Exhibit 10.2





Exhibit 10.2




SECURITY AGREEMENT




This is a Security Agreement (the “Security Agreement”) between Steel Vault Corporation, a
Delaware corporation (“Debtor”) and Blue Moon Energy Partners LLC, a Florida limited liability
company (the “Secured Party”), and is dated as of March 20, 2009.



BACKGROUND




Debtor and Secured Party are parties to a Secured Convertible Promissory Note in the aggregate
principal amount of $190,000.00 (the “Note”). This Security Agreement secures the Note.



Accordingly, in consideration of the mutual covenants and agreements set forth below, the
parties agree as follows:



TERMS




1. Grant of Security Interest. For good and valuable consideration received, the sufficiency
of which is hereby acknowledged and agreed, in order to secure payment of (collectively, the
“Liabilities”): (a) the Note; (b) all costs and expenses, including attorneys’ fees, incurred in
collecting amounts due under the Note following an Event of Default; (c) all costs and expenses,
including attorney’s fees, incurred in connection with realizing upon the value of the security
provided by this Security Agreement following an Event of Default; and (d) all other liabilities
and obligations of the Debtor to Secured Party, however and whenever incurred or evidenced, whether
primary, secondary, direct, indirect, absolute, contingent, sole, joint, or several, arising prior
to the date of this Security Agreement or in connection herewith, or which may be hereafter
contracted or acquired, or incurred directly or indirectly in respect thereof, and all extensions
or renewals thereof; Debtor grants to the Secured Party a lien and security interest in all of
Debtor’s Assets (defined below), including without limitation, the Acquired Assets and the accounts
receivable arising out of the Acquired Assets (collectively, the “Collateral”). This security
interest shall also attach to all replacements and proceeds of the Collateral. “Assets” means: all
accounts receivable, chattel paper, instruments, documents, inventory, equipment, general
intangibles, intellectual property, investment property, and all other tangible and intangible
property of Debtor, whether now owned or existing or hereafter acquired or arising, wherever
located, and all cash and non-cash proceeds and products thereof.



2. Delivery of the Security. To perfect the security interest granted above, the Debtor shall
deliver to the Secured Party an adequate number of executed Form UCC-1s in a form and content
appropriate for filing in all relevant jurisdictions and reasonably acceptable to the Secured
Party.


 


 









 






3. Assurances; Covenants. Debtor hereby agrees that:



a. The Debtor covenants to the Secured Party that except for the security interest granted to
the Secured Party by this Security Agreement: (i) the Collateral is and will be
free of all liens and security interests of every kind and nature, except as may have been the
result of actions of the Secured Party; (ii) the Debtor will not assign, transfer, sell, convey,
hypothecate, pledge, or in any other way dispose of or encumber the Collateral while this Security
Agreement is in effect; and (iii) the Debtor will warrant and defend the Collateral and the Secured
Party’s security interest against the claims and demands of all persons.



b. Debtor will not, without the prior written consent of Secured Party, borrow from anyone on
the security of the Collateral, or otherwise permit any liens, encumbrances, security interests, or
adverse claims against the Collateral, and will not permit the Collateral to be levied upon under
any legal process.



c. Debtor will not, without the prior written consent of Secured Party, sell, transfer,
assign, deliver, trade, lease, license, grant any other security interest in, rent, secrete, or
otherwise dispose of all or any part of the Collateral (other than accounts and inventory, which
may be sold only in the ordinary course of business), or permit anything to be done that may impair
the value of the Collateral.



d. Debtor authorizes Secured Party to file financing statements, including amendments or
continuations thereof, describing the Collateral, and from time to time at the request of Secured
Party, will execute such other documents, and will do such other acts and things, all as Secured
Party may reasonably request, to establish and maintain a valid perfected security interest in the
Collateral (free of all other liens and claims whatsoever) and to enable Secured Party to enforce
its rights and remedies hereunder with respect to the Collateral.



4. Representations and Warranties. Debtor represents and warrants to Secured Party as
follows:



a. Debtor is a corporation duly organized, validly existing, and in good standing and active
status under the laws of the state of Delaware;



b. Debtor has all requisite power to own and operate its properties and to carry on its
business as now being conducted, and has all necessary rights to conduct its business;



c. Debtor has the power, authority, and legal right to execute and deliver this Security
Agreement, and to perform its obligations hereunder, and has taken all action necessary to
authorize the execution, delivery, and performance of this Security Agreement and to authorize the
transactions contemplated hereby;



d. The execution, delivery, and performance by Debtor of this Security Agreement will not (i)
contravene, conflict with, result in the breach of, or constitute a violation of or default under
the organizational documents of Debtor, any applicable law, rule, regulation, judgment, order,
writ, injunction, or decree of any court or governmental authority, or any agreement or instrument
to which Debtor is a party or by which Debtor or its property may be bound or affected, or (ii)
result in the creation of any lien, charge, or encumbrance upon any property or assets of Debtor
pursuant to any of the foregoing, except the liens created by this Security Agreement;


 


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e. This Security Agreement constitutes a legal, valid, and binding agreement enforceable
against the Debtor and the Collateral in accordance with its terms and, without limiting the
foregoing, this Security Agreement grants Secured Party a valid, perfected security interest in the
Collateral; and



f. Debtor is the owner of the Collateral free and clear of all liens, encumbrances, security
interests, and adverse claims whatsoever, except in respect of the security interest granted in
this Security Agreement.



