SECURITY AGREEMENT
This
SECURITY AGREEMENT (as
amended, modified or otherwise supplemented from time to time, this “Agreement”), dated as
of the 7th day of
December, 2010, to be effective as of the 3rd day of
December, 2010, is given by CyberDefender Corporation, a Delaware corporation
(“Debtor”), in
favor of GR Match, LLC, a Delaware limited liability company (“Secured
Party”).
RECITALS
A. Secured
Party has agreed to make available to Debtor a revolving credit facility (the
“Facility”) in
the principal amount not to exceed Five Million Dollars ($5,000,000.00) pursuant
to the terms and conditions of that certain Loan Agreement, dated as of even
date herewith, by and between Secured Party and Debtor (the “Loan Agreement”), as
evidenced by that certain Revolving Credit Note in the maximum principal amount
of Five Million Dollars ($5,000,000.00), dated as of even date herewith, issued
by Debtor in favor of Secured Party (the “Revolving Credit
Note” and, together with the Loan Agreement and this Agreement,
collectively, the “Loan
Documents”).
B. As
a condition to making the Facility available to Debtor, Secured Party requires
that it be granted, and Debtor has agreed to grant to Secured Party, a security
interest in the property described in Exhibit “A” attached
hereto, whether now existing or hereafter from time to time acquired
(collectively, the “Collateral”).
NOW,
THEREFORE, in order to induce Secured Party to make the Facility available to
Debtor, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Debtor hereby represents, warrants, covenants,
grants and agrees as follows:
AGREEMENT
1. Incorporation of Recitals;
Capitalized Terms. The recitals set forth hereinabove are
incorporated herein by this reference. All capitalized terms not
otherwise defined herein have the meanings ascribed to them in the Loan
Agreement. Unless otherwise defined herein, all terms defined in the
UCC have the respective meanings given to those terms in the UCC.
2. Definitions.
(a) “Collateral” has the
meaning given to that term in the Recital B hereof.
(b) “Lien” means any
mortgage, deed of trust, lien, pledge, security interest or other charge or
encumbrance, of any kind whatsoever, including but not limited to the interest
of the lessor or titleholder under any capitalized lease, title retention
contract or similar agreement.
(c) “Media and Marketing Services
Agreement” shall mean that certain Media and Marketing Services
Agreement, dated March 24, 2009, by and between CyberDefender Corporation, a
California corporation (as predecessor in interest to Debtor) and Secured Party,
as amended.
(d) “Obligations” means
all loans, advances, debts, liabilities and obligations, howsoever arising, owed
by Debtor to Secured Party of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), now existing or hereafter arising under or pursuant to the terms of the
Loan Documents, including, all interest, fees, charges, expenses, attorneys'
fees and costs and accountants’ fees and costs chargeable to and payable by
Debtor thereunder and all costs of perfecting and protecting the pledge and
security interest herein granted and enforcing the rights of Secured Party
hereunder and all costs of transfer and sale of the Collateral in accordance
with the terms of this Agreement, including, but not limited to, all legal fees
and expenses and court costs incurred by Secured Party in connection with any of
such activities, in each case, whether direct or indirect, absolute or
contingent, due or to become due, and whether or not arising after the
commencement of a proceeding under Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time and whether or not allowed or
allowable as a claim in any such proceeding.
(e) “Permitted
Indebtedness” means (a) lease obligations and purchase money indebtedness
of up to $150,000, in the aggregate, incurred in connection with the acquisition
of capital assets and lease obligations with respect to newly acquired or leased
assets; (b) indebtedness to a strategic investor in connection with a strategic
commercial agreement, indebtedness to a commercial financial institution
pursuant to a revolving working capital line of credit not to exceed $500,000,
or incurred pursuant to the acquisition of another corporation or entity by
Debtor, provided that any such indebtedness incurred under this clause (b): (i)
is expressly subordinate, both in terms of payment and priority, to the
Revolving Credit Note and the security interest granted to Secured Party
hereunder pursuant to a written subordination agreement with Secured Party that
is reasonably acceptable to Secured Party; and (ii) matures at a date later than
March 31, 2011; (c) indebtedness of Debtor owing to Secured Party under the
Senior Loan Documents; and (d) “Payment Obligations” (as defined in the Media and Marketing Services
Agreement).
