Document:

EXHIBIT 10.59

 

EXECUTION COPY

 

 

 

INTERCREDITOR AGREEMENT

 

among

 

AMSOUTH BANK,

As Agent and Lender,

 

 

THE BANK OF NEW YORK,

As Trustee and Subordinated Creditor

 

 

AMSOUTH BANK,

as Lender Collateral Agent

 

 

THE BANK OF NEW YORK,

as Subordinated Creditor Collateral Agent,

 

 

and, solely for the purposes stated on the
signature pages herein,

 

NEW WORLD RESTAURANT GROUP, INC.

and certain of its SUBSIDIARIES,

 

as Borrower and Active Subsidiaries

 

Dated as of July 8, 2003

 

 

 

 

INTERCREDITOR AGREEMENT

 

THIS INTERCREDITOR
AGREEMENT dated as of July 8, 2003 (this “Agreement”) is made by
and among (i) AmSouth Bank, in its capacity as senior secured lender (together
with any future holder of any Senior Liabilities (as hereinafter defined), the
“Lender”) under and pursuant to the Lender Credit Agreement (as
hereinafter defined); (ii) The Bank of New York, solely in its capacity as
trustee (together with any successor trustee, the “Subordinated Creditor”)
under and pursuant to the Subordinated Creditor Indenture (as hereinafter
defined); (iii) AmSouth Bank, in its capacity as agent for the Lender (together
with any successor agent, the “Lender Collateral Agent”) under and
pursuant to the Lender Credit Agreement; (iv) The Bank of New York, in its
capacity as Trustee, as collateral agent (together with any successor
collateral agent, the “Subordinated Creditor Collateral Agent”) under
one or more of the Subordinated Creditor Loan Documents (as hereinafter
defined); and (v) solely for the purposes stated on the signature pages herein,
New World Restaurant Group, Inc., a Delaware corporation (the “Borrower”),
and those certain subsidiaries of the Borrower party hereto (together with any
future subsidiaries of the Borrower that are not “Non-Restricted Subsidiaries”
(as defined in the Lender Credit Agreement (as hereinafter defined)), the “Active
Subsidiaries”).

 

RECITALS

 

A.            Simultaneously with the execution
and delivery of this Agreement, Borrower, Active Subsidiaries and the
Subordinated Creditor have entered into an Indenture, dated as of July 8,
2003 (as amended, modified, supplemented, extended, renewed, refunded or
refinanced from time to time, the “Subordinated Creditor Indenture”),
pursuant to which and upon the terms and conditions stated therein indebtedness
is being incurred by the Borrower (together with all other “Secured
Obligations” as defined in the Security Agreement (defined below), the “Subordinated
Indenture Indebtedness”), the repayment of which is secured by security
interests in and liens on the assets and properties (the “Collateral”)
described in the Pledge and Security Agreement (the “Security Agreement”)
and certain real property mortgages (each a “Mortgage” and together with
the Subordinated Creditor Indenture and the Security Agreement the “Subordinated
Indenture Agreements”) in favor of the Subordinated Creditor Collateral
Agent.

 

B.                                     Simultaneously
with the execution and delivery of this Agreement, the Borrower, the Active
Subsidiaries existing on the date hereof (as additional borrowers), the Lender,
the Lender Collateral Agent and AmSouth Capital Corp., as administrative agent,
have entered into a Loan and Security Agreement (as amended, modified,
supplemented, extended, renewed, refunded or refinanced from time to time, the
“Lender Credit Agreement”) pursuant to which the Lender or the Lender
Collateral Agent, as the case may be, has agreed, upon the terms and conditions
stated therein, to make loans and advances to and to issue or cause to be
issued letters of credit on account of the Borrower

 

 

and the Active Subsidiaries in
an aggregate principal amount and face amount, as the case may be, not to
exceed in the aggregate $15,000,000 (such aggregate principal and face amount,
together with all interest and fees and expenses payable thereon or with respect
thereto, and all other “Obligations” as defined in the Lender Credit Agreement
being the “Senior Loan Indebtedness”), secured by security interests in
and liens on the Collateral pursuant to the Lender Credit Agreement and the
collateral security documents executed and delivered in connection therewith,
including, without limitation, the “blocked account agreements”, the
“Mortgages”, the “Patent and Trademark Agreement” and the “Pledge Agreement” (
all as defined in the Lender Credit Agreement and all such collateral security
documents referred to herein collectively as the “Senior Security Agreements”
and together with the Lender Credit Agreement, the “Senior Loan Agreements”)
in favor of the Lender Collateral Agent.

 

C.                                     The
Borrower and the Active Subsidiaries have entered into the Security Agreement
and, to the extent applicable, the Mortgages, pursuant to which the Borrower
and the Active Subsidiaries have granted to the Subordinated Creditor
Collateral Agent for the benefit of the Subordinated Creditor and the other
“Secured Parties” (as defined in the Security Agreement) a security interest in
and lien upon the Collateral and the Borrower and the Active Subsidiaries have
entered into the Senior Loan Agreements pursuant to which the Borrowers and the
Active Subsidiaries have granted to the Lender Collateral Agent for the benefit
of the Lender a security interest in and lien upon the Lender Collateral (as
hereinafter defined).

 

D.                                    One
of the conditions of the Lender Credit Agreement is that the priority of the
security interests in and liens on the Lender Collateral securing the Senior
Liabilities be senior to the security interests in and liens on the Collateral
securing the Subordinated Liabilities (except to the limited extent of the
Subordinated Creditor Pari-Passu Liens (as hereinafter defined)), in the manner
and to the extent provided in this Agreement.

 

E.                                      The
Lender, the Subordinated Creditor, the Lender Collateral Agent and the
Subordinated Creditor Collateral Agent desire to enter into this Agreement
concerning the respective rights of the Lender, the Subordinated Creditor, the
Lender Collateral Agent and the Subordinated Creditor Collateral Agent with
respect to the priority of their respective security interests in and liens on
the Lender Collateral.

 

F.                                      The
terms of Section 10.02 of the Subordinated Creditor Indenture and Section 10.1
of the Lender Credit Agreement contemplate the execution and delivery of this
Agreement.

 

G.                                     In
order to induce the Lender to extend credit to the Borrower and the Active
Subsidiaries and for purposes of certain conditions precedent and covenants of
the Senior Loan Agreements, the Subordinated Creditor and the Subordinated
Creditor Collateral Agent hereby agree with the Lender and the Lender
Collateral Agent, and in order to induce the Subordinated Creditor to approve
the Senior Loan Indebtedness and

 

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the Lender’s and the Lender
Collateral Agent’s security interests in and liens on the Lender Collateral for
purposes of certain conditions precedent and covenants of the Subordinated
Indenture Agreements, the Lender, the Subordinated Creditor, the Lender
Collateral Agent and the Subordinated Creditor Collateral Agent hereby agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01                                Terms
Defined Above and in the Recitals. 
As used in this Agreement, the following terms shall have the respective
meanings indicated in the opening paragraph hereof and in the above Recitals:

 

“Agreement”

“Borrower”

“Collateral”

“Lender”

“Lender Credit Agreement”

“Senior Loan Indebtedness”

“Senior Security Agreements”

“Senior Loan Agreements”

“Subordinated Creditor”

“Subordinated Creditor Indenture”

“Subordinated Indenture Indebtedness” 

“Subordinated Indenture Agreements”

 

Section 1.02                                Lender
Credit Agreement Definitions.  All
capitalized terms which are used but not defined herein shall have the same
meaning as in the Lender Credit Agreement.

 

Section 1.03                                Other
Definitions.  As used in this
Agreement, the following terms shall have the meanings set forth below:

 

“Collateral
Agent” shall mean each of the Subordinated Creditor Collateral Agent and
the Lender Collateral Agent.

 

“Contingent
Indemnification Obligation” shall mean, as of the relevant date of
determination, any contingent indemnification obligation of the Borrower or any
Active Subsidiary under any Lender Loan Document with respect to any event, act
or condition that is not known to Lender or Lender Collateral Agent to exist or
have occurred as of such date of determination.

 

“Enforcement
Action” shall mean the taking of any one or more of the following actions
by the Lender, Lender Collateral Agent, Subordinated Creditor or Subordinated
Creditor Collateral Agent, as the case may be: (a) the commencement or
maintenance of

 

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any receivership or foreclosure
proceeding against, or any other sale, collection or disposition of, any Lender
Collateral or any Proceeds thereof or the commencement of an Insolvency
Proceeding; (b) the notification of any third party account debtors that such
account debtor shall make payment directly to it or any of its agents or other
Persons acting on its behalf; or (c) the exercise of  any other default rights or remedies otherwise available to it
under any of the Lender Loan Documents or Subordinated Creditor Loan Documents,
as the case may be.

 

“Fully Paid”
shall mean the payment in cash in full of all Senior Liabilities at such time
when there shall no longer be any obligation of the Lender to make advances or
issue letters of credit and there shall no longer be any letter of credit
outstanding thereunder or such letter of credit shall have been cash
collateralized in the amounts required by, and in accordance with the terms of,
the Lender Credit Agreement; provided that for purposes of this defined term
only, Senior Liabilities shall exclude all Contingent Indemnification
Obligations owing by the Borrower or any Active Subsidiary on the date all
requirements of this defined term (other than the payment of such Contingent
Indemnification Obligations) have been satisfied.

 

“Insolvency
Proceeding” shall mean any proceeding for the purposes of dissolution,
winding up, liquidation, arrangement or reorganization of the Borrower, any
Active Subsidiary or their successors or assigns, whether in bankruptcy,
insolvency, arrangement, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshaling of the assets
and liabilities of the Borrower, any Active Subsidiary or their successors or
assigns, including, without limitation, the filing of a petition by or against
Borrower or any Active Subsidiary under Title 11 of the U.S.C.

 

“Lender
Collateral” shall mean all of Borrower’s and each Active Subsidiary’s
right, title and interest in, to, and under all real and personal property and
assets of the Borrower and each Active Subsidiary, including without
limitation, all Collateral, all “Collateral” ( as defined in the Lender Credit
Agreement), all “Pledged Collateral” (as defined in the Pledge Agreement), all
“Collateral” (as defined in the Patent and Trademark Agreement and all Proceeds
and products of any of the foregoing.

 

“Lender
Collateral Agent” shall mean AmSouth Bank in its capacity as agent under
the Lender Credit Agreement and any successor or replacement Lender Collateral
Agent appointed pursuant to the terms of the Lender Credit Agreement.

 

“Lender
Loan Documents” shall mean the Senior Loan Agreements, the “Loan Documents”
as defined in the Lender Credit Agreement, the collateral documents and
instruments executed and delivered in connection therewith, and such other
agreements, instruments and certificates as defined or referred to in the
Lender Credit Agreement, as any or all of the same may be amended or supplemented
from time to time.

 

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“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction, excluding
true lease and consignment filings).

 

“Lien
Priority” shall mean with respect to any Lien of the Lender Collateral
Agent or the Subordinated Creditor Collateral Agent in the Lender Collateral,
the order of priority of such Lien as specified in Section 2.01.

 

“Loan
Documents” shall mean the Lender Loan Documents and the Subordinated
Creditor Loan Documents.

 

“Maximum
Aggregate Principal Amount” shall mean a principal amount of Senior
Liabilities equal to the greater of (x) $15 million and (y) the maximum
aggregate principal amount permitted to be incurred under clause (i) of the
defined term “Permitted Indebtedness” (as defined in the Subordinated Creditor
Indenture as in effect on the date of execution thereof).

 

“Notice of
Trigger Event” shall mean a notice given by the Requisite Party to the
Collateral Agents, stating that a Trigger Event has occurred.  A Notice of Trigger Event shall be deemed to
have been given when the notice referred to in the preceding sentence has actually
been received by a Collateral Agent and to have been rescinded when such
Collateral Agent has actually received from the notifying party a notice
withdrawing such notice.  A Notice of
Trigger Event shall be deemed to be outstanding at all times after such notice
has been given until such time, if any, as such notice has been rescinded.  The Requisite Party may rescind a Notice of
Trigger Event during an Insolvency Proceeding.

 

“Pari-Passu
Lien Recovery Allocation Percentage” shall mean, at any time, a fraction
(expressed as a percentage), the numerator of which is the lesser of (x) the
aggregate amount of unpaid fees and expenses (including attorneys’ fees) of the
Subordinated Creditor and the Subordinated Creditor Collateral Agent owing
under the Subordinated Creditor Loan Documents at such time and (y) that amount
(not less than zero) which is the excess of $40,000 over the aggregate of all
amounts paid to or for the benefit of the Subordinated Creditor or the
Subordinated Creditor Collateral Agent prior to such time from the realization,
collection or recovery of any Lender Collateral, and the denominator of which
is the sum of (x) the above numerator and (y) the outstanding Senior
Liabilities at such time.

 

“Pari-Passu
Maximum Recovery Amount” shall mean, at any time, that amount set forth in
the numerator of the defined term Pari-Passu Lien Recovery Allocation
Percentage at such time.

 

“Party”
shall mean any signatory to this Agreement.

 

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“Pledged Collateral”
shall mean any tangible property in the possession of the Lender Collateral
Agent (or its agents or bailees) in which a security interest is perfected
solely by such possession, including, without limitation, stock certificates.

 

“Proceeds”
shall mean (i) all “Proceeds” as defined in Article 9 of the Uniform
Commercial Code, (ii) whatever is recoverable or recovered when Lender
Collateral is sold, exchanged, collected, or disposed of, whether voluntarily
or involuntarily and (iii) all cash and cash equivalents or non-cash
distributions collected or generated by or from any Lender Collateral in whole
or in part in the operation of, recapitalization or reorganization of the
business of Borrower or any Active Subsidiary.

 

“Requisite
Party” shall mean AmSouth Bank, as agent, or its successors or assigns from
time to time or any future Lender Collateral Agent, until such time as all of
the Senior Liabilities shall have been indefeasibly and fully paid and/or
performed in full by the Borrower and the Active Subsidiaries and all
commitments to lend under the Lender Credit Agreement are terminated and,
thereafter, shall mean the Subordinated Creditor.

 

“Secured
Obligations” shall mean collectively, the Senior Liabilities and the
Subordinated Liabilities.

 

“Security
Documents” shall mean any instrument or agreement pursuant to which a Lien
in Lender Collateral is created or arises to secure the Senior Loan
Indebtedness or the Subordinated Indenture Indebtedness.

 

“Senior
Liabilities” shall mean all amounts owed to Lender and/or the Lender
Collateral Agent under the Lender Loan Documents or this Agreement consisting
of all Senior Loan Indebtedness, contingent or otherwise, of the Borrower and
the Active Subsidiaries to the Lender and/or the Lender Collateral Agent,
including interest, early termination fees or penalties, fees (including,
without limitation, attorneys fees), indemnification obligations, costs and
expenses both prior to and after the initiation of any Insolvency Proceeding,
and including the claims of the Lender and/or the Lender Collateral Agent in
respect of the Lender Collateral in any Insolvency Proceeding whether or not
allowed or allowable in any Insolvency Proceeding.

