SECURITY AGREEMENT
Exhibit 4.5
This
Security Agreement (the "Security
Agreement"), dated as of July 31, 2009, is by and between (i) AdMax Media, Inc., a Nevada
corporation (the "Debtor"),
and (ii) Agile Opportunity
Fund, LLC, a Nevada limited liability company (the "Secured
Party").
Background
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1.
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Lenco
Mobile, Inc., the parent of Debtor, (the "Parent")
issued the Secured Party a Secured Convertible Promissory Note (the "Note")
in the principal amount of $718,500, pursuant to a Securities Purchase and
Restructuring Agreement among the Parent, the Secured Party and the other
parties signatory thereto dated of even date herewith (the "Securities
Purchase Agreement"). Capitalized terms used herein and
not otherwise defined herein shall have the meanings specified in the
Securities Purchase
Agreement.
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2.
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To
induce the Secured Party to enter into the Securities Purchase Agreement,
the Debtor has agreed to provide the Secured Party with a first priority
security interest in the Collateral (as hereinafter
defined).
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Now,
therefore, in consideration of the promises and the mutual covenants and
agreements herein set forth, and in order to induce the Secured Party to
purchase the Note, the Debtor hereby agrees with the Secured Party as
follows:
Section
1. Grant of
Security Interest. The Debtor hereby grants to the Secured
Party, on the terms and conditions hereinafter set forth, a first priority lien
and security interest in the collateral hereinafter identified (the "Collateral").
Section
2. Collateral. The
Collateral is all tangible and intangible assets of the Debtor of whatever kind
and nature (including, without limitation, all intellectual property of whatever
kind or nature of the Debtor including patents, trademarks, tradenames,
copyrights and all other intellectual property and any applications or
registrations therefore, accounts, chattel paper, commercial tort claims,
documents, equipment, farm products, general intangibles, instruments,
inventory, investment property, and the equity of all of Debtor's subsidiaries),
in each case whether now owned or hereafter acquired and wherever located, and
all proceeds thereof, together with all proceeds, products, replacements and
renewals thereof.
Section
3. Representations
and Warranties; Covenants. The Debtor hereby represents,
warrants and covenants as follows:
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(a)
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The
Debtor has title to the Collateral free from any lien, security interest,
encumbrance or claim.
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(b)
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The
Debtor will maintain the Collateral so as to preserve its value subject to
wear and tear in the ordinary
course.
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(c)
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The
Debtor is a corporation duly organized, validly existing and in good
standing under the laws of the State of
Nevada.
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(d)
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The
Debtor will pay when due all existing or future charges, liens, or
encumbrances on the Collateral, and will pay when due all taxes and
assessments now or hereafter imposed or affecting the Collateral unless
such taxes or assessments are diligently contested by the Debtor in good
faith and reasonable reserves are established
therefor.
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(e)
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All
information with respect to the Note and the Collateral and account
debtors set forth in any schedule, certificate or other writing at any
time heretofore or hereafter furnished by the Debtor to the Secured Party,
and all other written information heretofore or hereafter furnished by the
Debtor to the Secured Party, is or will be true and correct in all
material respects, as of the date
furnished.
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(f)
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As
soon as practicable following the date of execution of this Security
Agreement and in any event within five (5) business days of such date, the
Secured Party will prepare, execute and file with the Secretary of State
in the State of Nevada, a UCC-1 Financing Statement covering the
Collateral, naming the Secured Party as Secured Party
thereunder.
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(g)
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The
Debtor will keep its records concerning the Collateral at its address
shown in Section 2(b) of the Perfection Certification. Such
records will be of such character as to enable the Secured Party or their
representatives to determine at any time the status thereof, and the
Debtor will not, unless the Secured Party shall otherwise consent in
writing, maintain any such record at any other
address.
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(h)
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The
Debtor will furnish the Secured Party information on a quarterly basis
concerning the Debtor, the Note and the Collateral as the Secured Party
may at any time reasonably request.