(f) “Permitted Lien” means
the individual and collective reference to the following: (i) Liens for taxes,
assessments and other governmental charges or levies not yet due or Liens for
taxes, assessments and other governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Debtor) have been established in
accordance with U.S. GAAP; (ii) Liens imposed by law which were incurred in the
ordinary course of Debtor’s business, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of Debtor’s business, and which (x) do not individually or
in the aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of Debtor or
(y) are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing for the foreseeable future the
forfeiture or sale of the property or asset subject to such Lien; (iii) Liens
incurred in connection with Permitted Indebtedness under clause (a) of the
definition of Permitted Indebtedness, provided that such Liens are not secured
by assets of the Debtor other than the assets so acquired or leased; (iv) Liens
incurred pursuant to Section 2.3 of the Media and Marketing Services Agreement
and the Security Agreement contemplated thereby; (v) Liens incurred in
connection with Permitted Indebtedness under clause (b) of the definition of
Permitted Indebtedness; and (vii) Liens in favor of Secured Party or any of its
Affiliates.
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(g) “Senior Loan
Documents” means
that certain (i) 9% Secured Convertible Promissory Note, dated March 31, 2010,
issued by Debtor in favor of Secured Party, as amended, (ii) Loan and Securities
Purchase Agreement, dated as of March 31, 2010, by and between Debtor and
Secured Party as amended, and (iii) Security Agreement, dated as of March 31,
2010, executed by Debtor in favor of Secured Party, as amended.
(h) “UCC” means the
Uniform Commercial Code as in effect in the State of California from time to
time.
3. Security
Interest.
(a) Debtor
hereby grants to Secured Party a second lien priority security interest (subject
to Liens existing on the Original Issue Date in favor of Secured Party under the
Senior Loan Documents): (a) in all of the Collateral, whether now owned or
hereafter acquired, wherever located, whether or not such Collateral is or has
been purchased, financed or otherwise acquired by the use of the Loan proceeds,
whether such Collateral is related to the business conducted by Debtor under any
fictitious business name referred to herein or under any other name, and whether
or not the creation of a security interest therein is subject to the UCC or the
Uniform Commercial Code as in effect in any other jurisdiction; and (b) in all
proceeds and products thereof.
(b) Debtor
hereby authorizes Secured Party to file appropriate UCC or other financing
statements, all continuation, amendments and modification filings related
thereto and any other filings or recordings Secured Party deems necessary or
appropriate with respect to the Collateral and Secured Party’s interest
therein. Secured Party may, in its discretion, describe the
Collateral as “all assets” or “all personal property.”
(c) The
security interest granted to Secured Party hereunder shall secure the
Obligations.
4. Debtor’s Representations,
Warranties, Covenants and Agreements. Debtor hereby represents
and warrants to Secured Party, and covenants and agrees, that:
(a) Debtor
is the owner of (or, in the case of after-acquired Collateral, at the time
Debtor acquires rights in the Collateral, will be the owner thereof) and that no
other Person has (or, in the case of after-acquired Collateral, at the time
Debtor acquires rights therein, will have) any right, title, claim or interest
(by way of Lien or otherwise) in, against or to the Collateral, other than
Permitted Liens.
(b) Upon
the filing of UCC-l financing statements in the appropriate filing offices,
Secured Party has (or in the case of after-acquired Collateral, at the time
Debtor acquires rights therein, will have) a second priority perfected security
interest in the Collateral to the extent that a security interest in the
Collateral can be perfected by such filing, subject to Permitted
Liens;
(c) This
Agreement (i) has been duly authorized by all necessary corporate action of
Debtor, (ii) has been duly executed by Debtor, and (iii) constitutes the legal,
valid and binding obligation of Debtor, enforceable against Debtor in accordance
with its terms.
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(d) Debtor
will pay, or reimburse Secured Party, the cost of filing or recording financing
statements and/or fixture filings (and all continuation or amending filings
related thereto) in all public offices wherever filing is deemed by Secured
Party to be necessary or desirable.
