Exhibit 10.3

--------------------------------------------------------------------------------

 
GUARANTEE AND SECURITY AGREEMENT
 
This Guarantee and Security Agreement (this "Security Agreement") is entered
into effective as of February 21, 2020 (the “Effective Date”), by and among Mr.
Mark Bell, individuals residing in Oakley, Idaho (each a “Secured Party” and
collectively, the “Secured Parties”), A4 Construction Services, Inc., a Delaware
corporation (“Alpine 4 CS CS”), and Excel Fabrication, LLC., an Idaho Limited
Liability Company (the “Company”).  The Secured Parties, and the Company, and
Alpine 4 CS are sometimes referred to hereafter individually as a “Party” and
collectively as the “Parties.”
 
RECITALS

A.
Alpine 4 CS, the Secured Parties, and the Company entered into a Stock Purchase
Agreement of even or near date herewith (the “SPA”), pursuant to which Alpine 4
CS  purchased from the Secured Parties 100% of the issued and outstanding shares
of stock of the Company and related entities (the “Purchased Shares”).

B.
As partial payment for the Purchased Shares, Company made and conveyed to the
Secured Parties one (1) Secured Promissory Notes (each a “Note” and
collectively, the “Notes”) of even or near date herewith, pursuant to which,
Alpine 4 CS agreed to pay to the Secured Parties an aggregate of $2,300,000, on
terms set forth in the Notes, as consideration for the Purchased Shares.

C.
In recognition of, and to provide collateral to secure Company’s obligations
under the Notes, the Company agrees to enter into this Security Agreement
pursuant to which the Company will grant to Secured Parties a subordinated
security interest in the Collateral described below outlined in Exhibit E in the
SPA with a Subordination Agreement.

D.
At the request of Alpine 4 CS, Secured Parties agree to allow Alpine 4 CS to
change Senior Lenders and agree to execute new Subordination Agreements as
represented in Exhibit E at Alpine 4 CS’s request.

E.
Alpine 4 CS hereby agrees to guarantee the obligations of the Company in respect
of the payment obligations under the Notes.

 
AGREEMENT

 NOW, THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company, Secured Parties, and Alpine 4 CS hereby agree as
follows:
 
 1. Definition’s and Interpretation.  When used in this Security Agreement, the
following terms have the following respective meanings:
 
 “Company Collateral” shall mean the present and future assets of the Company,
including, without limitation, the equipment, accounts receivable, tools, parts,
inventory, and commingled goods relating to the foregoing property, customer
accounts, intellectual property, and investment property all whether now
existing or hereafter arising, whether now owned or hereafter acquired or
whether now or hereafter subject to any rights in the foregoing property, and
any and all accessions thereto, replacements or modifications thereof, and all
of the products and proceeds (whether cash or non-cash proceeds) from any of the
foregoing, including, without limitation, insurance payments or proceeds of any
policy of insurance relating thereto from any of the assets of the Company.

--------------------------------------------------------------------------------

 “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.
 
 “Obligations” shall be as defined in Section 2(a).
 
“Permitted Encumbrances” has the meaning specified therefor in the SPA.
 
 “Person” shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited liability
company, an unincorporated association, a joint venture or other entity or a
governmental authority.
 
“Senior Lender” shall mean the bank or other financing entity of Company
 
“Senior Security Interest” shall mean the security interest in the Collateral
granted to the Senior Lender which is senior to the security interest granted to
the Secured Parties hereunder as in Exhibit E in the SPA.

Except as otherwise provided herein or defined in the Notes, all other terms
used in this Security Agreement shall have the meanings given under Chapter 9.1
of the Indiana Uniform Commercial Code, or in any other article if not defined
in Chapter 9.1.

