Document:

exv10w6

 

Exhibit 10.6

SECURITY AGREEMENT

     THIS
SECURITY AGREEMENT is made as of this 26th day of September, 2005, by and between A Smart
Move L.L.C., whose address is 5350 South Roslyn Street, #380, Greenwood Village, Colorado 80111
(“Borrower”) and each of the persons listed on Schedule 1 to this Agreement (each a “Secured Party”
and collectively the “Secured Parties”).

     For and in consideration of the promises, covenants and agreements herein set forth, the
parties hereto agree as follows:

     1. Debt. Borrower has incurred an indebtedness to each Secured Party and, to evidence
the indebtedness, has executed and delivered to the Secured Parties Promissory Notes in the
aggregate original principal amount of                                          ($                    ) (each a “Note” and
collectively the “Notes”) of even date herewith, payable to the order of the respective Secured
Parties, providing for payments of principal and interest and maturity as provided for therein, and
containing provisions for payment of attorneys’ fees and acceleration of maturity in the event of
default, as therein set forth. The Notes, this Security Agreement and all other documents or
agreements given in connection therewith are hereafter collectively referred to as the “Loan
Documents”.

     2. Collateral. Borrower hereby grants the Secured Parties a security interest in the
property described on Schedule 2 attached hereto and incorporated herein by reference together with
all similar property now owned or hereafter acquired, additions, substitutions, replacements,
proceeds and products thereof, wherever located. All items in which a security interest is granted
hereby are referred to as the “Collateral.”

     3. Indebtedness Secured. The security interest granted hereby is to secure payment of
the following (the “Indebtedness”):

          (a) The amounts due under the Notes, together with interest, fees and other charged provided
for therein;

          (b) All future advances which any Secured Party may, at its option and for any purpose, make
to Borrower, together with interest thereon;

          (c) All sums which any Secured Party may, at its option, expend or advance for the
maintenance, preservation and protection of the Collateral, including without limitation, payment
of taxes, levies, assessments, insurance premiums and discharge of liens, together with interest
thereon, or in any other property given as security for payment of the Indebtedness;

          (d) All expenses, including reasonable attorneys’ fees, which any Secured Party incurs in
connection with collection of any or all Indebtedness secured hereby or in enforcement or
protection of its rights hereunder, or any other instrument given as security for a Note, or in
changes in form of such Indebtedness which may be made from time to time by agreement between
Borrower and Secured Party, together with interest thereon; and

 

 

          (e) All other present or future, direct or indirect, absolute or contingent, liabilities,
obligations and indebtedness of Borrower to Secured Parties pursuant to the Loan Documents, and all
further renewals, extensions, modifications, and restatements of the foregoing, whether or not the
Borrower executes any extension agreement or renewal instruments.

     4. Warranties and Covenants of Borrower. Borrower expressly warrants and covenants
and agrees that:

          (a) Borrower is and will continue to be the owner of the Collateral free from any lien,
security interest or encumbrance, other than that created by this Security Agreement; Borrower will
defend the Collateral against all claims and demands of all other persons at anytime claiming the
same or any interest therein; and Borrower will not sell the Collateral (except in the ordinary
course of business) without the prior written consent of the Secured Party;

          (b) No effective financing statement covering any of the Collateral or any proceeds thereof is
on file in any public office, and Borrower will not (except as provided herein) execute any
financing statement affecting the Collateral during the term of this Security Agreement without the
prior consent of the Secured Parties;

          (c) Borrower will pay the Indebtedness to Secured Parties as the same becomes due and payable;

          (d) Borrower will from time to time as required by Secured Parties authorize the filing of one
or more financing statements pursuant to the Uniform Commercial Code of Colorado (and any
assignments, extensions or modifications thereof) in form satisfactory to Secured Parties;

          (e) Borrower will pay all costs of filing any financing, continuation, assignment or
termination statements with respect to the security interest created by this Security Agreement and
hereby appoints Secured Parties its attorney-in-fact to do, at Secured Parties’ option and at
Borrower’s expense, all acts and things which Secured Parties may deem necessary to perfect and
continue perfected the security interest created by this Security Agreement;

          (f) Without the prior written consent of Secured Parties, Borrower will not voluntarily or
involuntarily encumber, or agree to encumber any portion of the Collateral (including the
replacement of such Collateral in the ordinary course of business), and in the event Secured
Parties grant written consent for the establishment of another security interest in the Collateral,
and with respect to the security agreements of record, Borrower will perform its obligations under
those security agreements;

          (g) Borrower will pay as they become due all taxes or other liens or claims which may become a
charge against the Collateral;

          (h) Borrower will insure the Collateral with companies and in amounts acceptable to Secured
Parties, such amount being the full replacement value of the Collateral or the maximum amount the
insurer will permit, against risks of theft, vandalism, fire and such

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other risks as are normally insured against, including standard extended coverage. All insurance policies shall be written for
the benefit of Borrower and Secured Parties as their interests may appear, and the Secured Parties
shall be named as loss payees on an endorsement to all insurance policies. All policies,
endorsements and certificates evidencing the same shall be furnished to Secured Parties. All
insurance policies shall provide for at least 10 days’ prior written notice of cancellation to
Secured Parties;

          (i) Borrower will maintain the Collateral in good condition and repair, and Secured Parties
may examine and inspect the Collateral at any reasonable time and wherever located;

          (j) Borrower may permit the Collateral to be removed from the State of Colorado in its normal
and customary use, without the prior consent of Secured Parties;

          (k) Borrower will indemnify and hold the Secured Parties harmless from any and all loss,
damage, injury or other casualty to persons or property caused or occasioned by the maintenance,
operation and use of the Collateral by Borrower, its agents, invitees or employees;

