EXHIBIT 10.2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "AGREEMENT") is made as of July 27, 2015 between
CrowdGather, Inc., a Nevada corporation (the "COMPANY") and each of the parties
executing below as a secured party (collectively, the "SECURED PARTY").
RECITALS
A. Company has issued to the Secured Party secured promissory notes (the
"NOTES" and each a "NOTE") in the aggregate principal amount of up to Two
Million Dollars ($2,000,000).
B. In order to induce each Secured Party to acquire the Notes from Company,
Company has agreed, among other things, to execute this Agreement.
NOW, THEREFORE, in consideration of the agreements herein and in reliance
upon the representations and warranties set forth herein and therein, the
parties agree as follows:
ARTICLE 1.
DEFINED TERMS
1.1 DEFINITIONS. Unless otherwise defined herein or unless the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Uniform Commercial Code in effect in
the State of California (the "UCC"). In addition, the following terms when used
in this Agreement, including its preamble and recitals, shall have the following
meanings:
"TRANSACTION DOCUMENTS" means (a) this Agreement, (b) each of the Notes,
and (c) the UCC-1 filed in connection herewith.
"OBLIGATIONS" means the payment and performance obligations of Company
under any of the Transaction Documents.
ARTICLE 2.
SECURITY INTEREST
2.1 GRANT OF SECURITY INTEREST. To secure the timely payment and
performance in full of the Obligations, Company does hereby assign, grant and
pledge to the Secured Party all of the estate, right, title and interest of
Company in and to the collateral as more fully described on EXHIBIT A hereto,
whether now owned or later acquired or created, and including all proceeds of
the collateral, whether cash or non-cash (the "COLLATERAL").
2.2 FINANCING STATEMENTS.
(a) Company hereby authorizes each Secured Party to file this Agreement and
all financing statements, continuation statements, amendments, assignments,
collateral assignments, certificates, and other documents and instruments with
respect to the Collateral pursuant to the UCC and otherwise in any jurisdiction
and with any filing offices (whether state, federal or foreign) as may be
necessary or reasonably requested by such Secured Party to perfect, or from time
to time to publish notice of, or continue or renew, the security interests
granted hereby (including, such financing statements, continuation statements,
certificates, and other documents as may be necessary or reasonably requested to
perfect a security interest in any additional property rights hereafter acquired
by Company or in any replacements, products or proceeds thereof), in each case
in form and substance satisfactory to such Secured Party.
(b) Company will pay the cost of filing such financing statements relating
to it in all public offices where filing is necessary or reasonably requested by
each Secured Party and will pay any and all recording, transfer or filing taxes
that may be due in connection with any such filing.
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(c) Such financing statements may describe the Collateral in the same
manner as described herein or may contain an indication or description of
collateral that describes such property in any other manner as each Secured
Party may reasonably determine is necessary, advisable or prudent to ensure the
perfection of the security interest in the Collateral granted to such Secured
Party herein.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF DEBTOR
Company makes the following representations and warranties to and in favor
of Secured Party as of the date hereof. All of these representations and
warranties shall survive the execution and delivery of this Agreement:
3.1 OFFICES, LOCATION OF COLLATERAL. The chief executive office or chief
place of business of Company is located at 20300 Ventura Blvd. Suite 330,
Woodland Hills, California 91364.
3.2 TITLE AND LIENS. Company has good, valid, and marketable title to its
respective portion of the Collateral, free from all liens and encumbrances of
any kind, except for (i) normal and customary state or municipal impositions not
yet due and payable, and (ii) purchase money security interests incurred in the
normal course of business. As a result of this Agreement, Secured Party will
together have a senior priority security interest in the Collateral, subordinate
to no other security interest.
ARTCLE 4. COVENANTS OF DEBTOR
Company covenants to and in favor of Secured Party as follows:
4.1 COMPLIANCE WITH OBLIGATIONS. Company shall perform and comply in all
material respects with all obligations and conditions on its part to be
performed with respect to the Collateral.
4.2 EVENTS OF DEFAULT. Company shall give to Secured Party prompt notice of
any material default with respect to the Collateral of which Company has
knowledge or has received notice.
