SECURITY AGREEMENT
Debtor:
 
Secured Party:
     
Blackboxstocks Inc.
 
Pepperwood Capital Partners, LLC
5430 LBJ Freeway,
 
1909 Woodall Rogers
Suite 1485
 
Suite 590
Dallas, Texas 75240
 
Dallas, Texas 75201

THIS SECURITY AGREEMENT (this "Agreement") is entered into this 29th day of
April, 2016, by and between Blackboxstocks Inc., a Nevada corporation with its
principal place of business located at the address set forth above ("Debtor"),
and Pepperwood Capital Partners, LLC, a Texas limited liability company
("Secured Party"). Concurrently herewith, Debtor has executed a Secured
Promissory Note of even date herewith (the "Secured Promissory Note"), in the
original principal amount of $50,000.00.
1. Security Interest and Indebtedness. Debtor hereby pledges and assigns to the
Secured Party, and grants to the Secured Party a continuing lien on and security
interest in, all of the Debtor's right, title and interest in, to and under all
the Debtor's assets and personal property, whether now or hereafter existing or
presently owned or hereafter acquired or arising and wherever located, of every
kind and description, tangible or intangible (collectively, the "Collateral"),
including, without limitation, all general intangibles, accounts, chattel paper,
deposit accounts, documents, equipment, fixtures, goods, instruments, inventory,
investment property, letter-of-credit rights and any commercial tort claims
hereafter identified by the Debtor in any authenticated record delivered to the
Secured Party, and all supporting obligations, products, proceeds, offspring,
accessions, rents, profits, income, benefits, substitutions and replacements of
or arising from or relating to any of the foregoing and all books,
correspondence, files and other records, including, without limitation, all
tapes, desks, cards, software, data and computer programs in the possession or
under the control of the Debtor or any person from time to time acting for the
Debtor, in each case, to the extent of the Debtor's rights therein, that at any
time evidence or contain information relating to any of the foregoing or are
otherwise necessary or helpful in the collection or realization thereof, in each
case howsoever the Debtor's interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).  The security interest
created hereby in the Collateral constitutes continuing collateral security for
all of the following obligations (collectively, referred to herein as
"Indebtedness," whether now existing or hereafter incurred, whether arising
before or after any filing of a petition in bankruptcy or the commencement of
any insolvency proceeding and including all interest accrued after any such
filing or commencement): (a) the payment by the Debtor, as and when due and
payable (by scheduled maturity, required prepayment, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect of the
Secured Promissory Note; and (b) the due and prompt and full payment,
performance and observance by the Debtor of (i) all indebtedness, obligations
and liabilities that the Debtor may at any time now or hereafter owe to the
Secured Party, whether direct or indirect, absolute or contingent, whether on
open accounts or otherwise, (ii) all liabilities and/or amounts that the Secured
Party may now or hereafter incur or pay or advance at any time in connection
with the Secured Promissory Note, or any other loan documents, including for
taxes, levies, insurance, repairs, maintenance or other protection with respect
to the Collateral, and (iii) all costs and expenses that the Secured Party may
incur in enforcing or protecting its rights under the Secured Promissory Note,
including with respect to the Collateral or the indebtedness secured by the
Collateral, including attorneys' fees.
 
