Document:

ex10_3.htm

    
      

    

    Exhibit
10.3

     

    FUNDS
ESCROW AGREEMENT

    

    This
Funds Escrow Agreement (this “Agreement”) is dated
as of July 11, 2008 among Rapid Link, Inc., a Delaware corporation (the “Parent”),
Telenational Communications, Inc., a Delaware corporation, One Ring Networks,
Inc., a Delaware corporation (collectively with the Parent, the “Companies”), Laurus
Master Fund, Ltd. (“Laurus”), Valens U.S.
SPV I, LLC (“Valens
US”), Valens Offshore SPV II, Corp. (“Valens Offshore” and
together with Valens US and Laurus, collectively, the “Lenders”), and Loeb
& Loeb LLP (the “Escrow
Agent”).

    

    W I T N E S S E T H:

    

    WHEREAS,
LV Administrative Services, Inc., as administrative and collateral agent for the
Lenders (the “Agent”), has advised
the Escrow Agent that (a) the Companies, the Agent and the Lenders have entered
into a Security Agreement (the “Security Agreement”)
pursuant to which the Companies issued to the Lenders secured term notes (the
“Term Notes”),
secured revolving notes (the “Revolving Notes”) and
deferred purchase price notes (the “Deferred Purchase Price
Notes”), (b) the Parent has issued to Valens US and Valens Offshore
common stock purchase warrants (the “Warrants”) and (c)
the Parent, Valens US and Valens Offshore have entered into Registration Rights
Agreements covering the registration of the Parent’s common stock underlying the
Warrants (the “Registration Rights
Agreements”);

    

    WHEREAS,
the Company and the Lenders wish to deliver to the Escrow Agent copies of the
Documents (as hereafter defined) and, following the satisfaction of all closing
conditions relating to the Documents, the Lenders to deliver the Escrowed
Payment (as hereafter defined), in each case, to be held and released by Escrow
Agent in accordance with the terms and conditions of this Agreement;
and

    

    WHEREAS,
the Escrow Agent is willing to serve as escrow agent pursuant to the terms and
conditions of this Agreement;

    

    NOW
THEREFORE, the parties agree as follows:

    

    ARTICLE
I

    

    INTERPRETATION

    

    1.1.           Definitions.  Whenever
used in this Agreement, the following terms shall have the meanings set forth
below.

    

    (a)           “Agreement” means this
Agreement, as amended, modified and/or supplemented from time to time by written
agreement among the parties hereto.

    

    (b)           “Closing Payment”
means the closing payment to be paid to Valens Capital Management, LLC, the
investment manager of Valens US and Valens Offshore, in the amount of
$94,500.

    

    (c)           “Creditor Parties”
means collectively, the Agent and the Lenders.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (d)           “Disbursement Letter”
means that certain letter delivered to the Escrow Agent by the Companies,
acceptable in form and substance to the Agent, setting forth wire instructions
and amounts to be funded at the Closing.

    

    (e)           “Documents” means
copies of the Disbursement Letter, the Security Agreement, the Term Notes, the
Revolving Notes, Deferred Purchase Price Notes the Warrants and the Registration
Rights Agreements.

    

    (f)           “Escrowed Payment”
means $1,500,000.

    

    1.2.           Entire
Agreement.  This Agreement constitutes the entire agreement
among the parties hereto with respect to the arrangement with the Escrow Agent
and supersedes all prior agreements, understandings, negotiations and
discussions of the parties, whether oral or written with respect to the
arrangement with the Escrow Agent.  There are no warranties,
representations and other agreements made by the parties in connection with the
arrangement with the Escrow Agent except as specifically set forth in this
Agreement.

    

    1.3.           Extended
Meanings.  In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders.  The word “person” includes
an individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.

    

    1.4.           Waivers and
Amendments.  This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, in each case only by a written instrument signed by all parties
hereto, or, in the case of a waiver, by the party waiving
compliance.  Except as expressly stated herein, no delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder preclude any other or future exercise of any other
right, power or privilege hereunder.

    

    1.5.           Headings.  The
division of this Agreement into articles, sections, subsections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.

    

    1.6.           Law Governing this
Agreement; Consent to Jurisdiction.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  With respect to
any suit, action or proceeding relating to this Agreement or to the transactions
contemplated hereby (“Proceedings”), each
party hereto irrevocably submits to the exclusive jurisdiction of the courts of
the County of New York, State of New York and the United States District court
located in the county of New York in the State of New York.  Each
party hereto hereby irrevocably and unconditionally (a) waives trial by jury in
any Proceeding relating to this Agreement and for any related counterclaim and
(b) waives any objection which it may have at any time to the laying of venue of
any Proceeding brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have
jurisdiction over such party.  As between the Companies and the
Lenders, the prevailing party shall be entitled to recover from the other party
its reasonable attorneys’ fees and costs.  In the event that any
provision of this Agreement is determined by a court of competent jurisdiction
to be invalid or unenforceable, then the remainder of this Agreement shall not
be affected and shall remain in full force and effect.