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(i)
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The
Debtor will permit the Secured Party and its representatives at any
reasonable time during normal business hours and on five (5) day prior
written notice to inspect and audit any and all of the Collateral and all
records and all other papers in possession of the Debtor pertaining to the
Note and the Collateral and will, on the written request of the Secured
Party, deliver to the Secured Party all such records and papers for the
purpose of enabling the Secured Party to inspect and
audit. Any of the Debtor's records delivered to the
Secured Party shall be returned to the Debtor as soon as the Secured Party
shall have completed its inspection, audit and/or copying thereof. The
Secured Party covenants and agrees to keep and hold all records and all
other papers in possession of the Debtor pertaining to the Note and the
Collateral confidential and shall not copy, reproduce or
disclose the same to any third party without the prior written consent of
the Debtor.
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(j)
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The
Debtor has set forth on Schedule 3(j) a schedule identifying the material
assets that comprise the Collateral subject to the security interest of
this Security Agreement as of the date
hereof.
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(k)
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If
and when so requested by the Secured Party, the Debtor will stamp on the
records of the Debtor concerning the Collateral a notation, in a form
reasonably satisfactory to the Secured Party, of the security interest of
the Secured Party under this Security
Agreement.
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Section
4. Disposition
of Collateral in Ordinary Course. Debtor shall not sell,
transfer, assign, convey, license, grant any right to use or otherwise dispose
of any Collateral except in the ordinary course of business, without
the prior written consent of the Secured Party.
Section
5. Secured
Party May Perform. Upon the occurrence and continuation of an
"Event of
Default" under the Note, at the option of the Secured Party the Secured
Party may discharge taxes, liens or security interests, or other encumbrances at
any time hereafter levied or placed on the Collateral; may pay for insurance
required to be maintained on the Collateral pursuant to Section 3; and may pay
for the maintenance and preservation of the Collateral. The Debtor
agrees to reimburse the Secured Party on demand for any payment made, or any
expense incurred, by the Secured Party pursuant to the foregoing
authorization. Until the occurrence and continuation of an Event of
Default, the Debtor may have possession of the Collateral and use it in any
lawful manner not inconsistent with this the Security Agreement.
Section
6. Obligations
Secured; Certain Remedies. This Security Agreement secures the
payment and performance of all obligations of the Parent to the Secured Party
under the Note and the other Loan Documents executed in connection therewith,
whether now existing or hereafter arising and whether for principal, interest,
costs, fees or otherwise (collectively, the "Obligations"). Upon
the occurrence and continuation of an Event of Default under the Note and/or the
other Loan Documents, the Secured Party may declare all obligations secured
hereby immediately due and payable and may exercise the remedies of a secured
party under the Uniform Commercial Code. Without limiting the
foregoing, the Secured Party may require the Debtor to assemble the Collateral
and make it available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties or to execute
appropriate documents of assignment, transfer and conveyance, in each case, in
order to permit the Secured Party to take possession of and title to the
Collateral. Unless the Collateral is perishable or threatens to
decline rapidly in value or is of a type customarily sold on a recognized
market, the Secured Party will give the Debtor reasonable notice of the time and
place of any public sale thereof or of the time after which any private sale or
any other intended disposition thereof is to be made. The
requirements of reasonable notice shall be met if such notice is mailed to the
Debtor via registered or certified mail, postage prepaid, at least thirty (30)
days before the time of sale or disposition. Expenses of retaking,
holding, preparing for sale, selling or the like, shall include the Secured
Party's reasonable attorneys' fees and legal expenses.
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Section
7. Debtor
Remains Liable. Anything herein to the contrary
notwithstanding:
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(a)
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Notwithstanding
the exercise of any remedy available to the Secured Party hereunder or at
law in connection with an Event of Default, the Parent shall remain liable
to repay the balance remaining unpaid and outstanding under the Note after
the value or proceeds received by the Secured Party in connection with
such remedy is subtracted. The Secured Party shall promptly
deliver and pay over to the Debtor any portion of the value or proceeds
received in connection with such remedy that remains after the unpaid and
outstanding portion of the Note is paid in
full.
