SECURITY AGREEMENT
Exhibit
10.3
THIS
SECURITY AGREEMENT (the "Security
Agreement") is made and entered into as of March 1, 2009 by
Lumea,
Inc., a Nevada corporation ("Lumea"),
with its principal place of business at 0000 X. Xxxxxxxx Xx., Xxxxx X,
Xxxxxxxxxx, Xxxxxxx 00000,
for the
benefit of
Easy
Staffing Services, Inc., a Delaware corporation ("Secured
Party"), with its principal place of business at 00000 X. Xxxxxxxxxx Xx.,
Xxxxx 000., Xxxxxxxxxx, XX 00000.
RECITALS
Lumea has
contemporaneously herewith executed in favor of Secured Party a Promissory Note
in the principal amount of Five
Million Seven Hundred Fifty Thousand Dollars ($5,750,000) (the "Promissory
Note").
As
security for the Promissory Note, Lumea has agreed to give Secured Party a
security interest (the "Security
Interest") in the property described on Exhibit "A" attached hereto and
incorporated herein by reference (hereinafter called the "Collateral").
1.
Security
Interest.
1.1 For
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Lumea hereby grants to Secured Party a security interest
(hereinafter called the "Security
Interest") in the property described on Exhibit "A".
1.2 This
Security Agreement is given for the purpose of securing, in such order of
priority as Secured Party may elect:
(a) Payment
of the amount of Five
Million Seven Hundred Fifty Thousand Dollars
($5,750,000) with interest thereon, extension and other fees, late
charges and attorney's fees, according to the terms of the Promissory Note, and
all extensions, modifications, renewals or replacements thereof;
and
(b) Payment,
performance and observance by Lumea of each agreement, term, provision and
condition contained herein, or to preserve any right of Secured Party hereunder,
or to protect or preserve the Collateral or any part thereof.
1.3 All
of the indebtedness and obligations secured by this Security Agreement are
hereinafter collectively called the "Obligation".
2.
Warranties, Covenants And
Agreements of Lumea. Lumea represents and warrants that:
(a) Lumea
is the true and lawful owner of the Collateral and has full power, right and
authority to execute and deliver this Security Agreement;
(b) No
defense, setoff, claim or counterclaim exists against Secured Party that could
be asserted against Secured Party, whether in any proceeding to enforce Secured
Party's interest in the Collateral or otherwise; and
(c) Lumea
has not conveyed, transferred, or assigned the Collateral or any of its rights
or interest therein and has not executed any other document or ins trument that
might prevent or limit Secured Party from operating under the terms and
conditions of this Security Agreement.
2.2 Except
as set forth in Section 2.7, Lumea will make no other assignment (and will allow
no other assignment to be made) of the Collateral or of any right or interest
therein without the prior written consent of Easy.
2.3 Lumea
does hereby make, constitute and appoint Secured Party, its successors and
assigns, Lumea's true and lawful attorney in fact, in Lumea's name, place and
stead, or otherwise:
(a) To
do all acts, including the filing of a UCC Financing Statement (including
continuation statements and amendments) with the appropriate filing office, and
to execute, acknowledge, obtain and deliver any and all instruments, documents,
items or things necessary, proper or required as a term, condition or provision
of the Collateral or in order to exercise any rights of Lumea under the
Collateral or to receive and enforce any performance due Lumea under the
Collateral;
(b) To
demand and receive all performances due under or with respect to the Collateral
and to take all lawful ways and means for the enforcement thereof and to
compromise and settle any claim or cause of action in Lumea arising from or
related to the Collateral and give acquittances and other sufficient discharges
relating thereto; and
(c) To
file any claim or to take any other action or proceeding, either in its own name
or in that of its nominee, or in the name of Lumea or otherwise, to enforce
performances due under or related to the Collateral or to protect and preserve
the right, title and interest of Secured Party hereunder.
2.4 The
power of attorney given herein is a power coupled with an interest and shall be
irrevocable so long as any part of the Obligation remains unpaid or unperformed.
Secured Party shall have no obligation to exercise any of the foregoing rights
and powers in any event.
2.5 No
change, amendment or modification shall be made to the Collateral or to the
instructions of Lumea contained herein without the prior written approval of
Secured Party.
2.6 Lumea,
at its cost and expense, shall protect and defend this Security Agreement, all
of the rights of Secured Party hereunder and the Collateral against all claims
and demands of other parties. Lumea shall pay a11 claims and charges that in the
opinion of Secured Party might prejudice, imperil or otherwise affect the
Collateral or the Security Interest. Lumea shall promptly notify Secured Party
of any levy, distraint or other seizure by legal process or otherwise of any
part of the Collateral and of any threatened or filed claims or proceedings that
might in any way affect or impair the terms of this Security
Agreement.
2.7 The
Security Interest, at all times, shall be perfected and shall be prior to any
other interest in the Collateral other than a security interest granted to
Xxxxxx Capital for factoring receivables, and any replacement factoring or
lending institution. Lumea, on demand, shall promptly pay all costs and expenses
of filing and recording, including the costs of any searches, deemed necessary
by Secured Party from time to time to establish and determine the validity and
the continuing priority of the Security Interest.
