Attached files
| file | filename |
|---|---|
| 10-K - Luvu Brands, Inc. | v198800_10k.htm |
| EX-31.2 - Luvu Brands, Inc. | v198800_ex31-2.htm |
| EX-32.2 - Luvu Brands, Inc. | v198800_ex32-2.htm |
| EX-31.1 - Luvu Brands, Inc. | v198800_ex31-1.htm |
| EX-32.1 - Luvu Brands, Inc. | v198800_ex32-1.htm |
| EX-10.24 - Luvu Brands, Inc. | v198800_ex10-24.htm |
| EX-10.23 - Luvu Brands, Inc. | v198800_ex10-23.htm |
| EX-10.22 - Luvu Brands, Inc. | v198800_ex10-22.htm |
| EX-10.25 - Luvu Brands, Inc. | v198800_ex10-25.htm |
Exhibit
10.21
Security
Agreement
(All
Assets)
This
Security Agreement (the “Security Agreement”) is made between WES Consulting,
Inc., a Florida corporation (“Guarantor”), whose address is 2745 Bankers
Industrial Drive, Atlanta, Georgia 30360, and Summit Financial Resources, L.P.,
a Hawaii limited partnership (“Summit”), whose address is 2455 East Parley’s
Way, Suite 200, Salt Lake City, Utah 84109, pursuant to a Guarantee dated May
17, 2010, executed by Guarantor in favor of Summit and as a further inducement
to Summit to enter into a Financing Agreement (the “Financing Agreement”) with
One Up Innovations, Inc., a Georgia corporation, and FoamLabs, Inc., a Georgia
corporation (individually and collectively, “Client”).
For good
and valuable consideration, receipt of which is hereby acknowledged, Guarantor
and Summit hereby agree as follows:
1. Definitions. Terms
defined in the singular shall have the same meaning when used in the plural and
vice versa. Terms defined in the Uniform Commercial Code which are
used herein shall have the meanings set forth in the Uniform Commercial Code,
except as expressly defined otherwise. In addition to the terms
defined above, as used herein, the term:
“Collateral”
means the collateral described in Section 2, Grant of Security
Interest, below.
“Liquidation
Costs” means the reasonable costs and out of pocket expenses incurred by Summit
in obtaining possession of any Collateral, in storage and preparation for sale,
lease or other disposition of any Collateral, in the sale, lease, or other
disposition of any or all of the Collateral, and/or otherwise incurred in
foreclosing on any of the Collateral, including, without limitation, (a)
reasonable attorneys fees and legal expenses, (b) transportation and storage
costs, (c) advertising costs, (d) sale commissions, (e) sales tax and license
fees, (f) costs for improving or repairing any of the Collateral, and (g)
costs for preservation and protection of any of the Collateral.
“Permitted
Encumbrances” means liens for taxes and assessments not yet due and payable or,
if due and payable, those being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained, security
interests and liens created by this Security Agreement, and security interests
and liens authorized in writing by Summit.
“Uniform
Commercial Code” means the Uniform Commercial Code as adopted now or in the
future in the State of Utah.
2. Grant of Security
Interest. Guarantor hereby grants to Summit a security
interest in the following personal property of Guarantor, wherever located, now
owned or existing or hereafter acquired or created (the
“Collateral”):
a. All
inventory, all proceeds and products thereof and all additions and accessions
to, replacements of, insurance or condemnation proceeds of, and documents
covering any of the foregoing, all leases of any of the foregoing, and all
rents, revenues, issues, profits and proceeds arising from the sale, lease,
license, encumbrance, collection, or any other temporary or permanent
disposition of any of the foregoing or any interest therein (collectively, the
“Inventory”).
b. All
accounts and all proceeds thereof (collectively, the “Accounts”).
c. All
equipment and goods, all motor vehicles, all proceeds and products of the
foregoing and all additions and accessions to, replacements of, insurance or
condemnation proceeds of, and documents covering any of the foregoing, all
leases of any of the foregoing, and all rents, revenues, issues, profits and
proceeds arising from the sale, lease, license, encumbrance, collection, or any
other temporary or permanent disposition of any of the foregoing or any interest
therein (collectively, the “Equipment”).
