SECURITY AGREEMENT
This Security Agreement (as amended, supplemented or otherwise
modified
from time to time, this "Agreement"), dated as of March 14, 2007,
is by and
between SiriCOMM, Inc., a Delaware corporation with its chief
executive office
and principal place of business located at 4710 East 32nd Street,
Joplin,
Missouri 64804 ("Debtor"), and Sunflower Capital, LLC, a Missouri
limited
liability company with an office at 10801 Mastin, Suite 920,
Overland Park,
Kansas 66210 ("Secured Party").
WHEREAS, Secured Party has agreed to make a loan (the "Loan")
to
Debtor, pursuant to that certain Loan Agreement, dated as of the
date hereof, by
and between Debtor and Secured Party (the "Loan Agreement");
and
WHEREAS, in order to induce Secured Party to enter into the
Loan
Agreement and to make the Loan, Debtor agreed to grant a continuing
Lien in the
Collateral (as defined below) to secure the Obligations;
NOW, THEREFORE, in consideration of the above recitals and for
other
good and valuable consideration, the receipt and adequacy of which
are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. All capitalized terms used but not defined
herein
(including the recitals hereto) have the meanings ascribed to them
in the Loan
Agreement. All other terms, unless the context otherwise requires,
have the
meanings provided by the Uniform Commercial Code to the extent the
same are used
or defined therein.
2. Grant of Security Interest. To secure Debtor's full and
timely
payment and performance of the Obligations to Secured Party
pursuant to the Loan
Documents, Debtor hereby grants, assigns, conveys, mortgages,
pledges,
hypothecates and transfers to Secured Party a continuing
first-priority security
interest (the "Security Interest") in and to all of the property
described on
Exhibit "A" to this Agreement (the "Collateral").
3. Representations and Covenants.
(a) Other Liens. Except for liens in favor of Secured Party
(the "Permitted Liens"), Debtor owns all right, title and interest
in
the Collateral (or has appropriate rights to use in the case of
property subject to leases, licenses or similar arrangements in
which
Debtor is the licensee or lessee) and will not permit the
Collateral to
be subject to any adverse lien, security interest or encumbrance
(other
than Permitted Liens), and Debtor will defend the Collateral
against
the claims and demands of all persons at any time claiming the same
or
any interest therein. No financing statements covering any
Collateral
or any proceeds thereof are on file in any public office except
for
financing statements filed by Secured Party.
(b) Further Documentation. At any time and from time to time,
at the sole expense of Debtor, Debtor will promptly and duly
execute
and deliver such further instruments and documents and take
such
further action as Secured Party may reasonably request for the
purpose
of obtaining or preserving the full benefits of this Agreement and
of
the rights and powers herein granted. Debtor hereby authorizes
Secured
Party to file with the appropriate filing office, now or hereafter
from
time to time, financing statements, continuation statements and
amendments thereto, naming the undersigned as debtor and covering
all
assets of the undersigned, including but not limited to any
specific
listing, identification or type of all or any portion of the assets
of
the undersigned. The undersigned acknowledges and agrees, by
evidence
of its signature below, that this authorization is sufficient
to
satisfy the requirements of Revised Article 9 of the Uniform
Commercial
Code, July 1, 2001 revisions.
(c) Indemnification. Debtor agrees to defend, indemnify and
hold harmless Secured Party against any and all liabilities, costs
and
expenses (including, without limitation, all reasonable legal fees
and
expenses): (i) with respect to, or resulting from, any delay in
paying
any and all excise, sales or other taxes which may be payable or
are
determined to be payable with respect to any of the Collateral;
(ii)
with respect to, or resulting from, any delay in complying with
any
law, rule, regulation or order of any governmental authority
applicable
to any of the Collateral or (iii) in connection with any of the
transactions contemplated by this Agreement; provided, however,
that
this indemnification shall not extend to any damages caused by
the
gross negligence or willful misconduct of Secured Party.
(d) Change of Jurisdiction of Organization; Relocation of
Business or Collateral. Debtor shall not change its jurisdiction
of
organization, relocate its chief executive office, principal place
of
business or its records or allow the relocation of any
Collateral
(unless such relocation is in the ordinary course of business)
without
thirty days' prior written notice to Secured Party.
(e) Limitations on Modifications of Accounts, Etc. Upon the
occurrence and during the continuance of any Event of Default,
without
Secured Party's prior written consent, Debtor shall not grant
any
extension of the time of payment of any of the accounts, chattel
paper,
instruments or amounts due under any contract or document,
compromise,
compound or settle the same for less than the full amount
thereof,
release, wholly or partly, any person liable for the payment
thereof,
or allow any credit or discount whatsoever thereon other than
trade
discounts and rebates granted in the ordinary course of
Debtor's
business.
