Agreement.

 

7.             Secured Party may give the

Collateral Agent and Debtor notice of conversion of the Secured Convertible

Promissory Note into Shares pursuant to the terms of Article VI or Section 9.2

of the Loan Agreement (the “Delivery Notice”). 

The Delivery Notice shall state the number of Shares to be delivered to

Secured Party pursuant to the conversion provisions.  Within 5 Business Days (as defined in the Loan Agreement) after

receipt of a Delivery Notice, the Collateral Agent shall, unless Debtor prior

thereto obtains a court order restraining such delivery,  deliver to Secured Party certificates duly

endorsed, or certificates with Assignments Separate From Certificates duly

endorsed, to Secured Party representing at a minimum  the Shares requested in the Delivery Notice.  If the certificates delivered to Secured

Party represent a number of Shares exceeding the number of Shares stated in the

Delivery Notice, Secured Party shall upon submission of the certificates to the

appropriate share transfer agent direct that the excess Shares be issued in the

name of Debtor but returned directly the Collateral Agent, to be retained by

Collateral Agent pursuant to the terms of this Agreement..  Collateral Agent shall return Collateral

remaining in Collateral Agent’s possession to Debtor when notified in writing

by the Secured Party and the Debtor the Secured Obligations have been paid in

full. Without limiting the foregoing, all Collateral remaining in the

possession of Collateral Agent on April 1, 2003 in excess of 250,000 shares of

Series A Preferred Stock shall be released and returned to Debtor on April 1,

2003, and any Collateral remaining in the possession of the Collateral Agent on

August 31, 2003, shall be returned to Debtor unless prior to either date Lender

obtains a court order restraining such delivery.

 

8.             The duties and responsibilities of

the Collateral Agent hereunder shall be determined solely by the express

provisions of this Agreement, and no other or further duties or

responsibilities shall be implied.  The

Collateral Agent shall not have any liability under, nor duty to inquire into,

the terms and provisions of any agreement or instructions, other than as

outlined in this Agreement.

 

9.             The Collateral Agent may rely upon

and shall be protected in acting or refraining from acting upon any written

notice, instruction or request furnished to it hereunder and believed by it to

be genuine and to have been signed or presented by the proper party or

parties.  The Collateral Agent shall be

under no duty to inquire into or investigate the validity, accuracy or 

 

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content of any such

document.  The Collateral Agent shall

have no duty to solicit any items that may be due it hereunder.

 

10.           The Collateral Agent shall not be

liable for any action taken or omitted by it in good faith unless a court of

competent jurisdiction determines that the Collateral Agent’s gross negligence,

bad faith or willful misconduct was the primary cause of any loss to any other

party hereto.  The Collateral Agent may

consult with counsel of its own choice and shall have full and complete

authorization and protection for any action taken or omitted by it hereunder in

good faith and in accordance with the opinion of such counsel.

 

11.           The Debtor and the Secured Party

shall indemnify the Collateral Agent for, and hold it harmless against, any

loss, liability or expense arising out of, or in connection with, this

Agreement and carrying out its duties hereunder, including the costs and

expenses of defending itself against any claim of liability, except in those

cases where the Collateral Agent has been guilty of negligence, bad faith or

willful misconduct.

 

12.           In the event that the Collateral

Agent is uncertain as to its duties or rights hereunder or receives

instructions, claims or demands from any party hereto that, in its opinion,

conflict with any of the provisions of this Agreement (i) the Collateral Agent

shall be entitled to refrain from taking any action and may withhold delivery

of the Collateral  until such

uncertainty is resolved or the conflicting instruction, claim or demand is

withdrawn, and its sole obligation shall be to keep safely the Collateral in

escrow until the Collateral Agent is directed otherwise by a final order or

judgment of a court of competent jurisdiction, and (ii) the Collateral Agent

shall have the right, but not the obligation, to institute a petition for

interpleader in any court of competent jurisdiction to determine the rights of

the parties hereto.  Should any such

petition for interpleader be instituted or should the Collateral Agent be

threatened with litigation or become a party to litigation or binding

arbitration in any manner whatsoever in connection with this Agreement or the

Collateral, the Collateral Agent shall be entitled to indemnification as set

forth in Section 11 hereof.

 

13.           The fees of the Collateral Agent are

set forth in Schedule 1 hereto. 

All fees of the Collateral Agent for establishing and holding the

Collateral shall be paid one-half by the Debtor and one-half by the Secured

Party.

 

14.           In the event the Collateral Agent

becomes unavailable or unwilling to continue in its appointed capacity

hereunder, the Collateral Agent may resign and be discharged from its duties or

obligations hereunder by giving notice of resignation to each of the parties

hereto, specifying a date not less than 60 days following such notice date when

such resignation will take effect; provided, however, that such

resignation shall in no event take effect before the successor to the

Collateral Agent shall have been appointed pursuant to this Section.  The Secured Party shall appoint a successor

to the Collateral Agent with the consent of the Secured Party, which consent

shall not be unreasonably withheld.  The

Collateral Agent shall promptly transfer the Collateral to such designated

successor.

 

15.           Any corporation or other entity into

which the Collateral Agent in its individual capacity may be merged or

converted or with which it may be consolidated, or any corporation or other

entity resulting from any merger, conversion or consolidation to which the

Collateral Agent in its individual capacity shall be a party, or any

corporation or other entity to which 

 

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substantially all of the

corporate trust business of the Collateral Agent in its individual capacity may

be transferred, shall be the Collateral Agent under this Agreement without

further act.