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    1.7.           Construction.  Each
party acknowledges that its legal counsel participated in the preparation of
this Agreement and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Agreement to favor any party against the
other.

    

    ARTICLE
II

    

    APPOINTMENT
OF AND DELIVERIES TO THE ESCROW AGENT

    

    2.1.           Appointment.  The
Companies and the Lenders hereby irrevocably designate and appoint the Escrow
Agent as their escrow agent for the purposes set forth herein, and the Escrow
Agent by its execution and delivery of this Agreement hereby accepts such
appointment under the terms and conditions set forth herein.

    

    2.2.           Copies of Documents to
Escrow Agent.  On or about the date hereof, the Creditor
Parties and the Companies shall deliver to the Escrow Agent copies of the
Documents executed by such parties.

    

    2.3.           Delivery of Escrowed Payment
to Escrow Agent.  Following the satisfaction of all closing
conditions relating to the Documents (other than the funding of the Escrowed
Payment), the Lenders shall deliver to the Escrow Agent the Escrowed
Payment.  At such time, the Escrow Agent shall hold the Escrowed
Payment as agent for the Companies, subject to the terms and conditions of this
Agreement.

    

    2.4.           Intention to Create Escrow
Over the Escrowed Payment.  The Lenders and the Companies
intend that the Escrowed Payment shall be held in escrow by the Escrow Agent and
released from escrow by the Escrow Agent only in accordance with the terms and
conditions of this Agreement.

    

    ARTICLE
III

    

    RELEASE
OF ESCROW

    

    3.1.           Release of
Escrow.  Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Escrowed Payment from escrow as
follows:

    

    (a)           Upon
receipt by the Escrow Agent of (i) oral instructions from David Grin and/or
Eugene Grin (each of whom is a principal of the Lenders) consenting to the
release of the Escrowed Payment from escrow in accordance with the Disbursement
Letter following the Escrow Agent’s receipt of the Escrowed Payment, (ii) the
Disbursement Letter, and (iii) the Escrowed Payment, the Escrowed Payment shall
promptly be disbursed in accordance with the Disbursement Letter.  The
Disbursement Letter shall include, without limitation, Escrow Agent’s
authorization to retain from the Escrowed Payment Escrow Agent’s fee for acting
as Escrow Agent hereunder and the Closing Payment for delivery to Valens Capital
Management, LLC in accordance with the Disbursement Letter.

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    (b)           Upon
receipt by the Escrow Agent of a final and non-appealable judgment, order,
decree or award of a court of competent jurisdiction (a “Court Order”)
relating to the Escrowed Payment, the Escrow Agent shall remit the Escrowed
Payment in accordance with the Court Order.  Any Court Order shall be
accompanied by an opinion of counsel for the party presenting the Court Order to
the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent) to
the effect that the court issuing the Court Order is a court of competent
jurisdiction and that the Court Order is final and non-appealable.

    

    3.2.           Acknowledgement of Companies
and Lenders; Disputes.  The Companies and the Lenders
acknowledge that the only terms and conditions upon which the Escrowed Payment
are to be released from escrow are as set forth in Sections 3 and 4 of this
Agreement.  The Companies and the Lenders reaffirm their agreement to
abide by the terms and conditions of this Agreement with respect to the release
of the Escrowed Payment.  Any dispute with respect to the release of
the Escrowed Payment shall be resolved pursuant to Section 4.2 or by
written agreement between the Companies and the Lenders.

    

    ARTICLE
IV

    

    CONCERNING
THE ESCROW AGENT

    

    4.1.           Duties and Responsibilities
of the Escrow Agent.  The Escrow Agent’s duties and
responsibilities shall be subject to the following terms and
conditions:

    

    (a)           The
Lenders and the Companies acknowledge and agree that the Escrow Agent (i) shall
not be required to inquire into whether the Creditor Parties, the Companies or
any other party is entitled to receipt of any Document or all or any portion of
the Escrowed Payment; (ii) shall not be called upon to construe or review any
Document or any other document, instrument or agreement entered into in
connection therewith; (iii) shall be obligated only for the performance of such
duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iv) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person or
party, without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity or the service thereof; (v)
may assume that any person purporting to give notice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so; (vi) shall not be responsible for the identity, authority
or rights of any person, firm or company executing or delivering or purporting
to execute or deliver this Agreement or any Document or any funds deposited
hereunder or any endorsement thereon or assignment thereof; (vii) shall not be
under any duty to give the property held by Escrow Agent hereunder any greater
degree of care than Escrow Agent gives its own similar property; and (viii) may
consult counsel satisfactory to Escrow Agent (including, without limitation,
Loeb & Loeb LLP or such other counsel of Escrow Agent’s choosing), the
opinion of such counsel to be full and complete authorization and protection in
respect of any action taken, suffered or omitted by Escrow Agent hereunder in
good faith and in accordance with the opinion of such counsel.