2. Guarantee.
 
a.  Alpine 4 CS hereby guarantees to the Secured Parties (i) all indebtedness,
obligations and liabilities (including, without limitation, indemnities, fees,
expenses) of the Company to the Secured Parties arising out of or in connection
with the Notes and this Security Agreement (collectively, the “Obligations”).
Upon the occurrence of an Event of Default as defined herein, Alpine 4 CS and
the Company, pursuant to the Notes which remains uncured pursuant to any
applicable cure periods or means, Alpine 4 CS shall have the obligation to make
any payment not made by the Company, until such time as the Company shall resume
making such payments. Additionally, if the Company does not pay any and all
amounts still owing at or before the Maturity Date of the Notes, then Alpine 4
CS shall have the obligation to pay all amounts due and payable under the Notes,
pursuant to the terms of the Notes.
 
b.  If any or all payments made from time to time to Secured Parties with
respect to any Obligations hereby guaranteed are recovered from, or repaid by,
Secured Parties in whole or in part in any bankruptcy, reorganization,
insolvency or similar proceeding instituted by or against Company, this Guaranty
shall continue to be fully applicable to such Obligations to the same extent as
if the recovered or repaid payment(s) had never been originally made on such
Obligations.
 
c.  Each of Alpine 4 CS and the Company represents, warrants, and agrees that
(i) such Party has legal capacity and full power and authority to enter into
this Security Agreement; (ii) this Security Agreement has been duly executed and
delivered by such Party; (iii) this Security Agreement constitutes such Party’s
legal, valid, and binding obligations which are enforceable in accordance with
its terms; and (iv) the execution of this Security Agreement and the
consummation of the transactions contemplated herein and the fulfillment of the
terms hereof will not conflict with, or result in a breach of any term of, or
constitute a default under any note, mortgage, indenture, or other agreement or
instrument by which such Party is bound, or by any law, order, rule, regulation,
writ, or injunction of any governmental body having jurisdiction over such Party
or any of its properties, assets, or rights.

--------------------------------------------------------------------------------

 
d.  Any and all rights of any nature of the Company to subrogation,
reimbursement, or indemnity, and any rights of the Company to recourse to any
assets or property of Alpine 4 CS, for any reason, shall be unconditionally
subordinated to all of Secured Parties’ rights, and the Company shall not at any
time exercise any of such rights unless and until all the Obligations have been
unconditionally paid in full.
 
e.  The Guaranty is and shall be absolute, unconditional and continuing and
shall remain in force until all amounts due to Secured Parties under the Notes
are paid in-full.
 
3. Grant of Security Interest.
 
a. As security for the Obligations and continuing so long as any amount remains
outstanding on the Notes, the Company hereby pledges and grants to Secured
Parties collectively a subordinated continuing security interest (subject only
to the Senior Security Interest granted to the Senior Lender) in and to all of
the Company Collateral.
 
b.   The Company hereby authorizes Secured Parties to execute and file any
financing or fixture filing statements signed only by Secured Parties as deemed
advisable by Secured Parties in the appropriate state or local offices on behalf
of The Company in connection herewith.
 
 4. Representations, Warranties, and Covenants.
 
a. Covenants Relating to Collateral.  As security for the Obligations, the
Company hereby agrees (i) to perform all acts that may be necessary to maintain,
preserve, protect and perfect the Collateral, the Subordinated Security Interest
(subject only to Permitted Encumbrances) granted to Secured Parties therein and
the perfection and priority of such Subordinated Security Interest (subject only
to the Senior Security Interest granted to the Senior Lenders, and to Permitted
Encumbrances); (ii) to pay promptly when due all taxes and other governmental
charges, all Liens and all other charges now or hereafter imposed upon or
affecting any Collateral; (iii) to procure, execute and deliver from time to
time any endorsements, assignments, financing statements and other writings
reasonably deemed necessary or appropriate by the Secured Parties to maintain
and protect Secured Parties’ Subordinated Security Interest (subject only to the
Senior Security Interest granted to the Senior Lender, and to Permitted
Encumbrances) hereunder and the priority thereof and to deliver promptly upon
the request of the Secured Parties all originals of Collateral consisting of
instruments, investment property, or other Collateral for which possession of
originals is necessary; (iv) to appear in and defend any action or proceeding
which may affect the Company's title to or Secured Parties’ interest in the
Collateral; and (v) except for in connection with sales of inventory in the
ordinary course of business, not to surrender or lose possession of (other than
to Secured Parties), sell, encumber, lease or otherwise dispose of or transfer
any Collateral or right or interest therein, and to keep the Collateral free of
all Liens (other than the Senior Security Interest granted to the Senior Lenders
and Permitted Encumbrances). The Company shall provide each Secured Party with
at least 30 days’ prior written notice of the Company’s desire to change the
holders of the Senior Security Interests from time to time as needed to help in
the financing activities of the Company, and provided that the Company is not
then in default with respect to the Obligations, the holders of the Senior
Security Interests may be changed.