5. Default. Each of the following shall, after receipt by Debtor of written notice from
Secured Party and after a cure period of five (5) business days with respect to Section 5(a) below,
and thirty (30) days with respect to Sections 5(b) through 5(d) below, constitute an event of
default under this Security Agreement (each, an “Event of Default”):



a. The occurrence of a default under the Note, or a breach of the assurances set forth in
Section 3 of this Security Agreement, or any other Liability is not paid when due (and such
nonpayment continues beyond the expiration of any applicable grace or cure period);



b. Any representation or warranty made by any Debtor under this Security Agreement or any
report, certificate, financial statement, or other information provided by any Debtor to Secured
Party in connection herewith is false or misleading in any material respect when made or deemed
made; and



c. Any Debtor fails to fully and promptly perform when due any agreement or covenant under
this Security Agreement or any related document (and such failure continues beyond the expiration
of any applicable grace or cure period).



In the event that Debtor substantially cures such default within the applicable cure period, such
default shall not constitute an Event of Default.




6. Remedies in the Event of a Default.



a. In an Event of Default under this Security Agreement, the Secured Party will have the right
at any time and from time to time, without further notice or demand to any Debtor to exercise the
rights and remedies upon default that are granted to a secured party under the Uniform Commercial
Code and/or that are otherwise available to Secured Party under this Security Agreement, the Note,
or otherwise available to secured creditors at law and/or in equity under applicable law, including
without limitation:



(i) Enforce any Debtor’s rights against account debtors and notify any and all account debtors
or other parties against which any Debtor has a claim under the Collateral that such Collateral has
been assigned by Debtor and that Secured Party has a security interest therein and, if desired by
Secured Party, that all payments should be made to Secured Party;



(ii) Receive and endorse the name of any Debtor upon any instruments of payment (including
payments made under any policy of insurance) that may come into the possession of Secured Party;


 


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(iii) Sell, assign, demand, sue for, collect, compromise, or settle payment of all or any part
of the Collateral in the name of any Debtor or in its own name, or make any other disposition of
the Collateral, or any part thereof, which disposition may be for cash, credit, or any combination
thereof, or make exchanges, substitutions, surrenders, or discharges of any of the Collateral;



(iv) Purchase all or any part of the Collateral at public or, if permitted by law, private
sale, and in lieu of actual payment of such purchase price, to set off the amount of such price
against the Liabilities; and



(v) Do all things that Secured Party may reasonably deem necessary or advisable to accomplish
the purposes of this Security Agreement;



granting to Secured Party, as the attorney-in-fact of Debtor, full power of substitution and full
power to do any and all things necessary to be done in and about the premises as fully and
effectually as any Debtor might or could do but for this appointment, and hereby ratifying all that
said attorney-in-fact shall lawfully do or cause to be done by virtue of this Security Agreement.
This power of attorney is coupled with an interest and shall be irrevocable until the Liabilities
have been paid in full and all commitments to lend have been terminated.




b. Upon the occurrence of an Event of Default:



(i) Secured Party may direct the disposition of the Collateral and any other collateral for
the Liabilities, in such order or manner as Secured Party may in its sole discretion determine;



(ii) Secured Party shall have the right to enter and remain upon the premises of Debtor,
without any obligation to pay rent to any Debtor or others, or any other place or places where any
of the Collateral is located or kept, and: (1) remove Collateral therefrom, in order to maintain,
sell, collect, and liquidate the Collateral; or (2) use such premises, together with materials,
supplies, books, and records of Debtor, to maintain possession of and the condition of the
Collateral, and to prepare the Collateral for selling, liquidating, or collecting.



(iii) Secured Party may require Debtor, at Debtor’s expense, to assemble the Collateral and
make it available to Secured Party at a place to be designated by Secured Party which is reasonably
convenient to both parties.



c. The net proceeds realized by Secured Party upon a sale or other disposition of the
Collateral, or any part thereof, after deduction of the expenses of retaking, holding, preparing
for sale, selling or the like, and reasonable attorneys’ fees and other expenses incurred by
Secured Party, shall, be applied to payment of (or held as a reserve against) the Liabilities,
whether or not then due, and in such order of application as Secured Party may from time to time
elect.


 


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7. Termination. This Security Agreement and the security interest granted pursuant to this
Security Agreement shall terminate when all the Liabilities have been paid in full. Upon such
termination, the Secured Party will deliver all the appropriate executed Form UCC-3s to the
Debtor necessary to terminate all effective financing statements in the Secured Party’s favor
that are then on file or recorded with respect to the collateral described in this Security
Agreement.