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    (b)           The
Lenders and the Companies acknowledge that the Escrow Agent is acting solely as
a stakeholder at their request and that the Escrow Agent shall not be liable for
any action taken by Escrow Agent in good faith and believed by Escrow Agent to
be authorized or within the rights or powers conferred upon Escrow Agent by this
Agreement.  The Lenders and the Companies hereby, jointly and
severally, indemnify and hold harmless the Escrow Agent and any of Escrow
Agent’s partners, employees, agents and representatives from and against any and
all actions taken or omitted to be taken by Escrow Agent or any of them
hereunder and any and all claims, losses, liabilities, costs, damages and
expenses suffered and/or incurred by the Escrow Agent arising in any manner
whatsoever out of the transactions contemplated by this Agreement and/or any
transaction related in any way hereto, including the fees of outside counsel and
other costs and expenses of defending itself against any claims, losses,
liabilities, costs, damages and expenses arising in any manner whatsoever out
the transactions contemplated by this Agreement and/or any transaction related
in any way hereto, except for such claims, losses, liabilities, costs, damages
and expenses incurred by reason of the Escrow Agent’s gross negligence or
willful misconduct.  The Escrow Agent shall owe a duty only to the
Lenders and the Companies under this Agreement and to no other
person.

    

    (c)           The
Lenders and the Companies shall jointly and severally reimburse the Escrow Agent
for its reasonable out-of-pocket expenses (including counsel fees (which counsel
may be Loeb & Loeb LLP or such other counsel of the Escrow Agent’s choosing)
incurred in connection with the performance of its duties and responsibilities
hereunder, which shall not (subject to Section 4.1(b))
exceed $1,500.

    

    (d)           The
Escrow Agent may at any time resign as escrow agent hereunder by giving five (5)
business days prior written notice of resignation to the Lenders and the
Companies.  Prior to the effective date of resignation as specified in
such notice, the Lenders and the Companies will issue to the Escrow Agent a
joint instruction authorizing delivery of the Documents and the Escrowed Payment
to a substitute escrow agent selected by the Lenders and the
Companies.  If no successor escrow agent is named by the Lenders and
the Companies, the Escrow Agent may apply to a court of competent jurisdiction
in the State of New York for appointment of a successor escrow agent, and
deposit the Documents and the Escrowed Payment with the clerk of any such court,
and/or otherwise commence an interpleader or similar action for a determination
of where to deposit the same.

    

    (e)           The
Escrow Agent does not have and will not have any interest in the Documents and
the Escrowed Payment, but is serving only as escrow agent, having only
possession thereof.

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    (f)           The
Escrow Agent shall not be liable for any action taken or omitted by it in good
faith and reasonably believed by it to be authorized hereby or within the rights
or powers conferred upon it hereunder, nor for action taken or omitted by it in
good faith, and in accordance with advice of counsel (which counsel may be Loeb
& Loeb LLP or such other counsel of the Escrow Agent’s choosing), and shall
not be liable for any mistake of fact or error of judgment or for any acts or
omissions of any kind except to the extent any such liability arose from its own
willful misconduct or gross negligence.

    

    (g)           This
Agreement sets forth exclusively the duties of the Escrow Agent with respect to
any and all matters pertinent thereto and no implied duties or obligations shall
be read into this Agreement.

    

    (h)           The
Escrow Agent shall be permitted to act as counsel for the Creditor Parties or
the Companies, as the case may be, in any dispute as to the disposition of the
Documents and the Escrowed Payment, in any other dispute between the Creditor
Parties and the Companies, whether or not the Escrow Agent is then holding the
Documents and/or the Escrowed Payment and continues to act as the Escrow Agent
hereunder.

    

    (i)           The
provisions of this Section 4.1 shall
survive the resignation of the Escrow Agent or the termination of this
Agreement.