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(b)
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The
Debtor shall remain liable under the contracts and agreements included in
the Collateral to the extent set forth therein and shall perform all of
its duties and obligations under such contracts and agreements to the same
extent as if this Security Agreement had not been
executed.
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(c)
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The
exercise by the Secured Party of any of its rights hereunder shall not
release the Debtor from any of its duties or obligations under any such
contracts or agreements included in the
Collateral.
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(d)
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The
Secured Party shall not have any obligation or liability under any such
contracts or agreements included in the Collateral by reason of this
Security Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Debtor thereunder or to take any
action to collect or enforce any claim for payment assigned
hereunder.
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Section
8. Security
Interest Absolute. All rights of the Secured Party and the
security interests granted to the Secured Party hereunder shall be absolute and
unconditional, to the maximum extent permitted by law, irrespective
of:
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(a)
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Any
lack of validity or enforceability of the Note or any other document or
instrument relating thereto;
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(b)
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Any
change in the time, manner or place of payment of, or in any other term
of, all or any part of the Obligations or any other amendment to or waiver
of or any consent to any departure from the Note or any other Loan
Document;
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(c)
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Any
exchange, release or non-perfection of any collateral (including the
Collateral), or any release of or amendment to or waiver of or consent to
or departure from any guaranty, for all or any of the Obligations;
or
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(d)
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Any
other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Debtor, a guarantor or a third party grantor of
a security interest.
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Section
9. Additional
Assurances. At the request of the Secured Party, the Debtor
will join in executing or will execute, as appropriate, all necessary financing
statements in a form reasonably satisfactory to the Secured Party, and the
Debtor will pay the cost of filing such statements, including all statutory
fees. The Debtor will further execute all other instruments deemed
necessary by the Secured Party and pay the cost of filing such
instruments. The Debtor warrants that no financing statement covering
Collateral or any part or proceeds thereof is presently on file in any public
office. The Debtor covenants that it will not grant any other
security interest in the Collateral without first obtaining the written consent
of the Secured Party.
Section
10. Representations,
Warranties and Covenants Concerning Debtor's Legal Status.
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(a)
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The
Debtor has previously executed and delivered to the Secured Party a
Perfection Certificate in the form of Schedule
I hereto. The Debtor represents and warrants to the Secured
Party as follows:
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(i)
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Debtor's
exact legal name is as indicated on the Perfection Certificate and on the
signature page hereof;
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(ii)
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Debtor
is an organization of the type, and is organized in the jurisdiction, set
forth in the Perfection
Certificate;
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(iii)
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the
Perfection Certificate accurately sets forth Debtor's organizational
identification number or accurately states that Debtor has
none;
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(iv)
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the
Perfection Certificate accurately sets forth Debtor's place of business
or, if more than one, its chief executive office as well as Debtor's
mailing address, if different; and
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(v)
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all
other information set forth on the Perfection Certificate is accurate and
complete.
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(b)
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The
Debtor covenants with the Secured Party as
follows:
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(i)
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without
providing fifteen (15) days' prior written notice to the Secured Party,
Debtor will not change its name, its place of business, or, if more than
one, its chief executive offices or its mailing address or organizational
identification number, if it has
one;
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(ii)
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if
Debtor does not have an organizational identification number and later
obtains one, Debtor shall forthwith notify the Secured Party of such
organizational identification number;
and
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(iii)
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without
providing fifteen (15) days prior written notice to the Secured Party,
Debtor will not change its type of organization or jurisdiction of
organization.
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Section
11. Expenses. The
Debtor will upon demand pay to the Secured Party the amount of any and all
reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Secured Party may incur in
connection with (i) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral upon the
occurrence and continuation of an Event of Default, (ii) the exercise or
enforcement of any of the rights of the Secured Party hereunder, or (iii) the
failure by the Debtor to perform or observe any of the provisions
hereof.