 

“Subordinated
Creditor Collateral Agent” shall mean The Bank of New York, in its capacity
as Trustee, as collateral agent under the Subordinated Creditor Indenture and
any successor or replacement Subordinated Creditor Collateral Agent appointed
pursuant to the terms of the Subordinated Creditor Indenture.

 

“Subordinated
Creditor Enforcement Event” shall mean the occurrence and continuance of an
“Event of Default’ under Section 6.01 of the Subordinated Creditor Indenture.

 

“Subordinated
Creditor Loan Documents” shall mean the Subordinated Indenture Agreements,
the Collateral Agreements (as defined in the Subordinated Creditor

 

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Indenture), the Subordinated
Creditor Notes, the real property mortgages referred to in the Subordinated
Creditor Indenture (now existing or hereafter negotiated, executed, delivered
and recorded), and such other agreements, instruments and certificates as
defined or referred to in the Subordinated Creditor Indenture, as any or all of
the same may be amended or supplemented from time to time.

 

“Subordinated Creditor Notes” shall mean the Notes issued to the
holders thereof pursuant to the Subordinated Creditor Indenture.

 

“Subordinated Creditor Pari-Passu Liens” shall mean Liens of the
Subordinated Creditor and the Subordinated Creditor Collateral Agent in the
Lender Collateral that shall secure solely that portion (and only that portion)
of the Subordinated Liabilities that constitute fees and expenses (including
attorneys’ fees) of the Subordinated Creditor and the Subordinated Creditor
Collateral Agent owing under the Subordinated Creditor Loan Documents in an
aggregate amount not to exceed at any time the lesser of  $40,000 and the Pari-Passu Maximum Recovery
Amount at such time (it being understood, acknowledged and agreed that (x) the
Liens of the Subordinated Creditor and the Subordinated Creditor Collateral
Agent in the Lender Collateral securing any other Subordinated Liabilities
(including, without limitation, any and all Subordinated Liabilities evidenced
by the Subordinated Creditor Notes and any portion of any fees and expenses
(including attorneys’ fees) of the Subordinated Creditor and the Subordinated
Creditor Collateral Agent owing under the Subordinated Creditor Loan Documents
in an aggregate amount in excess of the lesser of $40,000 and the Pari-Passu
Maximum Recovery Amount at the relevant time) shall be subject and subordinate
to the Liens of the Lender and Lender Collateral Agent in the Lender Collateral
and shall not constitute Subordinated Creditor Pari-Passu Liens and (y) the
maximum aggregate recovery by the Subordinated Creditor and the Subordinated
Creditor Collateral Agent from the realization of the Subordinated Creditor
Pari-Passu Liens at any time shall be the lesser of $40,000 and the Pari-Passu
Maximum Recovery Amount at such time).

 

“Subordinated Liabilities” shall mean all Subordinated Indenture
Indebtedness, contingent or otherwise, of the Borrower and the Active
Subsidiaries to the Subordinated Creditor, the Subordinated Creditor Collateral
Agent and the holders of the Subordinated Creditor Notes, including interest,
premiums, indemnities, fees (including, without limitation, attorneys fees),
costs and expenses both before and after the initiation of any Insolvency
Proceeding, and including the claims of the Subordinated Creditor in respect of
the Lender Collateral whether accrued or incurred before or after any
Insolvency Proceeding regardless of whether or not allowed or allowable in any
Insolvency Proceeding.

 

“Trigger Event” shall mean any of (a) the acceleration of
or demand for payment on the Lender Loan Documents by the Lender following the
occurrence of an Event of Default under the applicable section of the Lender
Loan Documents pursuant to the applicable section of the Lender Credit
Agreement, (b) the commencement of any action

 

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by the Lender or Lender
Collateral Agent, whether judicial or otherwise, for the enforcement of the
Lender’s or Lender Collateral Agent’s rights and remedies under any of the Loan
Documents following the acceleration of or demand for payment of the Lender
Loan Documents by the Lender, including (i) commencement of any
receivership or foreclosure proceedings against or any other sale of,
collection on or disposition of any Lender Collateral, including any
notification to third parties to make payment directly to the Lender or Lender
Collateral Agent, (ii) exercise of any right of set-off, and
(iii) the commencement of any action or proceeding against the Borrower or
any Active Subsidiary to recover all or any part of the Senior Liabilities or
(c) commencement of any Insolvency Proceeding.

 

Section 1.04                                Singular
and Plural.  All definitions herein
(whether set forth herein directly or by reference to definitions in other
documents) shall be equally applicable to both the singular and the plural
forms of the terms defined.

 

Section 1.05                                Miscellaneous.  The words “hereof,” “herein” or “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.  Article and section
references are to articles and sections of this Agreement unless otherwise
specified.  The term “including,” shall
mean “including, without limitation.”

 

ARTICLE II

 

LIEN PRIORITY

 

Section 2.01                                Agreement
to Subordinate.  Each of the
Subordinated Creditor Collateral Agent and the Subordinated Creditor hereby
agrees that the Liens of the Subordinated Creditor and the Subordinated
Creditor Collateral Agent in the Lender Collateral are and shall be subordinate
in priority of Lien to the Lender’s and the Lender Collateral Agent’s Liens in
the Lender Collateral to secure Senior Liabilities up to and not exceeding the
Maximum Aggregate Principal Amount plus the amount of all interest, early
termination fees or penalties, fees (including attorneys fees), indemnification
obligations, costs and expenses thereof whether accrued or incurred before or
after an Insolvency Proceeding and regardless of whether or not allowed or
allowable in any Insolvency Proceeding; provided that the Subordinated Creditor
Pari-Passu Liens (which Liens shall secure solely Subordinated Liabilities that
constitute fees and expenses (including attorneys’ fees) of the Subordinated
Creditor and the Subordinated Creditor Collateral Agent owing under the
Subordinated Creditor Loan Documents up to an aggregate amount not to
exceed  the lesser of $40,000 and the
Pari-Passu Maximum Recovery Amount at the relevant time) shall be pari passu in
priority with the Liens of the Lender and the Lender Collateral Agent in the
Lender Collateral (it being understood, acknowledged and agreed that the Liens
of the Subordinated Creditor and the Subordinated Creditor Collateral Agent in
the Lender Collateral securing any other Subordinated Liabilities (including,
without limitation, any and all Subordinated

 

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Liabilities evidenced by the
Subordinated Creditor Notes and any portion of any fees and expenses (including
attorneys’ fees) of the Subordinated Creditor and the Subordinated Creditor
Collateral Agent owing under the Subordinated Creditor Loan Documents in an
aggregate amount in excess of the lesser of $40,000 and the Pari-Passu Maximum
Recovery Amount at such time) shall be subject and subordinate to the Liens of
the Lender and Lender Collateral Agent in the Lender Collateral).  The subordination of Liens in favor of the
Lender and Lender Collateral Agent herein shall not be deemed to subordinate
the Subordinated Creditor’s Liens to the Liens of any other Person. It is the
intent  and the agreement of the parties
hereto that (i) except as expressly provided in the last sentence of this
Section 2.01, before the Subordinated Liabilities are paid from the Lender
Collateral, the Senior Liabilities shall be Fully Paid (or in a manner
otherwise satisfactory to the Lender in its sole and absolute discretion),
(ii) if the Lender or Lender Collateral Agent receives any non-cash
distributions or Proceeds in respect of the Lender Collateral, then, unless the
Senior Loan Agreements expressly provide to the contrary, the Lender or Lender
Collateral Agent shall hold such non-cash distributions and Proceeds as Lender
Collateral upon the terms of this Agreement until converted to cash and
thereupon distributed in accordance with this Section 2.01,
(iii) except as expressly provided in the last sentence of this Section
2.01, if the Subordinated Creditor or Subordinated Creditor Collateral Agent
receives any cash or property as Proceeds of or otherwise attributable to the Lender
Collateral, then all Lender Collateral received by the Subordinated Creditor or
the Subordinated Creditor Collateral Agent shall be turned over to the Lender
Collateral Agent to be applied to the Senior Liabilities until Fully Paid and
thereafter shall be turned over to the Subordinated Creditor Collateral Agent
to be applied to the Subordinated Liabilities until Fully Paid, and (iv) the
Lien Priority established pursuant to this Agreement shall be applicable
irrespective of the time, order or method of attachment or perfection of the
security interests of the Lender or the Lender Collateral Agent for the benefit
of the Lender or the Subordinated Creditor or the Subordinated Creditor
Collateral Agent for the benefit of the Subordinated Creditor and holders of
Subordinated Creditor Notes, the time or order of filing or recording financing
statements or other Liens or security interests with respect to the Lender
Collateral, or whether the Liens of the Lender, the Lender Collateral Agent,
the Subordinated Creditor or the Subordinated Creditor Collateral Agent or any
holder of any Secured Obligations are filed, recorded, or otherwise perfected
or perfectable in any manner.  The
Lender, the Lender Collateral Agent, the Subordinated Creditor and the Subordinated
Creditor Collateral Agent agree that in the event any such Party shall
foreclose or realize on any Lender Collateral (subject in any case to the
standstill and other provisions of this Agreement), then (i) until such time as
the Subordinated Creditor and the Subordinated Creditor Collateral Agent
receive in the aggregate from all such foreclosures and realizations on Lender
Collateral an amount equal to the lesser of $40,000 and the Pari-Passu Maximum
Recovery Amount at such time, the Subordinated Creditor and the Subordinated
Creditor Collateral Agent collectively shall be entitled to receive and retain
from the Proceeds of such foreclosure or realization that portion of the
Proceeds thereof equal to the product of (x) the Pari-Passu Lien Recovery Allocation
Percentage at the time of such foreclosure or realization and (y) the amount of
such Proceeds and the

 

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Lender and the Lender
Collateral Agent shall be entitled to receive and retain the remaining Proceeds
of such foreclosure or realization until all Senior Liabilities are Fully
Paid  (provided that in any event the
aggregate maximum amount of Lender Collateral or Proceeds that the Subordinated
Creditor or the Subordinated Creditor Collateral Agent shall be entitled to
receive and retain until the Senior Liabilities are Fully Paid is $40,000) and
(ii) at all times after clause (i) is not applicable, the Lender and the Lender
Collateral Agent shall be entitled to receive and retain all the Lender Collateral
and Proceeds until all Senior Liabilities are Fully Paid.

 

Section 2.02                                Standstill
Period.  If a Subordinated Creditor
Enforcement Event has occurred and is continuing and the Subordinated Creditor
has accelerated or demanded payment of the Subordinated Indenture Indebtedness
in accordance with the terms of the Subordinated Creditor Indenture, the
Subordinated Creditor may give the Lender and Lender Collateral Agent written
notice thereof, specifying the nature of the Subordinated Creditor Enforcement
Event in reasonable detail.  If such
Subordinated Creditor Enforcement Event is continuing for more than 30 days
after the delivery of such notice, and if the Lender or Lender Collateral Agent
has not prior to the expiration of such 30-day period notified the Subordinated
Creditor that the Lender or Lender Collateral Agent has commenced one or more
Enforcement Actions, then (and only then) the Subordinated Creditor and
Subordinated Creditor Collateral Agent may, subject to the Lien Priority and
prior application of the Lender Collateral to the Senior Liabilities (except to
the extent expressly provided otherwise in the last sentence of Section 2.01),
as provided herein, take one or more Enforcement Actions.  If Lender or Lender Collateral Agent has
taken or commenced any such Enforcement Action within such period and
thereafter discontinues such Enforcement Action and no other Enforcement Action
is then being taken by the Lender or Lender Collateral Agent, and such
Subordinated Creditor Enforcement Event is then continuing, then the
Subordinated Creditor and Subordinated Creditor Collateral Agent may, subject
to the Lien Priority and prior application of the Lender Collateral to the
Senior Liabilities (except to the extent expressly provided otherwise in the last
sentence of Section 2.01), as provided herein, take one or more Enforcement
Actions.

 

Section 2.03                                Exercise
of Rights.

 

(a)                                  Nothing
herein shall be deemed to restrict the right of the Subordinated Creditor to
accelerate or demand payment of the Subordinated Indenture Indebtedness in
accordance with the terms of the Subordinated Creditor Indenture.

 

(b)                                 The
Subordinated Creditor may make such demands or file such claims in respect of
the Subordinated Liabilities as may be necessary to prevent the waiver or bar
of such claims under applicable statutes of limitations or other statutes,
court orders or rules of procedure, but except as provided in this Section
2.03, the Subordinated Creditor shall not take any actions restricted by
Article 3 in respect of such claims until the Senior Liabilities are Fully
Paid.

 

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Section 2.04                                Priority
of Liens.  Irrespective of the order
of recording of mortgages, financing statements, security agreements or other
instruments, and irrespective of the descriptions of the Lender Collateral
contained in the Loan Documents, including any financing statements, the
Parties agree among themselves that their respective liens and security
interests in the Lender Collateral and the Proceeds shall be governed by the
Lien Priority, which shall be controlling in the event of any conflict between
this Agreement and any of the Loan Documents.

 

Section 2.05                                Notice
of Trigger Event.  The Lender agrees
that it will notify the other Parties hereto if it (i) receives actual notice
of the occurrence of a Trigger Event or (ii) has actual knowledge of a
Trigger Event arising out of the failure to pay principal, premium, interest or
reimbursement obligations, in each case not later than 30 days after the date
of any such occurrence, in accordance with Section 8.06.  The Subordinated Creditor agrees that it
will notify the other Parties hereto if it receives actual notice of the
occurrence of a Subordinated Creditor Enforcement Event not later than 30 days
after the date of any such occurrence, in accordance with Section 8.06.

 

Section 2.06                                Bailee
for Perfection.

 

(a)                                  The
Lender Collateral Agent agrees to hold the Pledged Collateral in its possession
or control (or in the possession or control of its agents or bailees) as bailee
for the Subordinated Creditor Collateral Agent solely for the purpose of
perfecting the security interest granted in such Pledged Collateral pursuant to
the Security Agreement, subject to the terms and conditions of this Section and
the other provisions of this Agreement.

 

(b)                                 Until
the Senior Liabilities are Fully Paid, the Lender Collateral Agent shall be
entitled to deal with the Pledged Collateral in accordance with the terms of
the Lender Loan Documents as if the Lien of the Subordinated Creditor and the
Subordinated Creditor Collateral Agent under the Security Agreement and all
other Subordinated Creditor Loan Documents did not exist.  The rights of the Subordinated Creditor
Collateral Agent and Subordinated Creditor shall at all times be subject to the
terms of this Agreement.

 

(c)                                  The
Lender Collateral Agent shall have no obligation whatsoever to the Subordinated
Creditor Collateral Agent or the Subordinated Creditor to assure that the
Pledged Collateral is genuine or owned by the Borrower or any Active Subsidiary
or to preserve rights or benefits of any Person except as expressly set forth
in this Section.  The duties or
responsibilities of the Lender Collateral Agent under this Section shall be
limited solely to holding the Pledged Collateral as bailee for the Subordinated
Creditor Collateral Agent for purposes of perfecting the Lien held by the
Subordinated Creditor Collateral Agent.

