Exhibit 10.3

 

SECURITY AGREEMENT

 

Security Agreement, dated as of October 3, 2018, by Super Crypto Mining, Inc.
(the “Borrower”), as grantor, in favor of ALLPPS LLC, a Delaware limited
liability company (“Lender”) and each other Secured Party (as defined below).

 

W i t n e s s e t h:

 

Whereas, pursuant to the Loan Agreement dated as of the date hereof (as the same
may be modified from time to time, the “Loan Agreement”) between the Borrower
and the Lender, the Lender has agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth therein; and

 

Whereas, it is a condition precedent to the obligation of the Lender to make
extensions of credit to the Borrower under the Loan Agreement that the Borrower
shall have executed and delivered this Agreement to the Lender;

 

Now, therefore, in consideration of the premises and to induce the Lender to
enter into the Loan Agreement and to make extensions of credit to the Borrower
thereunder, the Borrower hereby agrees with the Lender as follows:

 

Article I

Defined Terms

 

Section 1.1        Definitions. (a) Capital terms used herein without definition
are used as defined in the Loan Agreement.

 

(b)      The following terms shall have the following meanings:

 

“Agreement” means this Security Agreement.

 

“Collateral” has the meaning specified in Section 2.1.

 

“Control Agreement” means an agreement, in form and substance satisfactory to
the Lender between the Lender and the Borrower, to the extent such agreement is
effective to grant “control” (as defined under each applicable UCC) over the
Collateral to the Lender.

 

“Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, taxes, commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest accrued thereon or as a result thereto
and fees, charges and disbursements of financial, legal and other advisors and
consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.

 

“proceeds” means “proceeds” as such term is defined in section 9-102 of the UCC
but, in any event, shall include, without limitation, all dividends or other
income from the Collateral, collections thereon or distributions with respect
thereto. Without limiting the generality of the foregoing, the term “Proceeds”
includes any blockchain or other asset received with respect to any blockchain
asset that is otherwise part of the Collateral (including as a result of a fork
in the blockchain) and whatever is receivable or received when blockchain assets
or their proceeds are sold, exchanged, collected, or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes proceeds of
any right to indemnity or guaranty payable to Borrower from time to time with
respect to any other Collateral.

 

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“Secured Parties” means the Lender, its Related Parties, each other beneficiary
of any indemnification or reimbursement obligation by the Borrower under any
Loan Document and any other Person owed any Obligation.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York; provided, however, that, in the event that, by reason of
mandatory provisions of any applicable Regulation, any of the attachment,
perfection or priority of the Lender’s or any other Secured Party’s security
interest in any Collateral is governed by the Uniform Commercial Code of a
jurisdiction other than the State of New York, “UCC” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or priority and for
purposes of the definitions related to or otherwise used in such provisions.

 

(c)       The following terms have the meanings given to them in the UCC and
terms used herein without definition that are defined in the UCC have the
meanings given to them in the UCC (such meanings to be equally applicable to
both the singular and plural forms of the terms defined): “accounts,
“as-extracted collateral,” “deposit accounts,” “documents,” “equipment,” “farm
products,” “general intangibles,” “health-care-insurance receivable,”
“instruments,” “investment property,” “proceeds,” “record” and “securities’
accounts.”

 

Section 1.2         Certain Other Terms. (a) The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such
terms. The terms “herein,” “hereof” and similar terms refer to this Agreement as
a whole and not to any particular Article, Section or clause in this Agreement.
References herein to an Annex, Article, Section or clause refer to the
appropriate Annex to, or Article, Section or clause in this Agreement. Where the
context requires, provisions relating to any Collateral when used in relation to
the Borrower shall refer to the Borrower’s Collateral or any relevant part
thereof.

 

(b)       Section 8.16 (Interpretation) of the Loan Agreement is applicable to
this Agreement to the same extent it is applicable to the Loan Agreement.