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2.8 If
Lumea shall fail to pay any expenses or charges, to keep all of the Collateral
free from other security interests, encumbrances or claims or to perform
otherwise as required herein, Secured Party may advance the moneys necessary to
pay the same.
3.
EVENTS OF
DEFAULT; REMEDIES.
3.1 The
occurrence of any of the following events or conditions shall constitute and is
hereby defined to be an "Event of Default" under this Security Agreement, the
Promissory Note and the Asset Purchase Agreement:
(a) Any
failure to pay any principal or interest or any other part of the Obligation
pursuant to the provisions contained in the Promissory Note, when due, and such
failure is not remedied within thirty (30) days after receipt by Lumea of
written notice of default given by Secured Party to Lumea.
(b) Any
warranty, representation or statement contained in this Security Agreement, the
Promissory Note, or any other document or instrument executed or delivered in
connection with the Obligation, or made or furnished to Secured Party by or on
behalf of Lumea, that shall be or shall prove to have been materially false when
made or furnished.
(c) The
filing by Lumea, (or against Lumea) in which Lumea acquiesces or which is not
dismissed within sixty (60) days after the filing thereof) of any proceeding
under the federal bankruptcy laws now or hereafter existing or any other similar
statute now or hereafter in effect; the entry of an order for relief under such
laws with respect to Lumea or the appointment of a receiver, trustee, custodian
or conservator of all or any part of the assets of Lumea.
(d) The
insolvency of Lumea, or the execution by Lumea, of an assignment for the benefit
of creditors; or the convening by Lumea of a meeting of its creditors, or any
class thereof, for purposes of effecting a moratorium upon or extension or
composition of its debts; or the failure of Lumea to pay its debts as they
mature; or if Lumea is generally not paying its debts as they
mature.
(e) The
liquidation, termination or dissolution of Lumea if Secured Party is not
reasonably reassured of timely payment and performance hereunder and under the
Promissory Note.
(f) Any
attachment, garnishment, levy or execution upon, or judicial seizure of, any
portion of the Collateral that is not released within thirty (30) days of its
execution.
(g) Subject
to Section 2.7, the existence or the filing of any lien or encumbrance against
any portion of the Collateral which may impair the first lien position of
Secured Party that is not released within thirty (30) days of its
attachment.
(h) The
institution of any legal action or proceedings to enforce a lien or security
interest in any portion of the Collateral that is not dismissed within thirty
(30) days of its institution.
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(i)
The abandonment by Lumea of all or any part of the Collateral that is not
recovered or otherwise replaced within thirty (30) days of its
abandonment.
(j) The
loss, theft or destruction of, or any substantial damage to, any portion of the
Collateral that is not replaced, restored or returned within thirty (30)
days.
(k) Lumea's
abandonment or cessation of the business of providing Professional Employer
Organization or employee staffing services.
3.2 Upon
the occurrence of any Event of Default and at any time thereafter while such
Event of Default is continuing, Secured Party shall have the following rights
and remedies and may do one or more of the following:
(a)
Declare all or any part of the Obligation, including any or all of the
Promissory Note, immediately due and payable, and the same, with all costs and
charges, shall be collectible thereupon by action at law.
(b) Pursue
any legal remedy available to collect the Obligation, to enforce its title in
and right to possession of the Collateral and to enforce any and all other
rights or remedies available to it.
(c) After
notice to Lumea, sell such Collateral at public or private sale either with or
without having such Collateral at the place of sale. The proceeds of such sale,
after deducting therefrom all expenses of Secured Party in collecting and
selling the Collateral (including reasonable attorneys' fees) shall be applied
to the payment of the Obligation, and any surplus thereafter remaining shall be
paid to Lumea or any other person that may be legally entitled thereto. In the
event of a deficiency between such net proceeds from the same of the Collateral
and the total amount of the Obligation, Lumea, upon demand, shall promptly pay
the amount of such deficiency to Secured Party. Secured Party, so far as may be
lawful, may purchase all or any part of the Collateral offered at any public or
private sale made in the enforcement of Secured Party's rights and remedies
hereunder.
3.3 Secured
Party shall give Lumea reasonable notice of any sale or other disposition of all
or any part of the Collateral. Lumea agrees that notice and demand shall be
deemed to be commercially reasonable and effective if such notice is given to
Lumea at least ten (10) days prior to such sale or other disposition in the
manner provided herein for the giving of notices.
3.4 Lumea
shall and does hereby indemnify and hold Secured Party harmless from any and all
damages and losses arising as a result of or related to the Collateral, this
Security Agreement or the exercise by Secured Party of any of its rights under
this Security Agreement, including, without limitation, any judgment, amounts
paid in settlement, and all costs and expenses, including reasonable attorneys'
fees, incurred in defending or settling any action, suit or proceeding in
connection with the foregoing, but excluding damages and losses arising out of
or resulting from or relating to the gross negligence or intentional act of
Secured Party or its agents or employees.
3.5 All
sums advanced or paid by Secured Party under the terms hereof, all amounts paid,
suffered or incurred by Secured Party in exercising any authority granted
herein, including reasonable attorneys' fees, and all other amounts due Secured
Party from Lumea in connection with this Security Agreement shall be added to
the Obligation, shall be secured by all deeds of trust and other
lien and security documents securing the Obligation, shall bear interest at the
highest rate payable on any of the Obligation until paid, and shall be due and
payable by Lumea to Secured Party immediately without demand.