          (l) Borrower will from time to time supply Secured Parties with a current list specifying the
Collateral at the request of Secured Parties;

          (m) With respect to any Collateral to be purchased with monies advanced by Secured Parties to
Borrower, this Security Agreement creates a purchase money security interest;

          (n) Borrower will execute and deliver such other and further instruments and will do such
other and further acts as in the opinion of the Secured Parties may be necessary or desirable to
carry out more effectually the purposes of this instrument, including, without limiting the
generality of the foregoing:

               (i) prompt correction of any defect which may hereafter be discovered in the title to the
Collateral or in the execution and acknowledgment of this Agreement, the Note, or the Loan
Documents; and

               (ii) prompt execution and delivery of all other documents or instruments which in the opinion
of the Secured Parties are needed to transfer effectually the Collateral or the proceeds or the
Collateral to the Secured Parties.

          (o) Borrower is duly organized and validly existing as a limited liability company under the
laws of the State of Colorado and the execution of this Agreement has been duly authorized and
approved by its Managers and, if required, by its Members. Borrower has full power and authority
to carry on its business as now being conducted with full power and authority to enter into this
Agreement and effect the transactions contemplated to be effected by and under the terms of this
Agreement;

          (p) There is no pending or threatened litigation, claim for infringement, proceeding or
investigation by any governmental authority or any other person known to Borrower against or
otherwise affecting Borrower or any of its assets or its officers, partners,

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directors or agents in their capacities as such, nor does the Borrower know of any ground for any such litigation,
infringement claims, proceedings or investigations;

          (q) No contract or organizational document prohibits any term or condition of the security
agreement;

          (r) The execution and delivery of this Security Agreement and the Notes will not violate any
law or agreement governing the Borrower or to which the Borrower is a party;

          (s) All information and statements furnished in connection with the Notes, this Security
Agreement and the Loan Documents are true and correct, and contain no false or misleading
statements;

          (t) Borrower acknowledges that Lenders will enter into an Agreement Among Lenders pursuant to
which Lenders may appoint an agent to act on their behalf (the “Agent”). A copy of the Agreement
Among Lenders shall be provided to Borrower. Borrower, upon receiving written notice signed by
Secured Parties who hold a majority of the outstanding principal balance of the Notes that an Agent
has been appointed on their behalf, shall acknowledge and accept the Agent’s authority to act on
behalf of the Secured Parties in accordance with the Agreement Among Lenders; and

          (u) Borrower will not take any action that has the effect of favoring one Secured Party over
any other Secured Party. Without limitation, Borrower will not make any payment under the Notes or
amend or modify its obligations under the Notes except on a pro rata basis with respect to all
Lenders.

     5. Secured Parties’ Right to Discharge. At their option, Secured Parties may
discharge taxes, liens, assessments, security interest or other encumbrances at any time levied or
placed on the Collateral, may pay for premiums for insurance on the Collateral, costs of
maintenance or preservation of the Collateral, and any other charges or expenses or perform any
obligation imposed upon Borrower hereunder. Borrower agrees to reimburse Secured Parties on demand
for any payment made, or any expense incurred by Secured Parties, pursuant to the foregoing
authorization. Until reimbursed, the amounts so advanced or expenses incurred shall be part of the
Indebtedness to the Note, with interest thereon at the default rate specified in the Note.

     6. Possession of Collateral. Until default, Borrower may have possession of the
Collateral and use it in any lawful manner not inconsistent with this Agreement and not
inconsistent with any policy of insurance thereon, but upon default Secured Parties shall have the
immediate right to possession and use of the Collateral.

     7. Events of Default. Any one of the following shall constitute a default for
purposes of this Security Agreement:

          (a) If the Borrower uses the Collateral in violation of any statute or ordinance; or

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          (b) If Borrower fails to promptly pay when due all taxes and assessments upon the Collateral
or fails to keep the Collateral in good condition and repair and fully insured; or

          (c) If Borrower fails to pay promptly in full the Indebtedness secured hereby when any part of
such Indebtedness becomes due and payable; or

          (d) If Borrower breaches any term, condition, representation or covenant to be performed or
observed by Borrower provided in this Security Agreement or the Loan Documents securing part or all
of the Indebtedness of Borrower to Secured Parties; or

          (e) If any warranty, representation or statement made or furnished to Secured Parties by or on
behalf of Borrower in connection with the Security Agreement proves to have been false in any
respect; or

          (f) If the Collateral, or any part thereof, is levied upon or seized under any levy or
attachment or any other legal process; or

          (g) The insolvency (however evidenced) or the commission of any act of insolvency by Borrower,
or the making of an assignment to or for the benefit of creditors of Borrower, or the appointment
of a receiver, liquidator, conservator or trustee of Borrower, or its property, or the filing of a
voluntary petition or the commencement of any proceeding by Borrower for relief under any
bankruptcy, insolvency, reorganization, arrangement or receivership laws, or any other law relating
to the relief of debtors of any state or of the United States, or the filing of any involuntary
petition (unless and until discharged or dismissed within 30 days after such filing) for the
bankruptcy, insolvency, reorganization, arrangement or receivership or the involuntary commencement
of any similar proceeding under the laws of any state or of the United States relating to the
relief of debtors, against Borrower; or

          (h) If the Collateral suffers substantial damage or destruction, or if any of the items of
Collateral existing from time to time is lost or stolen, and is not immediately repaired or
replaced.