4.3 PRESERVATION OF VALUE; LIMITATION OF LIENS. Company shall not take any
action in connection with the Collateral which would impair in any material
respect the respective interests or rights of Secured Party therein or with
respect thereto, except as expressly permitted hereby; PROVIDED, HOWEVER, that
nothing in this Agreement shall prevent Company, prior to the exercise by
Secured Party of any of its respective rights pursuant to the terms hereof, from
undertaking Company's operations in the ordinary course of business. Company
shall not directly or indirectly create, incur, assume or suffer to exist any
liens on or with respect to all or any part of the Collateral senior to or pari
passu with the liens created by this Agreement, except for the Permitted
Encumbrances. Company shall at its own cost and expense promptly take such
action as may be necessary to discharge any such liens.
4.4 MAINTENANCE OF RECORDS. Company shall, at all times, keep accurate and
complete records of its respective portion of the Collateral. Company shall
permit representatives of Secured Party, upon reasonable prior notice, at any
time during normal business hours of the Company to inspect and make abstracts
from Company's books and records pertaining to the Collateral. Upon the
occurrence and during the continuation of any Event of Default, at Secured
Party's request, Company shall promptly deliver copies of any and all such
records to Secured Party.
4.5 PAYMENT OF TAXES. Company shall pay or cause to be paid, before any
fine, penalty, interest or cost attaches thereto, all taxes, assessments and
other governmental or non-governmental charges or levies (other than those taxes
that it is contesting in good faith and by appropriate proceedings, and in
respect of which it has established adequate reserves for such taxes) now or
hereafter assessed or levied against the Collateral pledged by it hereunder and
shall retain copies of, and, upon request, permit Secured Party to examine
receipts showing payment of any of the foregoing.
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4.6 NAME; JURISDICTION OF ORGANIZATION. Company shall give Secured Party at
least 30 days prior written notice before Company changes its name, jurisdiction
of organization or entity type and shall at the expense of Company execute and
deliver such instruments and documents as may be required by Secured Party or
applicable legal requirements to maintain their senior perfected security
interests in the Collateral subject to the Permitted Encumbrances.
4.7 PROCEEDS OF COLLATERAL. Company shall, at all times, keep pledged to
Secured Party pursuant hereto all Collateral and all dividends, distributions,
interest, principal and other proceeds received by the Company with respect
thereto, and all other Collateral and other securities, instruments, proceeds
and rights from time to time received by or distributable to Company in respect
of any Collateral, and shall not permit any issuer of such Collateral to issue
any shares of stock or other equity interests which shall not have been
immediately duly pledged to Secured Party hereunder.
ARTICLE 5. RIGHTS AND REMEDIES
5.1 EVENT OF DEFAULT DEFINED. Any breach of the provisions of this
Agreement which is not cured within fifteen calendar (15) days of written notice
from Secured Party or any event of default under any of the Transaction
Documents following expiration of any applicable notice and grace periods as
described in the Transaction Documents will constitute an "EVENT OF Default"
hereunder.
5.2 REMEDIES UPON EVENT OF DEFAULT.
(a) During any period during which an Event of Default shall have occurred
and be continuing, Secured Party may (but shall be under no obligation to),
directly or by using agent or broker:
(i) proceed to protect and enforce the rights vested in it by this
Agreement and under the UCC;
(ii) cause all moneys and other property pledged as security to be
paid and/or delivered directly to it, and demand, sue for, collect and
receive any such moneys and property;
(iii) cause any action at law or suit in equity or other proceeding to
be instituted and prosecuted to collect or enforce any Obligations of
Company or rights included in the Collateral, or for specific enforcement
of any covenant or agreement contained herein, or in aid of the exercise of
any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to enforce
any other legal or equitable right vested in it by this Agreement or by
law;
(iv) foreclose or enforce any other agreement or other instrument by
or under or pursuant to which the Obligations of any Company are issued or
secured;
(v) subject to SECTION 5.2(B), sell, lease or otherwise dispose of any
or all of the Collateral, in one or more transactions, at such prices as
Secured Party may deem best, and for cash or on credit or for future
delivery, without assumption of any credit risk, at any broker's board or
at public or private sale, without demand of performance or notice of
intention to sell, lease or otherwise dispose of, or of time or place of
disposition (except such notice as is required by applicable statute and
cannot be waived), it being agreed that Secured Party may be purchasers or
lessees on their own behalf at any such sale and that Secured Party or
anyone else who may be the purchaser, lessee or recipient for value of any
or all of the Collateral so disposed of shall, upon such disposition,
acquire all of Company's rights therein. Secured Party may adjourn any
public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the same, and such sale
may, without further notice or publication, be made at any time or place to
which the same may be so adjourned. If Secured Party sells any of the
Collateral upon credit, after reasonable inquiry as to the credit
worthiness of the purchaser, Company will be credited only with payments
actually made by the purchaser, received by Secured Party and applied to
the indebtedness of the purchaser. In the event the purchaser fails to pay
for the Collateral, Secured Party may resell the Collateral and Company
shall be credited with the proceeds of the sale;
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(vi) incur expenses, including reasonable attorneys' fees,
consultants' fees, and other costs appropriate to the exercise of any right
or power under this Agreement;
(vii) perform any obligation of Company hereunder and make payments,
purchase, contest or compromise any encumbrance, charge, or lien, and pay
taxes and expenses;
(viii) make any reasonable compromise or settlement deemed desirable
with respect to any or all of the Collateral and extend the time of
payment, arrange for payment installments, or otherwise modify the terms
of, any or all of the Collateral;
(ix) secure the appointment of a receiver of any or all of the
Collateral;
(x) exercise any other or additional rights or remedies granted to
Secured Party under any other provision of this Agreement or exercisable by
a secured party under the UCC, whether or not the UCC applies to the
affected Collateral, or under any other applicable law and take any other
action which Secured Party deem necessary or desirable to protect or
realize upon their security interests in the Collateral or any part
thereof; and/or
(xi) appoint a third party (who may be an employee, officer or other
representative of Secured Party) to do any of the foregoing, or take any
other action permitted hereunder, on behalf of Secured Party.