One Up
Innovations, Inc.
5/12/10
d. All
general intangibles and all documentation and supporting information related
thereto, all rents, profits and issues thereof, and all proceeds
thereof.
e. All
of the following (collectively, the “Financial Obligations
Collateral”):
i. Any
and all promissory notes and instruments payable to or owing to Guarantor or
held by Guarantor;
ii. Any
and all leases under which Guarantor is the lessor;
iii. Any
and all chattel paper in favor of, owing to, or held by Guarantor, including,
without limitation, any and all conditional sale contracts or other sales
agreements, whether Guarantor is the original party or the
assignee;
iv. Any
and all security agreements, collateral and titles to motor vehicles which
secure any of the foregoing obligations; and
v. All
amendments, modifications, renewals, extensions, replacements, additions, and
accessions to the foregoing and all proceeds thereof.
f.
All deposit
accounts, including without limitation, all interest, dividends or distributions
accrued or to accrue thereon, whether or not due, and all proceeds
thereof.
g. All
investment property, all interest, dividends or distributions accrued or to
accrue thereon, whether or not due, and all proceeds thereof.
h. All
documents, all amendments, modifications, renewals, extensions, replacements,
additions, and accessions thereto, and all proceeds thereof.
i.
All
letter-of-credit rights, all amendments, modifications, renewals, extensions,
replacements, additions, and accessions thereto, and all proceeds
thereof.
j.
All supporting obligations, all amendments, modifications, renewals, extensions,
replacements, additions, and accessions thereto, and all proceeds
thereof.
k. All
of the following:
i. All
right, title and interest of Guarantor in and to patent applications and
patents, including, without limitation, all proceeds thereof (such as, by way of
example, license royalties and proceeds of infringement suits), the right to sue
for past, present and future infringements, all rights corresponding thereto
throughout the world, and all reissues, divisions, continuations, renewals,
extensions, and continuations-in-part thereof (collectively, the
“Patents”);
ii. All
right, title and interest of Guarantor in and to trademark applications and
trademarks, including, without limitation, all renewals thereof, all proceeds
thereof (such as, by way of example, license royalties and proceeds of
infringement suits), the right to sue for past, present and future
infringements, and all rights corresponding thereto throughout the world
(collectively, the “Trademarks”), and the good will of the business to which
each of the Trademarks relates;
iii. All
copyrights of Guarantor and all rights and interests of every kind of Guarantor
in copyrights and works protectible by copyright, and all renewals and
extensions thereof, and in and to the copyrights and rights and interests of
every kind or nature in and to all works based upon, incorporated in, derived
from, incorporating or relating to any of the foregoing or from which any of the
foregoing is derived, and all proceeds thereof (such as, by way of example,
license royalties and proceeds of infringement suits), the right to sue for
past, present and future infringements, and all rights corresponding thereto
throughout the world (collectively, the “Copyrights”);
One Up
Innovations, Inc.
5/12/10
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iv. All
of Guarantor’s trade secrets and other proprietary information, and all proceeds
thereof (collectively, the “Trade Secrets”);
v. All
right, title, and interest of Guarantor in, to and under license agreements and
contracts concerning Patents, Trademarks, Copyrights, and Trade Secrets, all
amendments, modifications, and replacements thereof, all royalties and other
amounts owing thereunder, and all proceeds thereof; and
vi. All
internet domain names and addresses of Guarantor and all proceeds
thereof.
Guarantor
and Summit acknowledge their mutual intent that all security interests
contemplated herein are given as a contemporaneous exchange for new value
regardless of when advances to Client are actually made or when the Collateral
is created or acquired.
3. Debts
Secured. The security interest granted by this Security
Agreement shall secure all of Guarantor’s present and future debts, obligations,
and liabilities of whatever nature to Summit, including, without limitation, (a)
the obligations of Guarantor under the Guarantee, (b) all obligations of
Guarantor arising from or relating to the Financing Agreement, (c) all
obligations of Guarantor owing under this Security Agreement, (d) advances
of the same kind and quality or relating to this transaction, and (e)
transactions in which the documents evidencing the indebtedness refer to this
grant of security interest as providing security therefor.