     In the event of default, the Secured Parties, at their option, may declare the entire unpaid
principal of and the interest accrued on the Indebtedness secured hereby to be forthwith due and
payable, without any notice or demand of any kind, both of which are hereby expressly waived.

     8. Remedies of the Secured Parties in Event of Default. Borrower agrees that upon the
occurrence of any default set forth above, the full amount remaining unpaid on the Indebtedness secured hereby shall, at the option of Secured Parties and without notice, be and become due
and payable forthwith, and Secured Parties shall then have the rights, options, duties and remedies
of secured parties under, and the Borrower shall have the rights and duties of a debtor under, the
Uniform Commercial Code of Colorado, including without limitation the right in Secured Parties to
take possession of the Collateral and of anything found therein, and the right without legal
process to enter any premises where the Collateral may be found. Borrower further agrees in any
such case to assemble the Collateral and make it available to Secured Parties as directed by
Secured Parties. Secured Parties shall have the right and power to sell, at one or more sales, as
an entirety or in parcels, in public or private sales as they may elect, the

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Collateral, or any of it, at such place or places and otherwise in such manner and upon such notice as the Secured
Parties may deem appropriate, in its sole discretion, and to make conveyance to the purchaser or
purchasers; and the Borrower shall warrant title to the Collateral to such purchaser or purchasers.
If the Collateral is to be sold in a public sale, the Secured Parties may postpone the sale of all
or any portion of the Collateral by public announcement at the time and place of such sale, and
from time to time thereafter may further postpone such sale by public announcement made at time of
sale fixed by the preceding postponement. The right of sale hereunder shall not be exhausted by
one or any sale, and the Secured Parties may make other and successive sales until all of the
Collateral is sold. It shall not be necessary for the Secured Parties to be physically present at
any such sale, or to have constructively in their possession, any or all of the personal property
covered by this Security Agreement, and the Borrower shall deliver all of such personal property to
the purchaser at such sale on the date of sale, and if it should be impossible or impractical to
take actual delivery of such property, then the title and the right of possession to such property
shall pass to the purchaser at such sale as completely as if the same had been actually present and
delivered.

          (a) Judicial Proceedings. Upon occurrence of an event of default, the Secured Parties
in lieu of or in addition to exercising the power of sale hereinabove given, may proceed by a suit
or suits in equity or at law, whether for a foreclosure hereunder, or of the sale of the
Collateral, or for the specific performance of any covenant or agreement herein contained or in aid
of the execution of any power herein granted, or for the appointment of a receiver pending any
foreclosure hereunder of the sale of the Collateral, or for the enforcement of any other
appropriate legal or equitable remedy.

          (b) Certain Aspects of a Sale. The Secured Parties shall have the right to become the
purchaser at any sale held by it or by any court, receiver or public officer, and the Secured
Parties shall have the right to credit upon the amount of the bid made therefor, the amount payable
out of the net proceeds of such sale to them. Recitals contained in any covenant made to any
purchaser at any sale made hereunder shall conclusively establish the truth and accuracy of the
matters therein stated, including, without limiting the generality of the foregoing, non-payment of
the unpaid principal sum of, and the interest accrued on, the Indebtedness after the same has
become due and payable, and advertisement and conduct of such sale in the manner provided herein.

          (c) Receipt to Purchaser. Upon any sale, whether made under the power of sale herein
granted and conferred or by judicial proceedings, the receipt of the Secured Parties, or of the
officer making sale under judicial proceedings, shall be sufficient to discharge the purchaser or
purchasers at any sale for his or their purchase money, and such purchaser or purchasers, his or their assigns or personal representatives, shall not, after paying such purchase money and
receiving such receipt of the Secured Parties or of such officer therefor, be obligated to see the
application of such purchase money, or be in any way answerable for any loss, misapplication or
non-application thereof.

          (d) Effect of Sale. Any sale or sales of the Collateral, whether under the power of
sale herein granted and conferred or by virtue of judicial proceedings, shall operate to divest all
right, title, interest, claim and demand whatsoever either at law or in equity, of the Borrower of,
in and to the property sold, and shall be a perpetual bar, both at law and in equity,

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against the Borrower, Borrower’s successors or assigns and against any and all persons claiming or who shall
thereafter claim all or any of the property sold from, through or under the Borrower or Borrower’s
successors or assigns; nevertheless, the Borrower, if so requested by the Secured Parties, shall
join in the execution and delivery of all property conveyances, assignments and transfers of the
properties so sold.

          (e) Application of Proceeds. The proceeds of any sale of the Collateral or any part
thereof, whether under and conferred or by virtue of judicial proceedings, shall be applied as
follows:

               (i) To the payment of all expenses incurred by the Secured Parties in any entry or taking of
possession, of any sale, of advertisement thereof, and of conveyances, and court costs,
compensation of agents and employees and attorneys’ fees;

               (ii) To the payment of the Indebtedness with interest to the date of such payment; and

               (iii) Any surplus thereafter remaining shall be paid to the Borrower or Borrower’s successors
or assigns, as their interests shall appear.

          (f) Borrower’s Waiver of Appraisement, Marshaling, Etc., Rights. The Borrower agrees,
to the full extent that the Borrower may lawfully so agree, that the Borrower will not at any time
insist upon or plead or in any manner whatever claim the benefit of any appraisement, valuation,
stay, extension or redemption law now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Security Agreement or the sale of the Collateral or the
possession thereof by any purchaser at any sale made pursuant to any provision hereof; and the
Borrower, for Borrower and all who may claim through or under Borrower now or hereafter, hereby
waives the benefit of all such laws. The Borrower, for the Borrower and all who may claim through
or under Borrower, waives any and all right to have the Collateral marshaled upon any foreclosure
of the lien hereof, or sold in inverse order of alienation, and agrees that the Secured Parties or
any court having jurisdiction to foreclose such lien may sell the Collateral as an entirety.