    

    4.2.           Dispute Resolution;
Judgments.  Resolution of disputes arising under this Agreement
shall be subject to the following terms and conditions:

    

    (a)           If
any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the Documents and/or the Escrowed Payment, or if
the Escrow Agent shall in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be authorized, without liability to anyone, to
(i) refrain from taking any action other than to continue to hold the Documents
and the Escrowed Payment pending receipt of a joint instruction from the Lenders
and the Companies, (ii) commence an interpleader or similar action, suit or
proceeding for the resolution of any such dispute; and/or (iii) deposit the
Documents and the Escrowed Payment with any court of competent jurisdiction in
the State of New York, in which event the Escrow Agent shall give written notice
thereof to the Lenders and the Companies and shall thereupon be relieved and
discharged from all further obligations pursuant to this
Agreement.  The Escrow Agent may, but shall be under no duty to,
institute or defend any legal proceedings which relate to the Documents and the
Escrowed Payment.  The Escrow Agent shall have the right to retain
counsel if it becomes involved in any disagreement, dispute or litigation on
account of this Agreement or otherwise determines that it is necessary to
consult counsel which such counsel may be Loeb & Loeb LLP or such other counsel of the
Escrow Agent’s choosing.

    

    (b)           The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order.  In case the Escrow Agent obeys or complies with a Court Order,
the Escrow Agent shall not be liable to the Creditor Parties, the Companies or
any other person, firm, company or entity by reason of such
compliance.

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    ARTICLE
V

    

    GENERAL
MATTERS

    

    5.1.           Termination.  This
escrow shall terminate upon disbursement of the Escrowed Payment in accordance
with the terms of this Agreement or earlier upon the agreement in writing of the
Lenders and the Companies or resignation of the Escrow Agent in accordance with
the terms hereof.

    

    5.2.           Notices.  All
notices, requests, demands and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given one
(1) day after being sent by telecopy (with copy delivered by overnight courier,
regular or certified mail):

    

    
      	
              If
      to the Companies, to:

            	
              Rapid
      Link, Inc.

              5408
      No 99th
      Street

              Omaha,
      NE 68134

              Attention:
      Chris Canfield

              Telephone:  970-547-8165

              Fax:
      420-392-7545

            
	 
      	 
      
	
              With
      a copy to:

            	
              Crosby
      Guenzel LLP

              134
      South 13th
      Street, Suite 400

              Lincoln,
      Nebraska 68508

              Attention:  Thomas
      E. Jeffers

              Telephone:
      402-434-7300

              Facsimile:
      402-434-7303

            
	 
      	 
      
	
              If
      to the Lenders, to:

            	
              c/o
      Valens Capital Management LLC

              335
      Madison Avenue, 10th Floor

              New
      York, New York 10017

              Attention:  Portfolio
      Services

              Fax:  (212)
      581-5037

            
	 
      	 
      
	
              If
      to the Escrow Agent, to:

            	
              Loeb
      & Loeb LLP

              345
      Park Avenue

              New
      York, New York 10154

              Attention:  Scott
      J. Giordano, Esq.

              Fax:  (212)
      407-4990

            

    

    

    or to
such other address as any of them shall give to the others by notice made
pursuant to this Section
5.2.

    

    5.3.           Interest.  The
Escrowed Payment shall not be held in an interest bearing account nor will
interest be payable in connection therewith.

    

    5.4.           Assignment; Binding
Agreement.  Neither this Agreement nor any right or obligation
hereunder shall be assignable by any party without the prior written consent of
the other parties hereto.  This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    5.5.           Invalidity.  In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.

    

    5.6.           Counterparts/Execution.  This
Agreement may be executed in any number of counterparts and by different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same agreement.  This Agreement may be executed by facsimile
or electronic transmission.

    

    [Signature
Page to Follow]

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Funds Escrow Agreement as
of the date and year first above written.

    

    

    
      	 
      	
              RAPID
      LINK, INCORPORATED

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              TELENATIONAL
      COMMUNICATIONS, INC.

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              ONE
      RING NETWORKS, INC.

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      

    

     

    SIGNATURE PAGE TO

    FUNDS ESCROW AGREEMENT

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    
      	 
      	
              VALENS
      OFFSHORE SPV II, CORP.

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:
      Valens Capital Management, LLC, its investment manager

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              VALENS
      U.S. SPV I, LLC

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:
      Valens Capital Management, LLC, its investment manager

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              LAURUS
      MASTER FUND, LTD.

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:
      Laurus Capital Management, LLC, its investment manager

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              LOEB
      & LOEB LLP

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      

    

     

    
      SIGNATURE PAGE TO

      FUNDS ESCROW AGREEMENTex10_4.htm

    
      

    

    Exhibit
10.4

     

    INTELLECTUAL PROPERTY
SECURITY AGREEMENT

    

    This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (as from time to time amended,
restated, supplemented or otherwise modified, the “Agreement”), dated as
of July 11, 2008, is made by TELENATIONAL COMMUNICATIONS, INC., a Delaware
corporation (“Grantor”), in favor of LV ADMINISTRATIVE SERVICES CORP., as
administrative and collateral agent for the Creditor Parties (as defined in the
Security Agreement referred to below) (the “Agent”).