(e)
Debtor’s place of business (or, if Debtor has more than
one place of business, its chief executive office) is located at 000 Xxxx 0xx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000. Debtor’s true legal name is, and has been for the five
(5) year period preceding the date hereof, as set forth in the preamble to this
Agreement. Debtor’s jurisdiction of formation is, and since May 19,
2010 has been, as set forth in the preamble to this Agreement. Prior
to May 19, 2010, Debtor's jurisdiction of formation was the State of
California. Debtor does not do business under any trade name or
fictitious business name and has never used any other trade name or fictitious
business name. Debtor will notify Secured Party, in writing, at least
thirty (30) days prior to any change in its place of business or jurisdiction of
formation or the adoption or change of its legal name, any trade name or
fictitious business name, and will upon request of Secured Party, execute or
authenticate any additional financing statements or other certificates or
records necessary to reflect any change in its place of business or jurisdiction
of formation or the adoption or change in its legal name, trade names or
fictitious business name.
5. Protection of Collateral by
Debtor.
(a) Debtor
will not, without the prior written consent of Secured Party, sell, transfer or
dispose of any Collateral except for sales of inventory, licenses or sublicenses
of intellectual property to customers in the ordinary course of Debtor’s
business. Debtor shall keep the Collateral free from any and all
Liens other than Permitted Liens. Debtor shall, at its own expense,
appear in and defend any and all actions and proceedings which purport to affect
title to the Collateral, or any part thereof, or which purport to affect the
security interest of Secured Party therein under this Agreement.
(b) Debtor
will keep the Collateral current, collected and/or in good condition and repair,
and will not misuse, abuse, allow to deteriorate, waste or destroy the
Collateral or any part thereof, except for ordinary wear and tear resulting from
its normal and expected use in Debtor’s business and will not use or permit any
Collateral to be used in violation in any material respect of any applicable
law, rule or regulation, or in violation of any policy of insurance covering the
Collateral. Secured Party may examine and inspect the Collateral at
any reasonable time, wherever located. Debtor shall perform, observe,
and comply in all material respects with all of the material terms and
provisions to be performed, observed or complied with by it under each contract,
agreement or obligation relating to the Collateral.
(c) Debtor,
in a timely manner, will execute or otherwise authenticate, or obtain, any
document or other record, give any notices, do all other acts, and pay all costs
associated with the foregoing, that Secured Party determines is reasonably
necessary to protect the Collateral against rights, claims or interests of third
parties, or otherwise to preserve the Collateral as security
hereunder.
(d) Debtor
shall immediately notify Secured Party of any claim against the Collateral
adverse to the interest of Secured Party therein.
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(e) Debtor
shall, at its own expense, maintain insurance with respect to the Collateral in
such amounts, against such risks, in such form and with such insurers, as is
commonly maintained by prudent persons engaged in businesses similar to the
business engaged in by Debtor. Each policy of liability insurance
shall provide for all losses to be paid on behalf of Secured Party and Debtor as
their respective interests may appear; and each policy of property damage
insurance shall provide for all losses to be paid directly to Secured
Party. Each such policy shall name Secured Party as an insured party
thereunder (without any representation or warranty by or obligation upon Secured
Party) as its interest may appear. In addition, Debtor shall use its
commercially reasonable efforts to cause each policy to (i) contain the
agreement by the insurer that any loss thereunder shall be payable to Secured
Party notwithstanding any action, inaction or breach of representation and
warranty by Debtor; (ii) provide that there shall be no recourse against
Secured Party for payment of premiums or other amounts with respect thereto; and
(iii) provide that at least thirty (30) days’ prior written notice of amendment
to or cancellation or lapse of such policy shall be given to Secured Party by
the insurer. Debtor shall, if so requested by Secured Party, deliver
to Secured Party original or duplicate policies of all such insurance and, as
often as Secured Party may request, a report of a reputable insurance broker
with respect to such insurance. Further, Debtor shall, at the request
of Secured Party, duly execute or otherwise authenticate and deliver such
instruments of assignment of such insurance policies as Secured Party may
reasonably request for purposes of perfecting or protecting its interest therein
or with respect thereto, and cause each affected insurer to acknowledge notice
of such assignment.