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3.6 Lumea
shall pay all costs and expenses, including, without limitation, costs of
Arizona Uniform Commercial Code searches, court costs and reasonable attorneys'
fees, incurred in enforcing payment and performance of the Obligation or in
exercising the right and remedies of Secured Party hereunder whether in civil,
probate, bankruptcy or appellate courts. Such court costs and attorneys' fees
shall be set by the court and not by jury, shall be included in any judgment
obtained by Secured Party, shall be added to the Obligation and shall be secured
by this Security Agreement.
3.7 In
addition to the remedies provided herein for an Event of Default, Secured Party
shall have all the rights and remedies afforded a secured party under the
Arizona Uniform Commercial Code and all other legal and equitable remedies
allowed under applicable law. No failure on the part of Secured Party to
exercise any of its rights hereunder arising upon any Event of Default shall be
construed to prejudice its rights upon the occurrence of any other or subsequent
Event of Default. No delay on the part of Secured Party in exercising any such
rights shall be construed to preclude it from the exercise thereof any time
during the continuance of that Event of Default. Secured Party may enforce any
one or more remedies or rights hereunder successively or concurrently. By
accepting payment or performance of any of the Obligation after its due date,
Secured Party shall not thereby waive the agreement contained herein that time
is of the essence, nor shall Secured Party waive either its right to require
prompt payment or performance when due of the remainder of the Obligation or its
right to consider the failure to so pay or perform an Event of
Default.
4.
MISCELLANEOUS
PROVISIONS.
4.1 Other Security. The
acceptance of this Security Agreement by Secured Party shall not be considered a
waiver of or in any way to affect or impair any other security that Secured
Party may have, acquire simultaneously herewith, or hereafter acquire for the
payment or performance of the Obligation, nor shall the taking by Secured Party
at any time of any such additional security be construed as a waiver of, or in
any way to affect or impair, the Security Interest; Secured Party may resort,
for the payment or performance of the Obligation, to its several securities
therefor in such order and manner as it may determine.
4.2 No Obligations to
Collateral. Secured Party, by accepting this Security Agreement, shall
not be subject to any obligation or liability under the Collateral, including
without limitation, any duty to perform any of the terms, conditions, provisions
or agreements thereof, but any and all such obligations and liabilities shall
continue to rest upon Lumea as though this Security Agreement had not been
made.
4.3 Modifications.
Without notice of demand, without affecting the obligations of Lumea hereunder
or the personal liability of any person for payment or performance of the
Obligation, and without affecting the Security Interest or the priority thereof,
Secured Party, from time to time, may: (i) extend the time for payment of all or
any part of the Obligation, accept a renewal Promissory Note therefor, reduce
the payments thereon, release any person liable for all or any part thereof, or
otherwise change the terms of all or any part of the Obligation; (ii) take and
hold other security for the payment or performance of the Obligation and
enforce, exchange, substitute, subordinate, waive or release any such security;
(iii) join in any extension or subordination agreement; or (iv) release any part
of the Collateral from the Security Interest.
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4.4 Waiver. Lumea waives
and agrees not to assert: (i) any right to require Secured Party to proceed
against any guarantor, to proceed against or exhaust any other security for the
Obligation, to pursue any other remedy available to Secured Party, or to pursue
any remedy in any particular order or manner; (ii) the benefits of any statute
of limitations affecting the enforcement hereof; (iii) demand, diligence,
presentment for payment, protest and demand, and notice of extension, dishonor,
protest, demand and nonpayment, relating to the Obligation; and (iv) any benefit
of, and any right to participate in, any other security now or hereafter held by
Secured Party.
4.5 Assignment;
Delegation. No party may assign any of its rights under this Security
Agreement, or delegate any performance under this Security Agreement, in whole
or in part, whether they are voluntary, involuntary, by merger, consolidation,
dissolution, operation of law, or any other manner, except with the prior
written consent of the other party, which consent may be withheld for any reason
or no reason. For purpose of this Section: (i) a change of control or a change
of ownership is deemed an assignment of rights; and (ii) "merger" refers to any
merger in which a party participates, regardless of whether it is the surviving
or disappearing corporation. Any purported assignment of rights or delegation of
performance in violation of this Section is null and void.
4.6 Successors and
Assigns. This Security Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors, heirs,
representatives and assigns, as the case may be; provided, however, that no
party shall assign or delegate this Security Agreement or any of the rights or
obligations created hereunder without the prior written consent of the other
party. This Security Agreement shall not confer upon any person not a party to
this Security Agreement, or the legal representative of such person any rights
or remedies of any nature or kind whatsoever under or by reason of this Security
Agreement.
4.7 Expenses. Except as
otherwise expressly provided in this Security Agreement, the parties hereto
shall bear their respective expenses incurred in connection with the
preparation, execution and performance of this Security Agreement and the
transactions contemplated hereby, including, without limitation, all fees and
expenses of agents, representatives, counsel and accountants.