(b) If, pursuant to any law, prior notice of any action described in
SECTION 5.2(A) is required to be given to Company, Company hereby acknowledges
that the minimum time required by such law, or if no minimum is specified, ten
days, shall be deemed a reasonable notice period.
(c) Any action or proceeding to enforce this Agreement may be taken by
Secured Party either in a Company's name or in Secured Party's name, as Secured
Party may deem necessary.
i. All rights of marshalling of assets of Company, including any such
right with respect to the Collateral, are hereby waived by Company.
ii. Secured Party shall incur no liability as a result of the sale of any
or all of the Collateral at any private sale pursuant to SECTION
5.2(A) conducted in a commercially reasonable manner. Company hereby
waives any claims against Secured Party arising by reason of the fact
that the price at which any or all of the Collateral may have been
sold at such a private sale was less than the price that might have
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if Secured Party accepts the first offer received
and does not offer the Collateral to more than one offeree.
5.3 ATTORNEY-IN-FACT. Upon the occurrence and during the continuation of an
Event of Default, the Company hereby irrevocably constitutes and appoints
Secured Party as its true and lawful attorney-in-fact to enforce all rights of
such Company with respect to the Collateral, including the right to give
appropriate receipts, releases and satisfactions for and on behalf of and in the
name of the Company or, at the option of Secured Party, in the name of Secured
Party, with the same force and effect as the Company could do if this Agreement
had not been made. If Secured Party shall so elect after the occurrence and
during the continuation of an Event of Default hereunder, Secured Party shall
have the right at all times to settle, compromise, adjust, or liquidate all
claims or disputes directly with the Company or any obligor of the Company upon
such terms and conditions as Secured Party may determine in its sole discretion,
and to charge all costs and expenses thereof (including reasonable attorneys'
fees and charges) to the Company's account and to add them to the Obligations
whereupon such costs and expenses shall be and become part of the Obligations.
This power of attorney is a power coupled with an interest and shall be
irrevocable.
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5.4 EXPENSES; INTEREST. All costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Secured Party in connection with
exercising any actions taken under Article 5, together with interest thereon (to
the extent permitted by law) computed at a rate of 10% per annum (or if less,
the maximum rate permitted by law) from the date on which such costs or expenses
are invoiced to and become payable by Company, to the date of payment thereof,
shall constitute part of the Obligations secured by this Agreement and shall be
paid by Company to Secured Party within 10 days after written demand.
5.5 NO IMPAIRMENT OF REMEDIES. If under applicable law, Secured Party
proceeds by either judicial foreclosure or by non-judicial sale or enforcement,
Secured Party may, at its sole option, determine which of its remedies or rights
to pursue without affecting any of its respective rights and remedies under this
Agreement. If, by exercising any right and remedy, Secured Party forfeits any of
its other rights or remedies, including any right to enter a deficiency judgment
against Company or any third party (whether because of any applicable law
pertaining to "election of remedies" or the like), Company nevertheless hereby
consents to such action by Secured Party. To the extent permitted by applicable
law, Company also waives any claim based upon such action, even if such action
by Secured Party results in a full or partial loss of any rights of subrogation,
indemnification or reimbursement which Company might otherwise have had but for
such action by Secured Party or the terms herein. Any election of remedies which
results in the denial or impairment of the right of Secured Party to seek a
deficiency judgment against any third party shall not, to the extent permitted
by applicable law, impair Company's obligations hereunder. If Secured Party bids
at any foreclosure or trustee's sale or at any private sale permitted by law or
this Agreement, Secured Party may bid all or less than the amount of the
Obligations. To the extent permitted by applicable law, the amount of the
successful bid at any such sale, whether Secured Party or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral and any deficiency between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations.
