Exhibit 10.3

 

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of February 5, 2020, is by
and between PREDICTIVE ONCOLOGY INC., a Delaware corporation (the “Grantor”),
and OASIS CAPITAL, LLC, a Puerto Rico limited liability company (the “Secured
Party”).

 

WHEREAS, on the date hereof, the Grantor has issued its Senior Secured
Convertible Promissory Note (the “Note”) to the Secured Party pursuant to that
certain Securities Purchase Agreement of even date herewith (as amended,
supplemented or otherwise modified from time to time, the “Purchase Agreement”)
between the Grantor and the Secured Party; Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Purchase Agreement;

 

WHEREAS, this Agreement is given by the Grantor in favor of the Secured Party to
secure the payment and performance of all of the Secured Obligations (as defined
below); and

 

WHEREAS, one of the conditions of the Purchase Agreement is that the obligations
of the Grantor thereunder shall be secured by a security interest in the
Collateral owned by the Grantor in favor of the Secured Party;

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                   Definitions.

 

(a)                Unless otherwise specified herein, all references to Sections
and Schedules herein are to Sections and Schedules of this Agreement.

 

(b)                Unless otherwise defined herein, terms used herein that are
defined in the UCC shall have the meanings assigned to them in the UCC. However,
if a term is defined in Article 9 of the UCC differently than in another Article
of the UCC, the term has the meaning specified in Article 9.

 

(c)                For purposes of this Agreement, the following terms shall
have the following meanings:

 

“Collateral” has the meaning set forth in Section 2.

 

“Event of Default” has the meaning set forth in the Note.

 

“First Priority” means, with respect to any lien and security interest purported
to be created in any Collateral pursuant to this Agreement, such lien and
security interest is the most senior lien to which such Collateral is subject
(subject only to liens permitted under the Purchase Agreement).

 

“Proceeds” means “proceeds” as such term is defined in section 9-102 of the UCC
and, in any event, shall include, without limitation, all dividends or other
income from the Collateral, collections thereon or distributions with respect
thereto.

 

“Secured Obligations” has the meaning set forth in Section 3.

 

 

 

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or, when the laws of any other state govern the method or
manner of the perfection or enforcement of any security interest in any of the
Collateral, the Uniform Commercial Code as in effect from time to time in such
state.

 

2.                   Grant of Security Interest. The Grantor hereby pledges and
grants to the Secured Party, and hereby creates a continuing First Priority lien
and security interest in favor of the Secured Party in and to all of its right,
title and interest in and to the following, wherever located, whether now
existing or hereafter from time to time arising or acquired (collectively, the
“Collateral”):

 

(a)                all fixtures and personal property of every kind and nature
including all accounts (including health-care-insurance receivables), goods
(including inventory and equipment), documents (including, if applicable,
electronic documents), instruments, promissory notes, chattel paper (whether
tangible or electronic), letters of credit, letter-of-credit rights (whether or
not the letter of credit is evidenced by a writing), securities and all other
investment property, stock and all securities of the Grantor’s subsidiaries,
commercial tort claims, copyrights, patents, trademarks, all intellectual
property, general intangibles (including all payment intangibles), money,
deposit accounts, and any other contract rights or rights to the payment of
money; and

 

(b)                all Proceeds and products of each of the foregoing, all books
and records relating to the foregoing, all supporting obligations related
thereto, and all accessions to, substitutions and replacements for, and rents,
profits and products of, each of the foregoing, and any and all Proceeds of any
insurance, indemnity, warranty or guaranty payable to the Grantor from time to
time with respect to any of the foregoing.

 

3.                   Secured Obligations. The Collateral secures the due and
prompt payment and performance of:

 

(a)                the obligations of the Grantor from time to time arising
under the Note, the Purchase Agreement, this Agreement, the other Transaction
Documents or otherwise with respect to the due and prompt payment of (i) the
principal of and premium, if any, and interest on the Note (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations, including fees, commissions, costs, attorneys’ fees and
disbursements, reimbursement obligations, contract causes of action, expenses
and indemnities, whether primary, secondary, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, fixed or
otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Grantor under or in
respect of the Note, the Purchase Agreement and this Agreement; and

 

(b)                all other covenants, duties, debts, obligations and
liabilities of any kind of the Grantor under or in respect of the Note, the
Purchase Agreement, this Agreement, the other Transaction Documents or any other
document made, delivered or given in connection with any of the foregoing, in
each case whether evidenced by a note or other writing, whether allowed in any
bankruptcy, insolvency, receivership or other similar proceeding, whether
arising from an extension of credit, issuance of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, and whether primary, secondary,
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, fixed or otherwise (all such obligations, covenants,
duties, debts, liabilities, sums and expenses set forth in this Section 3 being
herein collectively called the “Secured Obligations”).