(f) Amounts
payable under any liability insurance maintained by Debtor pursuant hereto may
be paid directly to the person or entity who shall have incurred liability
covered by such insurance. All proceeds of insurance payable with
respect to any loss involving damage to or loss of any Collateral shall be paid
directly to Secured Party and, in Secured Party’s discretion, applied to payment
of the Obligations in such order as Secured Party may determine in its sole
discretion or held as Collateral hereunder. Notwithstanding the
foregoing, so long as no Default (as defined in Article 10)) shall
have occurred and be continuing, Secured Party shall permit the use of all or
any portion of such proceeds to repair or replace the affected Collateral,
Debtor shall make or cause to be made the necessary repairs to or replacements
of such Collateral, and, upon receipt by Secured Party of invoices and other
documentation, in reasonable detail, evidencing such repair or replacement and
the cost thereof, Secured Party shall release to Debtor, as reimbursement
therefor (but only to the extent of the lesser of the cost of such repair or
replacement and the amount of any such proceeds actually received by Secured
Party), the insurance proceeds paid with respect to such loss.
(g) Debtor
shall not change its place of business (or, if Debtor has more than one place of
business, its chief executive office), or the office in which Debtor 's records
relating to accounts receivable and payment intangibles are kept, without the
prior written consent of Secured Party.
(h) Debtor
shall promptly pay when due all taxes and other governmental charges, all Liens
and all other charges now or hereafter imposed upon or affecting any
Collateral.
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6. Protection of Collateral by
Secured Party.
(a) Secured
Party shall have the right at any time (but shall have no obligation), with or
without notice and either in its own name or in the name of its nominee or in
the name of Debtor, at the expense of Debtor, to, in each case subject to the
rights granted to Secured Party under the Senior Loan Documents:
(i) In
the event of a Default, collect by legal proceedings or otherwise all insurance
proceeds, rents, interest, dividends, distributions, principal payments and
other sums now or hereafter payable upon or on account of the
Collateral.
(ii) Enter
into any extension or other agreement in any way relating to or affecting the
security interest of Secured Party in the Collateral and, in connection
therewith, dispose of or surrender control of such security interest in the
Collateral, or any part thereof, and accept other property in addition to or in
exchange or substitution therefor, or any part thereof.
(iii) In
the event of a Default, make any compromise or settlement on terms advisable,
proper or reasonable with reference to the Collateral.
(iv) Insure,
protect and preserve the Collateral.
(v)
Without limiting the generality of the foregoing, exercise all
the rights, powers and remedies of an owner of the Collateral, subject, however,
to the exception that there shall be no sale of all or any portion of the
Collateral except upon an uncured default by Debtor under this Agreement or a
Default under the Loan Documents.
(b) If
Debtor fails to perform any agreement contained in this Agreement, subject to
the rights granted to Secured Party under the Senior Loan Documents, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith (including, without
limitation, attorneys' fees) shall be payable by Debtor in accordance with the
provisions of the Loan Agreement relating to payment and reimbursement of
expenses.
(c) The
powers conferred on Secured Party under this Agreement are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall not have any duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Without limiting the generality
of the foregoing, Secured Party shall have no obligation to ascertain or to
initiate any action with respect to or to inform Debtor of maturity dates,
conversion, call or exchange rights, offers to purchase the Collateral or any
similar matters, notwithstanding Secured Party’s knowledge. Secured
Party shall have no duty to initiate any action to protect against the
possibility of a decline in the value of the Collateral.
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7. Modification of Loan by
Secured Party. Without affecting the liability of Debtor or of
any other person or entity who is or shall become bound by the terms of this
Agreement or who is or shall become liable for the performance of all or any
portion of the Obligations, Secured Party may, in such manner, upon such terms
and at such times as Secured Party deems best and without notice or demand: (i)
release any party now or hereafter liable for the performance of any such
obligation; (ii) extend the time for such performance; (iii) accept additional
security therefore; (iv) alter, substitute or release any property securing such
performance; or (v) enter into any agreement with Debtor modifying in any way
whatsoever the terms and provisions of the Loan and any Loan
Document. No exercise or non-exercise by Secured Party of any of its
rights under this Agreement, no dealing by Secured Party with any person or
entity, and no change, impairment, loss or suspension of any right or remedy of
Secured Party, shall in any way affect any of the obligations of Debtor
hereunder or any security furnished by Debtor, or give Debtor any recourse
against Secured Party.
8. Further Acts of
Debtor. Debtor shall, at the request of Secured Party, execute
or otherwise authenticate and deliver to Secured Party any financing statements,
financing statement changes and any and all additional instruments, documents
and other records, and Debtor shall perform all actions, that from time to time
Secured Party may reasonably deem necessary or desirable to carry into effect
the provisions of this Agreement or to establish or maintain a perfected
security interest in the Collateral having the priority provided for herein or
otherwise to protect Secured Party’s interest in the
Collateral. Debtor shall not file any amendments, correction
statements, or termination statements concerning the Collateral without the
prior written consent of Secured Party.