 

Article II

Grant of Security Interest

 

Section 2.1         Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by the Borrower
or in which the Borrower now has or at any time in the future may acquire any
right, title or interests is collectively referred to as the “Collateral”:

 

(a)        the Collateral described on Schedule I of the Loan Agreement and all
other blockchain assets stored in the Borrower’s account in the Lender’s Wallet;

 

(b)       all other property of the debtor held by any Secured Party, including
all property of every description, in the custody of or in transit to such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of the debtor or as to which the debtor may have any right or power,
including but not limited to cash;

 

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(c)       all “accounts,” “deposit accounts,” “documents,” “general
intangibles,” “instruments,” “investment property” and “securities’ accounts” as
each of those terms is defined in the UCC, in each case solely to the extent
relating to, holding, containing or constituting the foregoing;

 

(d)       all books and records pertaining to the other property described in
this Section 2.1; and

 

(e)       to the extent not otherwise included, all “income” and rights to
receive such “income” (as defined in the UCC) of, replacements for,
substitutions of, products or proceeds of and distributions relating to or
constituting, any of the foregoing and all rights of Debtor to receive from any
third party any of the foregoing.

 

Section 2.2          Grant of Security Interest in Collateral. The Borrower, as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations of
the Borrower (the “Secured Obligations”), hereby mortgages, pledges and
hypothecates to the Lender for the benefit of the Secured Parties, and grants to
the Lender for the benefit of the Secured Parties a Lien on and security
interest in, all of its right, title and interest in, to and under the
Collateral of the Borrower.

 

Article III

Representations and Warranties

 

To induce the Lender to enter into the Loan Documents, the Borrower hereby
represents and warrants each of the following to the Lender and the other
Secured Parties:

 

Section 3.1        Title; No Other Liens. Except for the Lien granted to the
Lender pursuant to this Agreement or under any Loan Document (including
Section 3.2), the Borrower owns each item of the Collateral free and clear of
any and all Liens or claims of others. The Borrower (a) is the record and
beneficial owner of the Collateral pledged by it hereunder constituting
instruments or certificates and (b) has rights in or the power to transfer each
other item of Collateral in which a Lien is granted by it hereunder, free and
clear of any other Lien.

 

Section 3.2        Perfection and Priority. The security interest granted
pursuant to this Agreement constitutes a valid and continuing perfected
first-priority security interest in favor of the Lender in all Collateral
subject, for the following Collateral, to the occurrence of the following: (i)
in the case of all Collateral in which a security interest may be perfected by
filing a financing statement under the UCC, the completion of such filings,
which have been delivered to the Lender in completed and duly authorized form
and (ii) the execution of Control Agreements. Such security interest shall be
prior to all other Liens on the Collateral except as permitted by any Loan
Document upon the execution of Control Agreements as appropriate. Except as set
forth in this Section 3.2, all actions by the Borrower necessary or desirable to
protect and perfect the Lien granted hereunder on the Collateral have been duly
taken.

 

Section 3.3        Jurisdiction of Organization. The Borrower’s jurisdiction of
organization, legal name and organizational identification number, if any, as of
the date hereof, are as disclosed to the Lender prior to the date hereof.

 

Section 3.4         Collateral Delivery . As of the Closing Date, all Collateral
has been transferred to the Lender in accordance with Section 4.3. Upon the
occurrence and during the continuance of an Event of Default, the Lender shall
be entitled to exercise all of the rights of the Borrower in any Collateral, and
a transferee or assignee of such Collateral shall become a holder of such
Collateral to the same extent as the Borrower and be entitled to participate in
the management of the issuer of such Collateral and, upon the transfer of the
entire interest of the Borrower, the Borrower shall, by operation of law, cease
to be a holder or owner of such Collateral.

 

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Section 3.5         Specific Collateral. None of the Collateral is, or is
proceeds or products of, farm products, as-extracted collateral,
health-care-insurance receivables or timber to be cut.

 

Section 3.6        Enforcement. Except as set forth in the Intercreditor
Agreement, no Permit, notice to or filing with any Governmental Authority or any
other Person or any consent from any Person is required for the exercise by the
Lender of its rights (including voting rights) provided for in this Agreement or
the enforcement of remedies in respect of the Collateral pursuant to this
Agreement, including the transfer of any Collateral, except as may be required
in connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally or any approvals that
may be required to be obtained from any bailees or landlords to collect the
Collateral.

 

Article IV

Covenants

 

The Borrower agrees with the Lender to the following, as long as any Obligation
remains outstanding and, in each case, unless the Lender otherwise consents in
writing:

 

Section 4.1        Maintenance of Perfected Security Interest; Further
Documentation and Consents. (a) Generally. The Borrower shall (i) not use or
permit any Collateral to be used unlawfully or in violation of any provision of
any Loan Document, any Regulation or any policy of insurance covering the
Collateral and (ii) not enter into any agreement, obligation or undertaking
restricting the right or ability of the Borrower or the Lender to transfer any
Collateral.

