This is a Security Agreement (the
“Security Agreement”) between Steel Vault Corporation,
a Delaware corporation (“Debtor”) and Blue Moon Energy
Partners LLC, a Florida limited liability company (the
“Secured Party”), and is dated as of March 20,
2009.
Debtor and Secured Party are parties to a
Secured Convertible Promissory Note in the aggregate principal
amount of $190,000.00 (the “Note”). This Security
Agreement secures the Note.
Accordingly, in consideration of the mutual
covenants and agreements set forth below, the parties agree as
follows:
1. Grant of Security Interest. For
good and valuable consideration received, the sufficiency of which
is hereby acknowledged and agreed, in order to secure payment of
(collectively, the “Liabilities”): (a) the Note;
(b) all costs and expenses, including attorneys’ fees,
incurred in collecting amounts due under the Note following an
Event of Default; (c) all costs and expenses, including
attorney’s fees, incurred in connection with realizing upon
the value of the security provided by this Security Agreement
following an Event of Default; and (d) all other liabilities
and obligations of the Debtor to Secured Party, however and
whenever incurred or evidenced, whether primary, secondary, direct,
indirect, absolute, contingent, sole, joint, or several, arising
prior to the date of this Security Agreement or in connection
herewith, or which may be hereafter contracted or acquired, or
incurred directly or indirectly in respect thereof, and all
extensions or renewals thereof; Debtor grants to the Secured Party
a lien and security interest in all of Debtor’s Assets
(defined below), including without limitation, the Acquired Assets
and the accounts receivable arising out of the Acquired Assets
(collectively, the “Collateral”). This security
interest shall also attach to all replacements and proceeds of the
Collateral. “Assets” means: all accounts receivable,
chattel paper, instruments, documents, inventory, equipment,
general intangibles, intellectual property, investment property,
and all other tangible and intangible property of Debtor, whether
now owned or existing or hereafter acquired or arising, wherever
located, and all cash and non-cash proceeds and products
thereof.
2. Delivery of the Security. To
perfect the security interest granted above, the Debtor shall
deliver to the Secured Party an adequate number of executed Form
UCC-1s in a form and content appropriate for filing in all relevant
jurisdictions and reasonably acceptable to the Secured
Party.
3.
Assurances; Covenants. Debtor hereby agrees that:
a. The Debtor covenants to the Secured
Party that except for the security interest granted to the Secured
Party by this Security Agreement: (i) the Collateral is and
will be free of all liens and security interests of every kind and
nature, except as may have been the result of actions of the
Secured Party; (ii) the Debtor will not assign, transfer,
sell, convey, hypothecate, pledge, or in any other way dispose of
or encumber the Collateral while this Security Agreement is in
effect; and (iii) the Debtor will warrant and defend the
Collateral and the Secured Party’s security interest against
the claims and demands of all persons.
b. Debtor will not, without the prior
written consent of Secured Party, borrow from anyone on the
security of the Collateral, or otherwise permit any liens,
encumbrances, security interests, or adverse claims against the
Collateral, and will not permit the Collateral to be levied upon
under any legal process.
c. Debtor will not, without the prior
written consent of Secured Party, sell, transfer, assign, deliver,
trade, lease, license, grant any other security interest in, rent,
secrete, or otherwise dispose of all or any part of the Collateral
(other than accounts and inventory, which may be sold only in the
ordinary course of business), or permit anything to be done that
may impair the value of the Collateral.
d. Debtor authorizes Secured Party to file
financing statements, including amendments or continuations
thereof, describing the Collateral, and from time to time at the
request of Secured Party, will execute such other documents, and
will do such other acts and things, all as Secured Party may
reasonably request, to establish and maintain a valid perfected
security interest in the Collateral (free of all other liens and
claims whatsoever) and to enable Secured Party to enforce its
rights and remedies hereunder with respect to the
Collateral.
4. Representations and Warranties.
Debtor represents and warrants to Secured Party as
follows:
a. Debtor is a corporation duly organized,
validly existing, and in good standing and active status under the
laws of the state of Delaware;
b. Debtor has all requisite power to own
and operate its properties and to carry on its business as now
being conducted, and has all necessary rights to conduct its
business;
c. Debtor has the power, authority, and
legal right to execute and deliver this Security Agreement, and to
perform its obligations hereunder, and has taken all action
necessary to authorize the execution, delivery, and performance of
this Security Agreement and to authorize the transactions
contemplated hereby;
d. The execution, delivery, and performance
by Debtor of this Security Agreement will not (i) contravene,
conflict with, result in the breach of, or constitute a violation
of or default under the organizational documents of Debtor, any
applicable law, rule, regulation, judgment, order, writ,
injunction, or decree of any court or governmental authority, or
any agreement or instrument to which Debtor is a party or by which
Debtor or its property may be bound or affected, or (ii) result in
the creation of any lien, charge, or encumbrance upon any property
or assets of Debtor pursuant to any of the foregoing, except the
liens created by this Security Agreement;
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e. This Security Agreement constitutes a
legal, valid, and binding agreement enforceable against the Debtor
and the Collateral in accordance with its terms and, without
limiting the foregoing, this Security Agreement grants Secured
Party a valid, perfected security interest in the Collateral;
and
f. Debtor is the owner of the Collateral
free and clear of all liens, encumbrances, security interests, and
adverse claims whatsoever, except in respect of the security
interest granted in this Security Agreement.
5. Default. Each of the following
shall, after receipt by Debtor of written notice from Secured Party
and after a cure period of five (5) business days with respect
to Section 5(a) below, and thirty (30) days with respect to
Sections 5(b) through 5(d) below, constitute an event of default
under this Security Agreement (each, an “Event of
Default”):
a. The occurrence of a default under the
Note, or a breach of the assurances set forth in Section 3 of
this Security Agreement, or any other Liability is not paid when
due (and such nonpayment continues beyond the expiration of any
applicable grace or cure period);
b. Any representation or warranty made by
any Debtor under this Security Agreement or any report,
certificate, financial statement, or other information provided by
any Debtor to Secured Party in connection herewith is false or
misleading in any material respect when made or deemed made;
and
c. Any Debtor fails to fully and promptly
perform when due any agreement or covenant under this Security
Agreement or any related document (and such failure continues
beyond the expiration of any applicable grace o
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