Document:

Monaker Group, Inc. 8-K

Exhibit
10.3

 

SECURITY
AGREEMENT

 

THIS
SECURITY AGREEMENT (this “Agreement”), dated as of April 3, 2020, is executed by Monaker Group, Inc., a Nevada
corporation (“Debtor”), in favor of Iliad Research and Trading, L.P., a Utah limited partnership (“Secured
Party”).

 

A.             
Debtor has issued to Secured Party a certain
Secured Promissory Note of even date herewith, as may be amended from time to time, in the original face amount of $895,000.00
(the “Note”).

 

B.              
In order to induce Secured Party to extend the
credit evidenced by the Note, Debtor has agreed to enter into this Agreement and to grant Secured Party a security interest in
the Collateral (as defined below).

 

NOW,
THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Debtor hereby agrees with Secured Party as follows:

 

1.               
Definitions and Interpretation. When used in this Agreement, the following terms have the following respective meanings:

 

“Collateral” has the meaning given to that term in Section 2 hereof. “First Lien Holder” means National Bank of Commerce.

 

“Intellectual
Property” means all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses (software or
otherwise), information, know-how, inventions, discoveries, published and unpublished works of authorship, processes, any and
all other proprietary rights, and all rights corresponding to all of the foregoing throughout the world, now owned and existing
or hereafter arising, created or acquired.

 

“Lien”
shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance in,
of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional
sale agreement, capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing
of any financing statement or similar instrument under the UCC or comparable law of any jurisdiction.

 

“Obligations”
means (a) all loans, advances, future advances, debts, liabilities and obligations, howsoever arising, owed by Debtor or any of
its affiliates and/or subsidiaries to Secured Party or any affiliate of Secured Party of every kind and description, now existing
or hereafter arising, whether created by the Note, this Agreement, that certain Note Purchase Agreement of even date herewith,
entered into by and between Debtor and Secured Party (the “Purchase Agreement”), any other Transaction Documents
(as defined in the Purchase Agreement), any other agreement between Debtor or any affiliate or subsidiary of Secured Party) and
Secured Party (or any affiliate of Secured Party) or any other promissory note issued by Debtor (or any affiliate or subsidiary
of Debtor) in favor of Secured Party (or any affiliate of Secured Party), any modification or amendment to any of the foregoing,
guaranty of payment or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred or owed
directly to Secured Party or as an affiliate of Secured Party or acquired by Secured Party or an affiliate of Secured Party by
purchase, pledge or otherwise, (b) all costs and expenses, including attorneys’ fees, incurred by Secured Party or any affiliate
of Secured Party in connection with the Note or in connection with the collection or enforcement of any portion of the indebtedness,
liabilities or obligations described in the foregoing clause (a), (c) the payment of all other sums, with interest thereon, advanced
in accordance herewith to protect the security of this Agreement, and (d) the performance of the covenants and agreements of Debtor
(or any of its affiliates or subsidiaries) contained in this Agreement and all other Transaction Documents.

 

    	 

    	 

    

“Permitted
Liens” means (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate
proceedings for which adequate reserves have been established,

(b)
Liens in favor of Secured Party under this Agreement or arising under the other Transaction Documents or prior agreements between
Debtor and Secured Party, and (c) a Lien in the amount of up to $1,200,000 in favor of the First Lien Holder.

 

“UCC”
means the Uniform Commercial Code as in effect in the jurisdiction whose laws would govern the security interest in, including
without limitation the perfection thereof, and foreclosure of the applicable Collateral, or any equivalent laws in any other jurisdiction
that govern the grant of a security interest in the types of assets encumbered by this Agreement.

 

Unless
otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC.

 

2.               
Grant of Security Interest. As security for the Obligations, Debtor hereby pledges to Secured Party and grants to Secured
Party a second position security interest in all right, title, interest, claims and demands of Debtor in and to the property described
in Schedule A hereto, and all replacements, proceeds, products, and accessions thereof (collectively, the “Collateral”),
which Security Interest shall be subordinate to the security interests of the First Lien Holder.

 

3.               
Authorization to File Financing Statements. Debtor hereby irrevocably authorizes Secured Party at any time and from time
to time to file in any filing office in any Uniform Commercial Code jurisdiction or other jurisdiction of Debtor or its subsidiaries
any financing statements or documents having a similar effect and amendments thereto that provide any other information required
by the Uniform Commercial Code (or similar law of any non-United States jurisdiction, if applicable) of such state or
jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether
Debtor is an organization, the type of organization and any organization identification number issued to Debtor. Debtor agrees
to furnish any such information to Secured Party promptly upon Secured Party’s request.