    

    WHEREAS,
pursuant to that certain Security Agreement dated as of March 31, 2008 by and
among Grantor, Rapid Link, Incorporated (“Rapid Link”), One
Ring Networks, Inc. (“One Ring” and
together with Grantor and Rapid Link, collectively, the “Borrowers”), the
Agent and the Lenders (as defined therein) (as amended, restated, supplemented
and/or otherwise modified from time to time, the “Security Agreement”),
the Lenders have agreed to provide financial accommodations to
Borrowers;

    

    WHEREAS,
Creditor Parties are willing to provide financial accommodations to the
Borrowers in accordance with the Security Agreement only upon the condition,
among others, that Grantor shall have executed and delivered to Agent this
Agreement;

    

    NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor hereby agrees as
follows:

    

    Section
1.               DEFINED TERMS; RULES OF
CONSTRUCTION.

    

    
      	
               
      

            	
              (a)

            	
              Capitalized
      terms used in this Agreement but not otherwise defined herein have the
      meanings given to them in the Security
  Agreement.

            

    

    

    
      	
               
      

            	
              (b)

            	
              When
      used herein the following terms shall have the following
      meanings:

            

    

    

    “Copyrights” means all
copyrights arising or protected under the laws of the United States, any other
country or any political subdivision thereof, whether registered, or
unregistered and whether published or unpublished, all registrations and
recordings therefor, and all applications in connection therewith, including but
not limited to all registrations, recordings and applications in the United
States Copyright Office, any State, or any similar office or agency of the
United States, any State, any other country or political subdivision, or any
other registry.

    

    “Copyright Licenses”
means all agreements pursuant to which Grantor is licensor or licensee, granting
any right under any Copyright, including but not limited to, rights to
manufacture, reproduce, display, distribute, perform, modify or otherwise
exploit, and sell materials embodying or derived from, any Copyrighted
work.

    

    “Intellectual
Property” means any and all of the following, throughout the
world:  Patents, Trademarks, Copyrights, mask works, designs, trade
secrets, information, databases, rights of publicity, software, and any other
proprietary rights and processes; any licenses to use any of the foregoing owned
by a third party including Patent Licenses, Trademark Licenses and Copyright
Licenses; and registrations, applications and recordings pertaining to any of
the foregoing on any registry;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    “Obligations” shall
have the meaning provided thereto in the Security Agreement.

    

    “PTO” means the United
States Patent and Trademark Office and any successor office or
agency.

    

    “Patents” means all
patents issued by the PTO, any similar office or agency of the United States,
any State, or any other country or political subdivision or other registry, all
recordings thereof, and all applications therefor.

    

    “Patent Licenses”
means all agreements pursuant to which Grantor is licensor or licensee, granting
any right to manufacture, have made, import, use, or sell any invention covered
in whole or in part by a Patent.

    

    “Trademarks” means all
trademarks, trade names, corporate names, business names, fictitious business
names, Internet Domain Names, trade styles, services marks, logos and other
source or business identifiers, arising or protected under the laws of the
United States, any State any other country or political subdivision thereof,
whether registered or unregistered, and all goodwill connected with the use of
and symbolized thereby, all registrations and recordings thereof, and all
applications therefor, in the PTO, in any similar office or agency of the United
States, any State, any other country or political subdivision, any Internet
Domain Name registrar, or any other registry.

    

    “Trademark Licenses”
mean all agreements pursuant to which Grantor is licensor or licensee, granting
any right to use a Trademark.

    

    “UCC” shall have the
meaning provided thereto in the Security Agreement.

    

    
      	
               
      

            	
              (c)

            	
              All
      Schedules, Addenda, Annexes and Exhibits hereto or expressly identified to
      this Agreement are incorporated herein by reference and taken together
      with this Agreement constitute but a single agreement.  The
      words “herein”, “hereof” and “hereunder” or other words of similar import
      refer to this Agreement as a whole, including the Exhibits, Addenda,
      Annexes and Schedules thereto, as the same may be from time to time
      amended, modified, restated or supplemented, and not to any particular
      section, subsection or clause contained in this
      Agreement.  Wherever from the context it appears appropriate,
      each term stated in either the singular or plural shall include the
      singular and the plural, and pronouns stated in the masculine, feminine or
      neuter gender shall include the masculine, the feminine and the
      neuter.  The term “or” is not exclusive.  The term
      “including” (or any form thereof) shall not be limiting or
      exclusive.  All references to statutes and related regulations
      shall include any amendments of same and any successor statutes and
      regulations.  All references in this Agreement or in the
      Schedules, Addenda, Annexes and Exhibits to this Agreement to sections,
      schedules, disclosure schedules, exhibits, and attachments shall refer to
      the corresponding sections, schedules, disclosure schedules, exhibits, and
      attachments of or to this Agreement.  All references to any
      instruments or agreements, including references to any of this Agreement
      or the Ancillary Agreements shall include any and all modifications or
      amendments thereto and any and all extensions or renewals
      thereof.