ARTICLE 6. CERTAIN WAIVERS
6.1 MODIFICATION OF OBLIGATIONS. Company's liability hereunder shall not be
reduced, limited, impaired, discharged or terminated if Secured Party at any
time, without notice to or demand of Company (unless specifically required by
the Transaction Documents):
(a) renews, extends, accelerates, or otherwise changes the time, place,
manner or terms, or otherwise modifies any of the Obligations (including any
payment terms);
(b) extends or waives the time for Company's performance of, or compliance
with, any term, covenant or agreement on its part to be performed or observed
under the Transaction Documents, or waives such performance or compliance or
consents to a failure of, or departure from, such performance or compliance;
(c) settles, compromises, releases or discharges, or accepts or refuses any
offer of performance with respect to, or substitutions for, any of the
Obligations or any agreement relating thereto and/or subordinates the payment of
the same to the payment of any other obligations;
(d) requests and accepts other guaranties of any of the Obligations and
takes and holds security for the payment hereof or any of the Obligations;
(e) releases, surrenders, exchanges, substitutes, compromises, settles,
rescinds, waives, alters, subordinates or modifies, with or without
consideration, any security for payment of any of the Obligations, any other
guaranties of any of the Obligations, or any other obligation of any third party
with respect to any of the Obligations;
(f) to the extent permitted by law, enforces and applies any security, if
any, now or hereafter held by or for the benefit of Secured Party in respect
hereof or any of the Obligations and directs the order or manner of sale
thereof, or exercises any other right or remedy that Secured Party may have
against any such security, in each case as Secured Party in its discretion may
determine, including foreclosure on any collateral
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pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable; or
(g) exercises any other rights available to it under any of the Transaction
Documents, at law or in equity.
6.2 SECURITY INTERESTS ABSOLUTE. All rights of the Secured Party and the
security interests hereunder, and all obligations of Company hereunder, shall be
absolute and unconditional irrespective of:
(a) any failure or omission to assert or enforce or agreement or election
not to assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any claim or
demand or any right, power or remedy (whether arising under any of the
Transaction Documents, at law, in equity or otherwise) with respect to any of
the Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of any of the Obligations;
(b) any rescission, waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions (including provisions relating to
events of default) hereof, in any other Transaction Documents or any agreement
or instrument executed pursuant thereto, or of any other guaranty or security
for any of the Obligations, in each case, whether or not in accordance with the
terms hereof or any other Transaction Documents or any agreement relating to
such other guaranty or security;
(c) the application of payments received from any source to the payment of
indebtedness of Company to Secured Party other than the Obligations, even though
Secured Party might have elected to apply such payment to any part or all of the
Obligations;
(d) Secured Party's consent to the change, reorganization or termination of
the corporate structure or existence of Company and to any corresponding
restructuring of any of the Obligations;
(e) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of
Company as an obligor in respect of any of the Obligations;
(f) any Obligations or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect
(g) any defenses, set-offs or counterclaims which Company may allege or
assert against Secured Party in respect of the Obligations; and
(h) whether Secured Party makes, or does not or fails to make, any
additional loan to Company subsequent to the date hereof.
6.3 CERTAIN WAIVERS. Company hereby waives any and all defenses afforded to
a surety, including promptness, diligence, notice of acceptance and any other
notice with respect to any of the Obligations and this Agreement and any
requirement that Secured Party protect, secure, perfect or insure any security
interest or lien, or any property subject thereto, or exhaust any right or take
any action against Company or any other third party or entity or any collateral
securing any of the Obligations, as the case may be.