 

(b)       The Borrower shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 3.2 and shall defend such security interest and such
priority against the claims and demands of all Persons.

 

(c)       In accordance with the Loan Agreement, the Borrower shall furnish to
the Lender from time to time such lists, schedules and other documents as may be
requested by the Lender further identifying and describing the Collateral and
such other documents in connection with the Collateral as the Lender may
reasonably request, all in reasonable detail and in form and substance
satisfactory to the Lender.

 

(d)       At any time and from time to time, upon the written request of the
Lender, the Borrower shall, for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, (i)
promptly and duly execute and deliver, and have recorded, such further
documents, including an authorization to file (or, as applicable, the filing) of
any financing statement or amendment under the UCC (or other filings under
similar Regulations) in effect in any jurisdiction with respect to the security
interest created hereby and (ii) take such further action as the Lender may
reasonably request, including executing and delivering any Control Agreements.

 

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Section 4.2        Changes in Locations, Name, Etc. Except upon 30 days’ prior
written notice to the Lender and delivery to the Lender of all documents
reasonably requested by the Lender to maintain the validity, perfection and
priority of the security interests provided for herein, the Borrower shall not
do any of the following:

 

(a)       change its jurisdiction of organization or its location; or

 

(b)       change its legal name or organizational identification number, if any,
or corporation, limited liability company, partnership or other organizational
structure to such an extent that any financing statement filed in connection
with this Agreement would become misleading.

 

Section 4.3         Control. The Borrower shall have transferred all Collateral
to the Lender and ensured that it is subject to a Control Agreement. During the
continuance of an Event of Default, the Lender shall have the right, at any time
in its discretion and without notice to the Borrower, to (a) execute any further
document to transfer to or to register in its name or in the name of its
nominees or transferees any Collateral and (b) exchange any item representing or
evidencing any Collateral for items of smaller or larger denominations. The
Lender shall be entitled to receive all distributions paid or made in respect of
the Collateral (including with respect to the creation of any fork). The
Borrower shall not grant “control” (within the meaning of such term under
Article 9-106 of the UCC) over any Collateral to any Person other than the
Lender.

 

Article V

Remedial Provisions

 

Section 5.1         Code and Other Remedies. (a) UCC Remedies. During the
continuance of an Event of Default, the Lender may exercise, in addition to all
other rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any Secured
Obligation, all rights and remedies of a secured party under the UCC or any
other applicable Regulation.

 

(b)       Disposition of Collateral. Without limiting the generality of the
foregoing, the Lender may, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Borrower or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), during the continuance of any Event of Default (personally or through
its agents or attorneys), (i) collect, receive, appropriate and realize upon any
Collateral and (ii) transfer, grant option or options to purchase and deliver
any Collateral (enter into any agreement, commitment or other obligation to do
any of the foregoing), in one or more portions at public or private sale or
sales, at any exchange or office of any Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Lender shall have the right, upon any such public sale or sales
and, to the extent permitted by the UCC and other applicable Regulations, upon
any such private sale, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption of the Borrower, which right or
equity is hereby waived and released. The Borrower acknowledges and agrees that
(i) the Collateral is an asset of a nature that threatens to decline speedily in
value and is of a type customarily sold on a recognized market (and that the
exchanges available to sell the Collateral are recognized markets), (ii) that
the Collateral is also the subject to widely distributed price quotations, such
as the Valuation Index, and (iii) as a result thereof the Lender is not required
to give the Borrower any notification of such sale or sales under the UCC and
that, given the volatility of the price, the best way to sell it is as quickly
as possible in a private sale without prior notice. The Borrower understands and
agrees that (w) the value of the Collateral is highly volatile so that, if the
LTV Ratio of any Loan equals or exceeds the Liquidation Percentage for such Loan
or if any other Event of Default occurs, the Lender may sell all Collateral of
the Borrower held by the Lender immediately and without prior notice to the
Borrower, (x) any transfer of Collateral, either to or from the Borrower or
other parties, results in transfer fees (such as mining fees, etc.) and that
such transfer fees are the responsibility of the Borrower and are typically
deducted directly from such Collateral and reduce its value, so that, even if
the Borrower pays all Obligations in full in cash, the Collateral returned to
the Borrower shall be reduced by such transfer fees, (y) it may not be possible
to sell at the price shown in the Valuation Index at the time of the sale due to
market conditions and to the time necessary to complete all steps to sell the
Collateral and (z) the Lender will use its judgment to make choices to obtain
what it feels is the best price for the Collateral to get the Obligations repaid
and these choices will not necessarily reflect the choices the Borrower would
have made to obtain the best value for the Collateral as a whole.