 

4.               
General Representations and Warranties. Debtor represents and warrants to Secured Party that (a) Debtor is the owner of
the Collateral and that no other person has 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-1 financing statements with the appropriate state office
(or an equivalent in the appropriate foreign office), Secured Party shall have a perfected second-position security interest in
the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted
Liens, (c) Debtor has received at least a reasonably equivalent value in exchange for entering into this Agreement, (d) Debtor
is not insolvent, as defined in any applicable state or federal statute, nor will Debtor be rendered insolvent by the execution
and delivery of this Agreement to Secured Party; and (e) as such, this Agreement is a valid and binding obligation of Debtor.

 

5.               
Additional Covenants. Debtor hereby agrees:

 

5.1.          
to perform all acts that may be necessary to maintain, preserve, protect and perfect in the Collateral, the Lien granted to Secured
Party therein, and the perfection and priority of such Lien;

 

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5.2.          
to procure, execute (including endorse, as applicable), and deliver from time to time any endorsements, assignments, financing
statements, certificates of title, and all other instruments, documents and/or writings reasonably deemed necessary or appropriate
by Secured Party to perfect, maintain and protect Secured Party’s Lien hereunder and the priority thereof;

 

5.3.          
to provide at least fifteen (15) days prior written notice to Secured Party of any of the following events: (a) any changes or
alterations of Debtor’s name, (b) any changes with respect to Debtor’s address or principal place of business, (c)
the formation of any subsidiaries of Debtor, or (d) any changes in location of the Collateral;

 

5.4.          
upon the occurrence of an Event of Default (as defined in the Note) under the Note and, thereafter, at Secured Party’s request,
to endorse (up to the outstanding amount under such promissory notes at the time of Secured Party’s request), assign and
deliver any promissory notes and all other instruments, documents, or writings included in the Collateral to Secured Party, accompanied
by such instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify;

 

5.5.          
to the extent the Collateral is not delivered to Secured Party pursuant to this Agreement, to keep the Collateral at the principal
office of Debtor (unless otherwise agreed to by Secured Party in writing), and not to relocate the Collateral to any other locations
without the prior written consent of Secured Party;

 

5.6.          
not to sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein (other than
inventory in the ordinary course of business);

 

5.7.          
not to, directly or indirectly, allow, grant or suffer to exist any Lien upon any of the Collateral, other than Permitted Liens;

 

5.8.          
not to grant any license or sublicense under any of its Intellectual Property, or enter
into any other agreement with respect to any of its Intellectual Property, except in the ordinary course of Debtor’s business;

 

5.9.          
to the extent commercially reasonable and in Debtor’s good faith business judgment:
(a) to file and prosecute diligently any patent, trademark or service mark applications
pending as of the date hereof or hereafter until all Obligations shall have been paid
in full, (b) to make application on unpatented but patentable inventions and on trademarks
and service marks, (c) to preserve and maintain all rights in all of its Intellectual
Property, and (d) to ensure that all of its Intellectual Property is and remains
enforceable. Any and all costs and expenses incurred in connection with each of Debtor’s obligations under this Section
5.9 shall be borne by Debtor. Debtor shall not knowingly and unreasonably abandon any right to file a patent, trademark or service
mark application, or abandon any pending patent application, or any other of its
Intellectual Property, without the prior written consent of Secured Party except for Intellectual Property that Debtor
determines, in the exercise of its good faith business judgment, is not or is no longer
material to its business;

 

5.10.       
upon the request of Secured Party at any time or from
time to time, and at the sole cost and expense (including, without limitation,
reasonable attorneys’ fees) of Debtor, Debtor shall take all actions and execute and deliver any and all instruments, agreements,
assignments, certificates and/or documents reasonably required by Secured Party to collaterally assign any and all of
Debtor’s patent, copyright and trademark registrations and applications now owned or hereafter acquired to and in
favor of Secured Party; and

 

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5.11.       
at any time amounts paid by Secured Party under the Transaction Documents are used
to purchase Collateral, Debtor shall perform all acts that may be necessary, and
otherwise fully cooperate with Secured Party, to cause (a) any such amounts paid by Secured Party to be disbursed directly to
the sellers of any such Collateral, (b) all certificates of title pertaining to such Collateral (as applicable) to be properly
filed and reissued to reflect Secured Party’s Lien on such Collateral, and (c) all such reissued certificates of title to
be delivered to and held by Secured Party.

