Attached files
| file | filename |
|---|---|
| 10-Q - Vu1 CORP | v167349_10q.htm |
| EX-31.1 - Vu1 CORP | v167349_ex31-1.htm |
| EX-10.1 - Vu1 CORP | v167349_ex10-1.htm |
| EX-32.1 - Vu1 CORP | v167349_ex32-1.htm |
| EX-10.2 - Vu1 CORP | v167349_ex10-2.htm |
| EX-31.2 - Vu1 CORP | v167349_ex31-2.htm |
AMENDED AND RESTATED
SECURITY AGREEMENT
THIS
AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”) is entered into as
of November 19, 2009, by and among Vu1 Corporation, a California corporation
(the “Company”), and Full
Spectrum Capital, LLC, a Washington limited liability company (“FSC”), and SAM Special
Opportunity Fund, LP, a Delaware limited partnership (“SAM”, and collectively with
FSC, the “Lenders”).
This Agreement amends and replaces in its entirety the prior Security Agreement
dated June 8, 2009 between FSC and the Company.
A. Pursuant
to an amended and restated secured convertible grid promissory note dated of
even date herewith, FSC has agreed to provide for debt financing to the Company
in an amount of up to $7,000,000, on the terms and subject to the conditions
therein (the “FSC
Note”).
B. Concurrently
with the date hereof, the Company is issuing a similar secured convertible grid
promissory note to SAM providing for debt financing to the Company (the “SAM Note”), and SAM is making
an initial advance to the Company under the SAM Note on the date
hereof.
C. The
parties intend that repayment of the FSC Note and the SAM Note (collectively,
the “Secured Promissory
Notes”) be secured by a grant to Lenders of a first priority security
interest in the Company’s assets, pursuant to the terms hereof.
For good
and valuable consideration, receipt and adequacy of which are hereby admitted
and acknowledged, the parties hereto agree as follows:
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1.
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Grant
of Security Interest.
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In order
to secure the payment of any monies due to Lenders under the Secured Promissory
Notes (the “Obligations”), the Company
hereby grants to Lenders and their successors and permitted assigns, a first
priority security interest in all of the Collateral (defined below). This
security interest shall be subject to the terms and conditions of this Security
Agreement.
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2.
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Collateral
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The
“Collateral” subject to
this Security Agreement means all of the Company’s right, title and interest in,
to and under all of the Company’s assets, whether now owned or existing or
hereafter acquired or arising, and wherever located including, but not limited
to the following: all cash and cash equivalents, accounts, deposit
accounts, documents, inventory, equipment, goods, documents, instruments
(including, without limitation, promissory notes), contract rights, general
intangibles, chattel paper, supporting obligations, investment property
(including, without limitation, all equity interests owned by the Company),
letter-of-credit rights, trademarks, trademark applications, tradestyles,
patents, patent applications, copyrights, copyright applications and other
intellectual property in which the Company now has or hereafter may acquire any
right, title or interest, all proceeds and products thereof (including, without
limitation, proceeds of insurance) and all additions, accessions and
substitutions thereto or therefor.
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3.
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Perfection;
Recordation
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The first
priority security interest granted herein shall be perfected by the filing of
appropriate Uniform Commercial Code Forms UCC-1 with the appropriate government
filing offices. The parties agree to take all necessary actions to
record the security interest in the Company’s patents and trademarks by making
all necessary filings with the United States Patent and Trademark
Office.
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4.
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Rights
and Remedies upon Event of Default.
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(a) Upon
the occurrence, and during the continuation, of an Event of Default (as defined
in the Secured Promissory Notes), Lenders (at their election but without notice
of their election and without demand) may, except to the extent otherwise
expressly provided or required below, do any one or more of the following, all
of which are authorized by the Company. For purposes of this
Agreement, references to the Uniform Commercial Code means the Uniform
Commercial Code as in effect in the State of Washington.
(i) Proceed
directly and at once, without notice, against the Company to collect and recover
the full amount or any portion of the Obligations, or against any security or
collateral for the Obligations
(ii) Without
notice to the Company (such notice being expressly waived), and without
constituting a retention of any collateral in satisfaction of an obligation
(within the meaning of Section 9505 of the Uniform Commercial Code), set off and
apply to the Obligations any and all (i) balances and deposits of the Company
held by Lenders, or (ii) indebtedness at any time owing to or for the credit or
the account of the Company held by Lenders;
(iii) Hold
or cause to be held, as cash collateral, any and all balances and deposits of
the Company held by Lenders to secure the full and final repayment in cash of
all of the Obligations;
(iv) May
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein and in the Secured Promissory Notes or otherwise available
to it, all the rights and remedies available to it at law (including those of a
secured party under the Uniform Commercial Code) or in equity.
