SECURITY AGREEMENT
EXHIBIT 10.2
This
Security Agreement, dated as of January 31st , 2018 (as amended,
supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this “Agreement”), is made by SpendSmart
Networks, Inc., a California corporation (the “Grantor”), in favor of SpendSmart
Networks, Inc., a Delaware corporation (the “Secured Party”).
WHEREAS, as of the
date hereof, Eclipse Marketing LLC, a Delaware limited liability
company (“Company”), owns all of the issued
and outstanding shares of stock of the Grantor;
WHEREAS, on the
date hereof, the Secured Party has entered into a Secured
Promissory Note with the Company with an aggregate unpaid principal
amount of $750,000 (such note, the “Note”); and
WHEREAS, this
Agreement is given by the Grantor in favor of the Secured Party to
secure the payment and performance of all of the Secured
Obligations.
NOW,
THEREFORE, in consideration of the mutual covenants, terms and
conditions set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.
Definitions. For purposes of
this Agreement, the following terms shall have the following
meanings:
“Collateral” has the meaning set
forth in Section 2.
“Event of Default” means the
failure by the Company to make a payment that becomes due and owing
under the Note within fifteen days after receipt by the Company
from the Secured Party of such payment being overdue pursuant to
the terms of the Note.
“Proceeds” means
“proceeds” as such term is defined in the UCC and, in
any event, shall include, without limitation, all dividends or
other income from the Collateral, collections thereon or
distributions with respect thereto.
“Secured Obligations” has the
meaning set forth in Section 3.
“UCC” means the Uniform Commercial
Code as in effect from time to time in the State of Michigan or,
when the laws of any other state govern the method or manner of the
perfection or enforcement of any security interest in any of the
Collateral, the Uniform Commercial Code as in effect from time to
time in such state.
2. Grant
of Security Interest. The Grantor hereby pledges and grants
to the Secured Party, and hereby creates a continuing lien and
security interest in favor of the Secured Party in and to all of
its right, title and interest in and to the following, wherever
located, whether now existing or hereafter from time to time
arising or acquired (collectively, the “Collateral”):
(a) all
fixtures and personal property of every kind and nature including
all accounts, goods, documents, instruments, promissory notes,
chattel paper (whether tangible or electronic), letters of credit,
letter-of-credit rights, securities and all other investment
property, general intangibles (including all payment intangibles),
money, deposit accounts, and any other contract rights or rights to
the payment of money; and
(b) all
Proceeds and products of each of the foregoing, all books and
records relating to the foregoing, all supporting obligations
related thereto, and all accessions to, substitutions and
replacements for, and rents, profits and products of, each of the
foregoing, and any and all Proceeds of any insurance, indemnity,
warranty or guaranty payable to the Grantor from time to time with
respect to any of the foregoing.
3. Secured
Obligations. The Collateral secures the due and prompt
payment and performance of the obligations of the Company under the
Note (all such obligations being herein collectively called the
“Secured
Obligations”).
4. Perfection
of Security Interest and Further Assurances.
(a) The
Grantor hereby irrevocably authorizes the Secured Party at any time
and from time to time to file in any relevant jurisdiction any
financing statements and amendments thereto that contain the
information required by Article 9 of the UCC of each applicable
jurisdiction for the filing of any financing statement or amendment
relating to the Collateral, including any financing or continuation
statements or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the security
interest granted by the Grantor hereunder, without the signature of
the Grantor where permitted by law, including the filing of a
financing statement describing the Collateral as all assets now
owned or hereafter acquired by the Grantor, or words of similar
effect.
(b) The
Grantor agrees that at any time and from time to time, at the
expense of the Secured Party, the Grantor will promptly execute and
deliver all further instruments and documents, obtain such
agreements from third parties, and take all further action, that
the Secured Party may reasonably request, in order to create and/or
maintain the validity, perfection or priority of and protect any
security interest granted or purported to be granted hereby or to
enable the Secured Party to exercise and enforce its rights and
remedies hereunder or under any other agreement with respect to any
Collateral.
5. Voting
and Distributions.
(a) The
Secured Party agrees that unless an Event of Default shall have
occurred and be continuing, the Grantor may, to the extent the
Grantor has such right as a holder of the Collateral consisting of
securities, other equity interests or indebtedness owed by any
obligor, vote and give consents, ratifications and waivers with
respect thereto, and from time to time, upon request from the
Grantor, the Secured Party shall deliver to the Grantor suitable
proxies so that the Grantor may cast such votes, consents,
ratifications and waivers.
(b) The
Secured Party agrees that the Grantor may, unless an Event of
Default shall have occurred and be continuing, receive and retain
all dividends and other distributions with respect to the
Collateral consisting of securities, other equity interests or
indebtedness owed by any obligor.