 

6.               
Authorized Action by Secured Party. Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact (which appointment
is coupled with an interest) and agrees that Secured Party may perform (but Secured Party shall not be obligated to and shall
incur no liability to Debtor or any third party for failure so to do) any act which Debtor is obligated by this Agreement to perform,
and to exercise such rights and powers as Debtor might exercise with respect to the Collateral, including the right to (a) collect
by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums
and property now or hereafter payable on or on account of the Collateral; (b) enter into any extension, reorganization, deposit,
merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange
for the Collateral; (c) make any compromise or settlement, and take any action Secured Party deems advisable, with respect to
the Collateral, including without limitation bringing a suit in Secured Party’s own name to enforce any Intellectual Property;
(d) endorse Debtor’s name on all applications, documents, papers and instruments necessary or desirable for Secured Party
in the use of any Intellectual Property; (e) grant or issue any exclusive or non-exclusive license under any Intellectual Property
to any person or entity; (f) assign, pledge, sell, convey or otherwise transfer title in or dispose of any Intellectual Property
to any person or entity; (g) cause the Commissioner of Patents and Trademarks, United States Patent and Trademark Office (or as
appropriate, such equivalent agency in foreign countries) to issue any and all patents and related rights and applications to
Secured Party as the assignee of Debtor’s entire interest therein; (h) file a copy of this Agreement with any governmental
agency, body or authority, including without limitation the United States Patent and Trademark Office and, if applicable, the
United States Copyright Office or Library of Congress, at the sole cost and expense of Debtor; (i) insure, process and preserve
the Collateral; (j) pay any indebtedness of Debtor relating to the Collateral; (k) execute and file UCC financing statements and
other documents, certificates, instruments and agreements with respect to the Collateral or as otherwise required or permitted
hereunder; and (l) take any and all appropriate action and execute any and all documents and instruments that may be necessary
or useful to accomplish the purposes of this Agreement; provided, however, that Secured Party shall not exercise any such
powers granted pursuant to clauses (a) through (g) above prior to the occurrence of an Event of Default and shall only exercise
such powers during the continuance of an Event of Default. The powers conferred on Secured Party under this Section 6 are solely
to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. Secured Party shall
be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither Secured
Party nor any of its stockholders, directors, officers, managers, employees or agents shall be responsible to Debtor for any act
or failure to act, except with respect to Secured Party’s own gross negligence or willful misconduct. Nothing in this Section
6 shall be deemed an authorization for Debtor to take any action that it is otherwise expressly prohibited from undertaking by
way of other provision of this Agreement.

 

7.               
Default and Remedies.

 

7.1.          
Default. Debtor shall be deemed in default under this Agreement upon the occurrence of an Event of Default.

 

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7.2.          
Remedies. Upon the occurrence of any such Event of Default, Secured Party shall have the rights of a secured creditor under
the UCC, all rights granted by this Agreement and by law, including, without limiting the foregoing, (a) the right to require
Debtor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party, and (b)
the right to take peaceably possession of the Collateral, and for that purpose Secured Party
may peaceably enter upon premises on which the Collateral may be situated and remove the Collateral
therefrom. Debtor hereby agrees that fifteen (15) days’ notice of a public sale of any Collateral or notice of the date
after which a private sale of any Collateral may take place is reasonable. In addition, Debtor waives any and all rights that
it may have to a judicial hearing in advance of the enforcement of any of Secured Party’s rights and remedies hereunder,
including, without limitation, Secured Party’s right following an Event of Default to take immediate possession of Collateral
and to exercise Secured Party’s rights and remedies with respect thereto. Secured Party may also have a receiver appointed
to take charge of all or any portion of the Collateral and to exercise all rights of Secured Party under this Agreement. Secured
Party may exercise any of its rights under this Section 7.2 without demand or notice of any kind. The remedies in this Agreement,
including without limitation this Section 7.2, are in addition to, not in limitation of, any other right, power, privilege, or
remedy, either in law, in equity, or otherwise, to which Secured Party may be entitled. No failure or delay on the part of Secured
Party in exercising any right, power, or remedy will operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right hereunder. All of Secured Party’s rights
and remedies, whether evidenced by this Agreement or by any other agreement, instrument or document shall be cumulative and may
be exercised singularly or concurrently.

