This is a Security Agreement (the
“Security Agreement”) between National Credit
Report.com, LLC, a Florida limited liability company
(“Debtor”), and the holder of the Note (defined below)
signatory hereto (the “Secured Party”), and is dated as
of June 4, 2009.
WHEREAS , Steel Vault Corporation, a Delaware
corporation and the 100% owner of Debtor (“Steel
Vault”), has issued a Secured Convertible Promissory Note to
the Secured Party in the aggregate principal amount of $500,000.00
(the “Note”); and
WHEREAS , Steel Vault will contribute all or part of the
proceeds from the Note to Debtor, for use by Debtor for working
capital purposes. In exchange for the receipt of such proceeds,
Debtor has agreement to enter into this Security
Agreement.
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 Debtor to the 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 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 (collectively, the “Collateral”). This security
interest shall also attach to all replacements and proceeds of the
Collateral.
2.
Assurances; Covenants. Debtor hereby agrees that:
a. 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) 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) 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 the 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 authorizes the Secured Party to
file financing statements, including amendments or continuations
thereof, describing the Collateral, and from time to time at the
request of the Secured Party, will execute such other documents,
and will do such other acts and things, all as the Secured Party
may reasonably request, to establish and maintain a valid perfected
security interest in the Collateral and to enable the Secured Party
to enforce its rights and remedies hereunder with respect to the
Collateral.
3 . Representations and Warranties.
Debtor represents and warrants to the Secured Party as
follows:
a. Debtor is a limited liability company
duly organized, validly existing, and in good standing and active
status under the laws of the state of Florida;
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;
e. This Security Agreement constitutes a
legal, valid, and binding agreement enforceable against Debtor and
the Collateral in accordance with its terms and, without limiting
the foregoing, this Security Agreement grants the 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 for the security interest granted
in this Security Agreement.
2
4. Default. Each of the following
shall, after receipt by Debtor of written notice from the Secured
Party and after a cure period of five (5) business days with
respect to Section 4a. below, and thirty (30) days with
respect to Sections 4b. through 4d. 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 2 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
Debtor under this Security Agreement or any report, certificate,
financial statement, or other information provided by Debtor to the
Secured Party in connection herewith is false or misleading in any
material respect when made or deemed made; and
c. 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 or cure
period).
In the event
that Debtor substantially cures such default within the applicable
cure period, such default shall not constitute an Event of
Default.
5. Remedies
upon the occurrence of an Event of a Default.
a. Upon the occurrence and continuance of
an Event of Default under this Security Agreement, the Secured
Party will have the right at any time and from time to time,
without further
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