 

11

 

(d)                                 The
Lender Collateral Agent shall not have by reason of the Security Agreement or
this Agreement or any other document a fiduciary relationship in respect of the
Subordinated Creditor Collateral Agent or the Subordinated Creditor.

 

(e)                                  Once
the Senior Liabilities are Fully Paid, the Lender Collateral Agent shall, to
the extent permitted by applicable law, deliver to the Subordinated Creditor
Collateral Agent the Pledged Collateral together with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct.

 

Section 2.07                                Certain
Cash Delivered to Subordinated Creditor. 
This Agreement is not intended to govern, and shall not govern, the
right of the Subordinated Creditor to retain payments of cash it receives from
the Borrower to pay, when due, scheduled payments of interest and principal on
the Subordinated Creditor Notes and fees owing to the Subordinated Creditor
under the Subordinated Creditor Indenture or to reimburse the Subordinated
Creditor for costs and expenses incurred by the Subordinated Creditor in the ordinary
course of business pursuant to the terms of the Subordinated Creditor
Indenture, in each instance, so long as such payment does not constitute
Proceeds from (x) the liquidation, foreclosure, collection or other realization
on any Lender Collateral or (y) the sale, transfer, lease or other disposition
by the Borrower or any Active Subsidiary of Lender Collateral the Proceeds of
which sale, transfer, lease or other disposition are required, pursuant to the
terms of any of the Lender Loan Documents, to be paid or remitted to the Lender
or the Lender Collateral Agent.

 

Section 2.08                                Liquidation.
Dissolution. Bankruptcy.  In the
event of any Insolvency Proceeding involving the Borrower or any Active
Subsidiary:

 

(a)                                  Each
of Lender and the Lender Collateral Agent agrees not to initiate, prosecute or
participate in any claim, action or other proceeding challenging the
enforceability, validity, perfection or priority of the Subordinated
Liabilities or any liens and security interests securing the Subordinated Liabilities
other than to enforce the terms of this Agreement. Each of the Subordinated
Creditor Collateral Agent and the Subordinated Creditor agrees not to initiate,
prosecute or participate in any claim, action or other proceeding challenging
the enforceability, validity, perfection or priority of the Senior Liabilities
or any liens and security interests securing the Senior Liabilities other than
to enforce the terms of this Agreement.

 

(b)                                 Each
of the Subordinated Creditor Collateral Agent and the Subordinated Creditor
agrees that Lender and the Lender Collateral Agent may consent to the use of
cash collateral or provide financing to the Borrower and/or any one or more
Active Subsidiaries on such terms and conditions and in such amounts as Lender
and Lender Collateral Agent, in their sole discretion, may decide and, in
connection therewith, the Borrower and one or more of the Active Subsidiaries
may grant to Lender and the Lender Collateral Agent liens and security
interests upon any or all of the property of the Borrower and such Active
Subsidiaries, which liens and security interests (i) shall secure payment of
financing provided by Lender during such Insolvency

 

12

 

Proceeding and (ii) shall be
superior in priority to the liens and security interests, if any, in favor of
Subordinated Creditor and Subordinated Creditor Collateral Agent on the
property of the Borrower and such Active Subsidiaries; provided  however,
that (x) such agreement of the Subordinated Creditor Collateral Agent and the
Subordinated Creditor shall only be applicable if the aggregate maximum
outstanding principal amount of all such loans and other financing provided by
Lender secured by liens and security interests superior in priority to the
liens and security interests in favor of Subordinated Creditor and Subordinated
Creditor Collateral Agent shall not exceed $25,000,000 and (y) to the extent
such loans and other financing comply with the above requirements, each of
Subordinated Creditor and Subordinated Creditor Collateral Agent  waives any claim or objection it may now or
hereafter have arising out of Lender’s provision of such financing or consent
to such use of cash collateral. 
Notwithstanding anything herein to the contrary, Subordinated Creditor
and Subordinated Creditor Collateral Agent may assert, and neither Lender nor
Lender Collateral Agent shall oppose, any claim by Subordinated Creditor or
Subordinated Creditor Collateral Agent for “adequate protection” of its
interest under the Subordinated Liabilities in any Lender Collateral in any
Insolvency Proceeding due to diminution of value of the Subordinated Creditor’s
and Subordinated Creditor Collateral Agent’s interest in the Lender Collateral,
provided that the adequate protection sought is limited to (x)
replacement liens subject to the same priorities as set forth at subsection
2.01 hereof and (y) administrative priority claims under Section 507(a) of the Bankruptcy Code; provided
further that any failure of Subordinated Creditor and Subordinated
Creditor Collateral Agent to obtain any or all of the foregoing forms of
adequate protection shall not impair Lender and the Lender Collateral Agent’s
rights hereunder, or create any liability to Lender or the Lender Collateral
Agent with respect to such failure. 
Notwithstanding anything herein to the contrary, the Lender and the
Lender Collateral Agent may assert and bring, and neither the Subordinated
Creditor nor the Subordinated Creditor Collateral Agent shall oppose, any
motion, application, action, defense, claim or proceeding by or approved by the
Lender or the Lender Collateral Agent regarding the modification or lifting of
the automatic stay, the use of cash or the grant of adequate protection
necessary to prevent any diminution in the value of the Lender’s or Lender
Collateral Agent’s interest in the Lender Collateral or similar rights or
relief under the Bankruptcy Code with respect to the Lender Collateral.  Nothing contained in this Section 2.08 shall
constitute a commitment or agreement of the Lender or the Lender Collateral
Agent to provide any financing to the Borrower or any Active Subsidiary during
an Insolvency Proceeding.

 

(c)                                  In
an Insolvency Proceeding involving the Borrower or any Active Subsidiary, with
respect to the approval of any plan of reorganization (a “Plan”) proposed
during such Insolvency Proceeding, Subordinated Creditor and Subordinated
Creditor Collateral Agent shall be entitled to vote their claims under the
Subordinate Liabilities (the “Subordinate Claims”) in connection with any such
Plan.  Subordinated Creditor and
Subordinate Creditor Collateral Agent shall be entitled to execute, verify,
deliver and file any proofs of claim in respect of the Subordinated Claims in
connection with any such Insolvency Proceeding.

 

13

 

ARTICLE III

 

ACTIONS OF THE PARTIES

 

Section 3.01                                Limitation on Certain Actions.  Subject
to Section 2.02, so long as any of the Senior Liabilities are not Fully Paid or
any commitments under the Senior Loan Agreements remain outstanding, neither
the Subordinated Creditor nor the Subordinated Creditor Collateral Agent will,
without the consent of the Lender, take any Enforcement Actions.

 

Section 3.02                                Notices.  The Lender Collateral Agent shall provide
the Subordinated Creditor with written notice (a) not later than 15 days prior
to the Lender Collateral Agent’s disposition of Lender Collateral pursuant to
foreclosure remedies with respect to the Lender Collateral, and (b) not later
than 10 days prior to the filing by the Lender or Lender Collateral Agent of an
involuntary bankruptcy petition with respect to the Borrower or any of its
Active Subsidiaries.

 

Section 3.03                                Release
of Liens Upon Request.  Upon the
request of the Lender or the Lender Collateral Agent, each of the Subordinated
Creditor and the Subordinated Creditor Collateral Agent shall promptly release
or otherwise terminate its Lien in the Lender Collateral or any part thereof to
the extent that such Lender Collateral or any part thereof is sold or otherwise
disposed of by the Lender or the Lender Collateral Agent in accordance with the
terms of the Lender Loan Documents, and Lender and Lender Collateral Agent
agree to release or otherwise terminate their liens on the Lender Collateral so
sold or otherwise disposed of upon the consummation of such sale or other
disposition, and each of the Subordinated Creditor and the Subordinated
Creditor Collateral Agent will promptly execute, without recourse or
representation and warranty of any kind, such release documents as the Lender
or the Lender Collateral Agent may reasonably request in connection therewith
at the sole cost and expense of the Borrower or the Active Subsidiary, as
applicable.

 

Section 3.04                                Release
of Liens Under Certain Cases.  If
the Borrower or any Active Subsidiary sells, transfers or otherwise disposes of
a portion of the Lender Collateral and either (x) such sale, transfer or other
disposition is permitted by the terms of the Subordinated Creditor Indenture or
(y) the consideration for such sale, transfer or other disposition satisfies
the “fair market value” requirement in clause (i) of the first paragraph of
Section 4.15 of the Subordinated Creditor Indenture, the net cash proceeds of
such sale, transfer or other disposition are applied to the payment of the
Senior Liabilities and the commitments to lend under the Lender Credit
Agreement are permanently reduced by the amount of such payment, and, in either
instance under clause (x) or clause (y), the Lender and Lender Collateral Agent
each agrees to release its Lien on the Lender Collateral to be sold,
transferred or otherwise disposed of upon the consummation of such sale,
transfer or other disposition, then the Subordinated Creditor and the
Subordinated Creditor Collateral Agent, notwithstanding anything to the
contrary

 

14

 

contained in the Loan
Documents, each agrees to release its Lien on such Lender Collateral and shall
thereupon execute at the request of the Borrower or any such Active Subsidiary
termination statements or other Lien releases reasonably necessary to release
its Liens upon such Lender Collateral.

 

ARTICLE IV

 

ENFORCEMENT OF PRIORITIES

 

Section 4.01                                In
Furtherance of Lien Priorities.  The
Lender Collateral Agent, the Lender, the Subordinated Creditor Collateral Agent
and the Subordinated Creditor agree as follows:

 

(a)                                  Upon
any distribution of all or any of the assets of the Borrower or any Active
Subsidiary (whether in cash, securities or other property) in connection with
any Insolvency Proceeding or which otherwise would be payable or deliverable
upon or with respect to the Lender Collateral securing the Subordinated
Liabilities and the Senior Liabilities, the parties hereto agree that such
assets shall be paid or delivered by the Subordinated Creditor Collateral Agent
and/or Subordinated Creditor directly to the Lender Collateral Agent (or may be
retained by the Lender or Lender Collateral Agent) for application (in the case
of cash) to or as collateral (in the case of securities or other non-cash
property) to the payment or prepayment of the Senior Liabilities until the
Maximum Aggregate Principal Amount plus the amount of all interest, early
termination fees or penalties, fees (including attorney fees), indemnification
obligations, costs and expenses thereof whether accrued or incurred before or
after an Insolvency Proceeding and regardless of whether or not allowed or
allowable in any Insolvency Proceeding shall have been Fully Paid.  In addition, the Lender Collateral Agent
shall be permitted to retain an amount equal to the amount of obligations
(including attorneys’ fees), expense reimbursements and indemnities which the
Lender Collateral Agent in good faith estimates will become due from the Borrower
and/or the Active Subsidiaries in the future; provided that, upon the Senior
Liabilities being Fully Paid, all such retained amounts that remain unspent
shall, to the extent permitted by applicable law, be turned over to the
Subordinated Creditor.

 

(b)                                 If
any Insolvency Proceeding is commenced by or against the Borrower or any Active
Subsidiary, the Subordinated Creditor and the Subordinated Creditor Collateral
Agent, to the extent either has commenced any action permitted hereunder, shall
use their commercially reasonable efforts, at the expense of the Borrower and
Active Subsidiaries, to duly and promptly take such action as the Lender or the
Lender Collateral Agent may reasonably request (i) to collect the Proceeds
of Lender Collateral securing the Subordinated Liabilities and the Senior
Liabilities for the account of the Lender and to file appropriate claims or
proofs of claim in respect of the Subordinated Liabilities and the Senior
Liabilities and (ii) to collect and receive any and all payments or
distributions which may be payable or deliverable upon or with respect to

 

15

 

the Lender Collateral and the
Proceeds securing the Subordinated Liabilities and the Senior Liabilities and
to hold such payments or distributions in trust for the Lender to the extent
set forth herein; provided, however, the Subordinated Creditor
and the Subordinated Creditor Collateral Agent shall have no liability to the
Lender or the Lender Collateral Agent regarding the adequacy of any such
Proceeds or for any such action.

 

(c)                                  All
payments or distributions upon or with respect to the Subordinated Liabilities
which are received by the Subordinated Creditor or Subordinated Creditor
Collateral Agent contrary to the provisions of this Agreement shall be
segregated from other funds and property held by the Subordinated Creditor or
Subordinated Creditor Collateral Agent and shall be held for the Lender and
shall be forthwith paid over to the Lender Collateral Agent in the same form as
so received (with any necessary endorsement) to be applied (in the case of
cash) to or held as Lender Collateral (in the case of non-cash property or
securities) for the payment or prepayment of the Senior Liabilities in
accordance with the terms of the Lender Credit Agreement; provided, however,
after such application of Proceeds so that the Senior Liabilities are Fully
Paid to the extent of the maximum amount set forth herein (including the Lender
Collateral Agent’s holding of cash and other property as set forth in the last
sentence of Section 4.01(a)), the Lender and Lender Collateral Agent shall
segregate any remaining payments and distributions from the Lender’s and Lender
Collateral Agent’s other funds and properties and shall hold such payments and
distributions in trust for the Subordinated Creditor and shall be forthwith
paid over to the Subordinated Creditor Collateral Agent in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash)
to or held as Collateral (in the case of non-cash property or securities) for
the payment or prepayment of the Subordinated Liabilities in accordance with
the terms of the Subordinated Creditor Indenture, as further provided in
Section 8.14.

 

(d)                                 Each
of (x) the Lender, the Lender Collateral Agent, the Subordinated Creditor and
the Subordinated Creditor Collateral Agent, and (y) additionally with respect
to the obligations in favor of the Borrower and the Active Subsidiaries under
Section 3.04 hereof, the Borrower and each Active Subsidiary, is hereby
authorized to demand specific performance of this Agreement, whether or not the
Borrower or any Active Subsidiary shall have complied with any of the
provisions hereof applicable to it, at any time when any other Party shall have
failed to comply with any of the provisions of this Agreement applicable to
it.  Each of the Lender, the Lender
Collateral Agent, the Subordinated Creditor and the Subordinated Creditor
Collateral Agent hereby irrevocably waives any defense based on the adequacy of
a remedy at law, which might be asserted as a bar to such remedy of specific
performance.

 

(e)                                  This
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Senior Liabilities is rescinded or
must otherwise be returned by the Lender or the Lender Collateral Agent upon
the

 

16

 

insolvency, bankruptcy or
reorganization of the Borrower or any Active Subsidiary or otherwise, all as
though such payment had not been made.

 

ARTICLE V

 

CONCERNING THE COLLATERAL AGENTS

 

Section 5.01                                [Intentionally
omitted]

 

Section 5.02                                Recourse
of Secured Parties; Other Collateral.

 

(a)                                  Each
of the Lender and the Subordinated Creditor acknowledges and agrees that except
as provided in part (b) of this Section 5.02, (i) it shall only
have recourse to the Lender Collateral and the Proceeds through its respective
Collateral Agent and that it shall have no independent recourse to the Lender
Collateral and the Proceeds and (ii) its respective Collateral Agent shall
have no obligation to take any action, or refrain from taking any action,
except upon written instructions from the Requisite Party in accordance with
Section 5.03 hereof.