 

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(c)       Management of the Collateral. The Borrower further agrees, that,
during the continuance of any Event of Default, (i) to the extent the Collateral
is in the possession of the Borrower or any of its Related Parties, the Lender
also has the right to require that the Borrower provide such guards and
maintenance services as shall be necessary to protect the Collateral and to
preserve and maintain such Collateral in good condition, (ii) until the Lender
is able to transfer any Collateral, the Lender shall have the right to hold or
use such Collateral to the extent that it deems appropriate for the purpose of
preserving the Collateral or its value or for any other purpose deemed
appropriate by the Lender and (iii) the Lender may, if it so elects, seek the
appointment of a receiver or keeper to take possession of any Collateral and to
enforce any of the Lender's remedies (for the benefit of the Secured Parties),
with respect to such appointment without prior notice or hearing as to such
appointment. The Borrower hereby consents to such rights and such appointment
and hereby waives any objection the Borrower may have thereto or the right to
have a bond or other security posted by the Lender in connection therewith. The
Lender shall not have any obligation to the Borrower to maintain or preserve the
rights of the Borrower as against third parties with respect to any Collateral
while such Collateral is in the possession of the Lender.

 

(d)       Application of Proceeds. The Lender shall apply the cash proceeds of
any action taken by it pursuant to this Section 5.1, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any Collateral or in any way relating
to the Collateral or the rights of the Lender and any other Secured Party
hereunder, including reasonable attorneys’ fees and disbursements and any
transfer or mining fees relating to the transfer of any Collateral, to the
payment in whole or in part of the Secured Obligations, as set forth in the Loan
Agreement, and only after such application and after the payment by the Lender
of any other amount required by any Regulation, need the Lender account for the
surplus, if any, to the Borrower.

 

(e)       Direct Obligation. Neither the Lender nor any other Secured Party
shall be required to make any demand upon, or pursue or exhaust any right or
remedy against, the Borrower or any other Person with respect to the payment of
the Obligations or to pursue or exhaust any right or remedy with respect to any
Collateral therefor or any direct or indirect guaranty thereof. All of the
rights and remedies of the Lender and any other Secured Party under any Loan
Document shall be cumulative, may be exercised individually or concurrently and
not exclusive of any other rights or remedies provided by any Regulation. To the
extent it may lawfully do so, the Borrower absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert against
the Lender, any valuation, stay, appraisement, extension, redemption or similar
laws and any and all rights or defenses it may have as a surety, now or
hereafter existing, arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of any Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.

 

(f)        Commercially Reasonable. To the extent that applicable Regulations
impose duties on the Lender to exercise remedies in a commercially reasonable
manner, the Borrower acknowledges and agrees that it is not commercially
unreasonable for the Lender to do any of the following: 

 

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(i)        fail to incur significant costs, expenses or other Liabilities
reasonably deemed as such by the Lender to transfer the Collateral to an
exchange or otherwise prepare any Collateral for disposition;

 

(ii)       fail to obtain Permits, or other consents to dispose of, or for the
collection of, any Collateral, or, if not required by other Regulations, fail to
obtain Permits or other consents for the collection or disposition of any
Collateral;

 

(iii)      fail to remove Liens on any Collateral or to remove any adverse
claims against any Collateral;

 

(iv)      advertise or fail to advertise dispositions of any Collateral through
publications or media of general circulation, whether or not such Collateral is
of a specialized nature or to contact other Persons, whether or not in the same
business as the Borrower, for expressions of interest in acquiring any such
Collateral;

 

(v)       exercise collection remedies against other Persons obligated on any
Collateral, directly or through the use of collection agencies or other
collection specialists, hire one or more professional auctioneers to assist in
the disposition of any Collateral, whether or not such Collateral is of a
specialized nature or, to the extent deemed appropriate by the Lender, obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Lender in the collection or disposition of any
Collateral, or utilize Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets to dispose of any
Collateral;

 

(vi)     dispose of assets in private sales instead of through exchanges or in
wholesale rather than retail markets;

 

(vii)    disclaim disposition warranties, such as title, possession or quiet
enjoyment; or

 

(viii)   purchase insurance or credit enhancements to insure the Lender against
risks of loss, collection or disposition of any Collateral or to provide to the
Lender a guaranteed return from the collection or disposition of any Collateral.