6.4 POSTPONEMENT OF SUBROGATION. Company agrees that it will not exercise
any rights which it may acquire by way of rights of subrogation under this
Agreement, by any payment made hereunder or otherwise, while this Agreement is
in effect, unless such action is required to stay or prevent the running of any
applicable statute of limitations. Any amount paid to Company on account of any
such subrogation rights prior to such time shall be held in trust for Secured
Party and shall immediately be paid to Secured Party and credited and applied
against the Obligations. Any time after this Agreement has terminated and if
Company has made payment to Secured Party of all of the Obligations, or if an
action is required to stay or prevent the running of any applicable statute of
limitations, then, at Company's request, Secured Party will execute and deliver
to Company appropriate
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documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to Company of an interest in the
Obligations resulting from such payment by Company.
ARTICLE 7. MISCELLANEOUS PROVISIONS
7.1 NOTICE. All notices or other communications required or permitted to be
given hereunder shall be made in writing and shall be considered given (a) when
made if made by hand delivery, (b) one business day after being deposited with
an overnight courier if made by a courier guaranteeing overnight delivery, (c)
on the date indicated on the notice of receipt if made by first-class United
States mail, with return receipt requested, and (d) upon confirmation if made by
telecopier. Any party shall have the right to change its address for notice
hereunder to any other location within the continental United States by giving
of notice to the other parties in the manner set forth hereinabove.
7.2 DELAY AND WAIVER; REMEDIES CUMULATIVE. No failure or delay by Secured
Party in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. Any waiver, permit, consent or approval of any kind or character
on the part of Secured Party of any breach or default under the Agreement or any
waiver on the part of Secured Party of any provision or condition of this
Agreement must be in writing and shall be effective only to the extent in such
writing specifically set forth. No right, power or remedy herein conferred upon
or reserved to Secured Party hereunder is intended to be exclusive of any other
right, power or remedy, and every such right, power and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right,
power and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. Resort to any or all
security now or hereafter held by Secured Party may be taken concurrently or
successively and in one or several consolidated or independent judicial actions
or lawfully taken nonjudicial proceedings, or both.
7.3 ENTIRE AGREEMENT. This Agreement and any agreement, document or
instrument referred to herein integrate all the terms and conditions mentioned
herein or incidental hereto and supersede all oral negotiations and prior
writings in respect of the subject matter hereof.
7.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, exclusive of its conflict
of laws rules.
7.5 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
7.6 HEADINGS. Paragraph headings have been inserted in this Agreement as a
matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.
7.7 WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF SECURED PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR SECURED PARTY TO MAKE THE LOAN.
7.8 CONSENT TO JURISDICTION. Each party hereto agrees that any legal action
or proceeding with respect to or arising out of this Agreement may be brought in
or removed to the federal or state courts located in County of Los Angeles,
California, as Secured Party may elect. By execution and delivery of this
Agreement, each party hereto accepts, for themselves and in respect of their
property, generally and unconditionally, the
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jurisdiction of the aforesaid courts. Each of the parties hereto irrevocably
consents to the service of process out of any of the aforementioned courts in
any manner permitted by law. Nothing herein shall affect the right of Secured
Party to bring legal action or proceedings in any other competent jurisdiction.
Each party hereto hereby waives any right to stay or dismiss any action or
proceeding under or in connection with this Agreement brought before the
foregoing courts on the basis of FORUM non-conveniens.
7.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
7.10 COUNTERPARTS. This Agreement may be executed in one or more duplicate
counterparts and when signed by all of the parties listed below, shall
constitute a single binding agreement. Delivery of an executed signature page of
this Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart thereof.
7.11 BENEFIT OF AGREEMENT. Nothing in this Agreement, express or implied,
shall give or be construed to give, any person other than the parties hereto and
their respective successors, transferees and assigns any legal or equitable
right, remedy or claim under this Agreement, or under any covenants and
provisions of this Agreement, each such covenant and provision being for the
sole benefit of the parties hereto and their respective successors, transferees
and assigns.
7.12 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Agreement or consent to any departure therefrom
shall be effective unless the same shall be in writing and signed by each of the
parties hereto. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given.
7.13 SURVIVAL OF AGREEMENTS. The provisions regarding the payment of
expenses and indemnification obligations shall survive and remain in full force
and effect until terminated pursuant to Section 7.14 (unless reinstated pursuant
to section 7.15).
7.14 RELEASE AND SATISFACTION. Upon the indefeasible payment (whether in
cash and/or other consideration which is satisfactory to Secured Party in its
sole discretion) and performance in full of the Obligations, (i) this Agreement
and the security interests created hereby shall terminate and Secured Party will
return the Collateral, including all documentation evidencing or affecting the
Collateral, and (ii) upon written request of Company, Secured Party shall
execute and deliver to Company, at Company's expense and without representation
or warranty by or recourse to Secured Party, releases and satisfactions of all
financing statements, mortgages, notices of assignment and other registrations
of security.