 

(b)                                 Nothing
contained herein shall restrict (i) the Lender’s right to exercise the
right of setoff, (ii) the Lender’s right to give notice under the Senior
Loan Agreements, and to apply all amounts received from the depository accounts
covered by the Senior Loan Agreements to payment of the Senior Liabilities or
(iii) except as expressly set forth herein, the Lender’s and the
Subordinated Creditor’s rights to pursue remedies, by proceedings in law and
equity, to collect principal of or interest on the Senior Liabilities or, as
the case may be, the Subordinated Liabilities or to enforce the performance of
and provisions of the Senior Liabilities or, as the case may be, the
Subordinated Liabilities as against the Borrower or any Active Subsidiary to
the extent that such remedies do not (1) seek recovery from the Lender
Collateral; (2) interfere with the Collateral Agents’ rights to take
action hereunder or under the Senior Loan Agreements and Subordinated Indenture
Agreements, respectively, or (3) contravene the written instructions of
the Requisite Party.

 

Section 5.03                                Acts
of Secured Parties.  Any request,
demand, authorization, direction, notice, consent, waiver or other action
permitted or required by this Agreement to be given or taken by the Requisite
Party, may be and, at the request of the relevant Collateral Agent, shall be
embodied in and evidenced by one or more instruments reasonably satisfactory in
form to such Collateral Agent and signed by or on behalf of the Requisite Party
and, except as otherwise expressly provided in any such instrument, any such
action shall become effective when such instrument or instruments shall have
been delivered to such Collateral Agent. 
The instrument or instruments evidencing any action (and the action
embodied therein and evidenced thereby) are sometimes referred to herein as an
“Act” of the persons signing such instrument or instruments.   Each Collateral Agent shall be entitled to
rely absolutely upon an Act of the Requisite Party if such Act purports to be
taken by or on behalf of the Requisite Party.

 

17

 

Section 5.04                                Notices.  Each Collateral Agent shall within
five (5) business days following receipt thereof furnish to each of
the Lender, Subordinated Creditor and the Borrower:

 

(a)                                  a copy of each Notice
of Trigger Event received by such Collateral Agent;

 

(b)                                 a copy of each
certificate received by such Collateral Agent rescinding a Notice of Trigger
Event; and

 

(c)                                  written notice of any
release or subordination by such Collateral Agent of any Lender Collateral.

 

Section 5.05                                Actions
Under Security Documents.  Each
Collateral Agent shall take any reasonable action under or with respect to its
Security Documents which is requested by the Requisite Party and which request
does not contravene the provisions of this Agreement.  Each Collateral Agent shall exercise or refrain from exercising
all such rights, powers and remedies as shall be available to it under its
Security Documents or any of them in accordance with any written instructions
received from the Requisite Party.  In
the absence of written instructions (which may relate to the exercise of
specific remedies or to the exercise of remedies in general) from the Requisite
Party, neither Collateral Agent shall exercise remedies available to it under
any of its Security Documents with respect to the Lender Collateral and the
Proceeds or any part thereof.

 

Section 5.06                                Limitations
on Responsibility of Collateral Agents. 
Neither Collateral Agent shall be responsible in any manner whatsoever
for the correctness of any recitals, statements, representations or warranties
contained herein or in any Loan Document, except for those made by it
herein.  Neither Collateral Agent makes
any representation as to the value or condition of the Lender Collateral or any
part thereof, as to the title of the Borrower or any Active Subsidiary to the
Lender Collateral, as to the security afforded by this Agreement or any Loan
Document or, except as set forth in Article VI, as to the validity, execution,
enforceability, legality or sufficiency of this Agreement or any Loan Document,
and neither Collateral Agent shall incur any liability or responsibility in
respect of any such matters.  Neither
Collateral Agent shall be responsible for insuring the Lender Collateral, for
the payment of taxes, charges, assessments or liens upon the Lender Collateral
or otherwise as to the maintenance of the Lender Collateral, except as provided
in the immediately following sentence when such Collateral Agent has possession
of the Lender Collateral.  Neither
Collateral Agent shall have any duty to the Borrower or to any Active
Subsidiary or to the holders of any of the Secured Obligations as to any Lender
Collateral in its possession or control or in the possession or control of any
agent or nominee of such Collateral Agent or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, except the duty to accord such of the Lender Collateral as may be in
its possession substantially the same care as it accords its own assets, the
duty to account for monies received by it and any other duties contained in its
respective Loan

 

18

 

Documents.  Neither Collateral Agent shall be
responsible for any loss suffered with respect to any investment permitted to
be made under this Agreement or its Loan Documents and shall not be responsible
for the consequences of any oversight or error of judgment whatsoever, except
that such Collateral Agent shall be liable for losses due to its willful
misconduct or gross negligence.  Neither
Collateral Agent shall be required to ascertain or inquire as to the
performance by the Borrower  or any Active
Subsidiary of any of the covenants or agreements contained herein or in any of
the Loan Documents except for such person’s own gross negligence or willful
misconduct or breach of the express terms of this Agreement or as provided by
its respective Loan Documents.  Neither
Collateral Agent nor any officer, agent or representative of either of them
shall be personally liable for any action taken or omitted to be taken by any
such person in connection with this Agreement or any Loan Document, except as
may be provided by the respective Loan Documents.  Neither Collateral Agent nor any officer, agent or representative
of either of them shall be personally liable for any action taken by any such
person in accordance with any notice given by the Requisite Party pursuant to
the terms of this Agreement.  Notwithstanding any other provision of this
Agreement to the contrary, in no event shall either Collateral Agent, the
Lender or the Subordinated Creditor be liable for special, consequential or
punitive damages.

 

Section 5.07                                Reliance
by Collateral Agent; Etc.

 

(a)                                  Whenever
in the performance of its duties under this Agreement either Collateral Agent
shall deem it necessary or desirable that a matter be proved or established
with respect to any Person in connection with the taking, suffering or omitting
of any action hereunder by such Collateral Agent, such matter may be
conclusively deemed to be proved or established by a certificate executed by an
officer of such Person, and absent gross negligence or willful misconduct, such
Collateral Agent shall have no liability with respect to any action taken,
suffered or omitted in reliance thereon.

 

(b)                                 Each
Collateral Agent may consult with counsel and shall be fully protected in
taking any action hereunder in accordance with any advice of such counsel.  Each Collateral Agent shall have the right but
not the obligation at any time to seek instructions concerning the
administration of this Agreement, the duties created hereunder, or any of the
Lender Collateral from any court of competent jurisdiction.

 

(c)                                  Each
Collateral Agent shall be fully protected in relying upon any resolution,
statement, certificate, instrument, opinion, report, notice, request, consent,
order or other paper or document which it reasonably believes to be genuine and
to have been signed or presented by the proper party or parties.  In the absence of its gross negligence or
willful misconduct, each Collateral Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions furnished to such
Collateral Agent in connection with this Agreement.

 

(d)                                 Neither
Collateral Agent shall be deemed to have actual, constructive, direct or
indirect notice or knowledge of the occurrence of any Trigger

 

19

 

Event unless and until such
Collateral Agent shall have received a Notice of Trigger Event.  Neither Collateral Agent shall have any
obligation whatsoever either prior to or after receiving such a Notice of
Trigger Event to inquire whether a Trigger Event has, in fact, occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to it and shall have no obligation,
absent written instructions from the Requisite Party, to take or omit to take
any action with respect to such Notice of Trigger Event.

 

Section 5.08                                Resignation
or Replacement of the Collateral Agent. 
Each Collateral Agent may at any time resign in accordance with the
terms of its respective Loan Documents. 
Upon the acceptance of any appointment as a Collateral Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations hereunder and under its
respective Loan Documents.  After any
retiring Collateral Agent’s resignation or removal, the provisions of this
Agreement and the Loan Documents shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Collateral Agent and any successor Collateral Agent appointed in accordance
with the respective Loan Documents shall be a “Collateral Agent” for all
purposes under this Agreement entitled to all rights, privileges and benefits
and subject to all of the duties and obligations of such Collateral Agent
hereunder.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

Each of the Lender Collateral Agent, the Subordinated Creditor
Collateral Agent, the Subordinated Creditor, the Borrower, the Lender and each
Active Subsidiary represents and warrants to the other parties hereto that
(a) the execution, delivery and performance of this Agreement
(i) have been duly authorized by all requisite corporate action on its
part and (ii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which it
is subject or any judgment, order, writ, injunction, license or permit
applicable to it and will not conflict with any provision of its corporate
charter or bylaws or any agreement or other instrument binding upon it; and
(b) this Agreement (i) has been duly executed and delivered by it, (ii)
constitutes its legal, valid and binding obligation, and (iii) is enforceable
against it in accordance with its terms. 
The Subordinated Creditor represents and warrants to the other parties
hereto that the holders of Subordinated Creditor Notes have agreed in the
Subordinated Creditor Indenture to be bound by the terms of this Agreement.

 

20

 

ARTICLE VII

 

CERTAIN INTERCREDITOR ARRANGEMENTS

 

If the
Subordinated Creditor or Subordinated Creditor Collateral Agent acquires
custody, control or possession of any Lender Collateral, other than pursuant to
the terms of this Agreement, the Subordinated Creditor or Subordinated Creditor
Collateral Agent, as the case may be, shall promptly cause such Lender
Collateral or Proceeds to be delivered to or put in the custody, possession or
control of the Lender Collateral Agent or, if the Lender Collateral Agent shall
so designate, an agent of the Lender Collateral Agent (which agent may be a
branch or affiliate of the Lender Collateral Agent) in the same form of payment
received, with appropriate endorsements, in the country in which such Lender
Collateral is held, for distribution in accordance with the provisions of
Article IV.  Until such time as the
provisions of the immediately preceding sentence have been complied with, such
party shall be deemed to hold such Lender Collateral and Proceeds in trust for
the Lender Collateral Agent. 
Notwithstanding the foregoing, if the Requisite Party receives payments
or Proceeds of Lender Collateral in the form of cash, the Requisite Party may
apply such amounts to the payment of the Senior Liabilities (until the Senior
Liabilities shall have been Fully Paid) or the Subordinated Liabilities (after
the Senior Liabilities shall have been Fully Paid).

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.01                                Rights
of Subrogation.  The Subordinated
Creditor and Subordinated Creditor Collateral Agent each agrees that no payment
or distribution to the Lender or Lender Collateral Agent pursuant to the
provisions of this Agreement shall entitle such Party to exercise any rights of
subrogation in respect thereof until the Senior Liabilities shall have been
Fully Paid.

 

Section 8.02                                Further
Assurances.  The Parties will, at
their own expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that any Party may reasonably request,
in order to protect any right or interest granted or purported to be granted
hereby or to enable either Collateral Agent or the Lender or the Subordinated
Creditor to exercise and enforce its rights and remedies hereunder; provided,
however, that no Party shall be required to pay over any payment or
distribution, execute any instruments or documents, or take any other action
referred to in this Section 8.02 to the extent that such action would
contravene any law, order or other legal requirement, and in the event of a
controversy or dispute, such Party may interplead any payment or distribution
in any court of competent jurisdiction, without further responsibility in
respect of such payment or distribution under this Section 8.02.

 

Section 8.03                                Defenses
Similar to Suretyship Defenses.  All
rights and interests of the Lender and the Lender Collateral Agent hereunder,
and all agreements and obligations of the Subordinated Creditor and
Subordinated Creditor Collateral Agent under this Agreement, shall remain in
full force and effect irrespective of:

 

21

 

(a)                                  any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Senior Liabilities, or any other amendment or waiver of or any
consent to departure from the Senior Loan Agreements, provided, however,
that this clause (a) shall not apply to, and the Subordinated Creditor Collateral
Agent’s liens and security interests in the Lender Collateral shall not be
subordinated in priority by virtue of this Agreement to the Lender Collateral
Agent’s liens and security interests therein to the extent that the principal
amount of Senior Loan Indebtedness (exclusive of interest, early termination
fees or penalties, fees (including attorneys’ fees), indemnification
obligations and costs and expenses) is increased by virtue of any amendment to
an amount in excess of the Maximum Aggregate Principal Amount, without the
express written consent of the Subordinated Creditor; or

 

(b)                                 any
exchange or release of any Lender Collateral, or any release, amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Senior Liabilities.

 

Section 8.04                                Waiver.  Except as otherwise provided herein, the
Subordinated Creditor and Subordinated Creditor Collateral Agent each hereby
waives, with respect to the Lender Collateral and the Proceeds to which the
Lien Priority hereunder relates (i) any failure, omission, delay or lack
on the part of the Lender or Lender Collateral Agent to enforce, assert or
exercise any right, power or remedy conferred on the Lender or Lender
Collateral Agent in any of the Lender Loan Documents or this Agreement or the
inability of the Lender or Lender Collateral Agent to enforce any provision of
the Lender Loan Documents or this Agreement, and (ii) without limiting the
generality of the foregoing, any requirement that the Lender or Lender
Collateral Agent protect or insure any Liens or other lien or any property
subject thereto or exhaust any right or take any action against the Borrower or
any Active Subsidiary or any other Person or any Lender Collateral.

 

Section 8.05                                Amendments,
Etc.  No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Party hereto
shall in any event be effective unless the same shall be in writing and signed
by the other Parties, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

 

Section 8.06                                Addresses
for Notices.  All demands, notices
and other communications provided for hereunder shall be in writing and, if to
the Subordinated Creditor, mailed or sent by telecopy or delivered to it,
addressed to it as follows:

 

The Bank of New York

101 Barclay Street – 8W 

New York, NY  10286

Attention: Corporate Trust Division/New World Restaurant

Telephone:  (212) 815-5733

Facsimile:  (212) 815-5707

 

22

 

if to the Subordinated Creditor
Collateral Agent, mailed, sent or delivered thereto, addressed to it as
follows:

 

The Bank of New York

101 Barclay Street – 8W

New York, NY  10286

Attention: Corporate Trust Division/New World Restaurant

Telephone:  (212) 815-5733

Facsimile:  (212) 815-5707

 

With copies
to:

 

Winston & Strawn

200 Park Avenue

New York, NY  10166

Attention: Jeffrey Elkin

Telephone:  (212) 294-6711

Facsimile:  (212) 294-4700

 

if to the Lender, mailed, sent or delivered thereto, addressed to it as
follows:

 

AmSouth Bank

c/o AmSouth Capital Corp.

350 Park Avenue, 20th 
Floor

New York, New York 10022

Attention:  

Facsimile:  (212) 935-7458

 

With copies
to:

 

Kaye Scholer LLP

425 Park Avenue

New York, New York 10022

Attention:  Albert Fenster, Esq.

Facsimile:  (212) 836-8689

 

if to the Lender Collateral Agent, mailed, sent or delivered thereto,
addressed to it as follows:

 

AmSouth Bank

c/o AmSouth Capital Corp.

350 Park Avenue, 20th 
Floor

New York, New York 10022

Attention:  

Facsimile:  (212) 935-7458

 

23

 

With copies
to:

 

Kaye Scholer LLP

425 Park Avenue

New York, New York 10022

Attention:  Albert Fenster, Esq.