 

The Borrower acknowledges that the purpose of this Section 5.1 is to provide a
non-exhaustive list of actions or omissions that are commercially reasonable
when exercising remedies against any Collateral and that other actions or
omissions by the Secured Parties shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 5.1. Without limitation
upon the foregoing, nothing contained in this Section 5.1 shall be construed to
grant any rights to the Borrower or to impose any duties on the Lender that
would not have been granted or imposed by this Agreement or by applicable
Regulations in the absence of this Section 5.1. The Borrower understands and
agrees that the value of the Collateral is highly volatile so that, if the LTV
Ratio of any Loan equals or exceeds the Liquidation Percentage for such Loan or
if any other Event of Default occurs, the Lender may sell all Collateral of the
Borrower held by the Lender immediately and without prior notice to the
Borrower.

 

Section 5.2        Rights to Collateral. Upon the occurrence and continuance of
any an Event of Default, taking into account the associated cure period
pertinent thereto:

 

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(a)       Voting Rights. Until the return of the Collateral to the Borrower, the
Lender or its nominee may exercise directly any right pertaining to the
Collateral as the owner of the Collateral, including any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Collateral as if it were the absolute owner thereof and including the right
to exchange at its discretion any Collateral upon any event requiring such
exchange and the right to deposit and deliver any Collateral with any exchange,
transfer agent committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Lender may determine,
all without liability except to account for property actually received by it;
provided, however, that the Lender shall have no duty to the Borrower to
exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.

 

(b)       Proxies. In order to permit the Lender to exercise the rights that it
may be entitled to exercise pursuant hereto and to receive all distributions
that it may be entitled to receive hereunder, (i) the Borrower shall promptly
execute and deliver (or cause to be executed and delivered) to the Lender all
such proxies, payment orders, evidences of transfer and other instruments as the
Lender may from time to time reasonably request and (ii) without limiting the
effect of clause (i) above, the Borrower hereby grants to the Lender an
irrevocable proxy to exercise all other rights, powers, privileges and remedies
to which a holder of the Collateral would be entitled, which proxy shall be
effective, automatically and without the necessity of any action (including any
transfer of any Collateral on the applicable blockchain) by any other person and
which proxy shall only terminate upon the payment in full of the Secured
Obligations.

 

(c)       Authorization of Issuers. The Borrower hereby expressly irrevocably
authorizes and instructs, without any further instructions from the Borrower,
each other Person to (i) comply with any instruction received by it from the
Lender in writing that states that an Event of Default is continuing and is
otherwise in accordance with the terms of this Agreement and the Borrower agrees
that such issuer shall be fully protected from Liabilities to the Borrower in so
complying and (ii) unless otherwise expressly permitted hereby, make any payment
or distribution with respect to the Collateral directly to the Lender.

 

Section 5.3        Proceeds to be Turned over to and Held by Lender. Unless
otherwise expressly provided in the Loan Agreement or this Agreement, all
proceeds of any Collateral received by the Borrower hereunder in Dollars,
certificates of deposit, bankers’ acceptances, time and demand deposits and
other similar cash equivalents shall be held by the Borrower in trust for the
Lender and the other Secured Parties, segregated from other funds of the
Borrower, and shall, promptly upon receipt by the Borrower, be turned over to
the Lender in the exact form received (with any necessary endorsement). All such
proceeds and other proceeds being held by the Lender (or by the Borrower in
trust for the Lender) shall continue to be held as collateral security for the
Secured Obligations and shall not constitute payment thereof until applied as
provided in the Loan Agreement.

 

Section 5.4        Deficiency. The Borrower shall remain liable for any
deficiency if the proceeds of any sale or other disposition of any Collateral
are insufficient to pay the Secured Obligations and the fees and disbursements
of any attorney employed by the Lender or any other Secured Party to collect
such deficiency.