 

7.3.          
Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Secured Party to exercise
remedies in a commercially reasonable manner, Debtor acknowledges and agrees that it is not commercially unreasonable for Secured
Party (a) to fail to incur expenses reasonably deemed significant by Secured Party to prepare Collateral for disposition, (b)
to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed
of, (c) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to
remove liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection remedies against account
debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists,
(e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral
is of a specialized nature, (f) to contact other persons, whether or not in the same business as Debtor, for expressions of interest
in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature, (h)   to dispose of Collateral by utilizing
Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability
of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j)
to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure Secured Party against risks of
loss, collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection or disposition
of Collateral, or (l) to the extent deemed appropriate by Secured Party, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral. Debtor
acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Secured
Party would fulfill Secured Party’s duties under the UCC in Secured Party’s exercise of remedies against the Collateral
and that other actions or omissions by Secured Party shall not be deemed to fail to fulfill such duties solely on account of
not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be
construed to grant any rights to Debtor or to impose any duties on Secured Party that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this Section.

 

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7.4.          
Marshalling. Secured Party shall not be required to marshal any present or future Collateral for, or other assurances of
payment of, the Obligations or to resort to such Collateral or other assurances of payment in any particular order, and all of
its rights and remedies hereunder and in respect of such Collateral and other assurances of payment shall be cumulative and in
addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, Debtor hereby agrees
that it will not invoke any law relating to the marshalling of Collateral which might cause delay in or impede the enforcement
of Secured Party’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of
the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment
thereof is otherwise assured, and, to the extent that it lawfully may, Debtor hereby irrevocably waives the benefits of all such
laws.

 

7.5.          
Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds
and the avails of any remedy hereunder (as well as any other amounts of any kind held by Secured Party at the time of, or received
by Secured Party after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(a)             
First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral,
of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses,
liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Secured Party;

 

(b)            
Second, to the payment to Secured Party of the amount then owing or unpaid on the Note (to be applied first to accrued interest
and fees and second to outstanding principal) and all amounts owed under any of the other Transaction Documents or other documents
included within the Obligations; and

 

(c)             
Third, to the payment of the surplus, if any, to Debtor, its successors and assigns, or to whosoever may be lawfully entitled
to receive the same.

 

In
the absence of final payment and satisfaction in full of all of the Obligations, Debtor shall remain liable for any deficiency.

 

7.6.          
Priorities. Notwithstanding the other terms of this Agreement, the security interest of the First Lien Holder on the Collateral
is and shall be senior and prior in right and all other respects to the security interest of the Secured Party on the Collateral,
and such security interest of the Secured Party on the Collateral is and shall be junior and subordinate in all respects to the
Liens of the First Lien Holder on the Collateral. Without limitation of the First Lien Holder’s right or remedies hereunder,
the priorities of the security interest provided in this Section 7.6 shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement, replacement or refinancing of any of the Obligations, nor by any action
or inaction which the Secured Party may take or fail to take in respect of the Collateral. Notwithstanding anything to the contrary
herein or elsewhere, the priority of the security interest of the First Lien Holder and the rights and obligations of the parties
hereto will remain in full force and effect irrespective of (i) how a security interest was acquired (whether by grant, possession,
statute, operation of law, subrogation, or otherwise), (ii) the time, manner, or order of the grant, attachment, or perfection
of a security interest, (iii) any conflicting provision of the UCC or other applicable law, (iv) any defect in, or non-perfection,
setting aside, or avoidance of, a security interest or lien, (v) the modification of any Obligations, (vi) the modification of
any security agreement, (vii) the exchange of a security interest in any Collateral for a security interest in other Collateral,
(viii) the commencement of an insolvency proceeding or bankruptcy, or (ix) any other circumstance whatsoever, including a circumstance
that might be a defense available to, or a discharge of, an obligor in respect of an obligation.

 

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8.               
Miscellaneous.

 

8.1.          
Notices. Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled “Notices”
in the Purchase Agreement, the terms of which are incorporated herein by this reference.

 

8.2.          
Non-waiver. No failure or delay on Secured Party’s part in exercising any right hereunder shall operate as a waiver
thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof
or of any other right.

 

8.3.          
Amendments and Waivers. This Agreement may not be amended or modified, nor may any of its terms be waived, except by written
instruments signed by Debtor and Secured Party. Each waiver or consent under any provision hereof shall be effective only in the
specific instances for the purpose for which given.

 

8.4.          
Assignment. This Agreement shall be binding upon and inure to the benefit of Secured Party and Debtor and their respective
successors and assigns; provided, however, that Debtor may not sell, assign or delegate rights and obligations hereunder
without the prior written consent of Secured Party.