 

16.           Notices to Debtor and Secured Party

shall be given as set forth in the Loan Agreement.  Notices to Collateral Agent shall be given as set forth in the

Loan Agreement to the following address:

 

Wells Fargo

Bank Minnesota, N.A.

Attn: Tracy L.

Fix

Sixth and

Marquette Avenue

MAC N9303-110

Minneapolis,

MN. 55479

Telephone:

612-667-3623

Facsimile:

612-667-2160

 

17.           This Agreement shall be construed

under the laws of the State of Minnesota, excluding the conflict of law

provisions thereof.

 

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  Executed and

  delivered as of the first day and year set forth above.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  DEBTOR

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  ZAMBA

  CORPORATION

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By 

  	

  /s/ Michael

  H. Carrel

  	

   

  
	

   

  	

   

  	

  Its CFO

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SECURED

  PARTY

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  ENTRX

  CORPORATION

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By 

  	

  /s/ Kenneth

  W. Brimmer

  	

   

  
	

   

  	

   

  	

  Its Chairman

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  COLLATERAL

  AGENT

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Wells Fargo

  Bank Minneapolis (sic), N.A.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By 

  	

  /s/ Tracy L.

  Fix

  	

   

  
	

   

  	

   

  	

  Its Corporate Trust Officer

  	

   

  

 

5Exhibit 10.03

 

ZAMBA

CORPORATION

SECURED

CONVERTIBLE PROMISSORY NOTE

 

	

  $2,500,000.00

  	

   

  	

  November 4, 2002

  
	

   

  	

   

  	

  Minneapolis, Minnesota

  

 

For value

received, Zamba

Corporation, a Delaware corporation (“Maker”), promises to pay to Entrx

Corporation, a Delaware corporation (“Holder”), with its principal

offices located at 800 Nicollet Mall, Suite 2690, Minneapolis, Minnesota 55402,

or at such other place as Holder may from time to time designate, the principal

sum of Two Million Five Hundred Thousand and no/100 Dollars ($2,500,000.00), or

such lesser amount thereof as shall be advanced by Holder pursuant to the Loan

Agreement (“Principal Amount”), by and between Maker and Holder, as the same

may be amended, modified or restated from time to time hereafter (the “Loan Agreement”),

plus interest, as described below in this Secured Convertible Promissory Note

(the “Note”).  This Note is issued

pursuant to the terms of that certain Loan Agreement, dated of even date

herewith.  Any conflict between the

terms hereof and the Loan Agreement shall be resolved in favor of the Loan

Agreement.  Unless otherwise defined

herein, defined terms shall have the meanings ascribed to them in the Loan

Agreement.

 

This Note is

referred to in, and is entitled to the benefits of, the Loan Agreement.  The Loan Agreement, among other things, (i)

provides for the making of Advances from time to time in the aggregate amount

equal to but not in excess of the Principal Amount, the indebtedness of Maker

resulting from each such Advance being evidenced by this Note, and (ii)

contains additional provisions for acceleration of the Maturity Date upon the

happening of certain stated events.

 

Interest on any Advances outstanding shall accrue from the date thereof

at a rate of eight percent (8%) per annum, based on the actual number of days

elapsed and a 360-day year.  Interest

accrued on Advances made under this Note through the last day of each calendar

month shall be payable on the fifteenth (15th) day of the next

succeeding calendar month.

 

Subject to the terms of the Loan Agreement, the principal amount of

this Note shall be convertible into Conversion Securities on the Maturity Date.

 

The principal amount of this Note may not be prepaid by Maker

except with the prior written consent of Holder.

 

No act or omission of Holder, including, but not limited to, any

failure to exercise, or delay in exercising, any right, remedy or recourse with

respect to a particular event, shall be deemed a waiver or release of such

right, remedy or recourse.

 

Upon the occurrence of an Event of Default and at any time thereafter

during the continuation of such Event of Default, Holder and Maker may exercise

any one or more of the rights and remedies set forth in the Loan Agreement.

 

This Note is made pursuant to and shall be governed, performed,

construed and enforced according to the laws of the State of Minnesota.  Whenever Maker or Holder shall desire to

give or

 

 

serve any

notice, demand, request or other communication with respect to this Note, each

such notice, demand, request or other communication shall be made in accordance

with the notice provisions set forth in the Loan Agreement.  Any party may at any time change its address

for such notices by delivering to the other parties hereto, as aforesaid, a

notice of such change in accordance with the terms of the Loan Agreement.

 

This Note is secured by that Escrow and  Pledge Security Agreement by Maker, Holder and Collateral Agent

named therein of even date herewith (the “Pledge Agreement”).This Note, the

Loan Agreement and the Pledge Agreement, together with any other document

provided as part of the transaction described in the Loan Agreement are herein

collectively referred to as the “Loan Documents.”

 

Holder by acceptance hereof agrees to look

solely to the Collateral described in the Pledge Agreement or Loan Agreement

for the satisfaction and payment of principal under this Note. The forgoing

limitation of recourse is limited to the failure to pay principal when due

pursuant to the Note and nothing herein shall limit the liability of Maker, nor

limit the remedies available to Holder for damages or losses arising out of a

caused by the breach of any representation, warranty or covenant in any Loan

Document or Maker’s failure to perform any of its obligations under the Loan

Documents other than payment of principal when due under the Note.

 

This Note may

be transferred only as permitted by the Loan Agreement.

 

	

   

  	

  MAKER:

  
	

   

  	

   

  	

   

  
	

   

  	

  ZAMBA CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Michael H. Carrel

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Michael H. Carrel

  	

   

  
	

   

  	

   

  	

  Title:

  	

  CFO

  	

   

  
							

 

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