Exhibit 10.3
 
SECURITY
AGREEMENT
                               
THIS SECURITY AGREEMENT (this “Agreement”), is entered into as of April 16,
2018, by and between DPW Holdings, Inc., a Delaware corporation (the “Parent”),
Super Crypto Mining, Inc., a Delaware corporation (the “Borrower”), and
______________ (the “Secured Party” or “Secured Parties”). All capitalized terms
not otherwise defined herein shall the meanings ascribed to them in that certain
Securities Purchase Agreement by and between the Parent and the Secured Party of
even date (the “Securities Purchase Agreement”).
 
RECITALS
 
WHEREAS, the Secured Parties have loaned monies to Parent, as more particularly
described in the Securities Purchase Agreement and as evidenced by the 12%
Secured Convertible Promissory Note in the principal amount of $1,722,222.22
(the “Note”) issued by Parent to the Secured Party on April 16, 2018;
 
WHEREAS, the term “Secured Party” as used in this Agreement shall mean,
collectively, all holders of the Note, including those persons who become
holders of Note subsequent to the  date hereof; and
 
WHEREAS, this Agreement  is being executed and delivered by Borrower to secure
the
 
Note.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the parties hereto hereby agrees as
follows:
             
1.          Obligations Secured. This Agreement secures, in part, the prompt
payment and performance of all obligations of Parent under the Note, and all
renewals, extensions, modifications, amendments, and/or supplements thereto
(collectively, the “Secured Obligations”).
 
2.          Grant of Security.

a.          Collateral. Borrower hereby grants, pledges, and assigns for the
benefit of the Secured Parties, and there is hereby created in favor of each of
the Secured Parties, a security interest in and to all of Borrower' s right,
title, and interest in, to, and under all of the  collateral  set forth on
Exhibit A hereto (collectively,  “Collateral”).
 
b.          Effective Date.  This grant of security shall be effective as of the
date hereof.
 
c.          Subordination. The Note and the Secured Obligations shall not be
subordinated, or junior in interest, to any other obligations of Borrower.
 

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d.          Filings to Perfect Security. The Borrower will (and is hereby
authorized to) file with any filing office such financing statements,
amendments, addenda, continuations, terminations, assignments and other records
(whether or not executed by Borrower) to perfect and to maintain perfected
security interests in the Collateral by the Secured Parties, whereby  (a)
promptly  upon the execution of this Agreement, a Financing Statement on Form
UCC-1 (the “Financing Statement”) shall be filed with the Delaware Secretary of
State on behalf of the Secured Parties with respect to the Collateral; The
Financing Statement shall designate each of the Secured Parties as a Secured
Party and Borrower as the debtor, shall identify the security interest in the
Collateral, and contain any other items required by law.
 
The Financing Statement shall contain a description of collateral consistent
with the description set forth herein and shall not describe the collateral as
“all assets” or “all personal property.”
               
3.          Transfers and Other Liens. Except as set forth herein or in the
Note, Borrower shall not, without the prior written consent of the Secured
Party, in its sole and  absolute discretion:
 
a.          Sell, transfer, assign, or dispose of (by operation of law or
otherwise), any of the Collateral outside of the ordinary course of business;
 
b.          Create or suffer to exist any lien, security interest, or other
charge or  encumbrance upon or with respect to any of the Collateral, except the
security interests created hereby; or
 
c.          Permit any of the Collateral to be levied upon under any legal
process.
 