Guarantor
and Summit expressly acknowledge their mutual intent that the security interest
created by this Security Agreement secures any and all present and future debts,
obligations, and liabilities of Guarantor to Summit without any limitation
whatsoever.
4. Status of Guarantor and
Collateral. Guarantor represents and warrants
that:
a. Guarantor
is a corporation organized under the laws of the State of Florida.
b. The
complete and exact name of Guarantor is WES Consulting, Inc.
c. The
organizational identification number, if any, assigned to Guarantor by
Guarantor’s state of organization is 593581576.
d. During
the five (5) years preceding the date of this Security Agreement:
i. Guarantor
has not been known by nor used any legal, fictitious or trade name;
ii. Guarantor
has not changed its name in any respect;
iii. Guarantor
has not been the surviving entity of a merger or consolidation, except that in
2009 Guarantor was the surviving entity of a merger with Liberator, Inc.;
and
iv. Guarantor
has not acquired all or substantially all of the assets of any person or
entity.
e. Guarantor’s
chief executive office is located at 2745 Bankers Industrial Drive, Atlanta,
Georgia 30360.
f.
Guarantor’s
place of business is located at 2745 Bankers Industrial Drive, Atlanta, Georgia
30360.
One Up
Innovations, Inc.
5/12/10
3
g. During
the five (5) years preceding the date of this Security Agreement, there has not
been any change in any of the above matters or locations.
Guarantor
agrees that it will not change its state of incorporation, name, or any of the
above locations or create any new locations for such matters without giving
Summit at least thirty (30) days prior written notice thereof.
5. Representations and
Warranties Concerning Collateral. Guarantor represents and
warrants that:
a. Guarantor
is the sole owner of the Collateral.
b. The
Collateral is not subject to any security interest, lien, prior assignment, or
other encumbrance of any nature whatsoever except Permitted
Encumbrances.
c. The
Accounts and Financial Obligations Collateral, if any, are each a bona fide
obligation of the obligor identified therein for the amount identified in the
records of Guarantor, except for normal and customary disputes which arise in
the ordinary course of business and which do not affect a material portion of
the Accounts and Financial Obligations Collateral.
d. There
are no defenses or setoffs to payment of the Accounts and Financial Obligations
Collateral, if any, which can be asserted by way of defense or counterclaim
against Guarantor or Summit, except for normal and customary disputes which
arise in the ordinary course of business and which do not affect a material
portion of the Accounts and Financial Obligations Collateral.
e. There
is presently no default or delinquency in any payment of the Accounts and
Financial Obligations Collateral, if any, except for any default or delinquency
which has been reserved against by Guarantor in accordance with generally
accepted accounting principles and the Accounts and Financial Obligations
Collateral will be timely paid in full by the obligors, except for normal and
customary disputes which arise in the ordinary course of business and which do
not affect a material portion of the Accounts and Financial Obligations
Collateral.
f.
Guarantor has
no knowledge of any fact or circumstance which would materially impair the
ability of any obligor on the Accounts and Financial Obligations Collateral, if
any, to timely perform its obligations thereunder, except those which arise in
the ordinary course of business and which do not affect a material portion of
the Accounts and Financial Obligations Collateral.
g. Any
services performed or goods sold giving rise to the Accounts and Financial
Obligations Collateral, if any, have been rendered or sold in compliance with
applicable laws, ordinances, rules, and regulations and in the ordinary course
of Guarantor’s business.
h. There
have been no extensions, modifications, or other agreements relating to payment
of the Accounts and Financial Obligations Collateral, if any, except those
granted in the ordinary course of business and which do not affect a material
portion of the Accounts and Financial Obligations Collateral.
6. Covenants Concerning
Collateral. Guarantor covenants that:
a. Guarantor
will keep the Collateral free and clear of any and all security interests,
liens, assignments or other encumbrances, except Permitted
Encumbrances.
b. Guarantor
hereby authorizes Summit to file UCC Financing Statements concerning the
Collateral. Guarantor will execute and deliver any documents
(properly endorsed, if necessary) reasonably requested by Summit for perfection
or enforcement of any security interest or lien, give good faith, diligent
cooperation to Summit, and perform such other acts reasonably requested by
Summit for perfection and enforcement of any security interest or lien,
including, without limitation, obtaining control for purposes of perfection with
respect to Collateral consisting of deposit accounts, investment property,
letter-of-credit rights, and electronic chattel paper. Summit is
authorized to file, record, or otherwise utilize such documents as it deems
necessary to perfect and/or enforce any security interest or lien granted
hereunder.