Facsimile:  (212) 836-8689

 

if to Borrower or any Active Subsidiary, mailed, sent or delivered
thereto, addressed to any of them as follows:

 

New World Restaurant Group, Inc.

1687 Cole Blvd

Golden, CO 80401-3316

Attention:  Anthony Wedo

Facsimile:  (303) 568-8199

 

With copies
to:

 

Proskauer Rose LLP

1585 Broadway

New York, NY 10036-8299

Attention:  Julie Allen, Esq.

Facsimile:  (212) 969-2900

 

or as to any Party at such other address as shall be designated by such
party in a written notice to the other parties complying as to delivery with
the terms of this Section 8.06.  All
such demands, notices and other communications shall be effective, when mailed,
two business days after deposit in the mails, postage prepaid, when sent by
telecopy, when receipt is acknowledged by the receiving telecopy equipment (or
at the opening of the next business day if receipt is after normal business
hours), or when delivered, as the case may be, addressed as aforesaid; provided,
however, that notices to the Subordinated Creditor or the Subordinated
Creditor Collateral Agent shall not be deemed to have been given until actually
received by the Subordinated Creditor or the Subordinated Creditor Collateral
Agent.

 

Section 8.07                                No
Waiver, Remedies.  No failure on the
part of any Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right.  The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

 

Section 8.08                                Continuing
Agreement, Transfer of Senior Loan Agreements.  This Agreement is a continuing agreement and shall
(i) remain in full force and effect until the Senior Liabilities and,
solely for the purposes of Section 8.14, the Subordinated

 

24

 

Liabilities shall have been
Fully Paid, (ii) be binding upon the Parties and their successors and
assigns, and (iii) inure to the benefit of and be enforceable by the
Parties (in the case of the Borrower or any Active Subsidiary, only Section
3.04 shall inure to and be enforceable by it) and their respective successors,
transferees and assigns.  Without
limiting the generality of the foregoing clause (iii), the Lender or the
Subordinated Creditor may assign or otherwise transfer its Senior Liabilities
(in accordance with the terms of the Senior Loan Agreements) or Subordinated
Liabilities (in accordance with the terms of the Subordinated Creditor Loan
Documents) to any other Person (other than Borrower or any Active Subsidiary or
any affiliate of Borrower and any Active Subsidiary), and such other Person
shall thereupon become vested with all the rights and obligations in respect
thereof granted to the Lender or Subordinated Creditor, as the case may be,
herein or otherwise.

 

Section 8.09                                Governing
Law: Entire Agreement.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York except as otherwise preempted by applicable federal
law.  This Agreement constitutes the
entire agreement and understanding among the Parties with respect to the
subject matter hereof and supersedes any prior agreements, written or oral,
with respect thereto.

 

Section 8.10                                Counterparts.  This Agreement maybe executed in any number
of counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof, each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.

 

Section 8.11                                No
Third Party Beneficiary.  This
Agreement is solely for the benefit of the Lender, the Lender Collateral Agent,
the Subordinated Creditor, the Subordinated Creditor Collateral Agent and, as
to Section 3.04 only, the Borrower and each Active Subsidiary (and their permitted
assignees).  No other Person shall be
deemed to be a third-party beneficiary of this Agreement.

 

Section 8.12                                Headings.  The headings of the articles and sections of
this Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof

 

Section 8.13                                Severability.  If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement and shall not invalidate the Lien Priority or
any other priority set forth in this Agreement.

 

Section 8.14                                Payment
in Full of Senior Liabilities.  From
and after the Senior Liabilities being Fully Paid up to the Maximum Aggregate
Principal Amount plus all interest, early termination fees or penalties, fees
(including, attorneys fees), indemnification obligations (other than Contingent
Indemnification Obligations then owing), costs and expenses thereof whether
accrued or incurred before or after an Insolvency Proceeding and regardless of
whether or not allowed or allowable in any

 

25

 

Insolvency Proceeding, and the
Lender Collateral Agent having received any amounts required pursuant to the
last sentence of Section 4.01(a):

 

(a)                                  All
payments or distributions from the Borrower or any Active Subsidiary or with
respect to the Lender Collateral and the Proceeds received by the Lender or Lender
Collateral Agent shall be segregated from other funds and property held by the
Lender or Lender Collateral Agent and held in trust by the Lender or Lender
Collateral Agent for the Subordinated Creditor and Subordinated Creditor
Collateral Agent and shall be promptly paid over to the Subordinated Creditor
Collateral Agent in the same form as received (with any necessary endorsement
without recourse or warranty) to be applied to or held for the payment or
prepayment of the Subordinated Liabilities in accordance with the terms of the
Subordinated Creditor Indenture; and

 

(b)                                 The
Lender and Lender Collateral Agent will promptly execute and deliver all
further instruments and documents, and take all further acts that may be
necessary or desirable, or that the Subordinated Creditor or Subordinated
Creditor Collateral Agent may reasonably request, at the Subordinated
Creditor’s cost, to permit the Subordinated Creditor Collateral Agent to
enforce the Subordinated Liabilities or recover any Proceeds of the Lender
Collateral, provided, however, that the Lender and Lender
Collateral Agent shall not be required to pay over any payment or distribution,
execute any instruments or documents, or take any other action referred to in
this Section 8.14 to the extent that such action would contravene any law,
order or other legal requirement, and in the event of a controversy or dispute,
the Lender and Lender Collateral Agent may interplead any payment or
distribution in any court of competent jurisdiction, without further responsibility
in respect of such payment or distribution under this Section 8.14.

 

Section 8.15                                Subordinated
Creditor Trustee Status.  It is
acknowledged that the subordination and related agreements set forth herein by
the Subordinated Creditor and the Subordinated Creditor Collateral Agent are
made solely in its capacity as Trustee and as Collateral Agent under the
Subordinated Creditor Indenture and with respect to the Subordinated Creditor
Notes (and not in its individual capacity), and that the Subordinated Creditor
and the Subordinated Creditor Collateral Agent have entered into this Agreement
at the direction of the holders of the Subordinated Creditor Notes.

 

Section 8.16                                Amendments
to Loan Documents.  Each of the
Lender, the Lender Collateral Agent, the Subordinated Creditor and the
Subordinated Creditor Collateral Agent agree to provide each other with copies
of any amendments to the Loan Documents.

 

Section 8.17                                VENUE;
JURY TRIAL WAIVER.

 

(a)                                  THE
PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS

 

26

 

LOCATED IN THE CITY OF NEW YORK
OR THE SOUTHERN DISTRICT OF NEW YORK, PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY LENDER COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT LENDER COLLATERAL AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE LENDER COLLATERAL AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH LENDER
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. 
EACH PARTY HERETO WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW,
ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM  NON  CONVENIENS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE
WITH THIS SECTION 8.17.

 

(b)                                 EACH
PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY HERETO REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

Section 8.18                                No
Marshaling.  The Subordinated
Creditor and Subordinated Creditor Collateral Agent hereby agree not to assert
and hereby waive, to the fullest extent permitted by law, any right to demand,
request, plead or otherwise claim the benefit of any marshaling, appraisal,
valuation or other similar doctrine or right that may otherwise be available
under applicable law or any other similar rights a junior secured creditor
might have under applicable law.

 

Section 8.19                                Certain
Conflicts.  In the event of any
conflict between the terms of this Agreement and the terms of any Loan Document
in respect of the rights and obligations of either Collateral Agent, the terms
of this Agreement shall control.

 

27

 

IN WITNESS
WHEREOF, the Lender, the Subordinated Creditor, the Lender Collateral Agent and
the Subordinated Creditor Collateral Agent have caused this Agreement to be
duly executed and delivered as of the date first above written.

 

	
  LENDER:

  	
   

  	
  AMSOUTH BANK,

  
	
   

  	
   

  	
  solely in its capacity as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MARK McNALLY

  	
   

  
	
   

  	
   

  	
  Name: Mark McNally

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  

 

 

	
  SUBORDINATED

  CREDITOR:

  	
   

  	
  THE BANK OF NEW YORK,

  solely in its capacity as Trustee (and not individually)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MARGARET CIESMELEWSKI

  	
   

  
	
   

  	
   

  	
  Name: Margaret Ciesmelewski

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
  SUBORDINATED

  CREDITOR

  COLLATERAL

  AGENT:

  	
   

  	
  THE BANK OF NEW YORK,

  solely in its capacity as Subordinated Creditor Collateral

  Agent (and not individually)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MARGARET CIESMELEWSKI

  	
   

  
	
   

  	
   

  	
  Name: Margaret Ciesmelewski

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
  LENDER

  COLLATERAL

  AGENT:

  	
   

  	
  AMSOUTH BANK,

  solely in its capacity as Lender Collateral Agent (and not

  individually)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MARK McNALLY

  	
   

  
	
   

  	
   

  	
  Name: Mark McNally

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  

 

 

Each of the undersigned hereby (1)
acknowledges that it has received a copy of this Agreement and consents
thereto, and agrees to recognize all rights granted thereby to the Lender, the
Lender Collateral Agent, the Subordinated Creditor, the Subordinated Creditor
Collateral Agent and the Requisite Party, and will not do any act or perform
any obligation which is not in accordance with the agreements set forth in such
Agreement, (2) agrees to comply with its obligations under Sections 3.03 and
4.01(b), and (3) makes the representations and warranties applicable to it in
Article VI.

 

	
  BORROWER:

  	
  NEW WORLD RESTAURANT GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive Officer

  

 

 

	
  ACTIVE

  SUBSIDIARIES:

  	
  MANHATTAN BAGEL COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive Officer

  

 

	
   

  	
  CHESAPEAKE BAGEL FRANCHISE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive Officer

  

 

	
   

  	
  WILLOUHGBY’S INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive Officer

  

 

	
   

  	
  EINSTEIN AND NOAH CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive Officer

  

 

 

	
   

  	
  EINSTEIN/NOAH BAGEL PARTNERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive Officer

  

 

 

	
   

  	
  I. & J. BAGEL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY D. WEDO

  	
   

  
	
   

  	
  Anthony Wedo

  
	
   

  	
  Chief Executive OfficerMANUFACTURING LICENSE AGREEMENT

     THIS  AGREEMENT  made and entered into this 3rd day of September,  2003, by
and between  SKYCROSS,  INC.,  having a place of business at 300-A North  Drive,
Melbourne,  Florida 32934 ("SKYCROSS") and DIRECT2DATA TECHNOLOGIES,  A DIVISION
OF  PARKERVISION,  INC,,  having a place of  business  at 8493  Baymeadows  Way,
Jacksonville, Florida, 32256 ("LICENSEE").

                                    RECITALS

     WHEREAS,  SKYCROSS has developed  and is in possession of certain  patents,
technical  and  manufacturing   information,   software  and  other  proprietary
information related to antenna technology; and

     WHEREAS, LICENSEE desires to secure a licensee under the patents, technical
and  manufacturing  information,  software  and  other  proprietary  information
relating  to  antenna  technology  on  the  terms  and  conditions   hereinafter
contained.

     NOW  THEREFORE,  for  and in  consideration  of  the  premises  and  mutual
covenants herein contained the parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     A. "Field of Use" shall mean wireless  local area devices,  wireless  local
area network  access points and wireless  local area network  personal  computer
cards.

     B.  "Licensed  Product"  shall  mean the  antenna  manufactured  using  the
Licensed Technical Information.

     C. "Licensed  Technical  Information"  shall mean SKYCROSS trade secret and
proprietary  technical  information,  including  patents / patent  applications,
data, drawings,  operating manuals,  reports,  parts lists,  technical data, and
specifications in electronic, written, printed or non-documented form as used by
SKYCROSS  to  manufacture  the  Licensed  Product.  A list of  patented / patent
pending antenna  configurations  supported and/or covered by Licensed  Technical
Information is set forth in Appendix A.

     D. "Licensed  Patents"  shall mean the patents and  registered  designs and
applications  for  patents  and  registered  designs of SKYCROSS as set forth in
Appendix B.

     E. "Licensed  Copyrights" shall mean the copyrights of SKYCROSS  protecting
any portion of the Licensed Technical Information or the Licensed Software.

<PAGE>

     F. "Proprietary Information" is defined as any information,  either written
or oral,  originated  by or peculiarly  within the  knowledge of the  disclosing
party,  or its  suppliers,  and not generally  available to others.  Proprietary
Information shall include both business and technical information, including but
not limited  to,  business  plans,  product  plans,  proposal  plans,  technical
specifications,  test results,  presentations,  etc. Such information  should be
identified  prior to disclosure  with an appropriate  marking or  identification
such  as  "PROPRIETARY  OR  CONFIDENTIAL."  If  such  information  is  disclosed
verbally,  then in order to receive the protection  pursuant to this  Agreement,
such  Proprietary  Information  must be reduced to tangible  form  otherwise  in
compliance  with this  Agreement  and  furnished to the  receiving  party within
fifteen (15) business days of the original verbal disclosure.  Whether or not so
marked,  all  Licensed  Technical  Information  and Licensed  Software  shall be
considered Proprietary Information.

                                   ARTICLE II
                                LICENSING GRANTS

     A. Upon the terms, payments and conditions set forth herein SKYCROSS hereby
grants to LICENSEE a non-exclusive,  worldwide, paid-up and royalty free license
to practice the  inventions  covered by the claims of, and/or  described in, the
Licensed Patents, and divisionals and continuations thereof, to make, have made,
use, sell,  offer to sell,  import and maintain the Licensed  Product within the
Field of Use.

     B. Upon the terms,  payments  and  conditions  set forth  herein,  SKYCROSS
hereby grants to LICENSEE a non-exclusive,  worldwide,  paid-up and royalty free
license in the Licensed  Technical  Information,  the Licensed  Software and the
Licensed  Copyrights to make,  have made, use, sell,  offer to sell,  import and
maintain the Licensed Product within the Field of Use.

     C.  Notwithstanding the licenses granted above,  SKYCROSS retains the right
to make, have made, use, sell,  improve and maintain the Licensed  Product using
the Licensed Technical  Information and the Licensed  Copyrights and to practice
inventions covered by product or process claims of the Licensed Patents.

     D. SKYCROSS retains ownership of the Licensed Patents,  Licensed  Technical
Information,  and Licensed  Copyrights,  and all rights not expressly granted to
LICENSEE under this Agreement are hereby expressly reserved to SKYCROSS.

                                   ARTICLE III
                                   LICENSE FEE

     A. The license  fee to be paid by Licensee to SkyCross  shall be the sum of
$950,000 (nine hundred fifty thousand US dollars).  The license fee will be paid
with shares of the common stock, $.01 par value, of the Licensee,  the number of
shares to be set forth in Appendix C hereto and to be issued to SkyCross as soon
as  practicable  and  registered  all in accordance  with the provisions of such
Appendix C. Not later than 10 (ten) business days after the receipt of

                                       2
<PAGE>

the  initial  amount of  shares of common  stock,  which  amount is  subject  to
adjustment  as set  forth in  Appendix  C hereto,  SkyCross  shall  furnish  all
Licensed Technical Information.