 

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4.                   Perfection of Security Interest and Further Assurances.

 

(a)                The Grantor shall take all actions required to perfect the
security interest of the Secured Party in the Collateral, including, without
limitation, with respect to all Collateral over which control may be obtained
within the meaning of sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC.
The Grantor shall promptly take all actions as may be requested from time to
time by the Secured Party so that control of such Collateral is obtained and at
all times held by the Secured Party. All of the foregoing shall be at the sole
cost and expense of the Grantor.

 

(b)                The Grantor hereby irrevocably authorizes the Secured Party
at any time and from time to time to file in any relevant jurisdiction any
financing statements and amendments thereto that contain the information
required by Article 9 of the UCC of each applicable jurisdiction for the filing
of any financing statement or amendment relating to the Collateral, including
any financing or continuation statements or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security
interest granted by the Grantor hereunder, without the signature of the Grantor
where permitted by law, including the filing of a financing statement describing
the Collateral as all assets now owned or hereafter acquired by the Grantor, or
words of similar effect. The Grantor agrees to provide all information required
by the Secured Party pursuant to this Section promptly to the Secured Party upon
request.

 

(c)                The Grantor hereby further authorizes the Secured Party to
file with the United States Patent and Trademark Office and the United States
Copyright Office (and any successor office and any similar office in any state
of the United States or in any other country) this Agreement and other documents
for the purpose of perfecting, confirming, continuing, enforcing or protecting
the security interest granted by the Grantor hereunder, without the signature of
the Grantor where permitted by law.

 

(d)                If the Grantor shall at any time hold or acquire any
certificated securities, promissory notes, tangible chattel paper, negotiable
documents or warehouse receipts relating to the Collateral, the Grantor shall
promptly endorse, assign and deliver the same to the Secured Party, accompanied
by such instruments of transfer or assignment duly executed in blank as the
Secured Party may from time to time specify.

 

(e)                If the Grantor shall at any time hold or acquire a commercial
tort claim, the Grantor shall promptly notify the Secured Party in a writing
signed by the Grantor of the particulars thereof and grant to the Secured Party
in such writing a security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to the Secured Party.

 

(f)                 If any Collateral is at any time in the possession of a
bailee, the Grantor shall promptly notify the Secured Party thereof and, at the
Secured Party’s request and option, shall promptly obtain an acknowledgment from
the bailee, in form and substance satisfactory to the Secured Party, that the
bailee holds such Collateral for the benefit of the Secured Party and the bailee
agrees to comply, without further consent of the Grantor, at any time with
instructions of the Secured Party as to such Collateral.

 

(g)                The Grantor agrees that at any time and from time to time, at
the expense of the Grantor, the Grantor will promptly execute and deliver all
further instruments and documents, obtain such agreements from third parties,
and take all further action, that may be necessary or desirable, or that the
Secured Party may reasonably request, in order to create and/or maintain the
validity, perfection or priority of and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to exercise and
enforce its rights and remedies hereunder or under any other agreement with
respect to any Collateral.

 

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5.                   Representations and Warranties. The Grantor represents and
warrants as follows:

 

(a)                That: (i) the Grantor’s exact legal name is that indicated on
the signature page hereof, (ii) the Grantor is a corporation and is duly
organized in the State of Delaware, and (iii) the Grantor’s place of business
(or, if more than one, its chief executive office), and its mailing address are
identified in Section 9(h) the Purchase Agreement.

 

(b)                Other than investment securities and capital stock in its
subsidiaries, the Grantor holds no capital stock. All Collateral consisting of
securities have been duly authorized and validly issued, and are fully paid and
non-assessable and subject to no options to purchase or similar rights.

 

(c)                As of the date hereof, the Grantor holds no commercial tort
claims.

 

(d)                All intellectual property owned by the Grantor is valid,
subsisting and enforceable and all filings necessary to maintain the
effectiveness of such registrations have been made. The Grantor is the sole and
exclusive owner of the entire and unencumbered right, title and interest in and
to all intellectual property purported to be owned by the Grantor, free and
clear of any liens (including without limitation licenses and covenants by such
Grantor not to sue third persons). The Grantor has no notice of any suits or
actions commenced or threatened in writing with reference to any intellectual
property. The operation of the Grantor’s business as currently conducted and the
use of its intellectual property in connection therewith do not infringe,
misappropriate or otherwise violate the intellectual property rights of any
third party. The execution, delivery and performance of this Agreement or any
notice of grant of security interest in copyrights, trademarks or patents and
the filing of such notice by the Grantor will not violate or cause a default
under any intellectual property of the Grantor or any agreement in connection
therewith.