--------------------------------------------------------------------------------

 
b. Other Representations, Warranties, and Covenants.  Each of Alpine 4 CS and
the Company represents, warrants, and covenants to each of the following:
 
i. The exact legal names of Alpine 4 CS and the Company is set forth on the
signature page of this Security Agreement.
 
ii. Alpine 4 CS is duly incorporated and in good standing under the laws of the
state of Delaware, the Company is duly organized and validly existing under the
laws of the state of Indiana, and with respect to each of Alpine 4 CS and the
Company, the execution, delivery, and performance of this Security Agreement is
within Alpine 4 CS’s and the Company's powers, the Security Agreement has been
duly authorized, and is not in conflict with the terms of its respective
organizational documents, each as amended through the date of this Security
Agreement, and each constitutes a legal, valid and binding obligation of Alpine
4 CS and the Company enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and subject to equitable principles
(regardless of whether enforcement is sought in equity or at law).
 
iii. Alpine 4 CS’s chief executive office is located at 2525 E. Biltmore Cir.,
Suite C237, Phoenix, AZ 85016, and the Company's chief executive office is
located at ________________________________.
 
iv. Not to change the Company's name, any organizational identification number,
state of incorporation, organizational identity, or location of chief executive
office; provided, however, that the Company may change any of these upon at
least 30 days’ prior written notice to Secured Parties of such change along with
the Company paying all of Secured Parties’ incurred costs of filing amendments,
additional financing statements, or any other necessary documents to protect,
perfect, and preserve Secured Parties’ security interest in the Collateral.
 
v.  To pay all taxes and assessments of every nature which may be levied or
assessed against the Collateral.
 
vi.  At the time the Company Collateral becomes subject to the lien and security
interest created by this Agreement, the Company, as applicable, will be the
direct, legal and beneficial owner thereof, free and clear of any lien, security
interest, encumbrance, claim, option or right of others except for the Senior
Security Interest and the security interest created by this Security Agreement.
 
vii.  No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the pledge
by the Company of the Company Collateral pursuant to this Security Agreement or
for the execution and delivery of the Notes and this Security Agreement by the
Company or the performance by Alpine 4 CS of its obligations hereunder.

--------------------------------------------------------------------------------

 
 5.           Litigation and Other Proceedings.  The Secured Parties shall have
the right but not the obligation to bring suit or institute proceedings in the
name of the Company or the Secured Parties to enforce any rights in the Company
Collateral, including without limitation any license thereunder, in which event
the Company shall at the request of the Secured Parties do any and all lawful
acts and execute any and all documents reasonably required by Secured Parties or
determined to be necessary or appropriate by Secured Parties in aid of such
enforcement.
 
 6. Action by Secured Parties.  All actions of the Secured Parties pursuant to
this Security Agreement, including the enforcement of any rights pursuant to
this Security Agreement or the Guarantee of Alpine 4 CS above, shall be
determined by the Secured Parties jointly, acting together, and the Secured
Parties agree that the approval of all Secured Parties shall be required for any
action to be taken by the Secured Parties with respect to the enforcement of any
rights pursuant to this Security Agreement or the Guarantee of Alpine 4 CS
above. The Secured Parties further agree that neither the Company nor Alpine 4
CS shall be required to comply with any instructions or respond to any actions
or claims by the Secured Parties unless the Secured Parties affirm that they are
acting jointly.
 