          (g) Costs and Expenses. All costs and expenses for retaking, holding, storing,
preparing for sale, selling and documenting such transactions (including attorneys’ fees) incurred
by the Secured Parties in protecting and enforcing their rights hereunder, shall constitute a
demand obligation owing by the Borrower to the Secured Parties at the effective rate of interest of
the Note, all of which shall constitute a portion of the Indebtedness.

          (h) Operation of Property by the Secured Party. Upon the occurrence of an event of
default and in addition to all other rights herein conferred on the Secured Parties, the Secured
Parties (or any person, firm or corporation designated by the Secured Parties) shall have the right
and power, but shall not be obligated, to enter upon and take possession of any of the Collateral,
and to exclude the Borrower, and the Borrower’s agents or servants, wholly therefrom and to hold,
use, administer, manage and operate the same to the extent that the Borrower shall be at the time
entitled and in its place. The Secured Parties, or any person, firm or corporation designated by
them, shall have the right to collect, receive and receipt for all payments with

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respect to the Collateral or the goods, services produced and sold from the Collateral, and to exercise every
power, right and privilege of the Borrower with respect to the Collateral.

     9. Notification. Any requirement of the Uniform Commercial Code of reasonable
notification of the time and place of any public sale, or the time after which any private sale or
other disposition is to be made, shall be met by mailing to the Borrower at the address shown at
the beginning of this Agreement, at least ten (10) days’ prior notice of the time and place of any
public sale or the time after which any private sale or any other intended disposition is to be
made. Borrower shall be and remain liable for any deficiency remaining after applying the proceeds
of disposition of the Collateral as provided in this Security Agreement.

     10. No Waiver. The making of this Security Agreement shall not waive or impair any
other security Secured Parties may have or hereafter acquire for the payment of the Indebtedness,
nor shall the taking of any such additional security waive or impair this Security Agreement; but
Secured Parties may resort to any security they may have in the order they may deem proper, and
Secured Parties shall retain their rights to set-off against Borrower, notwithstanding any rights
to the Collateral hereunder.

     11. Advances by the Secured Parties. Each and every covenant herein contained shall
be performed and kept by the Borrower solely at the Borrower’s expense. If the Borrower shall fail
to perform or keep any of the covenants of whatsoever kind or nature contained in this instrument,
the Secured Parties, or any receiver appointed hereunder, may, but shall not be obligated to, make
advances to perform the same on the Borrower’s behalf, and the Borrower hereby agrees to repay such
sums upon demand plus interest as a part of the Indebtedness. No such advance shall be deemed to
relieve the Borrower from any default hereunder.

     12. Defense of Claims. The Borrower will notify the Secured Parties in writing,
promptly of the commencement of any legal proceedings affecting the lien hereof or the Collateral
or any part thereof, and will take such action, employing attorneys acceptable to the Secured
Parties or, as may be necessary to preserve the Borrower’s and the Secured Parties’ rights affected
thereby; and should the Borrower fail or refuse to take any such action, the Secured Parties may,
upon giving prior written notice thereof to the Borrower, take such action on behalf and in the
name of the Borrower and at the Borrower’s expense. The Secured Parties may also take such
independent action in connection therewith as it may, in its discretion, deem proper, the Borrower
hereby agreeing that all sums advanced or all expenses incurred in such actions plus interest,
will, on demand, be reimbursed to the Secured Parties, or any receiver appointed hereunder, and
shall become part of the Indebtedness.

     13. Payment of the Indebtedness. If the Indebtedness shall be fully paid and the
covenants herein contained shall be performed, the entire right, title and interest of the Secured
Parties shall thereupon cease; and the Secured Parties in such case shall, upon the request of the
Borrower and at the Borrower’s cost and expense, deliver to the Borrower proper instruments
acknowledging satisfaction of this Security Agreement.

     14. Renewals, Amendments and Other Security. Renewals and extensions of the
Indebtedness may be given at any time and amendments may be made to agreements relating to any part
of the Indebtedness without notice to or consent of the Borrower. The Secured Parties

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may resort first to such other security or any part thereof or first to the security herein given or any part
thereof, or from time to time to either or both, even to the partial or complete abandonment of
either security, and such action shall not be a waiver of any rights conveyed by this Security
Agreement, which shall continue as a lien upon the Collateral not expressly released until the
Indebtedness secured hereby is fully paid.

     15. Release. No release from the lien of this Security Agreement or any part of the
Collateral by Secured Parties shall in any way alter, vary, or diminish the force, effect or lien
of this Security Agreement on the balance of the Collateral.

     16. Subrogation. This Security Agreement is made with full substitution and
subrogation of Secured Parties in and to all covenants and warranties by another heretofore given
or made in respect of the Collateral or any part thereof.

     17. Governing Law. This Security Agreement shall be governed by the laws of the State
of Colorado.

     18. Instrument and Assignment, Etc. This Security Agreement shall be deemed to be and
may be enforced from time to time as an assignment, chattel mortgage, contract, financing
statement, real estate mortgage or security agreement, and from time to time as any one or more
thereof.

     19. Limitation on Interest. No provision of this Security Agreement or of the
Indebtedness shall require the payment or permit the collection of interest in excess of the
maximum permitted by law or which is otherwise contrary to law. If any excess of interest in such
respect is herein or in the Indebtedness provided for, or shall be adjudicated to be so provided
for herein or in the Indebtedness, the Borrower shall not be obligated to pay such excess.