                                   ARTICLE IV
                                     MARKING

     LICENSEE agrees to affix to each device  incorporating the Licensed Product
a legible notice reading "Patent Pending" and/or "Patent Issued".  SKYCROSS will
advise  LICENSEE of the issuance of a patent having claims covering the Licensed
Product. LICENSEE will then modify the accompanying documentation to include the
issued patent number.

                                    ARTICLE V
                            DURATION AND TERMINATION

     A.  The  term  of  this  Agreement  shall  be  perpetual  unless  otherwise
terminated as hereinafter set forth:

          (1) If  LICENSEE  shall at any time  default in  rendering  any of the
statements  required  hereunder,  or  in  the  payment  of  any  monies  payable
hereunder,  and such  default  is not  cured  within  fifteen  (15)  days  after
receiving  written notice  thereof from  SKYCROSS,  then SKYCROSS shall have the
right to terminate  this  Agreement by giving  written  notice of termination to
LICENSEE;  this Agreement  thereby being terminated  fifteen (15) days after the
notice of  termination  is mailed to LICENSEE.  LICENSEE shall have the right to
cure any such  default  up to,  by not  after,  the  giving  of such  notice  of
termination.

          (2)  SKYCROSS  shall have the right to  terminate  this  Agreement  by
giving  written notice of termination to LICENSEE in the event of any one of the
following, such termination being effective upon receipt of such notice, or five
(5) days after such notice is mailed, whichever is earlier:

          (a)  Liquidation of LICENSEE;

          (b)  Insolvency  or  bankruptcy  of  LICENSEE,  whether  voluntary  or
     involuntary;

          (c)  Inability of LICENSEE to meet its obligations hereunder;

          (d)  Failure of LICENSEE to satisfy any judgment against it;

          (e)  Appointment of a trustee or receiver for LICENSEE;

          (f)  Any assignment by LICENSEE for the benefit of creditors.

                                       3
<PAGE>

          (3) The waiver of any default under this  Agreement by SKYCROSS  shall
not  constitute  a waiver  of the  right to  terminate  this  Agreement  for any
subsequent or like default.  Any exercise of the right of termination  shall not
have the effect of waiving  any damages to which  SKYCROSS  might  otherwise  be
entitled.

     B. Upon  termination of this Agreement,  all rights granted and obligations
undertaken  hereunder  shall  terminate  forthwith,  except  that  each  party's
obligations  to protect  proprietary  information as set forth in Article VI and
LICENSEE'S  obligation  to pay  license fee under  Article  III shall  continue.
Further,  LICENSEE  shall be permitted to sell any Licensed  Products on hand at
the time of termination.

     C. In the event that  SKYCROSS  terminates  this  Agreement  for a material
breach by LICENSEE, then upon termination, LICENSEE shall immediately:

          (1) Cease  use of all  Licensed  Technical  Information  and  Licensed
Software  licensed under this  Agreement,  return all documents  containing such
information,  and  continue  to treat all such  information  as  proprietary  in
accordance with Article VI below; and

          (2) Cease  practicing any inventions  covered by Licensed  Patents and
the use of information protected by Licensed Copyrights.

     D.  Provided  that  Licensee has paid all monies due under this  agreement,
Licensee may terminate this agreement with 6 months written notice.

     E. If a party  materially  breaches  this  agreement,  the other  party may
terminate this agreement 30 days after providing  written notice.  The breaching
party is permitted to cure during this 30 day period.

     F. In the  event  Skycross  seeks,  or is  involuntarily  placed  under the
protection  of the  bankruptcy  law,  Title  XI,  US Code,  and the  trustee  in
bankruptcy rejects this Agreement,  Licensee hereby elects,  pursuant to Section
365(n),  to retain all rights  granted to it under this  Agreement to the extent
permitted by law.

                                   ARTICLE VI
                             PROPRIETARY INFORMATION

     A. LICENSEE acknowledges that SKYCROSS has spent and will continue to spend
considerable  time and money developing the Licensed  Technical  Information and
the Licensed Patents, and has valuable property rights therein.

     B.  LICENSEE  agrees to disclose the  Proprietary  Information  only to its
employees  having a need to know and to third  party  consultants  who  agree to
receive the Proprietary  Information on a proprietary basis.  Further,  LICENSEE
agrees to take  reasonable  measures to maintain the  proprietary  nature of the
Proprietary Information in the same manner and to the

                                       4
<PAGE>

same extent as it protects its own like Proprietary  Information.  All copies of
the  Proprietary  Information  shall bear the same  proprietary  markings as the
original.

     C.  Information  provided to LICENSEE  shall not be considered  Proprietary
Information if it:

          (1) Is proved  by  LICENSEE  to have  been  known to it at the time of
receipt; or

          (2) Is published or becomes  generally  known in the trade  through no
wrongful act of LICENSEE; or

          (3) Is received from a third party without  similar  restrictions  and
without breach of this license; or

          (4) Is  approved  for  release  into  the  public  domain  by  written
authorization of SKYCROSS; or

          (5) Is not clearly marked or designated by SKYCROSS as confidential or
proprietary; or

          (6) Is  independently  developed  by  LICENSEE  without  resort to the
Proprietary Information.

     D. Information  shall not be considered in the public domain merely because
certain  portions  thereof  are  embraced by general  discussions  in the public
domain.

     E. All Proprietary  Information  shall remain the property of SKYCROSS.  In
the event of the  termination of this  agreement,  all  proprietary  information
shall be returned,  together with all copies  thereof,  upon written  request of
SKYCROSS.

                                   ARTICLE VII
                           DISCLAIMERS AND WARRANTIES

     A.  SKYCROSS  warrants that it is sole owner of, and has a right to grant a
license for, the Licensed Technical  Information,  Licensed Patents and Licensed
Copyrights to LICENSEE and has the right and power to enter into this Agreement.

     B. SKYCROSS warrants that the Licensed  Technical  Information and Licensed
Copyrights  include all the information used by SKYCROSS to manufacture and test
the Licensed Product.  SKYCROSS does not make any  representations or warranties
as to the validity or scope of the Licensed Patent.

     C. SKYCROSS makes no express warranty and no warranty shall be implied with
respect to any Licensed  Technical  Information and Licensed  Copyrights,  other
than the exercise of reasonable  care in its  preparation  and  transfer.  It is
agreed that SKYCROSS shall not be liable,

                                       5
<PAGE>

whether in contract  or tort  (including  negligence  and strict  liability)  or
otherwise in any way responsible for:

          (1) The adequacy of the Licensed  Technical  Information  and Licensed
Copyrights furnished or disclosed by SKYCROSS;

          (2)  Performance  of  the  Licensed  Product  manufactured  by or  for
LICENSEE on the basis of Licensed Technical Information and Licensed Copyrights;

          (3) Claims that the Licensed Products  manufactured by or for LICENSEE
constitute infringement of any intellectual property rights of another; and

          (4) Any  damages  incurred by  LICENSEE  or damages  asserted  against
LICENSEE arising out of the manufacture, use or sale of the Licensed Product.

          (5) The quality or performance of Licensed Products manufactured by or
on behalf of LICENSEE.

     D. THE  LICENSED  TECHNICAL  INFORMATION  IS PROVIDED  TO LICENSEE  "AS IS"
WITHOUT WARRANTY OR CONDITION,  EXPRESS,  IMPLIED,  OR STATUTORY,  INCLUDING ANY
WARRANTY OF DESIGN,  MERCHANTABILITY  OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
WARRANTY  ARISING  FROM A COURSE OF DEALING OR USAGE IN THE TRADE.  FURTHER,  NO
WARRANTY OF  NON-INFRINGEMENT  IS PROVIDED.  SKYCROSS  DOES NOT WARRANT THAT THE
LICENSED TECHNICAL  INFORMATION OR THE PRODUCT WILL MEET LICENSEE'S OR ANY THIRD
PARTY'S REQUIREMENTS OR EXPECTATIONS.

     E.  SKYCROSS  shall  have no  obligation  to  continue  prosecution  of any
Licensed Patent application.

                                  ARTICLE VIII
                                     NOTICES

     A. All  notices,  requests or demands  given to or made upon  either  party
shall be in writing and shall be mailed  properly  addressed,  postage  prepaid,
registered  or  certified,  or delivered  to either  party by hand,  or by other
receipted  delivery,  with  all  expenses  of  delivery  being  prepaid,  at its
respective address set forth in the Agreement.  If mailed,  such notice shall be
deemed  received by the close of business on the date shown on the  certified or
registered  mail  receipt,  or whenever it is actually  received,  whichever  is
sooner.

     B. The primary,  but non-exclusive  points of contact for receiving notices
and other documentation related to this Agreement are:

                                       6
<PAGE>

          To LICENSEE    at     8493 Baymeadows Way
                                Jacksonville, FL  32256
                         Attn:  Jeff Parker

          To SKYCROSS    at     300-A North Drive
                                Melbourne, Florida 32934
                                Attn:  Andy Mellon, Controller

Either  party may change  its point of  contact  by written  notice to the other
party.

                                   ARTICLE IX
                                 DUTY TO EXPLOIT

     SKYCROSS  and  LICENSEE  agree  that it is in the  best  interests  of both
parties to  commercialize  the Licensed Product to the greatest extent possible.
Licensee  shall use its  commercially  reasonable  efforts to solicit orders for
sales of Licensee products containing the Licensed Products.

                                    ARTICLE X
                                    PUBLICITY

     The parties  shall agree to the  issuance  of a mutually  acceptable  press
release at a mutually agreed upon future date. Any article or publication beyond
the initial  press  release  shall be reviewed and  approved by the  non-issuing
party.

                                   ARTICLE XI
                                   TRADEMARKS

     Except as set forth herein, neither party is licensed to use the common law
trademarks or registered trademarks of the other party hereto.

                                   ARTICLE XII
                      INDEMNITY AND LIMITATION OF LIABILITY

     A. SKYCROSS will defend,  at its expense,  any action brought in the United
States against  LICENSEE to the extent that such action is based on a claim that
permitted  use of the Licensed  Technical  Information  within the scope of this
Agreement  results in the  infringement of any United States patent or copyright
or a misappropriation of any trade secret.  SKYCROSS will indemnify Licensee for
all costs,  damages  and fees  incurred by LICENSEE so long as SKYCROSS is given
prompt  notification  of the claim.  SKYCROSS  shall have the sole  authority to
defend,  compromise  or settle the claim.  LICENSEE  will provide all  available
information,  assistance,  and authority to enable  SKYCROSS to do so.  LICENSEE
shall have no authority to settle any claim on behalf of SKYCROSS.

                                       7
<PAGE>

     B. Should use of the Licensed Technical  Information become or in SKYCROSS'
opinion be likely to become,  the subject of a claim of infringement of a patent
or copyright or misappropriation of a trade secret, SKYCROSS may:

          (1)  Procure  for  LICENSEE,  at no cost to  LICENSEE,  the  right  to
continue use of the Licensed Technical Information; or

          (2) Replace or modify the Licensed Technical Information at no cost to
LICENSEE to make such Licensed Technical  Information  non-infringing,  provided
that the same function is performed by the replacement or modification; or

          (3) If the right to continue  use cannot be procured  and the Licensed
Technical Information cannot be replaced or modified,  terminate this License to
use  such  and  provide  LICENSEE  with  consideration,   the  details  of  such
consideration to be mutually agreed upon between SKYCROSS and LICENSEE.

                                  ARTICLE XIII
                 IMPROVEMENTS TO LICENSED TECHNICAL INFORMATION

     A. During the term of this  Agreement,  each party agrees to communicate to
the  other  any and all  technical  improvements  (whether  or not  patented  or
patentable) that relate to the design and/or manufacturing  methods or processes
pertaining  to the Licensed  Product.  Each party  hereby  grants to the other a
non-exclusive,  paid-up, royalty-free (notwithstanding the provisions of Article
III)  license to use and sell  Licensed  Product  incorporating  such  technical
improvements and to practice and process,  method, or procedure  embodied within
such technical improvements.

     B.  Each  party  hereby  grants  to the  other  a  non-exclusive,  paid-up,
royalty-free  license under any United  States and foreign  patents owned by the
granting  party  for  the  lives  thereof,  that  arise  out  of  the  technical
improvements as described  above,  to make, have made, use, sell,  offer to sell
and import the Licensed Product.

                                   ARTICLE XIV
                                  FORCE MAJEURE

     No failure or omission by the parties  hereto,  in the  performance  of any
obligation of this  Agreement,  with the exception of the payment of the license
fee, shall be deemed a breach of this Agreement, nor create any liability if the
same shall arise from any cause or causes beyond the  reasonable  control of the
parties,  including but not limited to the following:  Acts of God, fire, storm,
flood, earthquake, acts of the public enemy, war, rebellion, insurrection, riot,
invasion,  strikes  and  lock-outs.  In any  event,  the party  claiming  excuse
hereunder shall provide  reasonable notice to the other party of any such event,
with such notice to be given within thirty (30) days

                                       8
<PAGE>

from the time the claiming party becomes aware of such an event. Upon occurrence
of such an event, the time for such party's  performance  shall be extended by a
period of time reasonably necessary to overcome the effects of the delay.

                                   ARTICLE XV
                              TECHNICAL ASSISTANCE

     A.  Effective  upon  execution of this Agreement and continuing for two (2)
years thereafter, SKYCROSS will provide LICENSEE with forty (40) person-hours of
technical  assistance related to the use of the Licensed  Technical  Information
and the Licensed Patents for making, having made, using, selling and maintaining
the  Licensed  Product.  These  consulting  services  will  be  provided  on  an
as-available basis and with prior reasonable notice to SKYCROSS, at no charge to
LICENSEE.  The form and location of such support  shall be as  determined by the
parties.  After expiration of these consulting  services,  SKYCROSS will provide
additional  consulting  services on a time and material,  as available basis, at
the rate of $105.00 per person-hour.

     B.  SKYCROSS  agrees  to  provide  reasonable  assistance  to  LICENSEE  in
marketing and selling Licensed Products.  Such assistance may include attendance
at trade shows,  demonstrating  the Licensed Product and responding to telephone
and Internet inquiries regarding the Licensed Product.

     C.  LICENSEE  agrees to assume all financial  and service  obligations  for
Licensed Products manufactured and/or sold by it.

                                   ARTICLE XVI
                               DISPUTE RESOLUTION

     A. If a dispute arises out of or relates to this  Agreement,  or the breach
thereof,  the parties agree to submit the dispute to a sole mediator selected by
the parties or, if the  parties  are unable to agree to the sole  mediator,  the
parties agree to submit the dispute to mediation under the rules of the American
Arbitration  Association  (AAA). If not thus resolved and if both parties agree,
the dispute will be referred to a sole arbitrator selected by the parties within
ninety (90) days after the  conclusion of  mediation,  or in the absence of such
selection,  to AAA  arbitration  which shall be  governed  by the United  States
Arbitration Act.