7. Default and Remedies.
 
a. Default.  The Company shall be deemed in default under this Security
Agreement upon (each an “Event of Default” but subject to the Subordination
Agreement with the Senior Lender/s as outlined in Exhibit E.: (i) the occurrence
and during the continuance of a default or breach of any of Alpine 4 CS’s 
obligations arising under the terms of the Notes or a default or breach of any
of the Company's obligations arising under the terms of this Security Agreement,
(ii) the uninsured loss, theft, damage, or destruction to the Company
Collateral, sale (other than inventory in the ordinary course of business) or
encumbrance of any of the Company Collateral, or the making of any levy, seizure
or attachment on the Company Collateral, or (iii) dissolution, termination of
existence, insolvency, business failure, appointment of a receiver of any part
of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding under any bankruptcy or insolvency laws of, by or
against the Company, (iv) the Company’s merger, consolidation, or transfer of a
substantial part of its assets, a material decline in the value of the
Collateral or any significant part thereof, (v) Alpine 4 CS’s or the Company’s
concealment, removal (or permitting such concealment or removal) of any part of
the Company Collateral, with the intent to hinder, delay or defraud its
creditors, (vi) Secured Parties’ determination to deem themselves insecure, or
(vii) any other Event of Default as defined under the Notes.
 
b. Remedies.  Upon the occurrence and during the continuance of any Event of
Default, the Secured Parties shall have the rights granted by this Security
Agreement, and by law, including without limitation the right to: (i) declare
the Notes, individually or collectively, at the option of the Secured Parties,
(ii) require the Company to assemble the Company Collateral and make it
available to the Secured Parties at a place to be designated by the Secured
Parties, , (iv) prior to the disposition of the Company Collateral, require the
Company to store, process, repair or recondition the Company Collateral or
otherwise prepare the Company Collateral for disposition in any manner and to
the extent the Secured Parties deem appropriate and in connection with such
preparation and disposition, without charge to Secured Parties, and (v) may
collect all reasonable costs incurred in pursuing any remedies including, but
not limited to, reasonable attorneys’ fees.

--------------------------------------------------------------------------------

 
c. Application of Company Collateral Proceeds.  The proceeds and/or avails of
the Company 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 the
Secured Parties at the time of, or received by Secured Parties after, the
occurrence of an event of default) shall be paid to and applied as follows:
 
i. First, to the payment of reasonable costs and expenses of Secured Parties,
including, without limitation, all amounts expended to preserve the value of the
Company 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 Parties;
 
ii. Second, to the payment to Secured Parties of the amounts outstanding under
the Notes;
 
iii. Third, to the payment of the surplus, if any, to the Company, their
successors and assigns, or to whomsoever may be lawfully entitled to receive the
same.

 
 8.                Miscellaneous.
 

a. Notices.  Except as otherwise provided herein, all notices, requests,
demands, consents, instructions or other communications to or upon Alpine 4 CS,
the Company, or Secured Parties under this Security Agreement shall be in
writing and faxed, mailed or delivered to each party to the facsimile number or
the address set forth below, or to such other address as may be specified in
writing by a Party to the other parties to this Security Agreement.

If to Secured Parties:
 
Mark Bell
 
2002 S 600 W
 
Oakley, ID 83346
 
Email: 

 
with a copy (which shall not constitute notice) to:
 
 

 

 

 
Attn: 
 
Fax: 

Phone:
 

 

--------------------------------------------------------------------------------

 
If to the Company:
 

Excel Fabricaiton, Inc.
 

Attn:  [____________]
 
Fax: [_____________]
 
Phone: [___________]
 
 
with a copy (which shall not constitute notice) to:
 
 
Kirton McConkie PC
 
60 E. South Temple, Suite 1800
 
Salt Lake City, Utah 84111
 
Fax:  (801) 212-2187
 
Phone:  (801) 328-3600
 
Attn:  C. Parkinson Lloyd, Esq.
 

 
If to Alpine 4 CS
 

Attn:  [____________]
 
Fax: [_____________]
 
Phone: [___________]
 
 

 
with a copy (which shall not constitute notice) to:
 
 
Kirton McConkie PC
 
60 E. South Temple, Suite 1800
 
Salt Lake City, Utah 84111
 
Fax:  (801) 212-2187
 
Phone:  (801) 328-3600
 
Attn:  C. Parkinson Lloyd, Esq.
 

b. Nonwaiver.  No failure or delay on the part of Secured Parties in exercising
any of its rights hereunder will 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.