 
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2. Representations and Warranties. Debtor represents and warrants to Secured
Party that (a) Exhibit A hereto correctly identifies Debtor's legal name, type
of organization, state of organization, and, if required for the financing
statement, state organizational number and/or federal tax identification number;
(b) Debtor has the right to grant a security interest in the Collateral; (c)
there are no effective liens, security interests or encumbrances against the
Collateral except as described on Exhibit B hereto; (d) Debtor is legally formed
and validly existing; (e) the execution and performance of this Agreement have
been authorized by all necessary corporate, shareholder, membership and/or
partnership action and do not violate any provision of Debtor's organizational
documents or applicable law; and (f) the Indebtedness is incurred only for, and
the Collateral is to be used only for, commercial purposes and not for personal,
family or household purposes.
3. Debtor's Covenants. Until the Indebtedness has been paid in full, Debtor
shall (i) keep the Collateral free from any other effective lien; (ii) promptly
advise Secured Party of any event or circumstance which can reasonably be
expected to have a material adverse effect on the Collateral; (iii) to the
extent not being contested in the Debtor's good faith, pay when due all taxes
and similar obligations that might result in a lien on the Collateral if not
paid; and (iv) execute additional documents and take such other actions (at
Debtor's expense) as Secured Party may reasonably request from time to time to
implement or evidence the terms of this Agreement.
4. Perfection and Protection of Collateral. Debtor hereby authorizes Secured
Party to file financing statements in all applicable filing offices (a)
indicating the Collateral (i) as all accounts of the Debtor or words of similar
effect, or (ii) as being of an equal or lesser scope or with greater detail, and
(b) contain any other information required by part 5 of Article 9 of the UCC
(hereinafter defined). Debtor shall execute, obtain, deliver and (if applicable)
file or record all financing statements, correction statements and notices, and
use Commercially Reasonable Efforts to obtain consents, control agreements,
landlords' waivers, acknowledgments and other documents, and take all other
actions that Secured Party may deem necessary or advisable to perfect or protect
Secured Party's security interest in the Collateral against the interests of
third parties. Debtor agrees to pay, on demand, all costs, taxes and fees
payable in connection with any such filings, recordings, notices or other
actions. Debtor shall give Secured Party written notice on or before ninety (90)
days after changing its name or structure, or state of organization, and in each
case shall (at Debtor's expense) promptly take all steps necessary or advisable
to preserve continuously the perfection and priority of Secured Party's security
interests in the Collateral.
5. Events of Default; Remedies. "Event of Default" shall have the meaning given
to it in the Secured Promissory Note.  Upon the continuance of any Event of
Default, and at any time thereafter, at Secured Party's option, the Indebtedness
shall become immediately due and payable (with interest thereon from the date of
demand as provided in the Secured Promissory Note) without presentment or demand
or any notice to Debtor or any other person obligated thereon, and Secured Party
shall be entitled to exercise any or all of the rights and remedies available at
law or in equity, including the rights and remedies of a secured party under the
Uniform Commercial Code as in effect on the date hereof in the State of Texas
(the "UCC"). These remedies include the right and power to take possession of
the Collateral, wherever it may be found, or otherwise collect, enforce, dispose
of or use all or any portion of the Collateral in any manner authorized or
permitted under the UCC, in such order or manner as Secured Party may elect in
his sole discretion.
 
 
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6. General Authority. Secured Party shall be under no obligation or duty to
exercise any of the powers hereby conferred upon Secured Party, and shall have
no liability for any act or failure to act in connection with any of the
Collateral (including any diminution in the value of the Collateral from any
cause whatsoever). Secured Party shall be under no duty to collect any amount
that may be or become due on any of the Collateral, to redeem or realize on the
Collateral, to make any presentments, demands or notices of protest in
connection with any of the Collateral, to take any steps necessary to preserve
rights in any instrument, contract or lease against third parties or to preserve
rights against prior parties, to remove any liens or to do anything for the
enforcement, collection or protection of the Collateral, except to the extent,
if any, that the UCC requires Secured Party to use reasonable care with respect
to the Collateral while in his possession.
7. Debtor Waivers. Except as expressly provided herein, and to the fullest
extent permitted by law, Debtor hereby waives presentment, demand and protest
and notice of presentment, protest, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any or all accounts, contract
rights, documents, instruments, general intangibles, chattel paper and
guaranties at any time held by Secured Party on which Debtor may in any way be
liable and hereby ratifies and confirms whatever Secured Party may do in this
regard; notice prior to taking possession or control of the Collateral or any
bond or security that might be required by any court before allowing Secured
Party to exercise any of Secured Party's remedies, and any right to require
Secured Party to prepare the Collateral for sale; any marshalling of assets, or
any right to compel Secured Party to resort first or in any particular order to
any other collateral or other persons before enforcing his rights as to the
Collateral or pursuing Debtor for payment of the Indebtedness; the benefit of
all valuation, appraisement and exemption laws; and any claims and defenses
based on principles of suretyship or impairment of collateral.
8. General Provisions.
(a) Notices. All notices and communications required under this Agreement shall
be communicated as provided for in the Secured Promissory Note.
(b) Successors and Assigns. Debtor shall not assign its rights or delegate its
duties under this Agreement. Debtor's covenants and agreements herein shall bind
Debtor's successors and assigns, and those who become bound to this Agreement,
and shall inure to the benefit of Secured Party and his successors and assigns.
Secured Party may assign the Indebtedness to one or more assignees on such terms
and conditions as Secured Party shall deem advisable. As to any such assignee,
Debtor waives and will not assert any claims, setoffs, recoupments or defenses
that Debtor may have against Secured Party.
 