One Up
Innovations, Inc.
5/12/10
4
c. Guarantor
shall keep the Equipment in good repair, ordinary wear and tear and obsolescence
excepted, and be responsible for any loss or damage to the
Equipment. Guarantor shall pay when due all taxes, license fees and
other charges on the Equipment. Guarantor shall not sell, misuse,
conceal, or in any way dispose of the Equipment or permit it to be used
unlawfully or for hire or contrary to the provisions of any insurance
coverage. Risk of loss of the Equipment shall be on Guarantor at all
times unless Summit takes possession of the Equipment. Loss of or
damage to the Equipment or any part thereof shall not release Guarantor from any
of the obligations secured by the Equipment. Summit or its
representatives may, at any time and from time to time, enter any premises where
the Equipment is located and inspect, audit and check the
Equipment.
d. Guarantor
agrees to insure the Equipment, at Guarantor’s expense, against loss, damage,
theft, and such other risks as Summit may request to the full insurable value
thereof with insurance companies and policies satisfactory to
Summit. Proceeds from such insurance shall be payable to Summit as
its interest may appear, shall name Summit as an additional insured and as a
loss payee, and such policies shall provide for a minimum ten days written
cancellation notice to Summit. Upon request, policies or certificates
attesting to such coverage shall be delivered to Summit. Insurance
proceeds may be applied by Summit toward payment of any obligation secured by
this Security Agreement, whether or not due, in such order of application as
Summit may elect.
e. Guarantor
agrees to insure the Inventory, at Guarantor’s expense, against loss, damage,
theft, and such other risks as Summit may request to the full insurable value
thereof with insurance companies and policies satisfactory to
Summit. Proceeds from such insurance shall be payable to Summit as
its interest may appear, shall name Summit as an additional insured and as a
loss payee, and such policies shall provide for a minimum ten days written
cancellation notice to Summit. Upon request, policies or certificates
attesting to such coverage shall be delivered to Summit. Insurance
proceeds may be applied by Summit toward payment of any obligation secured by
this Security Agreement, whether or not due, in such order of application as
Summit may elect.
f.
Guarantor
shall submit to Summit reports as to the Collateral, at such times and in such
form as Summit may reasonably request. Guarantor will at all times
keep accurate and complete records of the Collateral. Summit or its
representatives may, at any time and from time to time, enter any premises where
the Collateral and/or the records pertaining to the Collateral are located and
inspect, inventory, audit, check, copy, and otherwise review the Collateral and
the records concerning the Collateral.
g. So
long as no Event of Default has occurred, Guarantor shall have the right to sell
or otherwise dispose of the Inventory in the ordinary course of
business. No other disposition of the Inventory may be made without
the prior written consent of Summit.
h. So
long as no Event of Default has occurred, Guarantor is authorized to collect the
Accounts and Financial Obligations Collateral in a commercially reasonable
manner. Guarantor agrees to use diligent and good faith efforts to
collect the Accounts and Financial Obligations Collateral, if any.
i.
Guarantor
shall, immediately upon obtaining knowledge thereof, report to Summit in writing
any default on any item of Financial Obligations Collateral, any material claim
or dispute asserted by any obligor on any item of that Collateral, and any other
material matters that may affect the value, enforceability or collectability of
any of that Collateral.
j.
Guarantor
shall not, without Summit’s written consent, make any material settlement,
compromise or adjustment of any item of Financial Obligations Collateral or
grant any material discounts, extensions, allowances or credits
thereon.
One Up
Innovations, Inc.
5/12/10
5
7. Right to Perform for
Guarantor. Summit may, in its sole discretion and without any
duty to do so, elect to discharge taxes, tax liens, security interests, or any
other encumbrance upon the Collateral, perform any duty or obligation of
Guarantor, pay filing, recording, insurance and other charges payable by
Guarantor, or provide insurance as provided herein if Guarantor fails to do
so. Any such payments advanced by Summit shall be repaid by Guarantor
upon demand, together with interest thereon from the date of the advance until
repaid, both before and after judgment, at the Default Rate set forth in the
Financing Agreement.