     20. Unenforceable or Inapplicable Provisions. If any provision hereof or of the
Indebtedness is invalid or unenforceable in any jurisdiction, or with respect to any person or
property, the other provisions hereof or of the Indebtedness in such jurisdiction and the
application thereof to any other person or property, shall remain in full force and effect, and the
remaining provisions hereof shall be liberally construed in favor of the Secured Parties in order
to effectuate the provisions thereof. The invalidity of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of any such provision in any other jurisdiction.

     21. Rights Cumulative. Each and every right, power and remedy herein given to the
Secured Parties shall be cumulative and not exclusive; and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to
time and so often and in such order as may be deemed expedient by the Secured Parties, and the
exercise, or the beginning of the exercise, or any such right, power or remedy shall not be deemed
a waiver of the right to exercise, at the same time or thereafter, any other right, power or
remedy. No delay or omission by the Secured Parties in the exercise of any right, power or remedy
shall impair any such right, power or remedy then or thereafter existing.

     22. Waiver by the Secured Parties. Any and all covenants in this Security Agreement
may from time to time by instrument in writing signed by the Secured Parties be waived to such

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extent and in such manner as the Secured Parties may desire, but no such waiver shall ever affect
or impair the Secured Parties’ rights or liens hereunder, except to the extent specifically stated
in such written instrument.

     23. Successors and Assigns. This Security Agreement is binding upon the Borrower, the
Borrower’s successors and assigns, and shall inure to the benefit of the Secured Parties, their
successors and assigns.

     24. Section Headings. The section headings in this instrument are inserted for
convenience and shall not be considered a part of this Security Agreement or used in its
interpretation.

     25. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which shall, for all purposes, be deemed to be an original, and all of which
are identical except that, to facilitate filing and recordation, in any particular counterpart
portions of the Exhibits hereto which describe properties situated in counties other than the
county in which such counterpart is to be recorded may have been omitted. All counterparts shall
together constitute but one and the same instrument.

     26. Special Filing as Financing Statement. This Security Agreement shall be a
Security Agreement and a Financing Statement and Borrower hereby grants to Secured Parties, their
successors and assigns, a security interest in all Collateral described herein and all proceeds
from the sale, lease or other disposition of the Collateral or any part thereof. This Agreement
may be filed for record, among other places, in the real estate records of each county in which the
Collateral, or any part thereof, is situated, and when filed in such counties shall be effective as
a financing statement covering fixtures, minerals, timber or located on properties (and accounts
arising therefrom). This Security Agreement may also be filed as a Financing Statement in the
office of the Secretary of State, as appropriate, in respect of those items of Collateral of a kind
or character defined in or subject to the applicable provisions of the Uniform Commercial Code, as
in effect in the appropriate jurisdiction with respect to each of the properties, rights and
interests.

     27. Notices. Any notice, request, demand or other instrument which may be required or
permitted to be given or served upon the Borrower or the Secured Parties shall be in writing and
shall be validly given or sent by certified mail, return receipt requested; or by telegram, telex
or express courier holding itself out as able to make delivery within 72 hours after receipt, or by
hand-delivery receipted by the addressee, and addressed to the Borrower or Secured Parties, as the
case may be, at its address shown above, or to such different address as shall have been designated by written notice to the other party hereunder. Notices shall be effective on the
date mailed to the Borrower and on the date received by Secured Parties.

     28. WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND BETWEEN BORROWER AND SECURED
PARTIES THAT THE RESPECTIVE PARTIES WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
BROUGHT BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS

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AGREEMENT, THE PROMISSORY NOTE AND ALL OTHER INSTRUMENTS EXECUTED IN
CONNECTION THEREWITH.

     IN WITNESS WHEREOF, the Borrower has executed or caused to be executed this Security
Agreement.

	 	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 
	A SMART MOVE L.L.C.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Chris Sapyta	 	 
	 

	 	 	 	 

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SCHEDULE 1

Attached to and made a part of Security Agreement

between

A Smart Move L.L.C.

as Borrower,

and

the Secured Parties Named Below

	 	 	 	 	 
	Name	 	Address	 	Principal Amount
	 
	 	 	 	 
	 	 	 	$	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	$	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	$	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	$	 
	 
	 	 	 	 

 

 

SCHEDULE 2

Attached to and made a part of Security Agreement

between

A Smart Move L.L.C.

as Borrower,

and

the Secured Parties Identified

on Schedule 1

Description of Collateral

     The Collateral consists of all of Borrower’s right, title and interest in and to the following
whether owned now or hereafter arising and whether the Borrower has rights now or hereafter has
rights therein and wherever located:

     All goods and equipment now owned or hereafter acquired, including, without limitation, all
machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of
the foregoing, and all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located;

     All inventory, now owned or hereafter acquired, including, without limitation, all
merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products including such inventory as is temporarily out of Borrower’s custody or
possession or in transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above;

     All contract rights and general intangibles (as such definitions may be amended from time to
time according to the Code), now owned or hereafter acquired, including, without limitation,
goodwill, trademarks, servicemarks, trade styles, trade names, patents, patent applications,
leases, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer
lists, route lists, infringements, claims, computer programs, computer discs, computer tapes,
literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights
to payment of any kind,;

     All now existing and hereafter arising accounts, contract rights, royalties, license rights
and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the
licensing of technology or the rendering of services by Borrower (as such definitions may be
amended from time to time according to the Code) whether or not earned by performance, and any and
all credit insurance, insurance (including refund) claims and proceeds, guaranties, and other
security therefor, as well as all merchandise returned to or reclaimed by Borrower;

     All documents, cash, deposit accounts, securities, securities entitlements, securities
accounts, investment property, financial assets, letters of credit, letter of credit rights,
certificates of deposit, instruments and chattel paper and electronic chattel paper now owned or
hereafter acquired and Borrower’s Books relating to the foregoing;

 

 

     All copyright rights, copyright applications, copyright registrations and like protections in
each work of authorship and derivative work thereof, whether published or unpublished, now owned or
hereafter acquired; all trade secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the protection of
semiconductor chips, now owned or hereafter acquired; all claims for damages by way of any past,
present and future infringement of any of the foregoing; and

     All Borrower’s Books relating to the foregoing and any and all claims, rights and interests in
any of the above and all substitutions for, additions and accessions to and proceeds thereof.