            

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (d)

            	
              The
      parties acknowledge that each party and its counsel have reviewed this
      Agreement and that the normal rule of construction to the effect that any
      ambiguities are to be resolved against the drafting party shall not be
      employed in the interpretation of this Agreement or any amendments,
      schedules or exhibits thereto.

            

    

    

    
      	
               
      

            	
              (e)

            	
              In
      the event of an irreconcilable conflict between the terms of this
      Agreement and the terms of the Security Agreement, the Agent shall have
      the right to determine which Agreement shall govern with respect to each
      such conflict.

            

    

    

    Section
2.              
GRANT OF SECURITY
INTEREST IN INTELLECTUAL PROPERTY COLLATERAL.  To secure the
prompt payment to the Creditor Parties of the Obligations of the Grantor now or
hereafter existing from time to time, Grantor hereby pledges and grants to the
Agent, for the ratable benefit of the Creditor Parties, a continuing security
interest in and Lien upon all of Grantor’s right, title and interest in, to and
under the following, whether presently existing or hereafter created or acquired
(collectively, the “Collateral”):

    

    
      	
               
      

            	
              (a)

            	
              Trademarks
      and Trademark Licenses to which it is a party including those referred to
      on Schedule
      I hereto;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Patents
      and Patent Licenses to which it is a party, including those referred to on
      Schedule
      II hereto;

            

    

    

    
      	
               
      

            	
              (c)

            	
              Copyrights
      and Copyright Licenses to which it is a party, including those referred to
      on Schedule
      III hereto;

            

    

    

    
      	
               
      

            	
              (d)

            	
              Intellectual
      Property not covered by the foregoing, including those referred to on
      Schedule
      IV hereto;

            

    

    

    
      	
               
      

            	
              (e)

            	
              Renewals,
      reissues, continuations, divisions, or extensions of any of the
      foregoing;

            

    

    

    
      	
               
      

            	
              (f)

            	
              Rights
      to sue third parties for past, present or future infringement, dilution,
      misappropriation, or other violation of rights in any Intellectual
      Property, including injury to the goodwill associated with any Trademark,
      and all causes of action for the
same:

            

    

    

    
      	
               
      

            	
              (g)

            	
              All
      products and Proceeds of all or any of the foregoing, tort claims and all
      claims and other rights to payment including (i) insurance claims against
      third parties for loss of, damage to, or destruction of, the foregoing
      Collateral and (ii) payments due or to become due under licenses of any or
      all of the foregoing and Proceeds payable under, or unearned premiums with
      respect to policies of insurance in whatever form; provided, however, that
      the Collateral shall not constitute a grant of a security interest in (a)
      any property to the extent that such grant of a security interest is
      prohibited by any rule of law, statute or regulation, requires a consent
      not obtained of any government, governmental body or official or is
      prohibited by, or constitutes a breach or default under or results in the
      termination of or requires any consent not obtained under, any contract,
      license, agreement, instrument or other document evidencing or giving rise
      to such property, except to the extent that such rule of law, statute or
      regulation or the term in such contract, license, agreement, instrument or
      other document or shareholder or similar agreement providing for such
      prohibition, breach, default or termination or requiring such consent is
      ineffective under applicable law; and (b) any trademark or service mark
      applications filed in the PTO on the basis of Grantor’s intent to use such
      trademark or service mark, unless and until a statement of use or
      amendment to allege use is filed in the PTO, in which event, such
      trademark or service mark shall automatically be included in the
      Collateral.

            

    

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    Section
3.               REPRESENTATIONS AND
WARRANTIES.

    

    Grantor
represents and warrants to Agent, in addition to the covenants in the Security
Agreement and Ancillary Agreements, that:

    

    
      	
               
      

            	
              (a)

            	
              Grantor
      does not own, in whole or in part, any Patent, Trademark, Copyright, or
      other Intellectual Property which is the subject of a registration or
      application in the United States Patent and Trademark Office, United
      States Copyright Office, any similar office or agency of the United
      States, any State, any other country or political subdivision, any
      Internet Domain Name registrar, or any other registry, except as set forth
      in Schedule
      I, Schedule II,
      Schedule
      III, and Schedule IV,
      respectively, hereto.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Grantor
      is the sole owner of the Intellectual Property listed on Schedules I to
      IV hereto (as such schedules may be amended or supplemented from
      time to time) identified as owned by Grantor, and all registrations and
      applications for such Intellectual Property are standing in the name of
      Grantor.