 

(e)                None of the Collateral constitutes, or is the proceeds of,
(i) farm products, (ii) as-extracted collateral, (iii) manufactured homes, (iv)
timber to be cut, or (v) aircraft, aircraft engines, satellites, ships or
railroad rolling stock. None of the account debtors or other persons obligated
on any of the Collateral is a governmental authority covered by the Federal
Assignment of Claims Act or like federal, state or local statutes or rules in
respect of such Collateral.

 

(f)                 The Grantor has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances.

 

(g)                At the time the Collateral becomes subject to the lien and
security interest created by this Agreement, the Grantor will be the sole,
direct, legal and beneficial owner thereof, free and clear of any lien, security
interest, encumbrance, claim, option or right of others.

 

(h)                The pledge of the Collateral pursuant to this Agreement
creates a valid and perfected First Priority security interest in the
Collateral, securing the payment and performance when due of the Secured
Obligations, subject to the security interest of L2 Capital, LLC related to the
L2 Note (as defined in the Note).

 

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(i)                 It has full power, authority and legal right to deliver the
Note and pledge the Collateral pursuant to this Agreement.

 

(j)                 This Agreement has been duly authorized, executed and
delivered by the Grantor and constitutes a legal, valid and binding obligation
of the Grantor enforceable against the Grantor 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).

 

(k)                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 Grantor of the Collateral pursuant to this Agreement or for
the execution and delivery of this Agreement by the Grantor or the performance
by the Grantor of its obligations hereunder other than (a) filings required to
perfect liens under the Transaction Documents and (b) approvals, consents,
exemptions, authorizations, actions, notices and filings which have been duly
obtained, taken, given or made and are in full force and effect.

 

(l)                 The execution and delivery of this Agreement by the Grantor
and the performance by the Grantor of its obligations hereunder, will not
violate any provision of any applicable law or regulation or any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, applicable to the Grantor or any of its
property, or the organizational or governing documents of the Grantor or any
agreement or instrument to which the Grantor is party or by which it or its
property is bound.

 

(m)              The Grantor has taken all action required on its part for
control (as defined in sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC,
as applicable) over all Collateral with respect to which such control may be
obtained pursuant to the UCC.

 

6.                   Voting, Distributions and Receivables.

 

(a)                The Secured Party agrees that unless an Event of Default
shall have occurred and be continuing, the Grantor may, to the extent the
Grantor has such right as a holder of the Collateral consisting of securities,
other capital stock or indebtedness owed by any obligor, vote and give consents,
ratifications and waivers with respect thereto, except to the extent that, in
the Secured Party’s reasonable judgment, any such vote, consent, ratification or
waiver could detract from the value thereof as Collateral or which could be
inconsistent with or result in any violation of any provision of the Purchase
Agreement or this Agreement, and from time to time, upon request from the
Grantor, the Secured Party shall deliver to the Grantor suitable proxies so that
the Grantor may cast such votes, consents, ratifications and waivers.

 

(b)                The Secured Party agrees that the Grantor may, unless an
Event of Default shall have occurred and be continuing, receive and retain all
cash dividends and other distributions with respect to the Collateral consisting
of securities, other capital stock or indebtedness owed by any obligor.

 

(c)                If any Event of Default shall have occurred and be
continuing, the Secured Party may, or at the request and option of the Secured
Party the Grantor shall, notify account debtors and other persons obligated on
any of the Collateral of the security interest of the Secured Party in any
account, chattel paper, general intangible, instrument or other Collateral and
that payment thereof is to be made directly to the Secured Party.

 

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7.                   Covenants. The Grantor covenants as follows:

 

(a)                The Grantor will not, without providing at least 30 days’
prior written notice to the Secured Party, change its legal name, identity, type
of organization, jurisdiction of organization, corporate structure, or the
location of its chief executive office or its principal place of business. The
Grantor will, prior to any change described in the preceding sentence, take all
actions reasonably requested by the Secured Party to maintain the perfection and
priority of the Secured Party’s security interest in the Collateral.