8. Default. Time
is of the essence of this Security Agreement. The occurrence of any
event of default or breach under the Guarantee or under the Financing Agreement
shall constitute a default under this Security Agreement and shall be termed an
“Event of Default” hereunder.
No course
of dealing or any delay or failure to assert any Event of Default shall
constitute a waiver of that Event of Default or of any prior or subsequent Event
of Default.
9. Remedies. Upon
the occurrence of an Event of Default, Summit shall have the following rights
and remedies, in addition to all other rights and remedies existing at law, in
equity, or by statute:
a. If
at any time Summit so requests, all proceeds from the sale or other disposition
of the Inventory, and all collections and other proceeds from the Accounts and
Financial Obligations Collateral, if any, shall be deposited into an account
designated by Summit (the “Cash Collateral Account”), which account shall be
under the sole and exclusive control of Summit. Such proceeds and
collections shall not be commingled with any other funds and shall be promptly
and directly deposited into such account in the form in which received by
Guarantor. Such proceeds and collections shall not be deposited in
any other account and said Cash Collateral Account shall contain no funds other
than such proceeds and collections. All or any portion of the funds
on deposit in said Cash Collateral Account may, in the sole discretion of
Summit, be applied from time to time as Summit elects to payment of obligations
secured by the Security Agreement or Summit may elect to turn over to Guarantor,
from time to time, all or any portion of such funds.
b. Upon
an Event of Default, Summit may terminate the authority of Guarantor to collect
Accounts and Financial Obligations Collateral at any time whereupon Summit is
authorized, without further act, to notify any and all obligors to make payment
thereon directly to Summit, and to take possession of all proceeds from the
Accounts and Financial Obligations Collateral, and to take any action which
Guarantor might or could take to collect the Accounts and Financial Obligations
Collateral, including the right to make any compromise, discharge, or
extension. Upon request of Summit after an Event of Default,
Guarantor agrees to execute and deliver to Summit a notice to the obligors
instructing said obligors to pay Summit. Guarantor further agrees to
execute and deliver to Summit, after an Event of Default, all other notices and
similar documents requested by Summit to facilitate collection of the Accounts
and Financial Obligations Collateral. All costs of collection of the
Accounts and Financial Obligations Collateral, if any, including attorneys fees
and legal expenses, shall be borne solely by Guarantor, whether such costs are
incurred by or for Guarantor or Summit. Guarantor agrees to deliver
to Summit, if so requested, all books, records, and documents in Guarantor’s
possession or under its control as may relate to the Accounts and Financial
Obligations Collateral or as may be helpful to facilitate such
collection. Summit shall have no obligation to cause an attorneys
demand letter to be sent, to file any lawsuit, or to take any other legal action
in collection of the Accounts and Financial Obligations
Collateral. It is agreed that collection of the Accounts and
Financial Obligations Collateral in a commercially reasonable manner does not
require that any such legal action be taken.
c. Guarantor
does hereby make, constitute, and appoint Summit and its designees as
Guarantor’s true and lawful attorney in fact, with full power of substitution,
such power to be exercised only upon an Event of Default and in the following
manner: (1) Summit may receive and open all mail addressed to
Guarantor and remove therefrom any payments of the Accounts and Financial
Obligations Collateral, if any; (2) Summit may cause mail relating to the
Accounts and Financial Obligations Collateral to be delivered to a designated
address of Summit where Summit may open all such mail and remove therefrom any
payments of the Accounts and Financial Obligations Collateral; (3) Summit may
endorse Guarantor’s name upon notes, checks, acceptances, drafts, money orders,
or other forms of payment of the Accounts and Financial Obligations Collateral;
(4) Summit may settle or adjust disputes or claims in respect to the Accounts
and Financial Obligations Collateral for amounts and upon such terms as Summit,
in its sole discretion and in good faith, deems to be advisable, in such case
crediting Guarantor with only the proceeds received and collected by Summit
after deduction of Summit’s costs, including reasonable attorneys fees and legal
expenses; and (5) Summit may do any and all other things necessary or proper to
carry out the intent of this Security Agreement and to perfect and protect the
liens and rights of Summit created under this Security Agreement.