4.8 Notices. All notices
and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been given or made, if delivered personally or
transmitted by telex, telecopy or telegram, on the date so delivered or
transmitted, if sent by Federal Express or other reputable national overnight
carrier, on the next business day after the date so sent, or if mailed by
registered or certified mail (postage prepaid, return receipt requested), on the
fifth business day after the date so mailed, to the parties at the following
addresses.
if to Sellers,
to: Easy
Staffing Services, Inc.
[address]
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, President
if to Lumea, to: Lumea,
Inc
0000 X.
Xxxxxxxx Xx., Xxxxx X
Xxxxxxxxxx,
Xxxxxxx 00000
Attention:
Xx. Xxxxxx X. Xxxxxxxx
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or to such other person or at such other
addresses as shall be furnished by any party by like notice to the other, and
such notice or communication shall be deemed to have been given or made as of
the date so delivered or transmitted, on the next business day after the date so
sent by overnight courier or on the fifth business day after the date so
mailed.
4.9 Entire Agreement.
This Security Agreement, together with the Annexes and Exhibits attached he
reto, r epresents t he e ntire agreement a nd unde rstanding o f the p arties h
ereto w ith reference to the transactions set forth herein, and no
representations, warranties or covenants have been made in connection with this
Security Agreement, either express or implied, other than those expressly set
forth herein, in the Annexes or in the certificates, agreements and other
documents delivered in connection with the transactions contemplated hereby.
This Security Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Security Agreement and all prior
drafts of this Security Agreement, all of which are merged into this Security
Agreement.
4.10 Third Parties. No
term or provision of this Security Agreement is for the benefit of any person
who is not a party hereto, and no such party will have any right or cause of
action hereunder.
4.11 Waivers, Amendments and
Remedies. This Security Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by Seller and Purchaser or, in the case of a waiver, by the
party waiving compliance. 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 such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power or
privilege.
4.12 Section Headings. The
Section headings contained in this Security Agreement are solely for convenience
of reference and shall not affect the meaning or interpretation of this Security
Agreement or of any term or provision hereof.
4.13 Counterparts. This
Security Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall be considered one
and the same agreement.
4.14 Facsimile and Electronic
Signatures. Signatures received via facsimile or other electronic means,
including in a digitally produced format (.tif, .pdf, .doc, .gif., etc.), will
be deemed originals, unless otherwise expressly set forth in a clear and
conspicuous manner elsewhere on the page or file that contains the facsimile or
electronic signature.
4.15 Enforcement Costs. If
either party institutes an action or proceeding to enforce any rights arising
under this Security Agreement, the party prevailing in such action or proceeding
will be paid all reasonable attorneys' fees and costs to enforce such rights by
the other party, such fees and costs to be set by the court, not by a jury, and
to be included in the judgment entered in such proceeding.
4.16 Governing Law. This
Security Agreement is made in and shall be governed by and construed in
accordance with the laws of the State of Arizona without giving effect to the
principles of conflicts of law thereof.
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4.17 Annexes, Exhibits and
Schedules. The Annexes, Exhibits and Schedules attached hereto
are part of this Security Agreement as if fully set forth herein. All
references herein to Sections, Clauses, Annexes, Exhibits and Schedules shall be
deemed references to such parts of this Security Agreement, unless the context
shall otherwise require. Any description or disclosure set forth in any
attachment hereto shall be deemed incorporated in all other attachments hereto
to the extent applicable.
[Signature
page follows]
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IN
WITNESS WHEREOF, this Security Agreement has been executed and delivered on
behalf of and in the name of Lumea on the date indicated above.
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LUMEA, INC.,
a Nevada corporation
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By:
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/s/ Xxxxxx X. Xxxxxxxx | ||
Its: | President |
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EASY STAFFING SERVICES,
INC.,
a Delaware corporation
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By:
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/s/ Xxxxx Xxxxx | ||
Its: | CEO |
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STATE OF ARIZONA | ) | ||
)
ss
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County of ______________ | ) |
The
foregoing instrument was acknowledged before me this _______ day of
_________________________, 2009, by
__________________________________________ the
_________________________ of Lumea, Inc., a Nevada corporation, for and on
behalf of
the company.
IN
WITNESS WHEREOF, I have hereunto set my hand and official seal.
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Notary Public | |||
My Commission Expires: | |||
___________________ | |||
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EXHIBIT
A
Collateral
The
Collateral means all of the right, title, and interest that Lumea possesses in
and to all of its assets, including all of
its:
(i)
intellectual property, goodwill associated therewith, licenses and sublicenses
granted and obtained with respect thereto, and rights thereunder, remedies
against infringements thereof, and rights to protection of interests therein
under the laws of all jurisdictions;
(ii) leases
(including equipment leases), subleases, and rights thereunder, and
improvements, fixtures, and fittings thereon;
(iii) agreements,
contracts, indentures, mortgages, instruments, security interests, guaranties,
other similar arrangements, and rights thereunder;
(iv) accounts,
notes, and other receivables;
(v) tangible
personal property (such equipment, supplies, and furniture);
(vi) claims,
deposits, prepayments, refunds, causes of action, choses in action, rights of
recovery, rights of set off, and rights of recoupment (including any such item
relating to the payment of taxes);
(vii) franchises,
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental agencies to the
extent assignable or transferable;
(viii) books,
records, ledgers, files, documents, correspondence, lists, plats, architectural
plans, drawings, and specifications, creative materials, advertising and
promotional materials, studies, reports, and other printed or written materials;
and
(ix) cash.
