Schedule 3.1 (a)
EXHIBIT
10.3 SECURITY AGREEMENT
Dated
March 19, 2007
Mesa,
Maricopa County, Arizona
B2
Digital, Inc., a Delaware corporation, (hereinafter called "Debtor"), whose
address is 0000 Xxxxx Xxxx Xxxxx, Xxxx Xxxx, Xxxxxxx 00000, for value received
and intending to be legally bound, hereby grants to Eagle West Communications,
Inc., a Nevada corporation, (hereinafter called "Secured Party"), whose address
is c/o Johnson, Rasmussen, Xxxxxxxx & Xxxxx, P.L.C., 00 Xxxxx Xxxxxxxxx,
Xxxx, Xxxxxxx 00000, a security interest in the following property:
1. Any
and
all of Debtor’s rights, title, benefits, and interests now owned or hereafter
acquired in Cable Asset Purchase from Eagle West Communications, Inc.
(hereinafter called “CAP/EWC”), including CAP/EWC’s accounts receivable;
and
2. Any
and
all of CAP/EWC’s rights, title, benefits, and interests now owned or hereafter
acquired in any and all of CAP/EWC’s capital equipment; and
3. Any
and
all other personal assets of CAP/EWC;
4. Together
with any and all proceeds received should any of the foregoing be sold,
exchanged, collected or otherwise disposed of (all of which is hereafter called
the "Collateral"); provided, however, no provisions herein shall be construed
as
or deemed authority for Debtor to sell, exchange or otherwise dispose of the
Collateral or any portion thereof without the express prior written consent
of
Secured Party, which consent shall not be unreasonably withheld. The security
interest granted hereby to Secured Party secures the payment of all
indebtedness, liabilities and obligations of Debtor to Secured Party
(hereinafter collectively called the "Obligations"), whether joint or several,
direct or indirect, absolute or contingent due or to become due, now existing
or
hereafter arising, and all renewals, extensions and rearrangements of the
Obligations, and any of the same, including, without limitation, the Promissory
Note of even date herewith (hereinafter the “Promissory Note”), together with
any and all extensions and rearrangements, amendments, supplements,
modifications and renewals of the foregoing, and including all reasonable costs
and expenses and attorneys' fees and legal expenses payable by Secured Party
in
connection herewith or therewith, and also secures the performance by Debtor
of
the agreements hereinafter set forth.
5. Debtor
hereby represents, warrants and agrees that:
6. (a)
Debtor is the sole owner and holder of the Collateral free and clear of all
liens and security interests except the security interest granted hereby; (b)
Debtor has the authority to enter into and perform this agreement and to grant
the security interests created hereby; and (c) the Collateral is being used
for
use primarily for business purposes.
7. (a)
To
the extent possible, the Collateral will be kept at CAP/EWC’s place of business
listed in Section 3 of this agreement; Debtor will give Secured Party at least
thirty (30) days prior written notice of any change in the location of the
Collateral within or without the States of the United States & territories;
and (b) Debtor will not remove the Collateral from the States of the United
States & territories without the prior written consent of Secured
Party.
8. The
President of EWC is Xxxx X.X. XxXxxxx.
9. Debtor
will defend the Collateral against any claims and demands of all Persons at
any
time claiming the same or any interest therein.
10. Except
for those in favor of Secured Party, no financing statement or security
agreement covering any Collateral or any proceeds thereof is currently or will
be on file in any public office. Debtor hereby authorizes Secured Party to
file,
in jurisdictions where this authorization will be given effect, a financing
statement signed only by Secured Party describing the Collateral in the same
manner as it is described herein; and from time to time, at the request of
Secured Party, Debtor will execute one or more financing statements and such
other documents (and pay the cost of filing or recording the same in all public
offices deemed necessary or desirable by Secured Party) and do such other acts
and things, all as Secured Party may request, to establish and maintain a valid
security interest in the Collateral (free of all other liens and claims
whatsoever except as otherwise provided herein) to secure the payment of the
Obligations. In connection with the forgoing, it is agreed and understood
between the parties hereto (and Secured Party is hereby authorized to carry
out
and implement the following agreements and understandings and Debtor hereby
agrees to pay the costs thereof) that Secured Party may, at any time or times,
file as a financing statement any counterpart, copy or reproduction of this
agreement signed by Debtor if Secured Party shall elect so to file, and it
is
also agreed and understood that Secured Party may, if deemed necessary or
desirable, file (or sign and file) as a financing statement any carbon copy
of,
or photographic or other reproduction of, this agreement or of any financing
statement executed in connection with this agreement.
11. Debtor
will not (a) permit any liens, encumbrances or security interests (other than
Secured Party's liens) to attach to any of the Collateral; (b) permit any of
the
Collateral to be levied upon under any legal process; (c) sell, transfer, lease
or otherwise dispose of any of the Collateral or any interest therein (other
than in the ordinary course of business), or offer to do so, without the prior
express written consent of Secured Party; and (d) permit anything to be done
that may impair the value of any of the Collateral or the security intended
to
be afforded thereby or hereby.