9. Effect of Additional
Security. If the performance of all or any portion of the
Obligations shall at any time be secured by any other collateral, the exercise
by Secured Party, in the event of a default in the performance of any such
obligation, of any right or remedy under any agreement or other record granting
a lien on or security interest in such collateral shall not be construed as or
deemed to be a waiver of, or limitation upon, the right of Secured Party to
exercise, at any time and from time to time thereafter, any right or remedy
under this Agreement or under any other such agreement or record.
10. Default. Upon
the occurrence of a Default or Event of Default under any Loan Document and the
continuance thereof beyond any applicable cure periods under the Loan Documents
(a “Default”),
subject to the rights granted to Secured Party under the Senior Loan
Documents:
(a) In
addition to any and all other rights and remedies provided for herein or
otherwise available to Secured Party, Secured Party shall have all the rights
and remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral) or, to the extent required by applicable
law, the Uniform Commercial Code as in effect in the jurisdiction where Secured
Party enforces such rights and remedies, and also may (i) require Debtor to, and
Debtor hereby agrees that it shall at its expense and upon the request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place, to be
designated by Secured Party, that is reasonably convenient to both parties; (ii)
enter the premises where any of the Collateral is located and take and carry
away all or any portion of the Collateral, by any of its representatives, with
or without legal process, to a place of storage; and (iii) without notice,
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Secured Party’s offices or
elsewhere, for cash, on credit or for future delivery and upon such other terms
as Secured Party may deem commercially reasonable, without assumption of any
credit risk. Secured Party may, in its own name, or in the name of a
designee or nominee, buy the Collateral at any public sale and, if permitted by
applicable law, at any private sale; and shall have the right to credit against
the amount of the bid made therefor the amount payable to Secured Party out of
the net proceeds of such sale. If sale of all or any part of the
Collateral is made on credit or for future delivery: (1) the
Collateral so sold may be retained by Secured Party until the sale price is paid
by the purchaser or purchasers thereof, (2) the Obligations shall be reduced
only to the extent that payment is actually received by Secured Party in respect
of such sale, and (3) Secured Party shall not incur any liability if any
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice.
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(b) Debtor
recognizes that Secured Party may be unable to effect a public sale of all or
part of the Collateral consisting of investment property by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, or in
applicable state securities laws as now or hereafter in effect, unless
registration or qualification, as the case may be, is
accomplished. Debtor acknowledges that Secured Party may resort to
one or more private sales to a single purchaser or a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
investment property for their own account, for investment and not with a view to
the distribution or resale thereof. Debtor agrees that private sales
may be at prices and other terms less favorable to Debtor than if such
investment property were sold at a public sale and that Secured Party shall have
no obligation to delay the sale of any such portion of the Collateral for the
period of time necessary to permit the issuer of such investment property to
register or qualify such investment property, even if such issuer would, or
should, proceed to register or qualify such investment property for public
sale. Debtor agrees that private sales made under the foregoing
circumstances shall be deemed to have been made in a “commercially reasonable”
manner.
(c) Secured
Party may use (and is hereby granted a license to use), in connection with any
assembly, preparation for disposition or disposition of the Collateral, any of
the trademarks, copyrights, patents, technical processes, trade names, service
marks or trade styles and other intellectual property used by Debtor, without
payment or additional compensation therefor.
(d) Debtor
agrees that at least ten (10) business days' notice to the Debtor of the time
and place at which any public or private sale is to be made shall constitute
reasonable notification; provided that Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given.
(e) Expenses
of retaking, holding, preparing for sale, selling, collecting or the like shall
include Secured Party’s attorneys’, expert witnesses’ and consultants’ fees and
disbursements, including, without limitation, those attorneys’, expert
witnesses’ and consultants’ fees and disbursements, and other expenses, incurred
by Secured Party in connection with any appeal, the enforcement of any judgment,
or any insolvency, bankruptcy, reorganization, arrangement or other similar
proceedings involving Debtor that in any way affect the exercise by Secured
Party of its rights and remedies hereunder shall be the responsibility of Debtor
and considered Obligations hereunder.