 

Article VI

The Lender

 

Section 6.1        Lender’s Appointment as Attorney-in-Fact. (a) The Borrower
hereby irrevocably constitutes and appoints the Lender with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in its own name, for the purpose of carrying out the terms of
the Loan Documents, to take any appropriate action and to execute any document
or instrument that may be necessary or desirable to accomplish the purposes of
the Loan Documents, and, without limiting the generality of the foregoing, the
Borrower hereby gives the Lender the power and right, on behalf of the Borrower,
without notice to or assent by the Borrower, to do any of the following when an
Event of Default shall be continuing:

 

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(i)        pay or discharge taxes and Liens levied or placed on or threatened
against any Collateral, effect any repair or pay any insurance called for by the
terms of the Loan Agreement (including all or any part of the premiums therefor
and the costs thereof);

 

(ii)       execute, in connection with any sale provided for in Section 5.1, any
document to effect or otherwise necessary or appropriate in relation to evidence
the transfer of any Collateral; or

 

(iii)      (A) direct any party liable for any payment under any Collateral to
make payment of any moneys due or to become due thereunder directly to the
Lender or as the Lender shall direct, (B) ask or demand for, and collect and
receive payment of and receipt for, any moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral, (C)
sign and indorse any receipt, assignment, verification, notice and other
document in connection with any Collateral, (D) commence and prosecute any suit,
action or proceeding at law or in equity in any court of competent jurisdiction
to collect any Collateral and to enforce any other right in respect of any
Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands,
orders or disputes brought against the Borrower with respect to any Collateral,
(F) settle, compromise or adjust any such actions, suits, proceedings, audits,
claims, demands, orders or disputes and, in connection therewith, give such
discharges or releases as the Lender may deem appropriate and (G) generally,
transfer, grant a Lien on, enter into any agreement or other obligation with
respect to and otherwise deal with, any Collateral as fully and completely as
though the Lender were the absolute owner thereof for all purposes and do, at
the Lender’s option, at any time or from time to time, all acts and things that
the Lender deems necessary to protect, preserve or realize upon any Collateral
and the Secured Parties’ security interests therein and to effect the intent of
the Loan Documents, all as fully and effectively as the Borrower might do.

 

(b)       If the Borrower fails to perform or comply with any obligation
contained herein, the Lender, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such obligation.

 

(c)       The expenses of the Lender incurred in connection with actions
undertaken as provided in this Section 6.1, together with interest thereon at
the rate set forth in Section 2.2 (Interest) of the Loan Agreement, from the
date of payment by the Lender to the date reimbursed by the relevant Borrower,
shall be payable by the Borrower to the Lender on demand.

 

(d)       The Borrower hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue of this Section 6.1. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.

 

Section 6.2        Authorization to File Financing Statements. The Borrower
authorizes, subject to any contrary provision in the Intercreditor Agreement (if
any), the Lender and its agents, contractors and Affiliates, at any time and
from time to time, to file or record financing statements, amendments thereto,
and other filing or recording documents or instruments with respect to any
Collateral in such form and in such offices as the Lender reasonably determines
appropriate to perfect the security interests of the Lender under this
Agreement, and such financing statements and amendments may described the
Collateral covered thereby as “all assets of the debtor.” A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction. The Borrower also hereby ratifies its
authorization for the Lender to have filed any initial financing statement or
amendment thereto under the UCC (or other similar laws) in effect in any
jurisdiction if filed prior to the date hereof.

 

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Section 6.3        Authority of Lender. The Borrower acknowledges that the
rights and responsibilities of the Lender under this Agreement with respect to
any action taken by the Lender or the exercise or non-exercise by the Lender of
any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between the
Lender and the other Secured Parties, be governed by the Loan Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Lender and the Borrower, the Lender shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Borrower shall be
under any obligation or entitlement to make any inquiry respecting such
authority.

 

Section 6.4        Duty of Lender. The Lender shall be considered the owner of
the Collateral until transferred back to the Borrower. The Lender’s sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession shall be to deal with it in the same manner as the
Lender deals with similar property for its own account. The powers conferred on
the Lender hereunder are solely to protect the Lender’s interest in the
Collateral and shall not impose any duty upon the Lender to exercise any such
powers. The Lender shall be accountable only for amounts that it receives as a
result of the exercise of such powers, and neither it nor any of its Affiliates
shall be responsible to the Borrower for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. In addition, the Lender shall
not be liable or responsible for any loss or damage to any Collateral, or for
any diminution in the value thereof, by reason of the act or omission of any
warehousemen, carrier, forwarding agency, consignee or other bailee if such
Person has been selected by the Lender in good faith.