 

(b)                The Collateral will be kept at the principal places of
business of the Grantor and/or its subsidiaries, and the Grantor will not remove
the Collateral from such locations without providing at least 30 days’ prior
written notice to the Secured Party. The Grantor will, prior to any change
described in the preceding sentence, take all actions reasonably required by the
Secured Party to maintain the perfection and priority of the Secured Party’s
security interest in the Collateral.

 

(c)                The Grantor shall, at its own cost and expense, defend title
to the Collateral and the First Priority lien and security interest of the
Secured Party therein against the claim of any person claiming against or
through the Grantor and shall maintain and preserve such perfected First
Priority security interest for so long as this Agreement shall remain in effect.
The Grantor hereby agrees that it shall promptly notify the Secured Party upon
obtaining information which would require any action in order to perfect or
maintain the perfection of the Secured Party’s security interest in the
Collateral.

 

(d)                The Grantor will not sell, offer to sell, dispose of, convey,
assign or otherwise transfer, grant any option with respect to, restrict, or
grant, create, permit or suffer to exist any mortgage, pledge, lien, security
interest, option, right of first offer, encumbrance or other restriction or
limitation of any nature whatsoever on, any of the Collateral or any interest
therein except with the prior written consent of the Secured Party or as
otherwise permitted by the Purchase Agreement.

 

(e)                The Grantor will keep the Collateral in good order and repair
and will not use the same in violation of law or any policy of insurance
thereon. The Grantor will permit the Secured Party, or its designee, to inspect
the Collateral at any reasonable time, wherever located.

 

(f)                 The Grantor will pay promptly when due all taxes,
assessments, governmental charges, and levies upon the Collateral or incurred in
connection with the use or operation of the Collateral or incurred in connection
with this Agreement except as provided in the Purchase Agreement.

 

(g)                The Grantor will continue to operate its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances.

 

(h)                The Grantor shall carry and maintain in full force and
effect, at its own expense and with financially sound and reputable insurance
companies, insurance with respect to the Collateral in such amounts, with such
deductibles and covering such risks as is customarily carried by companies
engaged in the same or similar businesses and owning similar properties in the
localities where the Grantor operates. All such insurance shall (i) name the
Secured Party as loss payee (to the extent covering risk of loss or damage to
tangible property) and as an additional named insured as its interests may
appear (to the extent covering any other risk), (ii) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least thirty (30) days after receipt by the
Secured Party of written notice thereof and (iii) be reasonably satisfactory in
all other respects to Secured Party.

 

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8.                   Secured Party Appointed Attorney-in-Fact. The Grantor
hereby appoints the Secured Party the Grantor’s attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, from time to time during the continuance of an Event of Default in
the Secured Party’s discretion to take any action and to execute any instrument
which the Secured Party reasonably may deem necessary or advisable to accomplish
the purposes of this Agreement (but the Secured Party shall not be obligated to
and shall have no liability to the Grantor or any third party for failure to do
so or take action). This appointment, being coupled with an interest, shall be
irrevocable. The Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof.

 

9.                   Secured Party May Perform. If the Grantor fails to perform
any obligation contained in this Agreement, the Secured Party may itself
perform, or cause performance of, such obligation, and the expenses of the
Secured Party incurred in connection therewith shall be payable by the Grantor;
provided that the Secured Party shall not be required to perform or discharge
any obligation of the Grantor.

 

10.               Reasonable Care. The Secured Party shall have no duty with
respect to the care and preservation of the Collateral beyond the exercise of
reasonable care. The Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Secured
Party accords its own property, it being understood that the Secured Party shall
not have any responsibility for (a) ascertaining or taking action with respect
to any claims, the nature or sufficiency of any payment or performance by any
party under or pursuant to any agreement relating to the Collateral or other
matters relative to any Collateral, whether or not the Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral. Nothing set
forth in this Agreement, nor the exercise by the Secured Party of any of the
rights and remedies hereunder, shall relieve the Grantor from the performance of
any obligation on the Grantor’s part to be performed or observed in respect of
any of the Collateral.