Section
12. Notices
of Loss or Depreciation. The Debtor will immediately notify
the Secured Party of any material claim, suit or proceeding against any
Collateral or any material event causing loss or depreciation in the value of
Collateral, including an estimate the amount of such loss or
depreciation.
Section
13. No
Waivers. No waiver by the Secured Party of any default shall
operate as a waiver of any other default or of the same default on any
subsequent occasion.
Section
14. Successor
and Assigns. The Secured Party shall have the right to assign
this Security Agreement and its rights hereunder without the consent of the
Debtor. All rights of the Secured Party shall inure to the benefit of
the successors and assigns of the Secured Party. All obligations of
the Debtor shall be binding upon the Debtor's successors and
assigns.
Section
15. No Grant
of Security Interest on Assets. The Debtor covenants that it
shall not grant a security interest in any of its assets, tangible or
intangible, except for the security interest granted in the Collateral to the
Secured Party hereunder.
Section
16. Governing
Law; Jurisdiction. This Security Agreement shall be governed
by the laws of the State of New York, without giving effect to such
jurisdiction's principles of conflict of laws, except to the extent that the
validity or the perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Each of the parties
hereto submits to the personal jurisdiction of and each agrees that all
proceedings relating hereto shall be brought in federal or state courts located
in the State of New York.
Section
17. Counterparts. This
Security Agreement may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together shall constitute one and
the same instrument.
Section
18. Remedies
Cumulative. The rights and remedies herein are cumulative, and
not exclusive of other rights and remedies which may be granted or provided by
law.
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Section
19. Notices. Any
notices required or permitted to be given under the terms of this Note shall be
sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile and shall be effective five days after being placed in the mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If to the
Lender:
Agile
Opportunity Fund, LLC
0000 Xxxx
Xxxxxxx Xxxx, Xxxxx 000X
Xxxxxxxx,
XX 00000
Attn:
Xxxxx Xxxxxx
Facsimile:
(000) 000-0000
With a copy to (which shall not
constitute notice):
Xxxxxxxxx
Ball Xxxxxx Xxxxxx & Xxxxxxxxxx, LLP
000 Xxx
Xxxxxxx Xxxx
Xxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxx, Esq.
Facsimile: (000)
000-0000
If to the
Debtor:
AdMax
Media, Inc.
00000
Xxxxxxxxxx Xxxxx
Xxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxxxxxx
Facsimile:
(000) 000-0000
With a copy to (which shall not
constitute notice):
Sheppard,
Mullin, Xxxxxxx & Hampton, LLP
00000 Xx
Xxxxxx Xxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Attn:
Xxxxx X. Xxxxxx III
Facsimile:
(000) 000-0000
Section
20. Entire
Agreement. This Security Agreement and the documents and
instruments referred to herein embody the entire agreement entered into between
the parties relating to the subject matter hereof, and may not be amended,
waived, or discharged except by an instrument in writing executed by the Secured
Party.
Section
21. Termination. This
Security Agreement shall terminate upon the repayment in full of the Note upon
which the Secured Party shall cooperate in the filing of the necessary or
appropriate documents and instruments to release the security interest created
hereby and will execute and deliver any and all documents and/or instruments
reasonably requested by Debtor in connection therewith.
[Intentionally
Left Blank; Signature Page Follows]
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IN
WITNESS WHEREOF, the parties hereto, by their duly authorized agents, have
executed this Security Agreement as of the date set forth above.
| ADMAX MEDIA, INC. | |
| By: /s/ Xxxxxxx Xxxxxxxxx | |
| Name: Xxxxxxx Xxxxxxxxx | |
| Title: President & Chief Executive Officer | |
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AGILE
OPPORTUNITY FUND, LLC
By:
AGILE INVESTMENTS, LLC, Managing Member
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| By: /s/ Xxxxx X. Xxxxxx | |
| Name: Xxxxx X. Xxxxxx | |
| Title: Managing Member |
[SIGNATURE PAGE TO SECURITY AGREEMENT]
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