One Up
Innovations, Inc.
5/12/10
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d. Summit
shall have all the rights and remedies available under the Uniform Commercial
Code.
e. Summit
shall have the right to enter upon any premises where the Collateral or records
relating thereto may be and take possession of the Collateral and such
records.
f.
Upon request of
Summit, Guarantor shall, at the expense of Guarantor, assemble the Collateral
and records relating thereto at a place designated by Summit and tender the
Collateral and such records to Summit.
g. Without
notice to Guarantor, Summit may obtain the appointment of a receiver of the
business, property and assets of Guarantor and Guarantor hereby consents to the
appointment of Summit or such person as Summit may designate as such
receiver.
h. Summit
may sell, lease or otherwise dispose of any or all of the Collateral and, after
deducting the Liquidation Costs, apply the remainder to pay, or to hold as a
reserve against, the obligations secured by this Security
Agreement.
Guarantor
shall be liable for all deficiencies owing on any obligations secured by this
Security Agreement after liquidation of the Collateral. Summit shall
not have any obligation to clean-up or otherwise prepare any Collateral for
sale, lease, or other disposition.
The
rights and remedies herein conferred are cumulative and not exclusive of any
other rights and remedies and shall be in addition to every other right, power
and remedy herein specifically granted or hereafter existing at law, in equity,
or by statute which Summit might otherwise have, and any and all such rights and
remedies may be exercised from time to time and as often and in such order as
Summit may deem expedient. No delay or omission in the exercise of
any such right, power or remedy or in the pursuance of any remedy shall impair
any such right, power or remedy or be construed to be a waiver thereof or of any
default or to be an acquiescence therein.
Upon the
occurrence of any Event of Default, Guarantor agrees to pay all costs and
expenses, including reasonable attorneys fees and legal expenses, incurred by or
on behalf of Summit in enforcing, or exercising any remedies under, this
Security Agreement, and any other rights and remedies. Additionally,
Guarantor agrees to pay all Liquidation Costs. Any and all such
costs, expenses, and Liquidation Costs shall be payable by Guarantor upon
demand, together with interest thereon from the date of the advance until
repaid, both before and after judgment, at the Default Rate set forth in the
Financing Agreement.
Regardless
of the occurrence of any Event of Default, Guarantor agrees to pay all expenses,
including reasonable attorneys fees and legal expenses, incurred by Summit in
any bankruptcy proceedings of any type involving Guarantor, the Collateral, or
this Security Agreement, including, without limitation, expenses incurred in
modifying or lifting the automatic stay, determining adequate protection, use of
cash collateral, or relating to any plan of reorganization.
10. Notices. All
notices or demands by any party hereto shall be in writing and may be mailed,
postage prepaid, addressed to the address stated at the beginning of this
Security Agreement, or to such other address which is provided in accordance
with this Section. Any notice so mailed shall be deemed given three
(3) days after mailing. Any notice otherwise delivered shall be
deemed given when received by the addressee.
11. Indemnification. Guarantor
shall indemnify Summit for any and all claims and liabilities, and for damages
which may be awarded or incurred by Summit, and for all reasonable attorneys
fees, legal expenses, and other out-of-pocket expenses incurred in defending
such claims, arising from or related in any manner to the negotiation,
execution, or performance by Summit of this Security Agreement, but excluding
any such claims based upon breach or default by Summit or gross negligence or
willful misconduct of Summit.
One Up
Innovations, Inc.
5/12/10
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Summit
shall have the sole and complete control of the defense of any such
claims. Summit is hereby authorized to settle or otherwise compromise
any such claims as Summit in good faith determines shall be in its best
interests.
12. Jury Waiver, Exclusive
Jurisdiction of Utah Courts. GUARANTOR HEREBY IRREVOCABLY
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT
OF OR IN ANY WAY RELATED TO THIS SECURITY AGREEMENT.