 
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(c) Amendments and Waivers. This Agreement may not be modified or amended except
in writing signed by Debtor and Secured Party, and none of its provisions may be
waived except in writing signed by Secured Party. No waivers shall be implied,
whether from any custom or course of dealing or any delay or failure in Secured
Party's exercise of his rights and remedies hereunder or otherwise. Any waiver
granted by Secured Party shall not obligate Secured Party to grant any further,
similar, or other waivers.
(d) Remedies. All remedies provided to Secured Party herein are cumulative, in
addition to all other remedies available to Secured Party under this Agreement
or any other agreement, at law or in equity or otherwise, and the exercise or
partial exercise of any such right or remedy shall not preclude the exercise of
any other right or remedy.
(e) Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Texas (without regard to its rules on
conflicts of laws).
(f) Usury. The parties intend that the interest charged, paid or collected
hereunder or on the Indebtedness shall not in any event exceed the maximum
permissible rate under applicable law. Any excess interest will be applied to
reduce the principal amount of the Indebtedness or repaid to Debtor.
(g) Defined Terms; UCC Terms. In addition to other words and terms defined in
this Agreement (including the Exhibits), the following terms have the following
meanings herein, unless the context expressly requires otherwise. The term
"business day" means any day other than a Saturday, Sunday or day on which
commercial banks are authorized to close under the laws of the State of Texas.
The term "Commercially Reasonable Efforts" means efforts that are commercially
reasonable but in no event require the making of material payments or material
concessions in exchange for such consent. The term "Loan Documents" means any
agreement evidencing or securing any Indebtedness. The term "person" means any
individual, corporation, partnership, joint venture, association, limited
liability company, joint stock company, trust, unincorporated organization,
government (or any agency or political subdivision thereof) or any other form of
entity. The terms "includes" and "including" and words of similar import are
inclusive and not exclusive terms, and are not intended to create any
limitation. All defined terms apply to both singular and plural forms, and all
references to any gender include all other genders. Terms used in this Agreement
that are defined in Article 9 of the UCC (as in effect on the date hereof) shall
have the same meanings herein. If Debtor is a partnership or an unincorporated
association of more than one person, the term "Debtor" refers to each partner
and/or each such person, jointly, severally and individually. All defined terms
and references as to any agreements, notes, instruments, certificates or other
documents shall be deemed to refer to such documents as they may from time to
time be amended, modified, renewed, extended, replaced, restated, supplemented
or substituted. Unless otherwise provided, all references to statutes and
related regulations shall include any amendments thereof and any successor
statutes and regulations.
(h) Captions; Exhibits; Severability. The captions in this Agreement are for
convenience only, and in no way limit or amplify the provisions hereof. All
Exhibits and Schedules attached hereto are by reference made a part hereof, and
this Agreement governs in case of any conflict. This Agreement is severable, and
the invalidity of any provision shall not affect any other provision hereof.
 
 
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9. Entire Agreement. This Agreement represents the entire agreement between
Secured Party and Debtor with respect to the subject matter hereof, superseding
any and all other agreements, promises or representations.
[Signature Page Follows]
 
 
 
 
 
 

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ENTERED INTO as of the date first written above.
 
Debtor:
Secured Party:
   
Blackboxstocks Inc.
Pepperwood Capital Partners, LLC
           
By:  ___________________________
By:  ________________________________
Gust C. Kepler
Name: ______________________________
President
Title: _______________________________

 

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EXHIBIT A
DEBTOR INFORMATION
Debtor's Legal Name and Address:
 
Blackboxstocks Inc.
5430 LBJ Freeway, Suite 1485
Dallas, Texas 75240
   
Debtor's Form of Entity:
Corporation
   
Debtor's State of Organization:
Nevada
   
Debtor's State Entity Number:
E0547532011-0
   
Federal Tax Identification Number:
45-3598066

 

 

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EXHIBIT B
EXISTING LIENS AGAINST THE COLLATERAL

 
 
 

 
 

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