4.          Representations and Warranties. Borrower hereby represents and
warrants to the Secured Parties as follows: (a) to Borrower' s knowledge,
Borrower  is the owner of the Collateral (or, in the case  of after-acquired
Collateral, at the time Borrower acquires ownership of the Collateral, will be
the owner thereof) and that, except as expressly provided herein, no other
person has (or, in the case of after-acquired Collateral, at the time Borrower
acquires ownership thereof, will have) any right, title, claim or interest  (by
way  of Lien or otherwise) in, against or to the Collateral; (b) to Borrower's
knowledge, except as expressly provided herein, upon the filing of a Financing
Statement with the Delaware Secretary of State, the Secured Parties (or in the
case of after-acquired Collateral, at the time Borrower acquires ownership
thereof, will have) will have a perfected  security interest  in the Collateral
to the extent that a security interest in the Collateral can be perfected  by
such filing; (c) all Accounts Receivable (as defined in Exhibit A) are genuine
and enforceable against the party obligated to pay the same; (d) Borrower has
full power and authority to enter into the transactions provided for in this
Agreement and the Note; (e) this Agreement and the Note, when executed and
delivered by Borrower, will constitute the legal, valid and binding obligations
of Borrower enforceable in accordance with their terms; (t) the execution and
delivery by Borrower of this Agreement and the Note and the performance and
consummation of the transactions contemplated hereby and thereby do not and will
not violate Borrower's Certificate of Incorporation or Bylaws or any material
judgment, order, writ, decree, statute, rule or regulation applicable to
Borrower (g) there does not exist any default or violation by Borrower of or
under any of the terms, conditions or obligations of (i) any indenture,
mortgage, deed of trust, franchise, permit, contract, agreement, or other
instrument to which Borrower is a party or by which Borrower is bound, or (ii)
any law, ordinance, regulation, ruling, order, injunction, decree, condition or
other requirement applicable to or imposed upon Borrower by any law, the action
of any court or any governmental authority or agency; and the execution,
delivery and performance of this Agreement will  not result in any such default
or violation; (h) there is no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand pending or, to the knowledge of Borrower,
threatened which adversely affects Borrower' s business or financial condition
and there is no basis known to Borrower for any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand which  could result
in the same; and (i) this Agreement and the Note do not contain any untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements contained in this Agreement and  the Note not misleading.
 

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5.             Events of Default. For purposes of this Agreement, the term
“Event of Default” shall  mean and refer to any of the following:
 

a.
Failure of Borrower or Parent to perform or observe any covenant set forth in
this Agreement, or to perform or observe any other term, condition, covenant,
warranty, agreement or other provision contained in this Agreement, where such
failure continues for fifteen (15) days after receipt of written notice from
Secured Party specifying such failure;

 

b.
Any representation or warranty made or furnished by Borrower or Parent in
writing in connection with this Agreement and the Note or any statement or
representation made in any certificate, report or opinion delivered pursuant to
this Agreement or in connection with this Agreement is false, incorrect or
incomplete in any material respect at the time it is furnished; or

 

c.
Occurrence of any other Event of Default as defined in the Note.

 
6.            Remedies. Upon the occurrence and during the continuance of an
Event of Default (subject to the notice and cure provisions provided for herein,
if any), each Secured Party shall have the rights of a secured creditor under
the Uniform Commercial Code of the applicable jurisdiction, all rights granted
by the Note, this Agreement and by law, including the right to require Borrower
to assemble the Collateral and make it available to the Secured Parties at a
place to be designated by Borrower.  The rights and remedies provided in this
Agreement and the Note are cumulative and may be exercised independently or
concurrently, and are not exclusive of any other right or remedy provided at law
or in equity. No failure to exercise or delay by the Secured Parties in
exercising any right or remedy under this Agreement or the Note shall impair or
prohibit the exercise of any such rights or remedies  in the future or be deemed
to constitute a waiver or limitation of any such right or remedy or acquiescence
therein. Every right and remedy granted to the Secured Parties under this
Agreement and the Note or by law or in equity may be exercised by any Secured
Party at any time and from time to time.
 
7.            Further Assurances.  Borrower agrees that, from time to time, at
its own expense, it will:
 

a.
Protect and defend the Collateral against all claims and demands of all persons
at any time claiming the same or any interest therein, and preserve and protect
Secured Party's security interest in the Collateral.