     B.  Any  resolution  reached  through  mediation  or award  arising  out of
arbitration  (i) shall be  limited  to a  holding  for or  against a party,  and
affording such monetary remedy as is deemed equitable, just and within the scope
of this  Agreement;  (ii) may not  include  special  consequential  or  punitive
damages;  (iii) may in appropriate  circumstances include injunctive relief; and
(iv) may be entered in court in accordance  with the United  States  Arbitration
Act.

     C.  Arbitration  shall not be  deemed a waiver of any right of  termination
under this  Agreement  and the  arbitrator  is not  empowered to act or make any
award other than based solely

                                       9
<PAGE>

on the  rights  and  obligations  of the  parties  prior to and  including  such
termination.

     D. The arbitrator may not limit,  expand,  or otherwise modify the terms of
this Agreement.

     E. Each  party  shall  bear its own  expenses  incurred  in any  mediation,
arbitration, or litigation, but any expenses related to the compensation and the
costs of any mediator or arbitrator shall be borne equally by the parties.

     F. A  request  by a party to a court  for  interim  measures  necessary  to
preserve a party's rights and remedies for  resolution  pursuant to this Section
shall not be deemed a waiver of the  obligation  to  mediate;  or  agreement  to
arbitrate.

     G. The parties, their representatives, other participants, and the mediator
or  arbitrator  shall hold the  existence,  content and result of  mediation  or
arbitration in confidence.

                                  ARTICLE XVII
                                     DAMAGES

     Neither  party  shall be liable,  whether in  contract  or tort  (including
negligence and strict liability) or otherwise liable for any special,  indirect,
incidental, or consequential damages whatsoever.

                                  ARTICLE XVIII
                              COMPLIANCE WITH LAWS

     A. Any payment that  requires  governmental  approval or  permission  under
foreign exchange control laws or other laws, if any, shall be made in accordance
with such laws.

     B.   LICENSEE   agrees  to  comply  with  all   provisions  of  the  Export
Administration  Regulations of the United States  Department of Commerce as they
currently exist or as they may be amended from time to time.

                                   ARTICLE XIX
                            MISCELLANEOUS PROVISIONS

     A. If any provisions,  or portions  thereof,  of this Agreement are invalid
under any  applicable  statute or rule of law, that  provision  notwithstanding,
this Agreement shall remain in full force and effect.  Such provisions  shall be
deemed omitted.

     B. This  Agreement  constitutes  and  expresses  the entire  agreement  and
understanding  between the parties and supercedes  all previous  communications,
representations  or  agreements,  whether  written or oral,  with respect to the
subject matter hereof.

                                       10
<PAGE>

     C. This  Agreement may not be modified,  amended,  rescinded,  cancelled or
waived  in whole or in part,  except  by a  written  instrument  signed  by both
parties.

     D. This  Agreement is made under and shall be governed by and  construed in
accordance with the laws of the State of Florida.

     E. The parties shall at all times be independent  contractors  and shall so
represent themselves to all third parties. Neither party shall have the right to
bind the other, nor represent the relationship as agent,  legal  representative,
or joint venture.

     F. All  covenants,  stipulations  and promises in this  Agreement  shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors,  assigns and legal representatives.  Except with the written consent
of the other  party,  neither  party shall have the right to assign or otherwise
transfer its rights or obligations under this Agreement.

     IN WITNESS WHEREOF,  the respective duly authorized  representatives of the
parties  have  caused this  Agreement  to be executed as of the date first above
written.

SKYCROSS, INC.                          NAME OF LICENSEE

By: _____________________________       By: ________________________________
    Name:  Christopher Morton           Name:  David Sorrells
    Title: Chief Executive Officer      Title: Co-Founder and CTO

Date: ___________________________       Date: ______________________________

                                       11
<PAGE>

                                   APPENDIX A
            LIST OF PATENTED / PATENT PENDING ANTENNA CONFIGURATIONS
               TO BE SUPPORTED WITH LICENSED TECHNICAL INFORMATION

1.   All   manifestations   of  antenna   configurations   described  in  Patent
     Application  #10/645,862,  "Apparatus  and Method for  Forming a  Monolthic
     Surface Mountable Antenna".

2.   All   manifestations   of  antenna   configurations   described  in  Patent
     Application    #10/313,971,    "Multiple   Antenna   Diversity   for   WLAN
     Applications".

3.   All   manifestations   of  antenna   configurations   described  in  Patent
     Application #10/453,841, titled "Wideband Printed Monopole Antenna".

4.   All   manifestations   of  antenna   configurations   described  in  Patent
     Application  #60/447,244,  titled "Monolithic Low Profile  Omni-directional
     Surface Mount Antenna".

                                       12
<PAGE>

                                   APPENDIX B
                                LICENSED PATENTS

Non-provisional  Patent Application  entitled Apparatus and Method for Forming a
Monolthic  Surface  Mountable  Antenna,  filed on Aug.  21,  2003  and  assigned
application number 10/645,862.

Non-Provisional  Patent Application  entitled PCB Fabrication  Realizaton of the
Printed  Monopole  Antenna  Incorporating  Diversity,  filed on June 4, 2003 and
assigned application number 10/453,841.

Non-Provisional  Patent Application entitled Multiple Antenna Diversity for WLAN
Applications, filed on Dec. 6, 2002 and assigned application number 10/313,971.

Provisional Patent Application entitled Monolithic Low Profile  Omni-directional
Surface Mount Antenna,  filed on Feb. 13, 2003 and assigned  application  number
60/447,244.

                                       13
<PAGE>

                                   APPENDIX C
                                   ----------

                    REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
                    -----------------------------------------

     This Registration Rights Agreement and Lock-up ("Agreement") is executed by
ParkerVision,  Inc., a Florida  corporation,  with an office at 8493  Baymeadows
Way,  Jacksonville,  Florida 32256 (hereinafter referred to as the "ISSUER") and
SkyCross,  Inc.,  a Florida  corporation,  with an office at the  address on the
signature  page  hereof  (hereinafter   referred  to  as  the  ("PURCHASER")  in
connection with PURCHASER'S acquisition of 138,158 shares ("Shares"), subject to
adjustment as herein provided,  of common stock $.01 par value ("Common Stock"),
which  Shares are being  issued in  reliance  upon the  exemption  contained  in
Section 4(2) of the Securities Act of 1933, as amended ("Securities Act").

     Each of the parties hereto represents and warrants to, and agrees with, the
other as follows:

1.   REPRESENTATIONS AND OTHER AGREEMENTS.

     (a)  PURCHASER REPRESENTATIONS. PURCHASER represents and warrants to ISSUER
          as follows:

          (i) PURCHASER is a corporation duly organized, validly existing and in
          good  standing  under the laws of the State of Florida.  The PURCHASER
          has all necessary  corporate  power and  corporate  authority to make,
          execute,  deliver and perform this  agreement,  and this agreement and
          the  transactions  contemplated  hereby have been duly  authorized and
          approved  by all  required  corporate  action  of the  PURCHASER.  The
          PURCHASER  is not subject to any  charter,  by-laws,  mortgage,  lien,
          lease, agreement,  instrument, order, law, rule, regulation,  judgment
          or decree,  or any other  restriction of any kind or character,  which
          would prevent  consummation of the  transactions  contemplated by this
          agreement.

          (ii)  PURCHASER  is  purchasing  the  Shares for its own  account  for
          investment purposes and not with a view toward distribution, except in
          compliance with federal and state securities laws.

          (iii) PURCHASER  understands  that the Shares have not been registered
          under the  Securities  Act and that such  securities  are  "restricted
          securities"  as defined in Rule 144  promulgated  under the Securities
          Act. PURCHASER further understands that the Shares may not be offered,
          resold,  pledged or otherwise transferred by such PURCHASER except: A)
          (1)  pursuant  to  an  effective   registration  statement  under  the
          Securities  Act, or (2)  pursuant to an available  exemption  from the
          registration  requirements of the Securities Act; and B) in accordance
          with all applicable securities laws of the states of the United States
          and other jurisdictions;

<PAGE>

          (iv) PURCHASER  understands that the purchase of the Shares involves a
          high  degree  of risk and  further  acknowledges  that it can bear the
          economic risk of the purchase of the  securities,  including the total
          loss of its investment;

          (v)  PURCHASER  understands  that the  Shares  are being sold to it in
          reliance on specific exemptions from the registration  requirements of
          federal and state  securities laws and that the ISSUER is relying upon
          the truth and accuracy of the representations, warranties, agreements,
          acknowledgments and understandings of PURCHASER set forth herein;

          (vi) PURCHASER is  sufficiently  experienced in financial and business
          matters  to be  capable  of  evaluating  the  merits  and risks of its
          investment, and to make an informed decision relating thereto; and

          (vii) In evaluating  its  investment,  PURCHASER has consulted its own
          investment and/or legal and/or tax advisors.

     (b)  CURRENT PUBLIC INFORMATION.  PURCHASER acknowledges that PURCHASER has
          available to it copies of the ISSUER's  Annual Report on Form 10-K for
          the year ended December 31, 2002 and Forms 10-Q for the quarters ended
          March 31, 2003,  and June 30, 2003 and Proxy  Statement for the Annual
          Meeting  held June 26,  2003,  all as filed  with the  Securities  and
          Exchange Commission (the "SEC").  PURCHASER further  acknowledges that
          PURCHASER  has read and  understands  the Risk  Factors  set  forth in
          ISSUER's  Form 10-K for the year ended  December 31,  2002,  and Forms
          10-Q for the quarters ended March 31, 2003 and June 30, 2003.

     (c)  INDEPENDENT  INVESTIGATION;  ACCESS.  PURCHASER  acknowledges that, in
          making its  decision  to  purchase  the  Shares,  it has relied on the
          publicly  available  information about the ISSUER and upon independent
          investigations made by it and its  representatives,  if any. PURCHASER
          has had the  opportunity  to ask questions  and received  satisfactory
          answers about the business of the ISSUER.

     (d)  NO GOVERNMENT  RECOMMENDATION OR APPROVAL.  PURCHASER understands that
          no  federal  or state  agency  has  passed on or made any  finding  or
          determination relating to the fairness of an investment in the Shares,
          or has passed on or made, or will pass on or make, any  recommendation
          or endorsement of the Shares.

     (e)  ISSUER REPRESENTATIONS. ISSUER represents and warrants to PURCHASER as
          follows:

          (i) AUTHORITY.  The ISSUER is a corporation  duly  organized,  validly
          existing and in good  standing  under the laws of the Sate of Florida.
          The ISSUER has all necessary  corporate power and corporate  authority
          to  make,  execute,  deliver  and  perform  this  agreement,  and this
          agreement  and the  transactions  contemplated  hereby  have been duly
          authorized  and  approved  by all  required  corporate  action  of the
          ISSUER. The ISSUER, is not subject to any charter,  by-law,  mortgage,
          lien,

                                       2
<PAGE>

          lease, agreement,  instrument, order, law, rule, regulation,  judgment
          or decree,  or any other  restriction of any kind or character,  which
          would prevent  consummation of the  transactions  contemplated by this
          agreement.

          (ii) VALIDITY. The Common Stock that has been issued or will be issued
          pursuant to this  agreement,  has been or will be duly  authorized and
          validly issued and is, or will be, fully paid and non-assessable.

     (f)  FULL  SATISFACTION.  It is agreed  that  acceptance  of the  shares of
          Common Stock being issued pursuant to the terms of this agreement (the
          initial 138,158 shares to be delivered promptly, but in no event later
          than September 30, 2003),  will be in full  satisfaction of the entire
          license fee of $950,000  as set forth in the License  Agreement  dated
          September 3, 2003, as amended, between the parties hereto and to which
          this Appendix C is a part ("License Agreement").  It is further agreed
          by the parties hereto, except as provided in the adjustments set forth
          in Section 4 hereof,  that if the value of the Shares  increases after
          the date of this  agreement,  the ISSUER  will not have any right of a
          credit to any other payment or amount due under the License  Agreement
          for the increase,  and if the value of the Shares  decreases after the
          date of this  agreement,  the  PURCHASER  will not  have any  right of
          further  payment  in cash or  shares  of Common  Stock in  respect  of
          license fee paid by the acceptance of the Shares.

2.  LEGEND.  PURCHASER  understands  that the ISSUER will  instruct its transfer
agent  to  place  a  stop  transfer  order  with  respect  to  the  certificates
representing  the  Shares  and that such  certificates  will bear the  following
legend,  as well as a legend  describing the restriction  referred to in Section
3(b) hereof:  "The shares represented by this certificate have been acquired for
investment  and have not been  registered  under the  Securities Act of 1933, as
amended (the "Securities  Act").  Transfer of these shares is prohibited  except
pursuant to  registration  under the  Securities Act or pursuant to an available
exemption from registration."

3.   REGISTRATION RIGHT.

     (a)  REGISTRATION. The ISSUER shall file a registration statement under the
          Securities  Act  ("Registration  Statement")  with the  Securities and
          Exchange Commission registering the Shares for re-offer and re-sale as
          soon as  practicable,  but in no event later than  September 30, 2003,
          and use its commercially  reasonable  efforts to have the Registration
          Statement   declared   effective  as  soon  as   possible.   Once  the
          Registration  Statement is declared  effective,  the ISSUER shall keep
          the  Registration  Statement  effective  and  current  until  all  the
          securities  registered  thereunder  are sold or may be sold  freely by
          PURCHASER  in  any  90-day  period  without   registration   under  an
          appropriate exemption under the Securities Act.

     (b)  PUBLIC RESALE LIMITATION. After the Registration Statement is declared
          effective,  the  PURCHASER  agrees that on any one trading day it will
          sell no more than the  greater of (i) 2,500 of the Shares or (ii) that
          number of Shares equal to 5% of the  reported  average  daily  trading
          volume of the Common Stock on Nasdaq for the immediately preceding ten
          trading days, during the 90 calendar days after the

                                       3
<PAGE>

          effective date of the Registration  Statement,  and thereafter without
          any  restriction  as to time or amount,  unless the  PURCHASER and the
          ISSUER  mutually  agree to some other  number of Shares,  from time to
          time, which agreement shall be in writing.

     (c)  TERMS. The ISSUER shall bear all of its fees and expenses attendant to
          registering   the  Shares,   but  PURCHASER  shall  pay  any  and  all
          underwriting  or selling  commissions  and the  expenses  of any legal
          counsel  selected by PURCHASER to represent it in connection  with the
          registration or sale of the Shares. Promptly upon request, ISSUER will
          provide to PURCHASER such number of copies of the prospectus forming a
          part of the Registration  Statement as are reasonably requested by the
          PURCHASER,  and  all  supplements  to  such  prospectus.  ISSUER  will
          promptly notify PURCHASER at any time that the Registration  Statement
          or the prospectus may not be used either due to the change of material
          information  contained therein or the omission of material information
          therefrom  or upon the  receipt by the ISSUER of a cease and desist or
          stop order of the Securities and Exchange Commission.  The ISSUER will
          use its  commercially  reasonably  efforts to amend or supplement  the
          Registration Statement to permit its continued use by the PURCHASER.