12. Debtor
will not use the Collateral or permit the Collateral to be used in violation
of
any statute, ordinance or other law which could result in a material adverse
effect upon its business or financial condition or which could result in loss
or
forfeiture of the Collateral or which could result in loss or impairment of
(or
priority with respect to) Secured Party's interest in the Collateral; and Debtor
will permit Secured Party and its agents, representatives and employees to
examine the Collateral at all times, and for such purpose, Secured Party may
enter upon or into any premises where the Collateral may be located without
being guilty of a trespass. Debtor will furnish to Secured Party upon request
all pertinent information regarding the Collateral.
13. Debtor
will protect the title and possession of the Collateral and will, at Debtor's
own cost and expense, promptly pay when due all taxes, assessments, maintenance
charges and other impositions of every kind and character charged, levied,
assessed or imposed against the Collateral or real property, if any, to which
the Collateral may be affixed or any part thereof, as the same become payable
and before they become delinquent, and upon request of Secured Party shall
furnish due proof of such payment to Secured Party promptly after
payment.
14. Secured
Party may at its option, but without any obligation to do so, pay, for the
account of Debtor, any taxes, liens or security interest or other encumbrances
at any time levied or placed on the Collateral, pay for the maintenance and
preservation of the Collateral, prosecute or defend any suits in relation to
security interests arising pursuant to this agreement and insure and keep
insured the Collateral in an amount not to exceed the Obligations hereunder.
Any
such amounts which may be so paid out by Secured Party and all sums paid for
insurance premiums, as aforesaid, including, without limitation, the costs,
expenses and attorneys' fees paid in any suit affecting the Collateral when
necessary to protect the security interest hereof shall bear interest from
the
date of such payments at the rate stated as the default rate in the Promissory
Note and shall be paid by Debtor to Secured party upon demand at such place
as
Secured Party may designate and shall be a part of the Obligations hereby
secured and recoverable in all respects.
15. Debtor
will pay promptly when due all taxes and assessments upon the Collateral, its
use or operation, upon this agreement and upon any note or notes or other
writing evidencing the Obligations, or any of them, including documentary or
other taxes.
16. Until
default, Debtor may have possession of the Collateral and use it in any lawful
manner not inconsistent with this agreement or the Promissory Note and not
inconsistent with any policy of insurance thereon.
17. The
happening of any one or more "Event of Default" set forth in Section 3 of the
Promissory Note shall constitute a default under this agreement.
18. Upon
the
occurrence of any default specified in this agreement, Secured Party may, in
addition to any other rights and remedies which it may have, immediately and
without demand, exercise any or all of the rights and remedies granted to a
secured party upon default under the Uniform Commercial Code as adopted and
amended in the State of Arizona from time to time (the "UCC") and under the
Promissory Note or any other writing evidencing any of the Obligations secured
hereby; and upon the request or demand of Secured Party, Debtor shall, at
Debtor's expense, assemble the Collateral and make it available to Secured
Party
at a convenient place acceptable to Secured Party; and Debtor shall promptly
pay
to Secured Party any and all reasonable costs and expenses, including legal
expenses and attorneys' fees (as specified in the Promissory Note or any other
evidence of the Obligations held by Secured Party, but in any event, which
shall
include attorneys' fees of the suit, out of court, in trial, on appeal, or
in
bankruptcy proceedings), incurred or paid by Secured Party in protecting and
enforcing the rights of Secured Party hereunder, including Secured Party's
right
to take possession of the Collateral and to hold, prepare for sale, sell and
dispose of such Collateral. Any notice of sale, disposition or other intended
action by Secured Party sent to Debtor at the address specified in the preamble
of this agreement, or to such other address of Debtor as may from time to time
be shown on Secured Party's records, at least ten (10) days prior to such
action, shall constitute reasonable notice to Debtor. Upon disposition by
Secured Party of any property in which Secured Party has a security interest
hereunder, Debtor shall be and remain liable for any deficiency; and Secured
Party shall account to Debtor for any surplus to (or to hold the same as a
reserve against) all or any of the Obligations of Debtor to Secured Party,
whether or not they or any of them be then due, and in such order of application
as Secured Party may from time to time elect.
19. The
right
of Secured Party to take possession or control of the Collateral upon the
happening of any of the events or conditions constituting a default may be
exercised without resort to any court proceeding or judicial process whatever
and without any hearing whatever thereon.
20. No
waiver
by Secured Party of any default shall operate as a waiver of any other default
or of the same default on a future occasion. No delay or omission on the part
of
Secured Party in exercising any right or remedy shall operate as a waiver
thereof, and no single or partial exercise by Secured Party of any right or
remedy shall preclude or affect any other or further exercise thereof or the
exercise of any other right or remedy. The provisions of this agreement are
cumulative to the provisions of the Promissory Note and any other writing
evidencing or pertaining to any of the Obligations secured by this agreement,
and Secured Party shall have all the benefits, rights and remedies of and under
the Promissory Note and any other writing evidencing any of the Obligations
secured hereby. The singular pronoun, when used herein, shall include the
singular and plural, as applicable, and the use of any gender shall include
all
genders. All rights of Secured Party hereunder shall inure to the benefit of
its
successors and assigns; and all obligations of Debtor shall bind Debtor's
successors and assigns. Debtor waives all rights to the marshaling of Debtor's
assets including, without limitation, the Collateral.