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SECURITY
AGREEMENT
THIS SECURITY AGREEMENT (the
"Security Agreement") is
made and entered into as of March 1, 2009 by
Lumea, Inc., a Nevada
corporation ("Lumea"),
with its principal place of business at 0000 X. Xxxxxxxx Xx., Xxxxx X,
Xxxxxxxxxx, Xxxxxxx 00000,
for the
benefit of
Easy Staffing Services, Inc.,
a Delaware corporation ("Secured Party"), with its
principal place of business at 00000 X. Xxxxxxxxxx Xx., Xxxxx 000., Xxxxxxxxxx,
XX 00000.
RECITALS
Lumea has
contemporaneously herewith executed in favor of Secured Party a Promissory Note
in the principal amount of Three Million Dollars
($3,000,000) (the "Promissory
Note").
As
security for the Promissory Note, Lumea has agreed to give Secured Party a
security interest (the "Security Interest") in the
property described on Exhibit "A" attached hereto and incorporated herein by
reference (hereinafter called the "Collateral").
1.
Security
Interest.
1.1
For good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Lumea hereby grants to Secured Party a security interest
(hereinafter called the "Security Interest") in the
property described on Exhibit "A".
1.2
This Security Agreement is given for the purpose of securing, in such order of
priority as Secured Party may elect:
(a)
Payment
of the amount of Three Million
Dollars ($3,000,000) with interest thereon, extension and other fees,
late charges and attorney's fees, according to the terms of the Promissory Note,
and all extensions, modifications, renewals or replacements thereof;
and
(b)
Payment,
performance and observance by Lumea of each agreement, term, provision and
condition contained herein, or to preserve any right of Secured Party hereunder,
or to protect or preserve the Collateral or any part thereof.
1.3
All of the indebtedness and obligations secured by this Security Agreement are
hereinafter collectively called the "Obligation".
Warranties, Covenants And
Agreements of Lumea. Lumea represents and warrants that:
(a)
Lumea is
the true and lawful owner of the Collateral and has frill power, right and
authority to execute and deliver this Security Agreement;
(b)
No
defense, setoff, claim or counterclaim exists against Secured Party that could
be asserted against Secured Party, whether in any proceeding to enforce Secured
Party's interest in the Collateral or otherwise; and
(c) Lumea
has not conveyed, transferred, or assigned the Collateral or any of its rights
or interest therein and has not executed any other document or instrument that
might prevent or limit Secured Party from operating under the terms and
conditions of this Security Agreement.
2.2
Except as set forth in Section 2.7, Lumea will make no other assignment (and
will allow no other assignment to be made) of the Collateral or of any right or
interest therein without the prior written consent of Easy.
2.3
Lumea does hereby make, constitute and appoint Secured Party, its successors and
assigns, Lumea's true and lawful attorney in fact, in Lumea's name, place and
stead, or otherwise:
(a)
To do all
acts, including the filing of a UCC Financing Statement (including continuation
statements and amendments) with the appropriate filing office, and to execute,
acknowledge, obtain and deliver any and all instruments, documents, items or
things necessary, proper or required as a term, condition or provision of the
Collateral or in order to exercise any rights of Lumea under the Collateral or
to receive and enforce any performance due Lumea under the
Collateral;
(b)
To demand
and receive all performances due under or with respect to the Collateral and to
take all lawful ways and means for the enforcement thereof and to compromise and
settle any claim or cause of action in Lumea arising from or related to the
Collateral and give acquittances and other sufficient discharges relating
thereto; and
(c)
To file
any claim or to take any other action or proceeding, either in its own name or
in that of its nominee, or in the name of Lumea or otherwise, to enforce
performances due under or related to the Collateral or to protect and preserve
the right, title and interest of Secured Party hereunder.
2.4
The power of attorney given herein is a power coupled with an interest and shall
be irrevocable so long as any part of the Obligation remains unpaid or
unperformed. Secured Party shall have no obligation to exercise any of the
foregoing rights and powers in any event.
2.5
No change, amendment or modification shall be made to the Collateral or to the
instructions of Lumea contained herein without the prior written approval of
Secured Party.
2.6
Lumea, at its cost and expense, shall protect and defend this Security
Agreement, all of the rights of Secured Party hereunder and the Collateral
against all claims and demands of other parties. Lumea shall pay a11 claims and
charges that in the opinion of Secured Party might prejudice, imperil or
otherwise affect the Collateral or the Security Interest. Lumea shall promptly
notify Secured Party of any levy, distraint or other seizure by legal process or
otherwise of any part of the Collateral and of any threatened or filed claims or
proceedings that might in any way affect or impair the terms of this Security
Agreement.
2.7
The Security Interest, at a11 times, shall be perfected and shall be prior to
any other interest in the Collateral other than a security interest granted to
Xxxxxx Capital for factoring receivables, and any replacement factoring or
lending institution. Lumea, on demand, shall promptly pay all costs and expenses
of filing and recording, including the costs of any searches, deemed necessary
by Secured Party from time to time to establish and determine the validity and
the continuing priority of the Security Interest.
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2.8
If Lumea shall fail to pay any expenses or charges, to keep all of the
Collateral free from other security interests, encumbrances or claims or to
perform otherwise as required herein, Secured Party may advance the moneys
necessary to pay the same.