 

8.5.          
Cumulative Rights, etc. The rights, powers and remedies of Secured Party under this Agreement shall be in addition to all
rights, powers and remedies given to Secured Party by virtue of any applicable law, rule or regulation of any governmental authority,
or the Note, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without
impairing Secured Party’s rights hereunder. Debtor waives any right to require Secured Party to proceed against any person
or entity or to exhaust any Collateral or to pursue any remedy in Secured Party’s power.

 

8.6.          
Partial Invalidity. If any part of this Agreement is construed to be in violation of any law, such part shall be modified
to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full
force and effect.

 

8.7.          
Expenses. Debtor shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses,
incurred by Secured Party in connection with the custody, preservation or sale of, or other realization on, any of the Collateral
or the enforcement or attempt to enforce any of the Obligations which are not performed as and when required by this Agreement.

 

8.8.          
Entire Agreement. This Agreement and the other Transaction Documents, taken together, constitute and contain the entire
agreement of Debtor and Secured Party with respect to this particular matter and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter
hereof.

 

8.9.          
Governing Law; Venue. Except as otherwise specifically set forth herein, the parties expressly agree that this Agreement
shall be governed solely by the laws of the State of Utah, without giving effect to the principles thereof regarding the conflict
of laws; provided, however, that enforcement of Secured Party’s rights and remedies against the Collateral as provided
herein will be subject to the UCC. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes
are incorporated herein by this reference.

 

8.10.       
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES
HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE
STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT
TO DEMAND TRIAL BY JURY.

 

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8.11.       
Purchase Agreement; Arbitration of Disputes. By executing this Agreement, each party agrees to be bound by the terms, conditions
and general provisions of the Purchase Agreement and the other Transaction Documents, including without limitation the Arbitration
Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

 

8.12.       
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all
of which together shall constitute one instrument. Any electronic copy of a party’s executed counterpart will be deemed
to be an executed original.

 

8.13.       
Further Assurances. Debtor shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as Secured Party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

 

8.14.       
Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement.

 

[Remainder
of page intentionally left blank; signature page follows]

 

 

 

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IN
WITNESS WHEREOF, Secured Party and Debtor have caused this Agreement to be executed as of the day and year first above written.

 

	 	SECURED PARTY:
	 	 
	 	ILIAD RESEARCH AND TRADING, L.P.
	 	 
	 	By: Iliad Management, LLC, its General
    Partner
	 	 
	 	 	By: Fife Trading, Inc., its Manager
	 	 
	 	 	 	By:	
	 	 	 	 	John M. Fife, President
	 	 	 	 	 
	 	 	 	 	John M. Fife, President
	 	 
	 	DEBTOR:
	 	 
	 	MONAKER GROUP, INC.
	 	 
	 	 
	 	By:	

                    

	 	Name:	 	 	Bill Kerby
	 	 
	 	Title:	CEO

 

 

 

 

 

 

[Signature
Page to Security Agreement]

 

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SCHEDULE
A

TO
SECURITY AGREEMENT

 

All
right, title, interest, claims and demands of Debtor in and to all of Debtor’s
assets owned as of the date hereof and/or acquired by Debtor at any time while the Obligations are still outstanding, including
without limitation, the following property:

 

1.               
All equity interests in all wholly- or partially-owned subsidiaries of Debtor.

 

2.               
All customer accounts, insurance contracts, and clients underlying such insurance contracts.

 

3.               
All goods and equipment now owned or hereafter acquired, including, without limitation,
all laboratory equipment, growing equipment, computer equipment, office equipment, machinery, containers, fixtures, vehicles,
and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing, wherever located;

 

4.               
All inventory now owned or hereafter acquired, including, without limitation, all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory
as is temporarily out of Debtor’s custody or possession or in transit and including any returns upon any accounts or other
proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title
representing any of the above, and Debtor’s books relating to any of the foregoing;

 

5.               
All accounts receivable, revenues or royalties, contract rights, general intangibles, healthcare insurance receivables, payment
intangibles and commercial tort claims, now owned or hereafter acquired, including,
without limitation, all patents, patent rights and patent applications (including without limitation, the inventions and improvements
described and claimed therein, and