            

    

    

    
      	
               
      

            	
              (c)

            	
              no
      Intellectual Property has been licensed or sublicensed by Grantor to any
      Affiliate or third party, except under the licenses disclosed in Schedules I to
      IV hereto.

            

    

    

    
      	
               
      

            	
              (d)

            	
              all
      Intellectual Property owned by Grantor, including the items set forth on
      Schedules I to
      IV, and, to Grantor’s knowledge, all Intellectual Property licensed
      to Grantor, is subsisting in good standing, valid, and enforceable and
      Grantor performed all acts and has paid all renewal, maintenance, and
      other fees and taxes required to maintain, each registration and
      application for Intellectual Property owned by Grantor in full force and
      effect.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Grantor
      has been using statutory notice of registration in connection with its use
      of registered Trademarks, proper marking practices in connection with the
      use of Patents, and appropriate notice of copyright in connection with the
      publication of Copyrighted material
;

            

    

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (f)

            	
              Grantor
      has taken all actions necessary to insure that all licensees
      of  Trademarks owned by Grantor use consistent standards of
      quality as directed by Grantor in connection with their licensed products
      and services;

            

    

    

    
      	
               
      

            	
              (g)

            	
              this
      Agreement is effective to create a valid security interest in favor of
      Agent, for the benefit of the Creditor Parties, in all of Grantor’s
      Intellectual Property.  Upon the (i) filing of this Intellectual
      Property Security Agreement in the PTO (with respect to the United States
      Patents set forth on Schedule I
      hereto and the United States Trademarks set forth on Schedule II
      hereto), and in the United States Copyright Office (with respect to the
      United States Copyrights set forth on Schedule III
      hereto), and (ii) the filing of all appropriate UCC-1 financing
      statements, such security interest will be enforceable as such as against
      any and all creditors of, and purchasers from, Grantor.  Upon
      the making of such filings set forth above, all action necessary or
      desirable to protect and perfect Agent’s Lien on Grantor’s United States
      and State Patents, Trademarks, and Copyrights, shall have been
      taken.

            

    

    

    Section
4.              
 COVENANTS.  Grantor
covenants and agrees with Agent, from and after the date of this Agreement, and
in addition to the covenants the Security Agreement, that:

    

    
      	
               
      

            	
              (a)

            	
              Grantor
      shall notify Agent immediately if it knows or has reason to know that any
      application or registration relating to any Intellectual Property owned by
      Grantor may become abandoned, dedicated to the public, placed in the
      public domain or otherwise invalidated or unenforceable, or of any adverse
      determination or development in any proceeding (including the institution
      of any proceeding) in the PTO, the United States Copyright Office, or any
      similar agency of the United States, any State, or other country or
      political subdivision thereof, any Internet Domain registry or other
      registry, or any court,  regarding Grantor’s ownership of or
      right to use register, keep and/or maintain any Intellectual
      Property:

            

    

    

    
      	
               
      

            	
              (b)

            	
              Grantor
      shall take all actions necessary, or requested by Agent, to maintain and
      pursue each application, for registration in respect of the Intellectual
      Property owned by Grantor from time to time, by including filing
      applications for renewal, affidavits of use, affidavits of
      noncontestability and the commencement and prosecution of opposition and
      interference and cancellation
proceedings;

            

    

    

    
      	
               
      

            	
              (c)

            	
              In
      the event that any Intellectual Property owned by or exclusively licensed
      to Grantor is infringed, diluted, misappropriated, or otherwise violated
      by a third party, Grantor shall notify Agent promptly after Grantor learns
      thereof and shall promptly take all reasonable actions to stop the same
      and enforce its rights in such Intellectual Property and to recover all
      damages therefor, including, but not limited to, the initiation of a suit
      for injunctive relief and damages and shall take such other actions as are
      reasonable, or as Agent shall deem appropriate under the circumstances to
      protect Grantor’s rights in such Intellectual
  Property;

            

    

    

    
      	
               
      

            	
              (d)

            	
              Grantor
      shall use statutory notice of registration in connection with its use of
      registered Trademarks, proper marking practices in connection with the use
      of Patents, appropriate notice of copyright in connection with the
      publication of Copyrighted materials, and other legends or markings
      applicable to other Intellectual
Property;

            

    

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (e)

            	
              Grantor
      shall maintain the level of the quality of products sold and services
      rendered under any Trademarks owned by Grantor at a level at least
      consistent with the quality of such products and services as of the date
      hereof, and Grantor shall adequately control the quality of goods and
      services offered by any licensees of its Trademarks;
  and

            

    

    

    
      	
               
      

            	
              (f)

            	
              Grantor
      shall take all steps necessary to protect the secrecy of all trade secrets
      material to its business.