3.
EVENTS OF
DEFAULT; REMEDIES.
3.1
The occurrence of any of the following events or conditions shall constitute and
is hereby defined to be an "Event of Default" under this Security Agreement, the
Promissory Note and the Asset Purchase Agreement:
(a)
Any
failure to pay any principal or interest or any other part of the Obligation
pursuant to the provisions contained in the Promissory Note, when due, and such
failure is not remedied within thirty (30) days after receipt by Lumea of
written notice of default given by Secured Party to Lumea.
(b)
Any
warranty, representation or statement contained in this Security Agreement, the
Promissory Note, or any other document or instrument executed or delivered in
connection with the Obligation, or made or furnished to Secured Party by or on
behalf of Lumea, that shall be or shall prove to have been materially false when
made or furnished.
(c)
The
filing by Lumea, (or against Lumea) in which Lumea acquiesces or which is not
dismissed within sixty (60) days after the filing thereof) of any proceeding
under the federal bankruptcy laws now or hereafter existing or any other similar
statute now or hereafter in effect; the entry of an order for relief under such
laws with respect to Lumea or the appointment of a receiver, trustee, custodian
or conservator of all or any part of the assets of Lumea.
(d)
The
insolvency of Lumea, or the execution by Lumea, of an assignment for the benefit
of creditors; or the convening by Lumea of a meeting of its creditors, or any
class thereof, for purposes of effecting a moratorium upon or extension or
composition of its debts; or the failure of Lumea to pay its debts as they
mature; or if Lumea is generally not paying its debts as they
mature.
(e)
The
liquidation, termination or dissolution of Lumea if Secured Party is not
reasonably reassured of timely payment and performance hereunder and under the
Promissory Note.
(f)
Any
attachment, garnishment, levy or execution upon, or judicial seizure of, any
portion of the Collateral that is not released within thirty (30) days of its
execution.
(g) Subject
to Section 2.7, the existence or the filing of any lien or encumbrance against
any portion of the Collateral which may impair the first lien position of
Secured Party that is not released within thirty (30) days of its
attachment.
(h) The
institution of any legal action or proceedings to enforce a lien or security
interest in any portion of the Collateral that is not dismissed within thirty
(30) days of its institution.
(i) The
abandonment by Lumea of all or any part of the Collateral that is not recovered
or otherwise replaced within thirty (30) days of its abandonment.
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The loss, theft or destruction of, or any substantial damage to, any portion of
the Collateral that is not replaced, restored or returned within thirty (30)
days.
(k)
Lumea's abandonment or cessation of the business of providing Professional
Employer Organization or employee staffing services.
3.2
Upon the occurrence of any Event of Default and at any time thereafter while
such Event of Default is continuing, Secured Party shall have the following
rights and remedies and may do one or more of the following:
(a)
Declare
all or any part of the Obligation, including any or all of the Promissory Note,
immediately due and payable, and the same, with all costs and charges, shall be
collectible thereupon by action at law.
(b)
Pursue
any legal remedy available to collect the Obligation, to enforce its title in
and right to possession of the Collateral and to enforce any and all other
rights or remedies available to it.
(c)
After
notice to Lumea, sell such Collateral at public or private sale either with or
without having such Collateral at the place of sale. The proceeds of such sale,
after deducting therefrom all expenses of Secured Party in collecting and
selling the Collateral (including reasonable attorneys' fees) shall be applied
to the payment of the Obligation, and any surplus thereafter remaining shall be
paid to Lumea or any other person that may be legally entitled thereto. In the
event of a deficiency between such net proceeds from the same of the Collateral
and the total amount of the Obligation, Lumea, upon demand, shall promptly pay
the amount of such deficiency to Secured Party. Secured Party, so far as may be
lawful, may purchase all or any part of the Collateral offered at any public or
private sale made in the enforcement of Secured Party's rights and remedies
hereunder.
3.3
Secured Party shall give Lumea reasonable notice of any sale or other
disposition of all or any part of the Collateral. Lumea agrees that notice and
demand shall be deemed to be commercially reasonable and effective if such
notice is given to Lumea at least ten (10) days prior to such sale or other
disposition in the manner provided herein for the giving of
notices.
3.4
Lumea shall and does hereby indemnify and hold Secured Party harmless from any
and all damages and losses arising as a result of or related to the Collateral,
this Security Agreement or the exercise by Secured Party of any of its rights
under this Security Agreement, including, without limitation, any judgment,
amounts paid in settlement, and all costs and expenses, including reasonable
attorneys' fees, incurred in defending or settling any action, suit or
proceeding in connection with the foregoing, but excluding damages and losses
arising out of or resulting from or relating to the gross negligence or
intentional act of Secured Party or its agents or employees.
3.5
All sun-is advanced or paid by Secured Party under the terms hereof, all amounts
paid, suffered or incurred by Secured Party in exercising any authority granted
herein, including reasonable attorneys' fees, and all other amounts due Secured
Party from Lumea in connection with this Security Agreement shall be added to
the Obligation, shall be secured by all deeds of trust and other lien and
security documents securing the Obligation, shall bear interest at the highest
rate payable on any of the Obligation until paid, and shall be due and payable
by Lumea to Secured Party immediately without demand.