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11. No Implied
Waivers. The several rights and remedies of Secured Party
hereunder or herein referred to shall, to the fullest extent permitted by law,
be construed as cumulative, and none of said rights and remedies is exclusive of
the others. No delay or omission on the part of Secured Party in
exercising any right or remedy created by, connected with or provided for in
this Agreement or arising from any default by Debtor or by any other person or
entity the performance of whose obligations is secured hereby, shall be
construed as or be deemed to be an acquiescence in or a waiver of such default
or a waiver of or limitation upon the right of Secured Party to exercise, at any
time and from time to time thereafter, any right or remedy under this
Agreement. No waiver of any breach of any of the covenants or
conditions in this Agreement shall be deemed to be a waiver of or acquiescence
in or consent to any previous or subsequent breach of the same or any other
covenant or condition.
12. Successive
Actions. Upon the occurrence and during the continuation of
any Default, Secured Party may commence and maintain an action therefor and may
maintain successive actions for each other Default. Secured Party’s
rights hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless each of the Secured Obligation has been fully performed or
paid.
13. Entire
Agreement. This Agreement, together with each of the Loan
Documents, contains the entire understanding and agreement of Debtor and Secured
Party with respect to the subject matter hereof and may not be altered or
amended in any way except by a written agreement signed by the
parties. No provision of this Agreement or right of Secured Party
hereunder can be waived, nor shall Debtor be released from its obligations
hereunder, except by a writing duly executed by Secured Party.
14. Transfer of
Indebtedness. Upon the transfer by Secured Party of all or any
portion of the indebtedness secured hereby, Secured Party may transfer therewith
all or any portion of the security interest created hereunder, but Secured Party
shall retain all of its rights hereunder with respect to any part of such
indebtedness and any part of its security interest hereunder not so
transferred.
15. Term; Binding
Effect. This Agreement shall be and remain in full force and
effect until the Obligations have been fully performed and paid. Upon
expiration and payment in full of the Obligations, this Agreement shall
automatically terminate and Secured Party shall promptly return possession of
the remaining Collateral, if any, to Debtor, and, at Debtor’s request and
expense, shall cause UCC termination statements to be filed with respect to the
Collateral. Each of the provisions hereof shall be binding upon
Debtor and its legal representatives, successors and assigns and shall inure to
the benefit of Secured Party and its legal representatives, successors and
assigns; provided that Debtor shall have no right to assign all or any portion
of its rights or obligations hereunder except with the prior written consent of
Secured Party.
16. Rules of
Construction. Terms used in the singular shall apply to the
plural, and vice versa, as the context requires; likewise masculine, feminine
and neuter genders shall be interchangeable as the context
requires. The use of the disjunctive term “or” does not imply an
exclusion of the conjunctive, i.e., “or” shall have the same meaning as the
expression “and/or.” “Including” shall not be
limiting. Headings and section titles are for convenience of
reference only and are not substantive parts of this Agreement, and shall not be
given effect in construing the provisions of this Agreement. Each
reference to a Loan Document shall mean such Loan Document as from time to time
extended, modified, renewed, restated, reaffirmed, supplemented or
amended.
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17. Severability. If
any provision of this Agreement, or the application thereof to any person or
circumstance, shall, to any extent, be invalid or unenforceable, the remainder
of this Agreement, or the application of such term to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
18. 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 but one and the
same instrument.
19. Governing Law and
Jurisdiction. This Agreement shall be deemed to be executed
and delivered in the State of California. Each of Debtor and Secured
Party: (i) agrees that this Agreement shall be construed according to and
governed by the laws of the State of California, without regard to principles of
conflicts of law (except to the extent governed by the UCC); (ii) consents to
personal jurisdiction in the State of California; and (iii) consents to venue in
Los Angeles County, California, for all actions and proceedings with respect to
this Agreement and the Loan Documents, and waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the extent
any proceeding is brought in accordance with this Section 19.
[SIGNATURES
FOLLOW ON NEXT PAGE]
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IN
WITNESS WHEREOF, the undersigned has executed this Security Agreement as of the
day and year first hereinabove written.
CYBERDEFENDER
CORPORATION,
a
Delaware corporation
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By:
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/s/ Xxxx Xxxxxxxx
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|
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Xxxx
Xxxxxxxx
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||
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Chief
Executive Officer
|
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State
of California
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)ss.