2exv10w7

 

Exhibit 10.7

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND
NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (II) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.

A SMART MOVE L.L.C

COMMON STOCK PURCHASE WARRANT

	 	 	 
	Warrant #D2-

	 	                     shares

Original Issue Date: September 26, 2005

     THIS CERTIFIES THAT, FOR VALUE RECEIVED,                      or its registered assigns (“Holder”)
is entitled to purchase, on the terms and conditions hereinafter set forth, at any time or from
time to time from the date hereof until 5:00 p.m., Eastern Time, on fifth anniversary of the
Original Issue Date set forth above, or if such date is not a day on which the Company (as
hereinafter defined) is open for business, then the next succeeding day on which the Company is
open for business (such date is the “Expiration Date”), but not thereafter, to purchase up to
                     (___) shares of the Common Stock, $.001 par value (the “Common Stock”), of A Smart
Move L.L.C., a Colorado limited liability corporation (the “Company”), at a purchase price of five
dollars ($5.00) per share (the “Exercise Price”), such number of shares and Exercise Price being
subject to adjustment upon the occurrence of the contingencies set forth in this Warrant. Each
share of Common Stock as to which this Warrant is exercisable is a “Warrant Share” and all such
shares are collectively referred to as the “Warrant Shares.”

     Section 1. Exercise of Warrant; Conversion of Warrant.

     (a) This Warrant may, at the option of Holder, be exercised in whole or in part from time to
time by delivery to the Company at its principal office, Attention: President, on or before 5:00
p.m., Eastern Time, on the Expiration Date, (i) a written notice of such Holder’s election to
exercise this Warrant (the “Exercise Notice”), which notice may be in the form of the Notice of
Exercise attached hereto, properly executed and completed by Holder or an authorized officer
thereof, (ii) payment for the Warrant Shares (“Payment”), as further described in Section 1(b),
below, and (iii) this Warrant (the items specified in (i), (ii), and (iii) are collectively the
“Exercise Materials”).

     (b) Payment may be made either in (i) a check payable to the order of the Company, in an
amount equal to the product of the Exercise Price multiplied by the number of Warrant Shares
specified in the Exercise Notice, (ii) by delivery of Warrants, Common Stock and/or Common Stock
receivable upon exercise of the Warrants in accordance with Section 1(c) below, or (iii) by a
combination of any of the foregoing methods) for the number of Common Shares specified in such form
(as such exercise number shall be adjusted to reflect any adjustment in the total number of shares
of Common Stock issuable to the holder per the terms of this Warrant) and the holder shall
thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as provided herein.

 

 

   (c) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one
share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash the holder may elect to receive shares equal to
the value (as determined below) of this Warrant (or the portion thereof being cancelled) by
surrender of this Warrant at the principal office of the Company together with the properly
endorsed Subscription Form in which event the Company shall issue to the holder a number of shares
of Common Stock computed using the following formula:

	 	 	 	 	 
	 	 	X=Y (A-B)
	 

	 	 	 	   A
	Where

	 	X=
	 	the number of shares of Common Stock to be issued to the holder
	 
	 	 	 	 
	 

	 	Y=
	 	the number of shares of Common Stock
purchasable under the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being exercised (at the
date of such calculation)
	 
	 	 	 	 
	 

	 	A=
	 	the Fair Market Value of one share of the
Company’s Common Stock (at the date of such calculation)
	 
	 	 	 	 
	 

	 	B=
	 	Purchase Price (as adjusted to the date of such calculation)

     (d) Anything contained herein to the contrary notwithstanding, the Holder, at his option, may
exercise the Warrants, in whole or in part, during the Exercise Term by delivering to the Company a
confirmation slip issued by a brokerage firm that is a member of the National Association of
Securities Dealers, Inc. with respect to the sale of those number of Warrant Shares for which the
Warrants are being exercised, and, in such case, the Company shall deliver certificates
representing such Warrant Shares on settlement date at the office of the Company’s stock transfer
agent against payment for such Warrant Shares by such brokerage firm or its clearing broker, made
payable to the Company or made payable to the order of the Holder and endorsed by the Holder to the
Company.

     (e) As promptly as practicable, and in any event within two (2) business days after its
receipt of the Exercise Materials, Company shall execute or cause to be executed and delivered to
Holder a certificate or certificates representing the number of Warrant Shares specified in the
Exercise Notice, together with cash in lieu of any fraction of a share, and if this Warrant is
partially exercised, a new warrant on the same terms for the unexercised balance of the Warrant
Shares. The stock certificate or certificates shall be registered in the name of Holder or such
other name or names as shall be designated in the Exercise Notice. The date on which the Warrant
shall be deemed to have been exercised (the “Effective Date”), and the date the person in whose
name any certificate evidencing the Common Stock issued upon the exercise hereof is issued shall be
deemed to have become the holder of record of such shares, shall be the date the Company receives
the Exercise Materials, irrespective of the date of delivery of a certificate or certificates
evidencing the Common Stock issued upon the exercise or conversion hereof, provided, however, that
if the Exercise Materials are received by the Company on a date on which the stock transfer books
of the Company are closed, the Effective Date shall be the next succeeding date on which the stock
transfer books are open. All shares of Common Stock issued upon the exercise or conversion of this
Warrant will, upon issuance, be fully paid and nonassessable and free from all taxes, liens, and
charges with respect thereto.