(f) Insurance. Debtor shall maintain insurance policies
insuring the Collateral against loss or damage from such risks and
in
such amounts and forms and with such companies as required by the
Loan
Agreement.
(g) Authority. Debtor has all requisite power and authority to
execute this Agreement and to perform all of its obligations
hereunder,
and this Agreement has been duly executed and delivered by Debtor
and
constitutes the legal, valid and binding obligation of Debtor,
enforceable in accordance with its terms. The execution, delivery
and
performance by Debtor of this Agreement have been duly authorized
by
all necessary corporate action and do not (i) require any
authorization, consent or approval by any governmental
department,
commission, board, bureau, agency or instrumentality, domestic
or
foreign, (ii) violate any provision of any law, rule or regulation
or
of any order, writ, injunction or decree presently in effect,
having
applicability to Debtor or the articles of incorporation or by-laws
of
Debtor, or (iii) result in a breach of or constitute a default
under
any indenture, loan or credit agreement or any other agreement,
lease
or instrument to which Debtor is a party or by which it or its
properties may be bound or affected.
(h) Defense of Intellectual Property. Debtor shall (i) use
commercially reasonable efforts to protect, defend and maintain
the
validity and enforceability of its material copyrights,
patents,
trademarks and trade secrets, (ii) use commercially reasonable
efforts
to detect infringements of its copyrights, patents, trademarks
and
trade secrets and promptly advise Secured Party in writing of
material
infringements detected and (iii) not allow any copyrights,
patents,
trademarks or trade secrets material to Debtor's business to be
abandoned, forfeited or dedicated to the public without the
written
consent of Secured Party.
(i) Maintenance of Records. Debtor will keep and maintain at
its own cost and expense satisfactory and complete records of
the
Collateral.
(j) Inspection Rights. Secured Party will have full access
during normal business hours, and upon reasonable prior notice, to
all
of the books, correspondence and other records of Debtor relating
to
the Collateral, and Secured Party or its representatives may
examine
such records and make photocopies or otherwise take extracts from
such
records, subject to Debtor's reasonable confidentiality
requirements.
Debtor agrees to render to Secured Party, at Debtor's expense,
such
clerical and other assistance as may be reasonably requested
with
regard to the exercise of its rights pursuant to this
paragraph.
(k) Compliance with Laws, Etc. Debtor shall comply in all
material respects with all laws, rules, regulations and orders of
any
governmental authority applicable to any part of the Collateral or
to
the operation of Debtor's business; provided, however, that Debtor
may
contest any such law, rule, regulation or order in any
reasonable
manner which does not, in the reasonable opinion of Debtor,
adversely
affect Secured Party's rights or the priority of its liens on
the
Collateral.
(l) Payment of Obligations. Debtor shall pay before
delinquency all obligations associated with the Collateral,
including
license fees, taxes, assessments and governmental charges or
levies
imposed upon the Collateral or with respect to any of its income
or
profits derived from the Collateral; as well as all claims of any
kind
(including, without limitation, claims for labor, materials and
supplies) against or with respect to the Collateral, except that
no
such charge need be paid if (i) the validity or amount of such
charge
is being contested in good faith by appropriate proceedings, (ii)
such
proceedings do not involve any material danger of the sale,
forfeiture
or loss of any of the Collateral or any interest in the Collateral
and
(iii) such charge is adequately reserved against on Debtor's books
in
accordance with generally accepted accounting principles. The
obligation of Debtor to repay the Loan, together with all
interest
accrued thereon, is absolute and unconditional, and there exists
no
right of set off or recoupment, counterclaim or defense of any
nature
whatsoever to payment of the Loans.
(m) Limitations on Liens on Collateral. Debtor shall not
create, incur or permit to exist, shall defend the Collateral
against
and shall take such other action as is necessary to remove, any
lien or
claim on or to the Collateral, other than the Permitted Liens,
and,
except with respect to the Permitted Liens, shall defend the
right,
title and interest of Secured Party in and to any of the
Collateral
against the claims and demands of all other Persons. Any prior
security
interest and lien granted by Debtor to Secured Party in connection
with
the Collateral shall remain in full force and effect, and Secured
Party
shall continue to have a first-priority, perfected security
interest in
and lien upon the collateral described therein
(n) Limitations on Dispositions of Collateral. Debtor shall
not sell, transfer, lease or otherwise dispose of a material
portion of
the Collateral, or offer or contract to do so without the
written
consent of Secured Party; provided, however, that Debtor will
be
allowed to (1) sell its inventory in the ordinary course of
business
and (2) sell and grant non-exclusive