(a)   
all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (b) all income, royalties, damages, proceeds
and payments now and hereafter due or payable under or with respect thereto, including,
without limitation, damages and payments for past or future infringements thereof,
(c) the right to sue for past, present and future infringements thereof, and (d) all rights corresponding thereto throughout the
world), trademarks and service marks (and applications and registrations therefor),
inventions, discoveries, copyrights and mask works (and applications and registrations therefor), trade names, trade styles, software
and computer programs including source code, trade secrets, methods, published and unpublished works of authorship, processes,
know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research and development,
goodwill, license agreements, information, any and all other proprietary rights, franchise agreements, blueprints, drawings, purchase
orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports,
catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind and whether in tangible or
intangible form or contained on magnetic media readable by machine together with all such magnetic media, and all rights
corresponding to all of the foregoing throughout the world, now owned and existing or hereafter arising, created or acquired;

 

6.               
All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations
owing to Debtor arising out of the sale or lease of goods, the licensing of technology
or the rendering of services by Debtor (subject, in each case, to the contractual rights
of third parties to require funds received by Debtor to be expended in a particular manner), whether or
not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Debtor and Debtor’s books relating to any of the foregoing;

 

    	

    	 

    

7.               
All documents, cash, deposit accounts, letters of credit, letter of credit rights, supporting obligations, certificates of deposit,
instruments, chattel paper, electronic chattel paper, tangible chattel paper and investment property, including, without
limitation, all securities, whether certificated or uncertificated, security
entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held
in any securities account or otherwise, wherever located, now owned or hereafter acquired and Debtor’s books relating
to the foregoing;

 

8.               
All other assets, goods and personal property of Debtor, wherever located, whether tangible or
intangible, and whether now owned or hereafter acquired; and

 

9.               
Any and all claims, rights and interests in any of the above and all substitutions
for, additions and accessions to and proceeds and products thereof, including, without limitation, insurance, condemnation, requisition
or similar payments and the proceeds thereof.Exhibit
4.7

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

The
following summary describes the common stock, $0.001 par value per share, of Stereotaxis, Inc. (the “Company,” “we,”
“our,” “us,” and “our”), which are the only securities of the Company registered pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended.

 

The
following description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference
to (i) our Restated Certificate of Incorporation, as amended by the Certificate of Amendment to Amended and Restated Certificate
of Incorporation (as so amended, the “Certificate of Incorporation”), and (ii) our Restated Bylaws (the “Bylaws”),
each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.7 is a part.
We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of the Delaware General Corporation
Law for additional information.

 

Authorized
and Outstanding Capital Stock

 

Our
authorized capital stock consists of 300,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares of
preferred stock, $0.001 par value per share. As of December 31, 2019, there were 68,529,623 shares of our common stock issued
and outstanding. In addition, as of such date, we had authorized the issuance of up to (i) 24,000 shares of Series A Convertible
Preferred Stock (the “Series A Preferred”) and (ii) 5,610,121 Series B Convertible Preferred Stock (the “Series
B Preferred”), leaving an aggregate of 4,365,879 shares of preferred stock authorized but undesignated. As of December 31,
2019, there were (i) 23,110 shares of Series A Preferred issued and outstanding, which are convertible into shares of the Company’s
common stock at an initial conversion rate of $0.65 per share (which was an aggregate of 42,497,068 shares of the Company’s
common stock as of such date) and (ii) 5,610,121 shares of Series B Preferred issued and outstanding, which were convertible into
an aggregate of 5,610,121 shares of the Company’s common stock as of such date, with a blocker on conversion of such Series
A and Series B Preferred if the holder would exceed a specified threshold of voting security ownership set forth in the
respective certificates of designation for each such series.

 

Common
Stock

 

Voting
Rights. Holders of our common stock are entitled to one vote per share on all matters to be voted upon by shareholders.
In addition, holders of our Series A Preferred are entitled to vote such shares on an as-converted basis with the common stock,
subject to specified beneficial ownership issuance limitations. In accordance with Delaware law, the affirmative vote of a majority
of the shares cast at a duly held meeting at which a quorum is present shall be the act of the shareholders. The presence at the
meeting, by person or by proxy, of the holders of record of a majority of shares issued and outstanding and entitled to vote will
constitute a quorum for transacting business. Our stockholders do not have cumulative voting rights in the election of directors.
Accordingly, holders of a majority of the shares eligible to vote, which as of the date of this prospectus are holders of our
common stock and our Series A Preferred, are able to elect all of the directors, subject to any rights to elect directors that
may be granted to any then-outstanding preferred stock.

 

Liquidation
Rights. If we are liquidated, our creditors and any holders of our preferred stock with preferential liquidation rights
will be paid before any distribution to holders of common stock.