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3.6
Lumea shall pay all costs and expenses, including, without limitation, costs of
Arizona Uniform Commercial Code searches, court costs and reasonable attorneys'
fees, incurred in enforcing payment and performance of the Obligation or in
exercising the right and remedies of Secured Party hereunder whether in civil,
probate, bankruptcy or appellate courts. Such court costs and attorneys' fees
shall be set by the court and not by jury, shall be included in any judgment
obtained by Secured Party, shall be added to the Obligation and shall be secured
by this Security Agreement.
3.7
In addition to the remedies provided herein for an Event of Default, Secured
Party shall have all the rights and remedies afforded a secured party under the
Arizona Uniform Commercial Code and all other legal and equitable remedies
allowed under applicable law. No failure on the part of Secured Party to
exercise any of its rights hereunder arising upon any Event of Default shall be
construed to prejudice its rights upon the occurrence of any other or subsequent
Event of Default. No delay on the part of Secured Party in exercising any such
rights shall be construed to preclude it from the exercise thereof any time
during the continuance of that Event of Default. Secured Party may enforce any
one or more remedies or rights hereunder successively or concurrently. By
accepting payment or performance of any of the Obligation after its due date,
Secured Party shall not thereby waive the agreement contained herein that time
is of the essence, nor shall Secured Party waive either its right to require
prompt payment or performance when due of the remainder of the Obligation or its
right to consider the failure to so pay or perform an Event of
Default.
4.
MISCELLANEOUS
PROVISIONS.
4.1
Other Security.
The acceptance of this Security Agreement by Secured Party shall not be
considered a waiver of or in any way to affect or impair any other security that
Secured Party may have, acquire simultaneously herewith, or hereafter acquire
for the payment or performance of the Obligation, nor shall the taking by
Secured Party at any time of any such additional security be construed as a
waiver of, or in any way to affect or impair, the Security Interest; Secured
Party may resort, for the payment or performance of the Obligation, to its
several securities therefor in such order and manner as it may
determine.
4.2
No Obligations to
Collateral. Secured Party, by accepting this Security Agreement, shall
not be subject to any obligation or liability under the Collateral, including
without limitation, any duty to perform any of the terms, conditions, provisions
or agreements thereof, but any and all such obligations and liabilities shall
continue to rest upon Lumea as though this Security Agreement had not been
made.
4.3
Modifications.
Without notice of demand, without affecting the obligations of Lumea hereunder
or the personal liability of any person for payment or performance of the
Obligation, and without affecting the Security Interest or the priority thereof,
Secured Party, from time to time, may: (i) extend the time for payment of all or
any part of the Obligation, accept a renewal Promissory Note therefor, reduce
the payments thereon, release any person liable for all or any part thereof, or
otherwise change the terms of all or any part of the Obligation; (ii) take and
hold other security for the payment or performance of the Obligation and
enforce, exchange, substitute, subordinate, waive or release any such security;
(iii) join in any extension or subordination agreement; or (iv) release any part
of the Collateral from the Security Interest.
4.4
Waiver. Lumea
waives and agrees not to assert: (i) any right to require Secured Party to
proceed against any guarantor, to proceed against or exhaust any other security
for the Obligation, to pursue any other remedy available to Secured Party, or to
pursue any remedy in any particular order or
manner; (ii) the benefits of any statute of limitations affecting the
enforcement hereof; (iii) demand, diligence, presentment for payment, protest
and demand, and notice of extension, dishonor, protest, demand and nonpayment,
relating to the Obligation; and (iv) any benefit of, and any right to
participate in, any other security now or hereafter held by Secured
Party.
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4.5
Assignment;
Delegation. No party may assign any of its rights under this Security
Agreement, or delegate any performance under this Security Agreement, in whole
or in part, whether they are voluntary, involuntary, by merger, consolidation,
dissolution, operation of law, or any other manner, except with the prior
written consent of the other party, which consent may be withheld for any reason
or no reason. For purpose of this Section: (i) a change of control or a change
of ownership is deemed an assignment of rights; and (ii) "merger" refers to any
merger in which a party participates, regardless of whether it is the surviving
or disappearing corporation. Any purported assignment of rights or delegation of
performance in violation of this Section is null and void.
4.6
Successors and
Assigns. This Security Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors, heirs,
representatives and assigns, as the case may be; provided, however, that no
party shall assign or delegate this Security Agreement or any of the rights or
obligations created hereunder without the prior written consent of the other
party. This Security Agreement shall not confer upon any person not a party to
this Security Agreement, or the legal representative of such person any rights
or remedies of any nature or kind whatsoever under or by reason of this Security
Agreement.
4.7
Expenses.
Except as otherwise expressly provided in this Security Agreement, the parties
hereto shall bear their respective expenses incurred in connection with the
preparation, execution and performance of this Security Agreement and the
transactions contemplated hereby, including, without limitation, all fees and
expenses of agents, representatives, counsel and accountants.
4.8
Notices. All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been given or made, if delivered personally
or transmitted by telex, telecopy or telegram, on the date so delivered or
transmitted, if sent by Federal Express or other reputable national overnight
carrier, on the next business day after the date so sent, or if mailed by
registered or certified mail (postage prepaid, return receipt requested), on the
fifth business day after the date so mailed, to the parties at the following
addresses.
if to Sellers,
to: Easy
Staffing Services, Inc.