7.15 REINSTATEMENT. This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time any payment
pursuant to this Agreement is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, reorganization, liquidation of Company
or upon the dissolution of, or appointment of any intervenor or conservator of,
or trustee or similar official for, Company or any substantial part of Company's
assets, or otherwise, all as though such payments had not been made.
7.16 LIMITATION ON DUTY OF SECURED PARTY WITH RESPECT TO THE COLLATERAL.
The powers conferred on Secured Party hereunder are solely to protect its
respective interests in the Collateral and shall not impose any duty on Secured
Party or any of its designated agents to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for
monies actually received by it hereunder, Secured Party shall have no duty with
respect to any Collateral and no implied duties or obligations shall be read
into this Agreement against Secured Party. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment that is substantially
equivalent to that which Secured Party accords its own property, it being
expressly agreed, to the maximum extent permitted by applicable law, that
Secured Party shall have no responsibility for (a) taking any necessary steps to
preserve rights against any parties with respect to any Collateral or (b) taking
any action to protect against any diminution in value of the Collateral, but, in
each case, Secured Party may do so and all expenses reasonably incurred in
connection therewith shall be part of the Obligations.
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IN WITNESS WHEREOF, the undersigned have executed this Security Agreement
as of the date first above written.
COMPANY:
CROWDGATHER, INC.,
A NEVADA CORPORATION
By:________________________
Sanjay Sabnani
Its: President
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[SECURED PARTY SIGNATURE PAGE TO AGREEMENT]
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name of Secured Party:
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SIGNATURE OF AUTHORIZED SIGNATORY OF SECURED PARTY:
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Name of Authorized Signatory:
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Title of Authorized Signatory:
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Email Address of Authorized Signatory:
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Facsimile Number of Authorized Signatory:
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EXHIBIT A
DESCRIPTION OF COLLATERAL
All assets of CrowdGather, Inc., a Nevada corporation referred to herein as
the "Company", which are specified below:
DIGITAL MEDIA ASSETS: All software, domain name, and member accounts and
content hosted on the Company's servers or network, including but not limited
to, Yuku.com, Lefora.com, Freeforums.org, and Forumer.com. All Company owned and
operated apps and games including, but not limited to Mega Fame Casino.
EQUIPMENT: All equipment means all goods, machinery, furniture,
furnishings, fixtures, tools, supplies, motor vehicles and all other property
used or useful in the business of the Company, now or hereafter owned or
possessed or hereafter acquired by the Company, and including specifically
(without limitation) all accessions thereto, all substitutions and replacements
thereof, and all deposits made on any such equipment;
DEPOSIT ACCOUNTS AND OTHER CASH: All deposits and deposit accounts with any
bank, savings and loan association, credit union or like organization, and all
funds and amounts therein, and whether or not held in trust, or in custody or
safekeeping, or otherwise restricted or designated for a particular purpose, and
all other cash or marketable securities on hand, whether held in-vault or
otherwise;
RECEIVABLES: Each and every right of the Company to the payment of money,
whether such right to payment now exists or hereafter arises, whether such right
to payment arises out of a sale, lease or other disposition of goods or other
property, out of a rendering of services, or of a loan, out of the overpayment
of taxes or other liabilities, or any other transaction or event, whether such
right to payment is created, generated or earned by the Company or by some other
person who subsequently transfers his, her or its interest to the Company,
whether such right to payment is or is not already earned by performance, and
howsoever such right to payment may be evidenced, together with all other rights
and interests (including all liens and other security interests) which the
Company may at any time have by law or agreement against any account debtor or
other person obligated to make such payment or against any property of such
account debtor or other persons including, but not limited to, all present and
future accounts, contract rights, chattel paper, bonds, notes and other debt
instruments, and rights to payment in the nature of general intangibles;
GENERAL INTANGIBLES: All general intangibles of the Company whether now
owned or hereafter acquired, including (without limitation) all general
intangibles (as defined in the UCC); and
SECURITIES: All securities, joint venture and other equity interests now
owned or hereafter acquired by the Company.
The collateral shall include (i) all substitutes and replacements for and
proceeds of any and all of the foregoing property, and in the case of all
tangible collateral, all accessions, accessories, attachments, parts, equipment
and repairs now or hereafter attached or affixed to or use in connection with
any such goods and (ii) all warehouse receipts, bills of lading and other
documents of titles now or hereafter covering such goods.