(v) Without
notice or demand, make such payments and do such acts as Lenders consider
necessary or reasonable to protect its security interest in the
Collateral. The Company agrees to assemble the Collateral if Lenders
so require, and to make the Collateral available to Lenders as Lenders may
designate. The Company authorizes Lenders to enter the premises where
the Collateral is located, to take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which is prior or superior to its security interest and to pay
all expenses incurred in connection therewith.
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(vi)
Sell all or any part of the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including the Company’s
premises) as is commercially reasonable. It is not necessary that the
Collateral be present at any such sale. The Company hereby agrees
that 30 days’ notice of any intended sale or disposition of the Collateral is
reasonable. Lenders shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in the Company, which right or equity is hereby waived
or released to the extent permitted by law;
Except as
required by law, Lenders may take any or all of the foregoing action without
demand, presentment, protest, advertisement or notice of any kind to or upon the
Company or any other person. The rights and remedies of Lenders under
this Agreement, the Secured Promissory Notes, and all other agreements shall be
cumulative. Lenders shall have all other rights and remedies not
inconsistent herewith as provided under the Uniform Commercial Code, by law, or
in equity. No exercise by Lenders of one right or remedy shall be
deemed an election, and no waiver by Lenders of any Event of Default on the
Company’s part shall be deemed a continuing waiver. No delay by
either Lender shall constitute a waiver, election, or acquiescence by
it.
(b) Application of Collateral
Proceeds. The proceeds and/or avails of the Collateral, or any
part thereof, and the proceeds and the avails of any remedy hereunder (as well
as any other amounts of any kind held by Lenders at the time of, or received by
Lenders after, the occurrence of an Event of Default) shall be paid to and
applied as follows:
(i) First,
to the payment of reasonable costs and expenses of foreclosure or suit, if any,
and of such sale and the exercise of any other rights or remedies, reasonable
legal expenses and attorneys’ fees, incurred or made hereunder by
Lender;
(ii) Second,
to the payment to Lenders of the Obligations (to be applied first to accrued
interest and second to outstanding principal); provided, that any such payments
shall be made pro rata to the Lenders based on the principal amounts outstanding
under their respective Secured Promissory Notes; and
(iii) Third,
to the payment of the surplus, if any, to Company, its successors and assigns,
or to whomsoever may be lawfully entitled to receive the same.
(c) Agreement Among the
Lenders. Upon the occurrence of any Event of Default, and if
any action is instituted to exercise any rights or remedies with respect to the
Collateral, the Lenders shall share the Collateral and the proceeds and value of
such Collateral ratably, without priority of one over the other. As
between the Lenders, the parties agree that enforcement of the Lenders’ rights
hereunder may be taken by SAM. Accordingly, the Company is entitled
to rely on written notice or other communication from SAM as the collective
action of the Lenders, without requiring any separate notice or communication
from or with FSC, and the Company shall not be liable to FSC for any action
taken at the written direction of SAM. FSC agrees to hold SAM harmless for any
such action taken hereunder in good faith.
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5.
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Lenders’
Appointment as Attorney-in-Fact
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The
Company appoints Lenders, any of its officers, as its attorney-in-fact, with
power and authority in the place and stead of the Company and in the name of the
Company to execute such documents and to supply any omitted information and
correct patent errors in any documents executed by the Company; to file
financing statements against the Company covering the Collateral (and, in
connection with the filing of any such financing statements, describe the
Collateral as "all right, title and interest in, to and under all of the
Company’s assets and all personal property, whether now owned and/or hereafter
acquired” (or any similar variation thereof)); to sign the Company’s name on
public records; and to do all other things Lenders deem necessary to carry out
this Security Agreement. The Company hereby ratifies and approves all
acts of the attorney and neither Lender nor the attorney will be liable for any
acts of commission or omission, nor for any error of judgment or mistake of fact
or law other than gross negligence or willful misconduct. This power
being coupled with an interest is irrevocable so long as any Obligations remain
unpaid.
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6.
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No
Waiver; Cumulative Remedies.
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The
failure of Lenders or the Company at any time to demand strict performance by
the other of any terms, covenants or conditions set forth herein, shall not be
construed as a continuing waiver or relinquishment thereof, and either party
may, at any time, demand strict and complete performance by the other of said
terms, covenants or conditions. The rights and remedies provided in
this Agreement are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
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7.