 

11.               Remedies Upon Default.

 

(a)                If any Event of Default shall have occurred and be
continuing, the Secured Party, without any other notice to or demand upon the
Grantor, may assert all rights and remedies of a secured party under the UCC or
other applicable law, including, without limitation, the right to take
possession of, hold, collect, sell, lease, deliver, grant options to purchase or
otherwise retain, liquidate or dispose of all or any portion of the Collateral.
If notice prior to disposition of the Collateral or any portion thereof is
necessary under applicable law, written notice mailed to the Grantor at its
notice address as provided in Section 15 hereof ten days prior to the date of
such disposition shall constitute reasonable notice, but notice given in any
other reasonable manner shall be sufficient. So long as the sale of the
Collateral is made in a commercially reasonable manner, the Secured Party may
sell such Collateral on such terms and to such purchaser(s) as the Secured Party
in its absolute discretion may choose, without assuming any credit risk and
without any obligation to advertise or give notice of any kind other than that
necessary under applicable law. Without precluding any other methods of sale,
the sale of the Collateral or any portion thereof shall have been made in a
commercially reasonable manner if conducted in conformity with reasonable
commercial practices of creditors disposing of similar property. At any sale of
the Collateral, if permitted by applicable law, the Secured Party may be the
purchaser, licensee, assignee or recipient of the Collateral or any part thereof
and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold,
assigned or licensed at such sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price of the Collateral or
any part thereof payable at such sale. To the extent permitted by applicable
law, the Grantor waives all claims, damages and demands it may acquire against
the Secured Party arising out of the exercise by it of any rights hereunder. The
Grantor hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Collateral, whether before or
after sale hereunder, and all rights, if any, of marshalling the Collateral and
any other security for the Secured Obligations or otherwise. At any such sale,
unless prohibited by applicable law, the Secured Party or any custodian may bid
for and purchase all or any part of the Collateral so sold free from any such
right or equity of redemption. Neither the Secured Party nor any custodian shall
be liable for failure to collect or realize upon any or all of the Collateral or
for any delay in so doing, nor shall it be under any obligation to take any
action whatsoever with regard thereto. The Grantor agrees that it would not be
commercially unreasonable for the Secured Party to dispose of the Collateral or
any portion thereof by utilizing internet sites that provide for the auction of
assets of the type included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets. The Secured
Party shall not be obligated to clean-up or otherwise prepare the Collateral for
sale.

 

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(b)                If any Event of Default shall have occurred and be
continuing, all rights of the Grantor to (i) exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to Section
6(a) and (ii) receive the dividends and other distributions which it would
otherwise be entitled to receive and retain pursuant to Section 6(b), shall
immediately cease, and all such rights shall thereupon become vested in the
Secured Party, which shall have the sole right to exercise such voting and other
consensual rights and receive and hold such dividends and other distributions as
Collateral.

 

(c)                If any Event of Default shall have occurred and be
continuing, any cash held by the Secured Party as Collateral and all cash
Proceeds received by the Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall be
applied in whole or in part by the Secured Party to the payment of expenses
incurred by the Secured Party in connection with the foregoing or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Secured Party hereunder, including reasonable
attorneys’ fees, and the balance of such proceeds shall be applied or set off
against the Secured Obligations.

 

(d)                Any surplus of such cash or cash Proceeds held by the Secured
Party and remaining after payment in full of all the Secured Obligations shall
be paid over to the Grantor or to whomsoever may be lawfully entitled to receive
such surplus. The Grantor shall remain liable for any deficiency if such cash
and the cash Proceeds of any sale or other realization of the Collateral are
insufficient to pay the Secured Obligations and the reasonable fees and other
charges of any attorneys employed by the Secured Party to collect such
deficiency.

 

(e)                If the Secured Party shall determine to exercise its rights
to sell all or any of the Collateral pursuant to this Section, the Grantor
agrees that, upon request of the Secured Party, the Grantor will, at its own
expense, do or cause to be done all such acts and things as may be necessary to
make such sale of the Collateral or any part thereof valid and binding and in
compliance with applicable law.

 

12.               No Waiver and Cumulative Remedies. The Secured Party shall not
by any act (except by a written instrument pursuant to Section 14), 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. All rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies provided by law.

 

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13.               SECURITY INTEREST ABSOLUTE. The Grantor hereby waives, to the
extent permitted by law, demand, notice, protest, notice of acceptance of this
Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description. All rights of the Secured Party and liens and
security interests hereunder, and all Secured Obligations of the Grantor
hereunder, shall be absolute and unconditional irrespective of:

 

(a)                any change in the time, place or manner of payment of, or in
any other term of, the Secured Obligations, or any rescission, waiver, amendment
or other modification of the Purchase Agreement, this Agreement or any other
agreement, including any increase in the Secured Obligations resulting from any
extension of additional credit or otherwise;

 

(b)                any taking, exchange, substitution, release, impairment or
non-perfection of any Collateral or any other collateral, or any taking,
release, impairment, amendment, waiver or other modification of any guaranty,
for all or any of the Secured Obligations;

 

(c)                any manner of sale, disposition or application of proceeds of
any Collateral or any other collateral or other assets to all or part of the
Secured Obligations;

 

(d)                any default, failure or delay, willful or otherwise, in the
performance of the Secured Obligations; or

 

(e)                any defense, set-off or counterclaim (other than a defense of
payment or performance) that may at any time be available to, or be asserted by,
the Grantor against the Secured Party.