8. Right to Inspect. If Debtor is in default under this Security Agreement, the Debtor will
permit representatives of the Secured Party to have full access to all premises, properties, books,
records, tax records, or documents of or pertaining to the Collateral in order to enable the
Secured Party to have access to the Collateral and the premises, properties, books, records, tax
records and documents related thereto.



9. Assignment. Neither this Security Agreement nor any of the rights, interests, or
obligations arising under this Security Agreement may be assigned by either party, without the
prior written consent of the other party hereto. Subject to the foregoing, this Security Agreement
shall be binding upon and inure to the benefit of Secured Party, its successors and assigns, and
shall be binding upon Debtor and its heirs, legal representatives, successors, and assigns and
shall bind all persons who become bound as a Debtor to this Security Agreement.



10. Binding Effect. This Security Agreement shall inure to the benefit of and be binding upon
the Secured Party’s permitted successors and assigns, and shall inure to the benefit of and be
binding upon Debtor’s permitted successors and assigns.



11. Severability. Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the remaining provisions of
this Security Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction. If any provision of this Security Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.



12. Titles. The titles and headings preceding the text of the sections of this Security
Agreement have been inserted solely for convenience of reference and do not constitute a part of
this Security Agreement or affect its meaning, interpretation, or effect.



13. Waiver. The failure of either party to insist in any one or more instances upon
performance of any terms or conditions of this Security Agreement shall not be construed as a
waiver of future performance of any such term, covenant, or condition, and the obligations of
either party with respect to such term, covenant, or condition shall continue in full force and
effect.



14. Entire Agreement. This Security Agreement contains the final, complete, and exclusive
expression of the understanding of the Debtor and the Secured Party with respect to the
transactions contemplated in this Security Agreement, and supersedes any prior or other
contemporaneous agreement or representation by or between the parties related to the subject matter
of this Security Agreement.



15. Amendment. This Security Agreement may not be amended, modified, or changed in any
respect except by an agreement in writing signed by the Debtor and the Secured Party, and any
waiver by either party of any requirement pursuant to this Security Agreement shall be in writing.


 


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16. Notices. All notices, requests, demands, claims and other communications under this
Security Agreement will be in writing. Any notice, request, demand, claim or other communication
under this Security Agreement shall be deemed duly given if it is sent: (a) by personal delivery,
or (b) by commercial delivery or overnight courier service that requires a signature as evidence of
delivery, and, in each case, addressed to the intended recipient as set forth below, or to any
other or additional persons and addresses as the Parties may from time to time designate in a
writing delivered in a writing in accordance with this Section 16:




If to the Secured Party:




Blue Moon Energy Partners LLC

1690 South Congress Drive, Suite 200

Delray Beach, Florida 33445

Attn: Scott R. Silverman




If to Debtor:




Steel Vault Corporation

1690 South Congress Drive, Suite 200

Delray Beach, Florida 33445

Attn: William J. Caragol



17. Governing Law. This Security Agreement shall be construed and enforced in accordance with
the laws of Florida. In any litigation in connection with or to enforce this, or any other related
documents, Debtor irrevocably consents to and confers personal jurisdiction on the courts of the
State of Florida or the United States courts located within the State of Florida, expressly waives
any objections as to venue in any of such courts, and agrees that service of process may be made on
Debtor by mailing a copy of the summons and complaint by registered or certified mail, return
receipt requested, to its most recent address provided in writing.



18. Relationship. This Security Agreement does not create or evidence a partnership or joint
venture between Debtor and the Secured Party.



19. Interpretation. Neither this Security Agreement nor any uncertainty or ambiguity in this
Security Agreement shall be construed or resolved against any party, whether under any rule of
construction or otherwise. No party to this Security Agreement shall be considered the draftsman.
The parties acknowledge and agree that this Security Agreement has been reviewed, negotiated, and
accepted by all the parties and their attorneys and shall be construed and interpreted according to
the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of
the parties.


 


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20. Time. Time shall be of the essence with respect to all of the provisions of this Security
Agreement.



21. Counterparts. This Security Agreement may be executed (including by facsimile
transmission) in two or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.



22. Enforcement of Security Agreement. The parties agree that irreparable damage will occur
if any of the provisions of this Security Agreement are not performed in accordance with its
specific terms or are otherwise breached. It is therefore agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Security Agreement and to
specifically enforce the terms and provisions of this Security Agreement in any court of the United
States or any state having jurisdiction, in addition to any other remedy to which they are
entitled.



23. Remedies Cumulative. The rights and remedies provided in this Security Agreement are
cumulative and not exclusive of any rights or remedies provided by law, and the warranties,
representations, covenants, and other provisions of this Security Agreement shall be cumulative.


 


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IN WITNESS WHEREOF, the undersigned have executed this Security Agreement as of the date and
year first above written.



	 	 	 	 	 
	 	
STEEL VAULT CORPORATION

 	 
	 	By:  	/s/ William J. Caragol
 	 
	 	 	William J. Caragol, Chief Executive Officer 	 
	 	 	 	 
	 	
BLUE MOON ENERGY PARTNERS, LLC

 	 
	 	By:  	/s/ Scott R. Silverman
 	 
	 	 	Scott R. Silverman, Managing Partner 	 




 


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