            

    

    

    Section
5.          
   SECURITY
AGREEMENT.  The security interests granted pursuant to this
Agreement are granted in conjunction with the security interests granted to
Agent, for the ratable benefit of the Creditor Parties, by Grantor pursuant to
the Security Agreement.  Grantor hereby acknowledges and affirms that
the rights and remedies of Agent with respect to the Collateral made and granted
herein are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.  Any rights and remedies set forth herein are without
prejudice to, and in addition to, those set forth in the Security
Agreement.

    

    Section
6.        
     REINSTATEMENT.  This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against Grantor for liquidation or
reorganization, should Grantor become insolvent or make an assignment for the
benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of Grantor’s assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance
had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

    

    Section
7.         
    INDEMNIFICATION.
Grantor assumes all responsibility and liability arising from the use of the
Intellectual Property and Grantor hereby indemnifies and holds Agent and each
other Creditor Party harmless from and against any claim, suit, loss, damage or
expense (inclu­ding reasonable attorneys’ fees) arising out of Grantor’s
operations of its business from the use of the Intellectual
Property.  In any suit, proceeding or action brought by Agent under
any Patent License, Trademark License, or Copyright License for any sum owing
thereunder, or to enforce any provisions of such License, Grantor will indemnify
and keep Agent and each other Creditor Party harmless from and against all
expense, loss or damage suffered by reason of any defense, set off,
counterclaim, recoupment or reduction or liability whatsoever of the obligee
thereunder, arising out of a breach of Grantor of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such obligee or its successors from Grantor, and all such
obligations of Grantor shall be and remain enforceable against and only against
Grantor and shall not be enforceable against Agent or any other Creditor
Party.

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    Section
8.            
  NOTICES.  Whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give and serve upon any other party any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be given in the manner, and
deemed received, as provided for in the Security Agreement.

    

    Section
9.           
    TERMINATION OF THIS
AGREEMENT.  Subject to Section 6 hereof,
this Agreement shall terminate upon payment in full in cash of all Obligations
and irrevocable termination of the Security Agreement.

    

    Section
10.             THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

    

    [Signature
Page to Follow]

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, Grantor has executed this Intellectual Property Security
Agreement as of the date first written above.

    

    

    
      	 
      	 
      	
              TELENATIONAL
      COMMUNICATIONS, INC.

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      
	 
      	 
      	 
      	
              Name:

            
	 
      	 
      	 
      	
              Title:

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              ACCEPTED
      and ACKNOWLEDGED by:

            
	 
      	 
      	 
      	 
      
	
              LV
      ADMINISTRATIVE SERVICES CORP., as Agent

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              By:

            	 
      	 
      	 
      
	 
      	
              Name:

            	 
      	 
      
	 
      	
              Title:

            	 
      	 
      

    

     

    SIGNATURE PAGE TO

    INTELLECTUAL PROPERTY

    SECURIOTY AGREEMENT

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
I

    TO

    INTELLECTUAL PROPERTY
SECURITY AGREEMENT

    

    
      	
              I.

            	
              TRADEMARK
      REGISTRATIONS

            

    

    

    
      	
              MARK

            	
              COUNTRY

            	
              REG.
      NO.

            	
              REG.
      DATE

            
	 
      	 
      	 
      	 
      
	
              T-Speed

            	
              USA

            	
              2475539

            	
              8/7/2001

            

    

    

    
      	
              II.

            	
              TRADEMARK
      APPLICATIONS

            

    

    

    None.

    

    
      	
              III.

            	
              TRADEMARK
      LICENSES

            

    

    

    None.

    

    
      	
              IV.

            	
              INTERNET
      DOMAIN NAMES

            

    

    

    None.

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
II

    TO

    INTELLECTUAL PROPERTY
SECURITY AGREEMENT

    

    
      	
              I.

            	
              PATENTS

            

    

    

    None.

    

    
      	
              II.

            	
              PATENT
      APPLICATIONS

            

    

    

    None.

    

    
      	
              III.

            	
              PATENT
      LICENSES

            

    

    

    None.

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
III

    TO

    INTELLECTUAL PROPERTY
SECURITY AGREEMENT

    

    
      	
              I.

            	
              COPYRIGHT
      REGISTRATIONS

            

    

    

    None.

    

    
      	
              II.

            	
              COPYRIGHT
      APPLICATIONS

            

    

    

    None.

    

    
      	
              III.

            	
              COPYRIGHT
      LICENSES

            

    

    

    None.

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
IV

    

    TO

    

    INTELLECTUAL PROPERTY
SECURITY AGREEMENT

    

    OTHER
INTELLECTUAL PROPERTY REGISTRATIONS AND APPLICATIONS.

    

    None.

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