 

14.               Amendments. None of the terms or provisions of this Agreement
may be amended, modified, supplemented, terminated or waived, and no consent to
any departure by the Grantor therefrom shall be effective unless the same shall
be in writing and signed by the Secured Party and the Grantor, and then such
amendment, modification, supplement, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which made or given.

 

15.               Addresses For Notices. All notices and other communications
provided for in this Agreement shall be in writing and shall be given in the
manner and become effective as set forth in the Purchase Agreement, and
addressed to the respective parties at their addresses as specified in Section
9(h) of the Purchase Agreement or as to either party at such other address as
shall be designated by such party in a written notice to each other party.

 

16.               Continuing Security Interest; Further Actions. This Agreement
shall create a continuing First Priority lien and security interest in the
Collateral and shall (a) subject to Section 17, remain in full force and effect
until payment and performance in full of the Secured Obligations, (b) be binding
upon the Grantor, its successors and assigns, and (c) inure to the benefit of
the Secured Party and its successors, transferees and assigns; provided that the
Grantor may not assign or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the Secured Party.

 

17.               Termination; Release. On the date on which all Secured
Obligations have been paid and performed in full, the Secured Party will, at the
request and sole expense of the Grantor, (a) duly assign, transfer and deliver
to or at the direction of the Grantor (without recourse and without any
representation or warranty) such of the Collateral as may then remain in the
possession of the Secured Party, together with any monies at the time held by
the Secured Party hereunder, and (b) execute and deliver to the Grantor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement.

 

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18.               GOVERNING LAW. This Agreement and any claim, controversy,
dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Agreement and the transactions
contemplated hereby and thereby shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

19.               Arbitration; Waiver of Jury Trial.  Any disputes, claims, or
controversies arising out of or relating to this Agreement or the transactions
contemplated thereby, or the breach, termination, enforcement, interpretation or
validity thereof, including the determination of the scope or applicability of
this Agreement to arbitrate, shall be referred to and resolved solely and
exclusively by binding arbitration to be conducted before the Judicial
Arbitration and Mediation Service (“JAMS” ), or its successor pursuant the
expedited procedures set forth in the JAMS Comprehensive Arbitration Rules and
Procedures (the “Rules” ), including Rules 16.1 and 16.2 of those Rules. The
arbitration shall be held in New York, New York, before a tribunal consisting of
three (3) arbitrators each of whom will be selected in accordance with the
“strike and rank” methodology set forth in Rule 15. Either party to this
Agreement may, without waiving any remedy under this Agreement, seek from any
federal or state court sitting in the State of New York any interim or
provisional relief that is necessary to protect the rights or property of that
party, pending the establishment of the arbitral tribunal. The costs and
expenses of such arbitration shall be paid by and be the sole responsibility of
the Grantor, including but not limited to the Secured Party’s attorneys’ fees
and each arbitrator’s fees. The arbitrators’ decision must set forth a reasoned
basis for any award of damages or finding of liability. The arbitrators’
decision and award will be made and delivered as soon as reasonably possibly and
in any case within sixty (60) days’ following the conclusion of the arbitration
hearing and shall be final and binding on the parties and may be entered by any
court having jurisdiction thereof. THE GRANTOR AND THE SECURED PARTY HEREBY
WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

 

20.               Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all taken together shall constitute a single contract. Delivery of
an executed counterpart of a signature page to this Agreement by facsimile or in
electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a
manually executed counterpart of this Agreement. This Agreement and the other
Transaction Documents constitute the entire contract among the parties with
respect to the subject matter hereof and supersede all previous agreements and
understandings, oral or written, with respect thereto.

 

[signature page follows]

 

 

 10 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Security Agreement as
of the date first above written.

 

  PREDICTIVE ONCOLOGY INC.,       as Grantor                     By:  /s/ Bob
Myers     Name: Bob Myers     Title: CFO                                        
    OASIS CAPITAL, LLC,       as Secured Party                     By:  /s/ Adam
Long     Name: Adam Long     Title: Managing Partner 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

** Signature Page to Security Agreement **