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County
of Los Angeles
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)
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On this ____ day of _______________,
2010, before me, the undersigned Notary Public, personally appeared
________________, to me personally known, who, being by me duly sworn did say
that he is the ______________________ of
_________________________________________, a ______________________________, and
that the foregoing instrument was signed on behalf of said corporation, and said
__________________________ acknowledged said instrument to be the free act and
deed of said corporation.
Notary
stamp/seal:
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Print
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Notary
Public in and for said
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County
and
State
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EXHIBIT
“A”
COLLATERAL
DESCRIPTION
All
property of Debtor, whether now owned or hereafter acquired, wherever located,
including, without limitation, all right, title and interest of Debtor in, to
and under the following:
(a) All
Accounts;
(b) All
Chattel Paper;
(c) All
Commercial Tort Claims and other claims or causes of action;
(d) All
Deposit Accounts and cash;
(e) All
Documents;
(f) All
Equipment;
(g) All
General Intangibles;
(h) All
Goods;
(i) All
Instruments;
(j) All
Intellectual Property;
(k) All
Inventory;
(l)
All Investment Property;
(m) All
Letter-of-Credit Rights;
(n) All
contract rights;
(o) All
financial assets;
(p) All
payment intangibles;
(q) To
the extent not otherwise described above:
(i) all
insurance policies, including the proceeds thereof, and water
stock;
(ii) All
architectural, structural, mechanical and engineering plans and specifications
prepared for construction of improvements or extraction of minerals from any
real property now or hereafter owned or leased by Debtor and all studies, data
and drawings related thereto; and also all contracts and agreements of the
Debtor relating to the foregoing plans and specifications or to the foregoing
studies, data and drawings or to the construction of improvements on or
extraction of minerals or gravel from any real property now or hereafter owned
or leased by Debtor;
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(iii) All
refunds, rebates, reimbursements, reserves, deferred payments, deposits, cost
savings, governmental subsidy payments, governmentally-registered credits (such
as, by way of example and not as limitation, emissions reduction credits), other
credits, waivers and payments, whether in cash or kind, due from or payable by
any governmental authority or any insurance or utility company relating to any
or all of the personal property or real property now or hereafter owned or
leased by Debtor or to any improvements thereon or any of the other collateral
described herein or arising out of the satisfaction of any condition imposed
upon or the obtaining of any approvals for the development of the any real
property now or hereafter owned by Debtor or the improvements
thereon;
(iv) All
refunds, rebates, reimbursements, credits and payments of any kind due from or
payable by any governmental authority or other entity for any taxes, special
taxes, assessments, or similar governmental or quasi-governmental charges or
levies imposed upon Debtor with respect to the any personal property or real
property now or hereafter owned or leased by Debtor and with respect to any
improvements thereon or to any of the other collateral described herein, or
arising out of the satisfaction of any condition imposed upon or the obtaining
of any approvals for the development of any real property now or hereafter owned
or leased by Debtor or the improvements thereon;
(v) All
supporting obligations with respect to any other collateral; and
(vi) All
proceeds and products of any of the foregoing (and proceeds and products of
proceeds and products).
The term
"Intellectual Property" means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by Company and its subsidiaries,
including inventions, designs, patents (whether registered or unregistered),
copyrights (whether registered or unregistered), trademarks (whether registered
or unregistered), trade secrets, domain names, confidential or proprietary
technical and business information, know-how, methods, processes, drawings,
specifications or other data or information and all memoranda, notes and records
with respect to any research and development, software and databases and all
embodiments or fixations thereof whether in tangible or intangible form or
contained on magnetic media readable by machine together with all such magnetic
media and related documentation, registrations and franchises, and all
additions, improvements and accessions to, and books and records describing or
used in connection with, any of the foregoing.
All terms
used herein which are defined in the UCC shall have the same meanings when used
herein, unless the context requires otherwise and except that (i) for
purposes of this Agreement, the meaning of such terms will not be limited by
reason of any limitation on the scope of the UCC, whether under Section 9-109 of
the UCC, by reason of federal preemption or otherwise, and (ii) to the
extent the definition of any category or type of Collateral is expanded by any
amendment, modification or revision to the UCC, such expanded definition will
apply automatically as of the date of such amendment, modification or
revision.
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