 

Section 6.5         Obligations and Liabilities with respect to Collateral.
Except for the obligation of the Lender to return the Collateral (less any
applicable transfer fees) set forth above after the Lender shall be fully
satisfied that all Secured Obligations shall have been irredeemably paid in full
in cash (and all Commitments shall have been terminated), no Secured Party and
no Affiliate thereof shall be liable for failure to transfer any Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Borrower or any other Person
or to take any other action whatsoever with regard to any Collateral. The powers
conferred on the Lender hereunder shall not impose any duty upon any other
Secured Party to exercise any such powers. The other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their respective officers,
directors, employees or agents shall be responsible to the Borrower for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. In
addition, the Borrower understands and agrees that certain events (including
forks) may add assets to the Collateral (or otherwise transform part of the
Collateral) so as to make it technologically difficult or impossible for the
Lender to transfer all or part of the Collateral back to the Borrower. The
Borrower agrees that all Losses to the Borrower, its Affiliates or other Persons
from such event shall constitute an “Indemnified Claim” under the Loan Agreement
for which the liability of the Lender and its Related Parties is limited
thereunder.

 

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Article VII

 
Miscellaneous

 

Section 7.1        Reinstatement. The Borrower agrees that, if any payment made
by the Borrower or other Person and applied to the Secured Obligations is at any
time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of any Collateral are required to be returned by any Secured Party
to the Borrower, its estate, trustee, receiver or any other party, including the
Borrower, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, any Lien or
other Collateral securing such liability shall be and remain in full force and
effect, as fully as if such payment had never been made. If, prior to any of the
foregoing, any Lien or other Collateral securing the Borrower’s liability
hereunder shall have been released or terminated by virtue of the foregoing or
(b) any other provision of this Agreement shall have been terminated, cancelled
or surrendered, such Lien, other Collateral or provision shall be reinstated in
full force and effect and such prior release, termination, cancellation or
surrender shall not diminish, release, discharge, impair or otherwise affect the
obligations of any the Borrower in respect of any Lien or other Collateral
securing such obligation or the amount of such payment.

 

Section 7.2        No Waiver by Course of Conduct. No Secured Party shall by any
act (except by a written instrument pursuant to Section 7.4), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of any Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that such
Secured Party would otherwise have on any future occasion.

 

Section 7.3        Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 8.1 of the Loan Agreement.

 

Section 7.4        Notices. All notices, requests and demands to or upon the
Lender or the Borrower hereunder shall be effected in the manner provided for in
Section 8.2 of the Loan Agreement; provided, however, that any such notice,
request or demand to or upon the Borrower shall be addressed to the Borrower’s
notice address set forth in such Section 8.2.

 

Section 7.5        Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of the Borrower and shall inure to the benefit of
each Secured Party and their successors and assigns; provided, however, that the
Borrower may not assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Lender.

 

Section 7.6         Counterparts. This Agreement may be executed in any number
of counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
facsimile transmission or by e-mail shall be as effective as delivery of a
manually executed counterpart hereof.

 

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Section 7.7        Severability. Any provision of this Agreement being held
illegal, invalid or unenforceable in any jurisdiction shall not affect any part
of such provision not held illegal, invalid or unenforceable, any other
provision of this Agreement or any part of such provision in any other
jurisdiction.

 

Section 7.8         Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed, interpreted, and
enforced in accordance with, the law of the State of New York.

 

Section 7.9       Waiver of Jury Trial. Each party hereto hereby irrevocably
waives trial by jury in any suit, action or proceeding with respect to, or
directly or indirectly arising out of, under or in connection with, any Loan
Document or the transactions contemplated therein or related thereto (whether
founded in contract, tort or any other theory). Each party hereto (A) certifies
that no other party and no Affiliate or agent 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 the other parties hereto have been induced to enter into this
agreement by the mutual waivers and certifications in this Section 7.9.

 

[Signature Pages Follow]

 

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In witness whereof, each of the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.

 

  

 

 

 SUPER CRYPTO MINING, INC.   as Borrower and grantor  

 

 

 By:/s/ Darren Magot     Name: Darren Magot     Title: Chief Executive Officer  

 

 

 

 

 

Accepted and Agreed
as of the date first above written:

 

ALPPS LLC

 as Lender        By:s/ Gennadiy Gurevich    Name: Gennadiy Gurevich    Title:
Chief Investment Officer  

  

 

 

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