Guarantor
acknowledges that by execution and delivery of this Security Agreement,
Guarantor has transacted business in the State of Utah and Guarantor hereby
voluntarily submits to, consents to, and waives any defense, to the jurisdiction
of courts located in the State of Utah as to all matters relating to or arising
from this Security Agreement. EXCEPT AS EXPRESSLY AGREED IN WRITING
BY SUMMIT, THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF UTAH SHALL HAVE
SOLE AND EXCLUSIVE JURISDICTION OF ANY AND ALL CLAIMS, DISPUTES, AND
CONTROVERSIES ARISING UNDER OR RELATING TO THIS SECURITY
AGREEMENT. NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION RELATING TO OR
ARISING UNDER THIS SECURITY AGREEMENT MAY BE COMMENCED OR PROSECUTED IN ANY
OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING BY SUMMIT.
13. General. This
Security Agreement is made for the sole and exclusive benefit of Guarantor and
Summit and is not intended to benefit any third party. No such third
party may claim any right or benefit or seek to enforce any term or provision of
this Security Agreement.
In
recognition of Summit’s right to have all its attorneys fees and expenses
incurred in connection with this Security Agreement secured by the Collateral,
notwithstanding payment in full of the obligations secured by the Collateral,
Summit shall not be required to release, reconvey, or terminate any security
interest in the Collateral unless and until Guarantor, Client, and all other
guarantors have executed and delivered to Summit general releases in form and
substance satisfactory to Summit.
Summit
and its officers, directors, employees, representatives, agents, and attorneys,
shall not be liable to Client, Guarantor, or any other guarantors for
consequential damages arising from or relating to any breach of contract, tort,
or other wrong in connection with or relating to this Security Agreement or the
Collateral.
If the
incurring of any debt by Guarantor or the payment of any money or transfer of
property to Summit by or on behalf of, Client, Guarantor, or any other guarantor
should for any reason subsequently be determined to be “voidable” or “avoidable”
in whole or in part within the meaning of any state or federal law (collectively
“voidable transfers”), including, without limitation, fraudulent conveyances or
preferential transfers under the United States Bankruptcy Code or any other
federal or state law, and Summit is required to repay or restore any voidable
transfers or the amount or any portion thereof, or upon the advice of Summit’s
counsel is advised to do so, then, as to any such amount or property repaid or
restored, including all reasonable costs, expenses, and attorneys fees of Summit
related thereto, the liability of Client, Guarantor, and any other guarantor,
and each of them, and this Security Agreement, shall automatically be revived,
reinstated and restored and shall exist as though the voidable transfers had
never been made.
This
Security Agreement shall be governed by and construed in accordance with the
laws of the State of Utah.
Any
provision of this Security Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction only, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
All
references in this Security Agreement to the singular shall be deemed to include
the plural if the context so requires and vice versa. References in
the collective or conjunctive shall also include the disjunctive unless the
context otherwise clearly requires a different interpretation.
One Up
Innovations, Inc.
5/12/10
8
All
agreements, representations, warranties and covenants made by Guarantor shall
survive the execution and delivery of this Security Agreement, the filing and
consummation of any bankruptcy proceedings, and shall continue in effect so long
as any obligation to Summit contemplated by this Security Agreement is
outstanding and unpaid, notwithstanding any termination of this Security
Agreement. All agreements, representations, warranties and covenants
in this Security Agreement shall bind the party making the same and its heirs
and successors, and shall be to the benefit of and be enforceable by each party
for whom made and their respective heirs, successors and assigns.
This
Security Agreement constitutes the entire agreement between Guarantor and Summit
as to the subject matter hereof and may not be altered or amended except by
written agreement signed by Guarantor and Summit. All other prior and
contemporaneous agreements, arrangements, and understandings between the parties
hereto as to the subject matter hereof are, except as otherwise expressly
provided herein, rescinded.
Dated: May
17, 2010.
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Summit
Financial Resources, L.P.
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By:
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/s/ Mark J. Picillo
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Name:
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Mark J. Picillo
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Title:
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Senior Vice President
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WES
Consulting, Inc.
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By:
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/s/ Louis S. Friedman
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Name:
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Louis S. Friedman
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Title:
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President and
CEO
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One Up
Innovations, Inc.
5/12/10
9