SECURITY AGREEMENT
For
good
and valuable consideration, Xxxxx Xxxx and Cord Xxxxxx (together, “Pledgors”),
hereby make and deliver this Security Agreement (this “Agreement”)
in
favor of ZAGG,
Inc. a
Utah
corporation (“Pledgee”),
and
hereby agree as follows:
1. Grant
of Security Interest.
As
collateral security for the prompt, complete, and timely satisfaction of all
present and future indebtedness, liabilities, duties, and obligations of
Brighton Partners, LLC and/or Uinta Equity Partners, LLC to Pledgee as evidenced
by or arising under that certain Secured Promissory Note dated March __, 2008,
and including, without limitation, all principal and interest payable under
such
Note, any future advances added to the principal amount due thereunder, and
all
attorneys’ fees, costs and expenses incurred by Pledgee in the collection or
enforcement of the same (collectively, the “Obligations”),
Pledgors hereby pledge, assign and grant to Pledgee a continuing security
interest and lien in all of Pledgors’ right, title and interest in and to one
hundred percent (100%) of Pledgors’ membership interests in Brighton Partners,
LLC, a Utah limited liability company, which are now or shall hereafter be
issued and outstanding in the name or names of Pledgors (the “Collateral”). The
terms of this Agreement with respect to Pledgors’ granting of a security
interest in the Collateral to Pledgee shall be deemed to be a security agreement
under applicable provisions of the Uniform Commercial Code (“UCC”), with Pledgee
as the secured party.
2. Perfection.
Upon
the
execution and delivery of this Agreement, Pledgors authorize Pledgee to file
such financing statements and other documents in such offices as shall be
necessary or as Pledgee may reasonably deem necessary to perfect and establish
the priority of the liens granted by this Agreement. Pledgors agree, upon
Pledgee’s request, to take all such actions as shall be necessary or as Pledgee
may reasonably request to perfect and establish the priority of the liens
granted by this Agreement.
3. Covenant
of Pledgors.
For so
long as any Obligations remain outstanding, Pledgors shall not sell, assign,
encumber, pledge, hypothecate, transfer or otherwise dispose of any of the
Collateral.
4. Rights
and Remedies of Pledgee.
Upon the
occurrence of an event of default under any of the Obligations, then, in
addition to all other rights and remedies at law or in equity, Pledgee may
exercise any one or more of the following rights and remedies:
a. Receive
any dividends or other payments payable to the owners of the Collateral and
exercise all voting, consensual, and other rights pertaining thereto.
b. Pursue
and enforce all of the rights and remedies provided to a secured party with
respect to the Collateral under the Uniform Commercial Code; and
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c. Pursue
any other rights or remedies available to Pledgee at law or in
equity.
5. Obligations
Without Recourse To Pledgors.
Pledgors shall not be personally liable for the payment of any principal,
interest or other sum due under the Obligations or for any deficiency judgment
that Pledgee may obtain following the foreclosure of the security interest
granted hereby, and Pledgee’s sole recourse against Pledgors for any default
under the Obligations shall be limited to the Collateral.
6. Representation
of Counsel.
Pledgors
acknowledge that they have consulted with or have had the opportunity to consult
with their legal counsel prior to executing this Agreement. This Agreement
has
been freely negotiated by Pledgors and Pledgee and any rule of construction
to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement.
7. Choice
of Laws.
This
Note shall be constructed and construed in accordance with the internal
substantive laws of the State of Utah, without regard to the choice of law
principles of said State.
8.
Miscellaneous.
a.
This
Agreement shall be binding upon Pledgors and shall inure to the benefit of
Pledgee and its successors, assigns, heirs, and legal
representatives.
b.
Any
failure or delay by Pledgee to insist upon the strict performance of any term,
condition, covenant or agreement of this Agreement, or to exercise any right,
power or remedy hereunder shall not constitute a waiver of any such term,
condition, covenant, agreement, right, power or remedy.
c.
Any
provision of this Agreement that is unenforceable shall be severed from this
Agreement to the extent reasonably possible without invalidating or affecting
the intent, validity or enforceability of any other provision of this
Agreement.
d.
In the
event of any action at law or in equity to enforce this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys’ fees and
costs from the unsuccessful party.
e.
This
Agreement may not be modified or amended in any respect except in a writing
executed by the party to be charged.
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IN
WITNESS WHEREOF,
this
Agreement has been executed effective February 27, 2008.
“Pledgors”:
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CORD
XXXXXX
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