 

b.
Promptly execute and deliver to Secured Parties all instruments and documents,
and take all further action necessary or desirable, as any Secured Party may
reasonably request to (i) continue, perfect, or protect any security interest
granted or purported to be granted hereby, and (ii) enable a Secured Party to
exercise and enforce any of Secured Party's rights and remedies hereunder with
respect to any Collateral.

 

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c.
Permit a Secured Party's representatives to inspect and make copies of all books
and records relating to the Collateral, wherever such books and records are
located, and to conduct an audit relating to the Collateral at any reasonable
time or times.

8.            Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by  confirmed telex, e-mail or facsimile if
sent during normal business hours of the recipient,  if not, then on the next
business day, (c) five 5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
as follows:

If to the Borrower or Parent, to:
 
Super Crypto Mining, Inc.
DPW Holdings, Inc.
48430 Lakeview Blvd.
Fremont, CA 94538
Attention: Milton C. Ault III
e-mail: Todd@DPWHoldings.com

If to the Secured Party:
 
                                                            

                                                            

                                                            

                                                            

or to such other address or telecopy number  as the party to whom  notice  is to
be  given may have furnished to the other party in writing in accordance
herewith.
 
9.           Amendments and Waivers.  No modification, amendment or waiver of
any provision of, or consent required by, this Agreement, nor any consent to any
departure herefrom, shall be effective unless it is in writing and signed by
each of the parties hereto. Such modification, amendment, waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.
 
10.         Exclusivity and Waiver of Rights.  No failure to exercise, and no
delay in exercising, on the part of any party, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any other rights or remedies provided by law.
 
11.          Invalidity. Any term or provision of this Agreement shall be
ineffective to the extent it is declared invalid or unenforceable, without
rendering invalid or enforceable the remaining terms and provisions of this
Agreement.
 
12.          Headings. Headings used in this Agreement are inserted for
convenience only and shall not affect the meaning of any term or provision of
this Agreement.
 

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13.          Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original instrument, but all of
which collectively shall constitute one and the same agreement.
 
14.          Assignment. This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by the any of the parties without the
prior written consent of all Secured Parties, at their sole and absolute
discretion.
 
15.          Survival. Unless otherwise expressly provided herein, all
representations warranties, agreements and covenants contained in this Agreement
shall survive the execution hereof  and  shall remain in full force and effect
until the earliest to occur of (a) the payment in full of the Note, and (b) the
conversion of the principal and accrued and unpaid interest and all other
amounts owing under the Note into common stock of the Parent.
 
16.          Miscellaneous. This Agreement shall inure to the benefit of each of
the parties hereto and all their respective successors and permitted assigns.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained.
 
17.          GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO
ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).
 
18.          CONSENT TO JURISDICTION. ANY ACTION BROUGHT BY EITHER PARTY AGAINST
THE OTHER ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL BE COMMENCED ONLY IN
THE STATE OR FEDERAL COURTS OF GENERAL JURISDICTION LOCATED IN THE STATE, CITY
AND COUNTY OF NEW YORK. 
 
19.          WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND EACH OF THE OTHER PARTIES HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 19.
 
20.          Attorneys' Fees.  In the event that any suit or action is
instituted to enforce any provision  in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
 

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21.          Entire Agreement. This Agreement contains the entire agreement
among the parties with respect to the transactions contemplated by this
Agreement and supersedes all prior agreements or understandings  among the
parties with respect to the subject matter hereof.
 
[SIGNATURE PAGE(S) FOLLOW]

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first set
written above.

 
SUPER CRYPTO MINING, INC.
             
By:
   
Name: DARREN MAGOT
 
Title: CHIEF EXECUTIVE OFFICER
 

 
DPW HOLDINGS, INC.

By:
 
 
 
Name: MILTON C. AULT III
 
 
Title: CHIEF EXECUTIVE OFFICER
 

By:

By:
 
 
 
 
 

 

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