     (d)  INDEMNIFICATION BY THE ISSUER. The ISSUER agrees to indemnify and hold
          harmless  PURCHASER,  its directors  and officers and each person,  if
          any, who controls  PURCHASER  within the meaning of the Securities Act
          and/or the  Securities  Exchange  Act of 1934,  as amended  ("Exchange
          Act"), against any losses,  claims,  damages or liabilities,  joint or
          several,  to which PURCHASER or such person may become subject,  under
          the Securities Act, Exchange Act or otherwise, insofar as such losses,
          claims,  damages or liabilities (or actions in respect  thereof) arise
          out of or are based upon (i) any untrue  statement  or alleged  untrue
          statement  of a  material  fact  contained  (A) in any  prospectus  or
          registration  statement  for  the  Shares  or  (B)  in  any  blue  sky
          application or other document executed by the ISSUER  specifically for
          blue  sky  purposes  or  based  upon  any  other  written  information
          furnished  by the  ISSUER  or on its  behalf  to any  state  or  other
          jurisdiction  in order to qualify  any or all of the Shares  under the
          securities laws thereof (any such application, document or information
          being hereinafter called a "Blue Sky Application"),  (ii) the omission
          or  alleged  omission  by the  ISSUER  to state in any  prospectus  or
          registration statement for the Shares or in any Blue Sky Application a
          material fact  required to be stated  therein or necessary to make the
          statements  therein,  in light of the  circumstances  under which they
          were made, not misleading,  and will reimburse PURCHASER and each such
          person  for  any  legal  or  other  expenses  reasonably  incurred  by
          PURCHASER or such person in connection with investigating or defending
          any such  loss,  claim,  damage,  liability  or  action,  or (iii) any
          violation  by  the  ISSUER  of the  Securities  Act  or  any  rule  or
          regulation promulgated thereunder,  or any blue sky law or other state
          securities  laws  law or rule or  regulation  promulgated  thereunder,
          relating to any action or inaction  by the ISSUER in  connection  with
          the issuance and registration of the Shares;  provided,  however, that
          the ISSUER  will not be liable in any such case to the extent that any
          such loss, claim, damage or liability

                                       4
<PAGE>

          arises out of or is based upon an untrue  statement or alleged  untrue
          statement or omission or alleged omission made in reliance upon and in
          conformity with information  regarding PURCHASER which is furnished in
          writing  to  the  ISSUER  by  PURCHASER  or  its  representatives  for
          inclusion  in any  registration  statement  for the Shares or any such
          Blue Sky Application ("Non-Indemnity Events").

     (e)  INDEMNIFICATION  BY THE PURCHASER.  The PURCHASER  agrees to indemnify
          and hold harmless the ISSUER, each officer and director of the ISSUER,
          and each person, if any, who controls the ISSUER within the meaning of
          the Securities Act and/or the Exchange Act against any losses, claims,
          damages or liabilities,  joint or several, to which the ISSUER or such
          person may become subject,  under the Securities Act,  Exchange Act or
          otherwise insofar as such losses,  claims,  damages or liabilities (or
          actions  in  respect  thereof)  arise  out of or are  based  upon  any
          Non-Indemnity  Event;  and will  reimburse the ISSUER and such persons
          for any legal or other expenses  reasonably  incurred by the ISSUER in
          connection  with  investigating  or  defending  any such loss,  claim,
          damage,  liability or action provided that such loss, claim, damage or
          liability  is found  ultimately  to arise out of or be based  upon any
          Non-Indemnity   Event;   provided  that  the  maximum  amount  of  the
          indemnification  payments by  PURCHASER  shall not exceed the net sale
          proceeds of any of the Shares or shares of Common Stock underlying the
          Purchase  Option sold by the  PURCHASER  pursuant to the  registration
          statement.

     (f)  PROCEDURE.  Promptly after receipt by an indemnified  party under this
          Section  3  of  notice  of  the  commencement  of  any  action,   such
          indemnified  party will,  if a claim in respect  thereof is to be made
          against any indemnifying party under this Section 3, notify in writing
          the indemnifying party of the commencement  thereof;  and the omission
          so to notify the  indemnifying  party will  relieve  the  indemnifying
          party from any  liability  under this  Section 3 as to the  particular
          item for which  indemnification  is then being sought (if such failure
          materially  prejudices the indemnifying party), but not from any other
          liability which it may have to any indemnified party. In case any such
          action is brought  against any indemnified  party,  and it notifies an
          indemnifying party of the commencement thereof, the indemnifying party
          will be entitled to participate therein, and to the extent that it may
          wish, jointly with any other indemnifying  party,  similarly notified,
          to  assume  the  defense  thereof,  with  counsel  who shall be to the
          reasonable  satisfaction of such  indemnified  party, and after notice
          from the indemnifying  party to such indemnified party of its election
          so to assume the defense thereof,  the indemnifying  party will not be
          liable to such indemnified party under this Section 3 for any legal or
          other  expenses  subsequently  incurred by such  indemnified  party in
          connection  with the defense  thereof other than  reasonable  costs of
          investigation.  Any such indemnifying party shall not be liable to any
          such  indemnified  party on account of any  settlement of any claim or
          action effected without the consent of such indemnifying  party, which
          consent shall not be unreasonably withheld.

     (g)  CONTRIBUTION. If the indemnification provided for in this Section 3 is
          unavailable to any indemnified party in respect to any losses, claims,
          damages, liabilities or

                                       5
<PAGE>

          expenses referred to therein,  then the indemnifying party, in lieu of
          indemnifying  such  indemnified  party,  will contribute to the amount
          paid or payable by such indemnified party, as a result of such losses,
          claims,  damages,  liabilities  or expenses in such  proportion  as is
          appropriate  to reflect  the  relative  fault of the ISSUER on the one
          hand,  and of the PURCHASER on the other hand, in connection  with the
          statements  or  omissions  which  resulted  in  such  losses,  claims,
          damages,  liabilities  or  expenses  as  well  as any  other  relevant
          equitable considerations.  The relative fault of the ISSUER on the one
          hand,  and the PURCHASER on the other hand,  will be  determined  with
          reference to, among other things, whether the untrue or alleged untrue
          statement of a material  fact or the omission to state a material fact
          relates  to  information  supplied  by the  ISSUER,  and its  relative
          intent, knowledge, access to information and opportunity to correct or
          prevent such statement or omission.

     (h)  EQUITABLE  CONSIDERATIONS.  The ISSUER and the PURCHASER agree that it
          would  not be just and  equitable  if  contribution  pursuant  to this
          Section  3 were  determined  by pro rata  allocation  or by any  other
          method of  allocation  which does not take into account the  equitable
          considerations referred to in the immediately preceding paragraph.

     (i)  ATTORNEYS' FEES. The amount payable by a party under this Section 3 as
          a result of the  losses,  claims,  damages,  liabilities  or  expenses
          referred to above will be deemed to include any legal or other fees or
          expenses   reasonably  incurred  by  such  party  in  connection  with
          investigating  or defending  any action or claim  (including,  without
          limitation,   fees  and   disbursements  of  counsel  incurred  by  an
          indemnified party in any action or proceeding between the indemnifying
          party and indemnified  party or between the indemnified  party and any
          third party or otherwise).

     (j)  DOCUMENTS TO BE DELIVERED BY  PURCHASER.  PURCHASER  represents to the
          ISSUER  that it does not own any  shares of  Common  Stock or have the
          right to  acquire  any Common  Stock,  except as  provided  under this
          agreement,  that it has no contract or  arrangement  currently for the
          sale of the  Shares,  and that it has read and agrees that the plan of
          distribution  set forth in the form of  Registration  Statement is its
          proposed plan for the sale of the Shares.  PURCHASER  agrees to update
          any these representations promptly to the ISSUER. Within five business
          days,  PURCHASER shall furnish to the ISSUER, at ISSUER=S  request,  a
          completed and executed questionnaire provided by the ISSUER requesting
          information customarily sought of selling security holders.

     (k)  NO PURCHASES AND SALES. PURCHASER represents that it has not purchased
          or sold any  shares of Common  Stock  within  the 60 days prior to the
          date of the License Agreement,  and it will not purchase or short sell
          any shares of Common Stock while it holds any of the Shares or has the
          right to acquire any of the Shares.

                                       6
<PAGE>

4.   RECALCULATION AND ADDITIONAL SHARE AND PENALTY CALCULATION.

     (a)  Two days prior to the effectiveness of the Registration Statement, the
          ISSUER  will  determine  the number of shares of Common  Stock that is
          equal to $950,000  divided by the  average of the closing  prices of a
          share of Common  Stock  for the 10  trading  days  ending on the third
          business day before the proposed  effective  date of the  Registration
          Statement,  times  1.05.  If the number  determined  by the  preceding
          sentence is greater than the number of Shares previously issued to the
          PURCHASER,  then the  ISSUER  will issue  additional  shares of Common
          Stock  to the  PURCHASER  equal  to  such  difference  and  amend  the
          Registration  Statement  to include such  additional  shares of Common
          Stock, and such additional shares shall be considered "Shares" for the
          purposes  of this  agreement.  If the number  determined  by the first
          sentence of this  paragraph  is less than the number of Shares  issued
          hereunder to the  PURCHASER,  then the PURCHASER will surrender to the
          ISSUER that number of Shares equal to the difference for cancellation,
          and the ISSUER  will amend the  Registration  Statement  to reduce the
          number of Shares being registered and subject to this agreement.

     (b)  If  PURCHASER  sells  all the  Shares  prior to the 90th day after the
          effective  date of the  Registration  Statement,  and the net proceeds
          (being the sales price less customary  commissions,  selling costs and
          taxes)  from  those  sales of Shares  ("Net  Proceeds")  are less than
          $950,000,  then upon written  request  ("Request") by the PURCHASER to
          the ISSUER, which Request must be received by ISSUER no later than the
          95th day after the effective  date of the  Registration  Statement and
          include  supporting  documentation  of the Net  Proceeds  amount,  the
          ISSUER shall promptly issue that number of additional shares of Common
          Stock ("Additional  Shares") equal to $950,000 minus the Net Proceeds,
          divided  by the  average  of the  closing  prices of a share of Common
          Stock for the 10 trading days ending on the second business day before
          the date of the Request,  times 1.05.  Upon issuance of the Additional
          Shares,  the  ISSUER  will  file a new  registration  statement  ("New
          Registration  Statement") with the SEC no later than the twentieth day
          from  the  date of the  Request,  and use  its  reasonable  commercial
          efforts  to have the New  Registration  Statement  declared  effective
          sixty days after the date of filing of the New Registration Statement.
          Once the New Registration Statement is declared effective,  the ISSUER
          shall keep the New Registration  Statement effective and current until
          all  the  securities  registered  thereunder  are  sold or may be sold
          freely by PURCHASER in any 90-day period without registration under an
          appropriate   exemption   under  the   Securities   Act.  If  the  New
          Registration Statement is declared effective,  then the provisions set
          forth  in  Section  3(c)  through  3(k)  above  shall  apply  the  New
          Registration  Statement.  Notwithstanding the foregoing,  if ISSUER is
          obligated  to issued any  Additional  Shares  pursuant to this Section
          4(b),  it  may  either  file  and  have  declared  effective  the  New
          Registration  Statement,  include the  Additional  Shares on any other
          registration  statement where permitted,  issue the Additional  Shares
          under a shelf  registration  statement,  if  permitted,  or in lieu of
          issuing Additional Shares pay to the PURCHASER, the difference between
          the Net  Proceeds  and  $950,000  in cash rather than shares of Common
          Stock.

                                       7
<PAGE>

          If all the Shares are not sold by the PURCHASER  prior to December 31,
          2003,  because the volume  limitations  and terms set forth in Section
          3(b) made their sale impossible, and the ISSUER and the PURCHASER have
          not modified the volume  limitations  after the date of this agreement
          in such a way as would have  permitted the sale of the Shares prior to
          December 31, 2003,  then, the ISSUER will pay to the PURCHASER the sum
          of $50,000.

5.  GOVERNING  LAW.  This  Agreement  shall be  governed by and  interpreted  in
accordance  with the rulings of the laws of the State of Florida  without regard
to  conflicts  of law.  The ISSUER and  PURCHASER  each  hereby  agrees that any
action, proceeding or claim against it arising out of, or relating in any way to
this  agreement  shall be  brought  and  enforced  in the courts of the State of
Florida or of the United  States of America for the Middle  District of Florida,
Jacksonville  Division  and  irrevocably  submits  to such  jurisdiction,  which
jurisdiction  shall be  exclusive.  The ISSUER and  PURCHASER  hereby waives any
objection  to such  exclusive  jurisdiction  and that such courts  represent  an
inconvenient  forum.  Any  process or  summons to be served  upon the ISSUER and
PURCHASER  may be  served  by  transmitting  a copy  thereof  by  registered  or
certified mail, return receipt  requested,  postage prepaid,  addressed to it at
its address set forth herein.  Such mailing shall be deemed personal service and
shall be legal  and  binding  upon  the  ISSUER  and  PURCHASER  in any  action,
proceeding  or claim.  The  ISSUER  and  PURCHASER  agrees  that the  prevailing
party(ies)  in any such  action  shall be  entitled  to  recover  from the other
party(ies) all of its reasonable  attorneys' fees and expenses  relating to such
action  or  proceeding  and/or  incurred  in  connection  with  the  preparation
therefor.

6. ENTIRE  AGREEMENT.  This agreement and the License  Agreement  constitute the
entire  agreement  among the parties  hereof with respect to the subject  matter
hereof  and  supersedes  any and all prior or  contemporaneous  representations,
warrants,  agreements and understandings in connection therewith. This Agreement
may be amended only by a writing executed by all parties hereto.

7. NOTICES.  Any notice or other  document  required or permitted to be given or
delivered to the parties to this agreement shall be personally delivered or sent
by  facsimile  or other  form of  electronic  transmission  to the  party at the
address or addresses or telecopier  number on the signature page hereto.  Unless
otherwise  specified in this  agreement,  all notices and other  documents given
under this agreement shall be deemed to have been duly given when delivered,  if
personally delivered, and when transmitted if sent by facsimile or other form of
electronic transmission.

                                       8
<PAGE>

     IN WITNESS  WHEREOF,  this  Agreement  was duly  executed on the date first
written below.

Dated this 19th day of the month of September, 2003.

SKYCROSS, INC..                         PARKERVISION, INC.

By: /s/ Christopher Morton              By: /s/ William A. Hightower
    ------------------------------          ----------------------------
Name:  Christopher Morton               Name: William A. Hightower
Title: Chief Executive Officer          Title: President

Notice Addresses:                       William A. Hightower, President
SkyCross, Inc.                          ParkerVision, Inc.
300-A North Drive                       8493 Baymeadows Way
Melbourne, Florida 32934                Jacksonville, Florida 32256
Facsimile: (321) 308-6599               Facsimile: (904) 731-7125

with a copy to                          with a copy to

Bradley D. Houser                       David Alan Miller, Esq.
Akerman Senterfitt                      Graubard Miller
One Southeast Third Avenue              600 Third Avenue
28th Floor                              New York, NY  10016
Miami, Florida  33131-1714              Facsimile: (212) 818-888
Facsimile: (305) 374-5095

                                       9
<PAGE>

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