 

 

       Section 2. Adjustments to Warrant Shares. The number of Warrant Shares issuable upon the
exercise hereof shall be subject to adjustment as follows:

     (a) In the event the Company is a party to a consolidation, share exchange, or merger,
or the sale of all or substantially all of the assets of the Company to, any person, or in
the case of any consolidation or merger of another corporation into the Company in which the
Company is the surviving corporation, and in which there is a reclassification or change of
the shares of Common Stock of the Company, this Warrant shall after such consolidation,
share exchange, merger, or sale be exercisable for the kind and number of securities or
amount and kind of property of the Company or the corporation or other entity resulting from
such share exchange, merger, or consolidation, or to which such sale shall be made, as the
case may be (the “Successor Company”), to which a holder of the number of shares of Common
Stock deliverable upon the exercise (immediately prior to the time of such consolidation,
share exchange, merger, or sale) of this Warrant would have been entitled upon such
consolidation, share exchange, merger, or sale; and in any such case appropriate adjustments
shall be made in the application of the provisions set forth herein with respect to the
rights and interests of Holder, such that the provisions set forth herein shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation to the
number and kind of securities or the type and amount of property thereafter deliverable upon
the exercise of this Warrant. The above provisions shall similarly apply to successive
consolidations, share exchanges, mergers, and sales. Any adjustment required by this
Section 2 (a) because of a consolidation, share exchange, merger, or sale shall be set forth
in an undertaking delivered to Holder and executed by the Successor Company which provides
that Holder shall have the right to exercise this Warrant for the kind and number of
securities or amount and kind of property of the Successor Company or to which the holder of
a number of shares of Common Stock deliverable upon exercise (immediately prior to the time
of such consolidation, share exchange, merger, or sale) of this Warrant would have been
entitled upon such consolidation, share exchange, merger, or sale. Such undertaking shall
also provide for future adjustments to the number of Warrant Shares and the Exercise Price
in accordance with the provisions set forth in Section 2 hereof.

     (b) In the event the Company should at any time, or from time to time after the
Original Issue Date, fix a record date for the effectuation of a stock split or subdivision
of the outstanding shares of Common Stock or the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in additional shares of Common
Stock, or securities or rights convertible into, or entitling the holder thereof to receive
directly or indirectly, additional shares of Common Stock (hereinafter referred to as
“Common Stock Equivalents”) without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon exercise or exercise thereof), then, as of such record
date (or the date of such dividend, distribution, split, or subdivision if no record date is
fixed), the number of Warrant Shares issuable upon the exercise hereof shall be
proportionately increased and the Exercise Price shall be appropriately decreased by the
same proportion as the increase in the number of outstanding Common Stock Equivalents of the
Company resulting from the dividend, distribution, split, or subdivision. Notwithstanding
the preceding sentence, no adjustment shall be made to decrease the Exercise Price below
$.001 per Share.

     (c) In the event the Company should at any time or from time to time after the Original
Issue Date, fix a record date for the effectuation of a reverse stock split, or a
transaction having a similar effect on the number of outstanding shares of Common Stock of
the Company, then, as of such record date (or the date of such reverse stock split or
similar transaction if no

 

 

record date is fixed), the number of Warrant Shares issuable upon
the exercise hereof shall be proportionately decreased and the Exercise Price shall be
appropriately increased by the same proportion as the decrease of the number of outstanding
Common Stock Equivalents resulting from the reverse stock split or similar transaction.

     (d) In the event the Company should at any time or from time to time after the Original
Issue Date, fix a record date for a reclassification of its Common Stock, then, as of such
record date (or the date of the reclassification if no record date is set), this Warrant
shall thereafter be convertible into such number and kind of securities as would have been
issuable as the result of such reclassification to a holder of a number of shares of Common
Stock equal to the number of Warrant Shares issuable upon exercise of this Warrant
immediately prior to such reclassification, and the Exercise Price shall be unchanged.

     (e) The Company will not, by amendment of its Certificate of Incorporation or through
reorganization, consolidation, merger, dissolution, issue, or sale of securities, sale of
assets or any other voluntary action, void or seek to avoid the observance or performance of
any of the terms of the Warrant, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such actions as may be necessary or
appropriate in order to protect the rights of Holder against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (x) will not create a par
value of any share of stock receivable upon the exercise of the Warrant above the amount
payable therefor upon such exercise, and (y) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and
non-assessable shares upon the exercise of the Warrant.

     (f) When any adjustment is required to be made in the number or kind of shares
purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall
promptly notify Holder of such event and of the number of shares of Common Stock or other
securities or property thereafter purchasable upon exercise of the Warrants and of the
Exercise Price, together with the computation resulting in such adjustment.

     (g) The Company covenants and agrees that all Warrant Shares which may be issued will,
upon issuance, be validly issued, fully paid, and non-assessable. The Company further
covenants and agrees that the Company will at all times have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to provide for the
exercise of the Warrant in full.

       Section 3. No Stockholder Rights. This Warrant shall not entitle Holder hereof to any voting
rights or other rights as a stockholder of the Company.

       Section 4. Transfer of Securities.