21. All
recitals in any instrument or assignment or any other instrument executed by
Secured Party incident to the sale, transfer, assignment, lease or other
disposition or utilization of the Collateral or any part thereof hereunder
shall
be full proof of the matters stated therein and no other proof shall be
requisite to establish full legal propriety of the sale or other action taken
by
Secured Party or of any fact, condition or thing incident thereto and all
prerequisites of such sale or other action or any fact, condition or thing
incident thereto shall be presumed conclusively to have been performed or to
have occurred.
22. If
any
certificate of title or similar document is, at any time and pursuant to the
laws of any jurisdiction, issued or outstanding with respect to the Collateral
or any part thereof, Debtor shall promptly cause the interest of Secured Party
to be properly noted thereon; and Debtor will further promptly deliver to
Secured Party any such certificate of title or similar document issued or
outstanding at any time with respect to such Collateral. If any instruments,
chattel paper, money or monies, or documents are, at any time or times included
in Collateral, whether as proceeds or otherwise, Debtor will promptly deliver
the same to Secured Party upon demand there for by Secured Party.
23. This
agreement shall be construed in accordance with the laws of the State of
Arizona, including the UCC and applicable federal law; provided, however, that
if additional rights or remedies are hereafter granted to secured parties by
the
laws of the State of Arizona or by applicable federal law, Secured Party shall
also have and may exercise any such rights or remedies. Wherever possible,
each
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this agreement
shall be prohibited by, or invalid under, applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this
agreement. To the extent permitted by applicable law, Debtor hereby waives
any
provision of law that renders any provision hereof prohibited or unenforceable
in any respect.
24. Debtor
will pay all out-of-pocket fees (including, but not limited to, legal fees
and
attorneys' fees) incurred by Secured Party in connection with the preparation
of
this agreement, the Promissory Note and other documents securing or pertaining
to the Promissory Note. Debtor will promptly reimburse Secured Party for all
amounts expended, advanced or incurred by Secured Party to satisfy any
obligation of Debtor under this agreement or any of the other documents securing
or pertaining to the Promissory Note, to enforce the rights of Secured Party
under this agreement, or any of the other documents securing or pertaining
to
the Promissory Note (whether or not any legal or other proceeding is
instituted), which amounts will include all reasonable court costs, attorneys'
fees, fees of auditors and accountants, and investigation expenses reasonably
incurred by Secured Party to third parties in connection with any such
matters.
25. Debtor
represents and warrants to Secured Party that the value of the consideration
received and to be received, directly or indirectly, by Debtor as a result
of
the credit or other financial accommodations granted and extended by Secured
Party to Debtor, including, without limitation, the benefits derived by Debtor
under the Promissory Note, is fair consideration to Debtor and reasonably worth
at least as much as the Obligations, and that the financial accommodations
granted and extended by Secured Party have benefitted and may reasonably be
expected to benefit Debtor, directly or indirectly.
26. All
right
to marshaling of assets of Debtor, including any such right with respect to
the
Collateral, are hereby waived by Debtor.
27. The
execution and delivery of this agreement in no manner shall impair or affect
any
other security (by endorsement or otherwise) for the payment of the Obligations
and no security taken hereafter as security for payment of any part or all
of
the Obligations shall impair in any manner or affect the agreement, all such
present and future additional security to be considered as cumulative security.
Any of the Collateral may be released from this agreement without altering,
varying or diminishing in any way the force, effect, lien, security interest
or
charge of this agreement as to the Collateral not expressly released, and this
agreement shall continue as a first lien security interest and charge on all
of
the Collateral not expressly released until all sums and indebtedness secured
hereby have been paid in full. Any future assignment or attempted assignment
or
transfer of the interest of Debtor in and to any of the Collateral shall not
deprive Secured Party of the right to sell or otherwise dispose of or utilize
all of the Collateral shall not deprive Secured Party of the right to sell
or
otherwise dispose of or utilize all of the Collateral as above provided or
necessitate the sale or disposition thereof in parcels or in
severalty.
28. This
agreement may be executed in one or more counterparts, each of which shall
constitute an original, but when taken together shall constitute but one and
the
same agreement. This agreement has been substantially negotiated in, delivered
and accepted at, and the financial benefits extended by Secured Party to Debtor
occurred in, Maricopa County, Arizona.
29. IN
WITNESS WHEREOF, this agreement has been duly executed as of the date
hereinabove first written.
"Debtor"
B2
Digital, Inc.
By
Xxxxxx
Xxxxxxx
Xxxxxx
Xxxxxxx
Its:
C.E.O.
STATE
OF
CALIFORNIA
)
)
ss.
COUNTY
OF
LOS ANGELES )
Subscribed,
sworn to and acknowledged before me by _______________________, _______________
of
this
19 day of March, 2007.
_______________________________
Notary
Public
My
Commission expires: _______________