--------------------------------------------------------------------------------

 

c. Amendments and Waivers.  This Security Agreement may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by Alpine 4 CS, the Company and Secured Parties.  Each waiver or consent
under any provision hereof shall be effective only in the specific instances for
the purpose for which given.
 
 
d. Assignments.  This Security Agreement shall be binding upon and inure to the
benefit of Secured Parties, Alpine 4 CS and the Company, and their respective
successors and assigns; provided, however, that neither Alpine 4 CS nor the
Company may sell, assign or delegate rights and obligations hereunder without
the prior written consent of Secured Parties.
 
 
e. Cumulative Rights, etc.  The rights, powers and remedies of Secured Parties
under this Security Agreement shall be in addition to all rights, powers and
remedies given to Secured Parties by virtue of any applicable law, rule or
regulation of any governmental authority and under the Notes, all of which
rights, powers, and remedies will be cumulative and may be exercised
successively or concurrently without impairing the rights of the Secured Parties
hereunder or thereunder.  The Company hereby waives any right to require Secured
Parties to proceed against any person or entity or to exhaust any Collateral or
to pursue any remedy in the Secured Parties’ power.
 
 
f. Payments Free of Taxes, Etc.  All payments made by Alpine 4 CS under the
Notes will be made by Alpine 4 CS free and clear of and without deduction for
any and all present and future taxes, levies, charges, deductions and
withholdings.
 
 
g. Partial Invalidity.  If at any time any provision of this Security Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Security Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
 
 
h. Expenses.  Each of Alpine 4 CS and the Company shall pay on demand all
reasonable fees and expenses, including reasonable attorneys’ fees and expenses,
incurred by Secured Parties 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 is not performed as and when required by
this Security Agreement or the Notes.
 
 
i. Construction.  Each of this Security Agreement and the Notes is the result of
negotiations among, and has been reviewed by, Alpine 4 CS, the Company and
Secured Parties.  Accordingly, this Security Agreement and the Notes will be
deemed to be the product of all parties hereto, and no ambiguity shall be
construed in favor of or against Alpine 4 CS, the Company or Secured Parties.
 
 
j. Entire Agreement.  This Security Agreement and the Notes constitute and
contain the entire agreement of the Company, and Secured Parties and supersede
any and all prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof.  In the event of any inconsistencies between the terms of
this Security Agreement or the Notes and the terms of any other document related
to the loans by the Company to the Secured Parties, the terms of this Security
Agreement or the Notes, as applicable, shall prevail.
 
 
k. Governing Law.  This Security Agreement shall be governed by and construed in
accordance with the laws of the State of Idaho without reference to conflicts of
law rules.
 

--------------------------------------------------------------------------------

 
l. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute one instrument.
 
 
m. Waiver of Right to Jury.  In order to avoid delays and minimize
expense Alpine 4 CS, the Company and Secured Parties knowingly, voluntarily and
intentionally waive any right to trial by jury in respect of any claim, demand,
action or cause of action arising out of, under or in connection with this
Security Agreement or any related writing or any amendment thereto, whether now
existing or hereinafter arising and whether sounding in contract or tort or
otherwise, and each party hereby agrees and consents that any such claim,
demand, action or cause of action shall be decided by a court trial without a
jury, and a copy of this Security Agreement may be filed with any court as
evidence of the consent of each of the parties hereto to the waiver of its right
to trial by jury.
 
[Signature page follows.]

--------------------------------------------------------------------------------

 

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

ALPINE 4 CS:

A4 Construction Services, Inc.
a Delaware Corporation

By: 
       Kent Wilson
       Its Chief Executive Officer

SECURED PARTIES:

 

Name:______________________ 
 

Name:______________________ 
 
 

COMPANY:

EXCEL FABRICATION, LLC.

By: 
       Kent Wilson

       Its: Interim CEO

--------------------------------------------------------------------------------