     (a) This Warrant and the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification thereof, a
stock dividend thereon, or otherwise, shall not be transferable except upon compliance with the
provisions of the Securities Act of 1933, as amended (the “Securities Act”) and applicable
state securities laws with respect to the transfer of such securities. The Holder, by
acceptance of this Warrant, agrees to be bound by the provisions of Section 4 hereof and to
indemnify and hold harmless the Company against any loss or liability arising from the
disposition of this Warrant or the Warrant Shares issuable upon exercise hereof or any
interest in either thereof in violation of the provisions of this Warrant.

 

 

       (b) Each certificate for the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification thereof, a stock
dividend thereon or otherwise, and each certificate for any such securities issued to subsequent
transferees of any such certificate shall (unless otherwise permitted by the provisions hereof) be
stamped or otherwise imprinted with a legend in substantially the following form:

“NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED
UNTIL (I) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) THE
COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.”

      Section 5. Registration.

       All Warrant Shares are subject to the rights and privileges granted to the participants in the
private placement offering pursuant to which this Warrant was issued.

       Section 6. Miscellaneous.

          (a) The terms of this Warrant shall be binding upon and shall inure to the benefit of any
successors or permitted assigns of the Company and Holder.

          (b) Except as otherwise provided herein, this Warrant and all rights hereunder are
transferable by the registered holder hereof in person or by duly authorized attorney on the books
of the Company upon surrender of this Warrant, properly endorsed, to the Company. The Company may
deem and treat the registered holder of this Warrant at any time as the absolute owner hereof for
all purposes and shall not be affected by any notice to the contrary.

          (c) Notwithstanding any provision herein to the contrary, Holder may not exercise, sell,
transfer, or otherwise assign this Warrant unless the Company is provided with an opinion of
counsel satisfactory in form and substance to the Company, to the effect that such exercise, sale,
transfer, or assignment would not violate the Securities Act or applicable state securities laws.

          (d) This Warrant may be divided into separate warrants covering one share of Common Stock or
any whole multiple thereof, for the total number of shares of Common Stock then subject to this
Warrant at any time, or from time to time, upon the request of the registered holder of this
Warrant and the surrender of the same to the Company for such purpose. Such subdivided Warrants
shall be issued promptly by the Company following any such request and shall be of the same form
and tenor as this Warrant, except for any requested change in the name of the registered holder
stated herein.

          (e) Any notices, consents, waivers, or other communications required or permitted to be given
under the terms of this Warrant must be in writing and will be deemed to have been delivered (a)
upon receipt, when delivered personally, (b) upon receipt, when sent by facsimile, provided a copy
is mailed by U.S. certified mail, return receipt requested, (c) three (3) days after being sent by
U.S. certified mail, return receipt requested, or (d) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the party to receive the
same.

 

 

     If to Holder, to the registered address of Holder appearing on the books of the Company. Each
party shall provide five (5) days prior written notice to the other party of any change in address,
which change shall not be effective until actual receipt thereof

          (f) This Warrant shall be construed and enforced in accordance with the laws of the State of
Illinois. The Company and the Holder hereby consent to the jurisdiction of the Courts of the State
of Colorado and the United States District Courts situated therein in connection with any action
concerning the provisions of this Note instituted by the Holder against the Company.

[Signatures on the following page]

 

 

SIGNATURE PAGE

TO

COMPANY

COMMON STOCK PURCHASE WARRANT

     IN WITNESS WHEREOF, the Company, has caused this Warrant to be executed in its name by its
duly authorized officers under seal, and to be dated as of the date first above written.

	 	 	 	 	 
	 	 	A Smart Move L.L.C.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Chris Sapyta
	 

	 	 	 	 
	 

	 	 	 	Name: Chris Sapyta
	 

	 	 	 	Title:   Chief Executive Officer

 

 

ASSIGNMENT

     (To be Executed by the Registered Holder to effect a Transfer of the foregoing Warrant)

     FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and transfers unto
                                                                                                                                             the foregoing Warrant
and the rights represented thereto to purchase shares of Common Stock of A SMART MOVE L.L.C. in
accordance with terms and conditions thereof, and does hereby irrevocably constitute and appoint
                     Attorney to transfer the said Warrant on the books of the Company, with full power
of substitution.

	 	 	 	 	 	 	 
	 

	 	Holder:	 	 
	 

	 	 	 	 
	 

	 	 

	 

	 	 	 	 
	 

	 	 

	 

	 	 	 	 
	 

	 	Address	 	 
	 

	 	 	 	 
	 

	 	Dated:	, 20	 	 	 
	 	 	 
	 	 
	 

	 	 	 	 
	 

	 	In the presence of:	 	 
	 
	 	 	 	 
	 

	 	 

 

 

EXERCISE OR CONVERSION NOTICE

     [To be signed only upon exercise of Warrant]

To: A SMART MOVE L.L.C.

     The undersigned Holder of the attached Warrant hereby irrevocably elects to exercise the
Warrant for, and to purchase thereunder, ___ shares of Common Stock of A SAMRT MOVE L.L.C, upon
exercise of said Warrant and hereby surrenders said Warrant.

     The undersigned herewith requests that the certificates for such shares be issued in the name
of, and delivered to the undersigned, whose address is                                         .

If electronic book entry transfer, complete the following:

	 	 	 
	 

	Account
Number:  
	 

	 	 
	 

	Transaction Code
Number:  
	 

	 	 
	 

	Dated: 

	 	 	 	 	 
	 	 	Holder:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

NOTICE

     The signature above must correspond to the name as written upon the face of the within Warrant
in every particular, without alteration or enlargement or any change whatsoever.

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