[address]
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, President
if to Lumea, to: Lumea,
Inc
0000 X.
Xxxxxxxx Xx., Xxxxx X
Xxxxxxxxxx,
Xxxxxxx 00000
Attention:
Xx. Xxxxxx X. Xxxxxxxx
or to
such other persons or at such other addresses as shall be furnished by any party
by like notice to the other, and such notice or communication shall be deemed to
have been given or made as of the date so delivered or transmitted, on the next
business day after the date so sent by overnight courier or on the fifth
business day after the date so mailed.
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4.9
Entire
Agreement. This Security Agreement, together with the Annexes and
Exhibits attached hereto, represents the entire agreement and understanding of
the parties hereto with reference to the transactions set forth herein, and no
representations, warranties or covenants have been made in connection with this
Security Agreement, either express or implied, other than those expressly set
forth herein, in the Annexes or in the certificates, agreements and other
documents delivered in connection with the transactions contemplated hereby.
This Security Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Security Agreement and all prior
drafts of this Security Agreement, all of which are merged into this Security
Agreement.
4.10
Third Parties.
No term or provision of this Security Agreement is for the benefit of any person
who is not a party hereto, and no such party will have any right or cause of
action hereunder.
4.11
Waivers, Amendments
and Remedies. This Security Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by Seller and Purchaser or, in the case of a waiver,
by the party waiving compliance. 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 such right, power or privilege,
nor any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such right,
power or privilege.
4.12
Section
Headings. The Section headings contained in this Security Agreement are
solely for convenience of reference and shall not affect the meaning or
interpretation of this Security Agreement or of any term or provision
hereof.
4.13
Counterparts.
This Security Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
4.14
Facsimile and
Electronic Signatures. Signatures received via facsimile or other
electronic means, including in a digitally produced format (.tif, .pdf, .doc,
..gif., etc.), will be deemed originals, unless otherwise expressly set forth in
a clear and conspicuous manner elsewhere on the page or file that contains the
facsimile or electronic signature.
4.15
Enforcement
Costs. If either party institutes an action or proceeding to enforce any
rights arising under this Security Agreement, the party prevailing in such
action or proceeding will be paid all reasonable attorneys' fees and costs to
enforce such rights by the other party, such fees and costs to be set by the
court, not by a jury, and to be included in the judgment entered in such
proceeding.
4.16
Governing Law.
This Security Agreement is made in and shall be governed by and construed in
accordance with the laws of the State of Arizona without giving effect to the
principles of conflicts of law thereof.
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4.17
Annexes, Exhibits and
Schedules. The Annexes, Exhibits and Schedules attached hereto are a part
of this Security Agreement as if fully set forth herein. All references herein
to Sections, Clauses, Annexes, Exhibits and Schedules shall be deemed references
to such parts of this Security Agreement, unless the context shall otherwise
require. Any description or disclosure
set forth in any attachment hereto shall be deemed incorporated in all other
attachments hereto to the extent applicable.
[Signature
page follows]
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IN
WITNESS WHEREOF, this Security Agreement has been executed and delivered on
behalf of and in the name of Lumea on the date indicated above.
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LUMEA, INC.,
a Nevada corporation
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|
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By:
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/s/ Xxxxxx X. Xxxxxxxx | ||
Its: | President |
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EASY STAFFING SERVICES,
INC.,
a Delaware corporation
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By:
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/s/ Xxxxx Xxxxx | ||
Its: | CEO |
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STATE OF ARIZONA | ) | ||
)
ss
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County of ______________ | ) |
The
foregoing instrument was acknowledged before me this _______ day of
_________________________, 2009, by
__________________________________________ the
_________________________ of Lumea, Inc., a Nevada corporation, for and on
behalf of
the company.
IN
WITNESS WHEREOF, I have hereunto set my hand and official seal.
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Notary Public | |||
My Commission Expires: | |||
___________________ | |||
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EXHIBIT
A
Collateral
The
Collateral means all of the right, title, and interest that Lumea possesses in
and to all of its assets, including all of
its:
(i)
intellectual property, goodwill associated therewith, licenses and sublicenses
granted and obtained with respect thereto, and rights thereunder, remedies
against infringements thereof, and rights to protection of interests therein
under the laws of all jurisdictions;
(ii) leases
(including equipment leases), subleases, and rights thereunder, and
improvements, fixtures, and fittings thereon;
(iii) agreements,
contracts, indentures, mortgages, instruments, security interests, guaranties,
other similar arrangements, and rights thereunder;
(iv) accounts,
notes, and other receivables;
(v) tangible
personal property (such equipment, supplies, and furniture);
(vi) claims,
deposits, prepayments, refunds, causes of action, choses in action, rights of
recovery, rights of set off, and rights of recoupment (including any such item
relating to the payment of taxes);
(vii) franchises,
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental agencies to the
extent assignable or transferable;
(viii) books,
records, ledgers, files, documents, correspondence, lists, plats, architectural
plans, drawings, and specifications, creative materials, advertising and
promotional materials, studies, reports, and other printed or written materials;
and
(ix) cash.
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