6. Remedies
Upon Default. If any Event of Default shall have occurred
and be continuing, the Secured Party, without any other notice to
or demand upon the Grantor, may assert all rights and remedies of a
secured party under the UCC or other applicable law, including,
without limitation, the right to take possession of, hold, collect,
sell, lease, deliver, grant options to purchase or otherwise
retain, liquidate or dispose of all or any portion of the
Collateral. If notice prior to disposition of the Collateral or any
portion thereof is necessary under applicable law, written notice
mailed to the Grantor at its notice address as provided in Section
8 hereof thirty days prior to the date of such disposition shall
constitute reasonable notice, but notice given in any other
reasonable manner shall be sufficient. So long as the sale of the
Collateral is made in a commercially reasonable manner, the Secured
Party may sell such Collateral on such terms and to such
purchaser(s) as the Secured Party in its absolute discretion may
choose, without assuming any credit risk and without any obligation
to advertise or give notice of any kind other than that necessary
under applicable law.
7. Amendments.
None of the terms or provisions of this Agreement may be amended,
modified, supplemented, terminated or waived, and no consent to any
departure by the Grantor therefrom shall be effective unless the
same shall be in writing and signed by the Secured Party and the
Grantor, and then such amendment, modification, supplement, waiver
or consent shall be effective only in the specific instance and for
the specific purpose for which made or given.
2
8. Addresses
For Notices. All notices and other communications provided
for in this Agreement shall be in writing and shall be given in the
manner and become effective as set forth in the Note, and addressed
to the respective parties at their addresses as specified on the
signature pages hereof or as to either party at such other address
as shall be designated by such party in a written notice to each
other party (it being understood that notices and other
communications addressed to the Grantor and delivered to the
Company in accordance with the Note shall be deemed to be in
compliance with this Section as a notice and/or other communication
delivered to the Grantor).
9. Continuing
Security Interest; Further Actions. This Agreement shall
create a continuing lien and security interest in the Collateral
and shall (a) subject to Section 10, remain in full force and
effect until payment and performance in full of the Secured
Obligations, (b) be binding upon the Grantor, its successors and
assigns, and (c) inure to the benefit of the Secured Party and its
successors, transferees and assigns.
10. Termination;
Release. On the date on which all Secured Obligations have
been paid and performed in full, the Secured Party will, at the
request of the Grantor, (a) duly assign, transfer and deliver to or
at the direction of the Grantor (without recourse and without any
representation or warranty) such of the Collateral as may then
remain in the possession of the Secured Party, together with any
monies at the time held by the Secured Party hereunder, and (b)
execute and deliver to the Grantor a proper instrument or
instruments acknowledging the satisfaction and termination of this
Agreement and the rights granted hereunder.
11. Governing
Law. This Agreement and the Note and any claim, controversy,
dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Agreement
or the Note and the transactions contemplated hereby and thereby
shall be governed by the laws of the State of Michigan without
giving effect to any choice or conflict of law provision or rule
(whether of the State of Michigan or any other
jurisdiction).
12. Arbitration.
Except for claims seeking injunctive or other equitable relief, any
controversy or claim arising out of or relating to this Agreement
or the Note or a breach of either of the foregoing, shall be
settled by binding arbitration in Detroit, Michigan (or such other
location as may be agreed to by the parties) to be administered by
the American Arbitration Association (“AAA”) in accordance with its
then-prevailing Commercial Rules of Arbitration. Each Party shall
select an arbitrator from a list provided by the AAA that is
mutually satisfactory to them. If the Parties are unable to agree
on an arbitrator, then each (i.e., the Grantor on the one hand and
the Secured Party on the other) shall choose an arbitrator from a
list provided by the AAA. The two arbitrators so selected shall
then select a third arbitrator mutually satisfactory to them from
the list provided by the AAA. The single arbitrator so selected by
the aforesaid procedure shall hear the dispute and decide it. The
arbitrator selected shall not be a present or former officer,
employee, consultant or representative of any of the parties or any
of their affiliates. The arbitrator shall have a background and
training in the general areas of law covered by this Agreement and
the Note. The arbitrator shall have the right to award costs, fees
and expenses, including, without limitation, the arbitrator’s
fees and reasonable attorneys’ fees, to the prevailing party.
A party shall be entitled to have a judgment entered on the
determination or decision of the arbitrator in any court of
competent jurisdiction. The award of the arbitrator shall be
binding and final on all parties. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR
THE NOTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND,
THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL
ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS
AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE
EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
13. Counterparts.
This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute
an original, but all taken together shall constitute a single
contract. Delivery of an executed counterpart of a signature page
to this Agreement by facsimile or in electronic (i.e.,
“pdf” or “tif”) format shall be effective
as delivery of a manually executed counterpart of this Agreement.
This Agreement and the Note constitute the entire contract among
the parties with respect to the subject matter hereof and supersede
all previous agreements and understandings, oral or written, with
respect thereto.
[SIGNATURE
PAGE FOLLOWS]
3
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SpendSmart
Networks, Inc., as Grantor
By____________________
Name:
Xxxxxxx X. Xxxxx
Title:
Authorized Person
Address
for Notices: 000 Xxxx Xxxxxx,
Xxxxx
000, Xxxxxxxxxx, XX 00000
as
Secured Party
By:__________________
Name:
Xxxx Xxxxxxx
Title:
Chief Executive Officer
Address
for Notices: 000 Xxxxxxxxx,
Xxxxx
000, Xxx Xxxx Xxxxxx, XX 00000
4