 

Shares
of our Series A Preferred rank senior to shares of our common stock and our Series B Preferred as to distributions and payments
upon the liquidation, dissolution and winding up of the Company. No such distributions or payments upon the liquidation, dissolution
or winding up of the Company may be made to holders of common stock or holders of the Series B Preferred unless and until the
holders of the Series A Preferred have received the stated value of $1,000 per share plus any accrued and unpaid dividends. Our
Series A Preferred bears dividends at a rate of six percent (6.0%) per annum, which are cumulative and accrue daily from their
date of issuance, September, 2016, on the $1,000 stated value. However, such dividends will not be paid in cash, except in connection
with any liquidation, dissolution or winding up of the Company or any redemption of the Series A Preferred. Instead, the value
of the accrued dividends is added to the liquidation preference of the Series A Preferred and will increase the number of shares
of common stock issuable upon conversion, which will dilute the ownership of our common stockholders.

 

The
Series B Convertible Preferred Stock ranks on parity with our common stock as to distributions and payments upon the liquidation,
dissolution and winding up of the Company. Subject to the prior and superior rights of the holders of the Series A Preferred and
any other securities of the Company that rank senior to our common stock and the Series B Preferred, upon liquidation, dissolution
or winding up of the Company, shares of common stock and Series B Preferred will be entitled to receive distributions of any of
the assets or surplus funds of the Company on a pari passu basis.

 

In
addition, the liquidation rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected
by, the rights of the holders of shares of any series of preferred stock which we may designate and issue in the future.

 

    	 	1	 

    	 	 	 

    

 

Dividend
Rights. The holders of our common stock are entitled to receive dividends when and as declared by our board of directors
out of funds legally available for dividends, subject to the prior rights or preferences applicable to any preferred stock as
may then be outstanding. The Series B Preferred is entitled to dividends equal to and in the same form as dividends actually paid
on shares of common stock when, as and if such dividends are paid on shares of common stock.

 

Until
all shares of our Series A Preferred have been converted or redeemed, no dividends may be paid on the common stock or the Series
B Preferred without the express written consent of the holders of a majority of the outstanding shares of Series A Preferred.
In the event that dividends or other distributions of assets are made or paid by the Company to the holders of the common stock
or the holders of shares of the Series B Preferred, the holders of shares of the Series A Preferred are entitled to participate
in such dividend or distribution on an as-converted basis.

 

The
Company has not declared or paid any cash dividends on its common stock and the Company does not presently intend to pay any cash
dividends in the foreseeable future.

 

Other
Rights and Preferences. Shares of our common stock have no preemptive rights, no conversion rights, no redemption or sinking
fund provisions, and are not liable for further call or assessment.

 

Listing.
Our common stock currently trades on the NYSE American LLC under the symbol “STXS.”

 

Anti-Takeover
Provisions

 

Interested
Stockholder Transactions. We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware
corporation from engaging in any “business combination” with any “interested stockholder” for a period
of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

 

	 	●	before
    such date, the board of directors of the corporation approved either the business combination or the transaction that resulted
    in the stockholder becoming an interested stockholder;
	 	 	 
	 	●	upon
    consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
    owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes
    of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee
    stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to
    the plan will be tendered in a tender or exchange offer; or
	 	 	 
	 	●	on
    or after such date, the business combination is approved by the board of directors and authorized at an annual or special
    meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting
    stock that is not owned by the interested stockholder.

 

Section
203 defines “business combination” to include the following:

 

	 	●	any
    merger or consolidation involving the corporation and the interested stockholder;
	 	 	 
	 	●	any
    sale, transfer, pledge or other disposition involving the interested stockholder of assets with a value of 10% or more of
    either the total assets or all outstanding stock of the corporation;
	 	 	 
	 	●	subject
    to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
    to the interested stockholder;
	 	 	 
	 	●	any
    transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class
    or series of the corporation beneficially owned by the interested stockholder; or
	 	 	 
	 	●	the
    receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
    by or through the corporation.

 

In
general, Section 203 defines “interested stockholder” as an entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation or any entity or person affiliated with or controlling or controlled by such entity
or person.

 

In
addition, some provisions of our Certificate of Incorporation and Bylaws may be deemed to have an anti-takeover effect and may
delay or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts
that might result in a premium over the market price for the shares held by stockholders.

 

    	 	2	 

    	 	 	 

    

 

Cumulative
Voting. Our amended and restated certificate of incorporation expressly denies stockholders the right to cumulative voting
in the election of directors.