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Inspection.
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Lenders
(through any of their officers, employees, or agents) shall have the right, from
time to time hereafter to inspect the Company’s books and records and to check,
test, and appraise the Collateral in order to verify the Company’s financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral.
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8.
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Liens
and Encumbrances.
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The
Company represents and warrants that the Company has good and marketable title
to the Collateral, free and clear of any mortgage, pledge, lien, encumbrance,
charge, or other security interest other.
-4-
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9.
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Covenants.
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(a) The
Company shall not sell, lease, transfer or otherwise dispose of any of the
Collateral, or attempt or contract to do so, other than (a) the sale of
inventory, (b) the granting of non-exclusive licenses in the ordinary course of
business, or (c) the disposal of surplus, worn-out or obsolete
equipment.
(b) The
Company shall not change its jurisdiction of organization, relocate its chief
executive office, principal place of business or its records, or allow the
relocation of any Collateral (other than to another location in Washington after
providing advance notice to the Lenders) from such address(es) listed on the
signature page hereto without thirty (30) days prior written notice to
Lenders.
(c) The
Company shall pay promptly when due all property and other taxes, assessments
and government charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Collateral, except to the extent
the validity thereof is being contested in good faith and adequate reserves are
being maintained in connection therewith.
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10.
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Miscellaneous.
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(a) Notices. Unless
otherwise provided, any notice required to be given hereunder shall be given in
writing and shall be deemed effectively delivered (i) upon personal
delivery to the party to be notified, (ii) upon confirmation of receipt by
fax by the party to be notified, (iii) one business day after deposit with
a reputable overnight courier, prepaid for overnight delivery, or
(iv) three days after deposit with the United States Post Office, postage
prepaid, registered or certified with return receipt requested. The
address for any such party shall be the address of such party as set forth on
the signature page below or at such other address as such party may designate by
ten days advance written notice to the other party given in the foregoing
manner.
(b) Headings. The
subject headings of the paragraphs of this Agreement are included for purposes
of convenience only and shall not affect the construction of interpretation of
any of its provisions.
(c) Severability. In
the event that any of the terms of this Agreement are held to be partially or
wholly invalid or unenforceable for any reason whatsoever, such holdings shall
not affect, alter, modify or impair in any manner whatsoever, any of the other
terms, or the remaining portion of any term, held to be partially invalid or
unenforceable.
(d) Entire Agreement;
Amendments. This Agreement, together with the Secured
Promissory Notes, and any document or agreement entered into in connection
herewith or contemplated hereby, constitute the entire agreement between the
parties, and contains all of the agreements between the parties with respect to
the subject matter hereof. No change or modification of this
Agreement shall be valid unless the same shall be in writing and signed by
Lenders and the Company. No waiver of any provision of this Agreement
shall be valid unless in writing and signed by the person or party against whom
charged.
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(e) Attorneys’
Fees. In the event of any action brought by either party
against the other arising out of this Agreement, or for the purposes of
enforcing this Agreement or collection of any damages alleged to have resulted
to one of the parties by reason of the breach or failure of performance of the
other, the party prevailing in any such action shall be entitled to recover
reasonable attorneys’ fees and cost of suit as may be determined by the
court.
(f) Governing Law;
Venue. This Agreement shall be governed by and construed under
the laws of the state of Washington without regard to principles of conflict of
laws. The parties irrevocably consent to the jurisdiction and venue
of the federal courts located in King County, Washington in connection with any
action relating to this Agreement.
(g) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
[Remainder
of Page Intentionally Left Blank; Signature Page Follows]
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EXECUTED
by the parties hereto as of the day and year first above written.
COMPANY:
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VU1
CORPORATION
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By:
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/s/ Richard Herring
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Name:
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Richard
Herring
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Title:
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Chief
Technology Officer
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Address:
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557
Roy Street, Suite 125
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Seattle,
WA 98109
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Fax
No.:
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(303)
651-3559
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LENDERS:
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FULL
SPECTRUM CAPITAL, LLC
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By:
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/s/ Richard Sellers
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Name:
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Richard
Sellers
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Title:
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Manager
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Address:
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24
Roy Street, #421
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Seattle,
WA 98109
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Fax
No.:
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(206)
524-9990
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SAM
SPECIAL OPPORTUNITY FUND, LP
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By:
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/s/ William B. Smith
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Name:
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William
B. Smith
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Title:
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Managing
Member
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Address:
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111
Broadway, Suite 808
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New
York, NY 10006
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Fax
No.:
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(212)
812-9336
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