 

Classified
Board of Directors. Our board of directors is divided into three classes of directors serving staggered three-year terms.
As a result, approximately one-third of the board of directors is elected each year, which has the effect of requiring at least
two annual stockholder meetings, instead of one, to replace a majority of the members of the board. These provisions, when coupled
with the provision of our Certificate of Incorporation authorizing only the board of directors to fill vacant directorships or
increase the size of the board of directors, may deter a stockholder from removing incumbent directors and simultaneously gaining
control of the board of directors by filling the vacancies created by such removal with its own nominees. The certificate of incorporation
also provides that directors may be removed by stockholders only for cause. Since the board of directors has the power to retain
and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect
a change in management.

 

Stockholder
Action; Special Meeting of Stockholders. Our Certificate of Incorporation and Bylaws do not permit stockholders to act by
written consent. They provide that special meetings of our stockholders may be called only by the chairman of our board of directors,
our chief executive officer or a majority of our directors. Further, our Certificate of Incorporation provides that the stockholders
may amend bylaws adopted by the board of directors or specified provisions of the certificate of incorporation by the affirmative
vote of at least 66-2/3% of our capital stock.

 

Advance
Notice Requirements for Stockholder Proposals and Directors Nominations. Our Bylaws provide that stockholders seeking to bring
business before an annual meeting of stockholders, or to nominate candidates for election as directors at an annual meeting of
stockholders, must provide timely notice in writing. To be timely, a stockholder’s notice must be delivered to or mailed
and received at our principal executive offices not more than 120 days or less than 90 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders. However, in the event that the annual meeting is called for a date that
is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be received
not later than the close of business on the 10th day following the date on which notice of the date of the annual meeting was
mailed to stockholders or made public, whichever first occurs. Our Bylaws also specify requirements as to the form and content
of a stockholder’s notice. These provisions may preclude stockholders from bringing matters before an annual meeting of
stockholders or from nominating directors at an annual meeting of stockholders.

 

Authorized
But Unissued Shares. Our authorized but unissued shares of common stock and preferred stock are available for future issuance
without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public
offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued
shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of Stereotaxis
by means of a proxy contest, tender offer, merger or otherwise.

 

Amendments;
Supermajority Vote Requirements. The Delaware General Corporation Law provides generally that the affirmative vote of a majority
of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws,
unless either a corporation’s certificate of incorporation or bylaws requires a greater percentage. Our Certificate of Incorporation
imposes supermajority vote requirements of 66-2/3% of the voting power of our capital stock in connection with the amendment of
certain provisions of our Certificate of Incorporation and Bylaws, including those provisions relating to the classified board
of directors, action by written consent and the ability of stockholders to call special meetings.

 

Limitation
of Liability and Indemnification

 

Our
Certificate of Incorporation provides that we will indemnify our directors and officers, and may indemnify our employees and other
agents, to the fullest extent permitted by the General Corporation Law of the State of Delaware. We currently have a directors’
and officers’ liability insurance policy that insures such persons against the costs of defense, settlement or payment of
a judgment under certain circumstances.

 

In
addition, our Certificate of Incorporation provides that the liability of our directors for monetary damages shall be eliminated
to the fullest extent permissible under the General Corporation Law of the State of Delaware. This provision in our Certificate
of Incorporation does not eliminate a director’s duty of care, and, in appropriate circumstances, equitable remedies such
as an injunction or other forms of non-monetary relief remain available. Each director will continue to be subject to liability
for any breach of the director’s duty of loyalty to us, for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law, for acts or omissions that the director believes to be contrary to our best interests
or our stockholders, for any transaction from which the director derived an improper personal benefit, for improper transactions
between the director and us, and for improper distributions to stockholders and loans to directors and officers. This provision
also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or state or
federal environmental laws.

 

We
have entered into, and intend to continue to enter into, separate indemnification agreements with each of our directors and officers
which may be broader than the specific indemnification provision contained in the Delaware General Corporation Law. Under these
agreements, we are required to indemnify them against all expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred, in connection with any actual, or any threatened, proceeding if any of them may be made a party because he
or she is or was one of our directors or officers. We are obligated to pay these amounts only if the officer or director acted
in good faith and in a manner that he or she reasonably believed to be in or not opposed to our best interests. With respect to
any criminal proceeding, we are obligated to pay these amounts only if the officer or director had no reasonable cause to believe
that his or her conduct was unlawful. The indemnification agreements also set forth procedures that will apply in the event of
a claim for indemnification thereunder.

 

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