EXHIBIT 10.1

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (as amended, modified or otherwise supplemented from
time to time, this “Agreement”), dated and effective as of the day of August 1,
2017, is made by Viridis Analytics MA, LLC, a Delaware limited liability company
(the “Company”) in favor of PalliaTech, Inc. (“Secured Party”).

 

RECITALS

 

A. Signal Bay, Inc., a Delaware corporation (“Buyer”) has issued that certain
secured promissory note of even date herewith to Secured Party (the “Note”), in
consideration for the purchase of the sole outstanding membership interest of
the Company from Secured Party pursuant to that certain Membership Interest
Transfer Agreement, dated as of July 26, 2017, by and among Sececured Party,
Buyer, and the Company (the “Transfer Agreement”).

 

B. In connection with acceptance of the Note, Secured Party requires that it be
granted, and the Buyer and the Company have agreed to grant to Secured Party, a
security interest in (i) all of the Company’s right, title and interest now
owned or hereafter acquired in the inventory, equipment, products and accounts
receivable of the Company and all other personal property of the Company, and
(ii) the proceeds (whether cash or non-cash) to be paid and payable to the
Company upon any assignment or other transfer of any right, title or interest of
the Company in any of the items of personal property within (i); whether now
existing or hereafter acquired or arising (the “Collateral”).

 

NOW, THEREFORE, in order to induce Secured Party to accept the Note in
consideration for the Note, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company hereby
represents, warrants, covenants, grants and agrees as follows:

 

AGREEMENT

 

1. Incorporation of Recitals; Capitalized Terms. The recitals set forth
hereinabove are incorporated herein by this reference. All capitalized terms not
otherwise defined herein have the meanings ascribed to them in the Transfer
Agreement. Unless otherwise defined herein, all terms defined in the UCC have
the respective meanings given to those terms in the UCC.

 

2. Definitions.

 

(a) “Collateral” has the meaning given to that term in the Recital B hereof.

 

(b) “Lien” means any mortgage, deed of trust, lien, pledge, security interest or
other charge or encumbrance, of any kind whatsoever, including but not limited
to the interest of the lessor or titleholder under any capitalized lease, title
retention contract or similar agreement.

 

(c) “Obligation” means the then outstanding principal amount due under the Note
plus all accrued unpaid interest thereon.

 

(d) “UCC” means the Uniform Commercial Code as in effect in the State of
Colorado from time to time.

 

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3. Security Interest.

 

(a) The Company hereby grants to Secured Party a security interest: (a) in the
Collateral; and (b) in all proceeds thereof.

 

(b) The Company hereby authorizes Secured Party to file appropriate UCC or other
financing statements, all continuation, amendments and modification filings
related thereto and any other filings or recordings Secured Party deems
necessary or appropriate with respect to the Collateral and Secured Party’s
interest therein. Secured Party may, in its discretion, describe the Collateral
as “all assets” or “all personal property.”

 

(c) The security interest granted to Secured Party hereunder shall secure the
Obligation and shall be a first priority security interest in the Collateral.

 

4. The Company’s Representations, Warranties, Covenants and Agreements. The
Company hereby represents and warrants to Secured Party, and covenants and
agrees, that:

 

(a) The Company is the owner of (or, in the case of after-acquired Collateral,
at the time the Company acquires rights in the Collateral, will be the owner
thereof) and that no other person or entity has (or, in the case of
after-acquired Collateral, at the time the Company acquires rights therein, will
have) any right, title, claim or interest (by way of Lien or otherwise) in,
against or to the Collateral.

 

(b) Upon the filing of UCC-l financing statements in the appropriate filing
offices, Secured Party has (or in the case of after-acquired Collateral, at the
time the Company acquires rights therein, will have) a first priority perfected
security interest in the Collateral to the extent that a security interest in
the Collateral can be perfected by such filing.

 

(c) This Agreement (i) has been duly authorized by all necessary corporate
action of the Company, (ii) has been duly executed by the Company, and (iii)
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.

 

(d) The Company’s place of business (or, if the Company has more than one place
of business, its principal executive office) is located at 62930 O. B. Riley
Road, Suite 300, Bend, Oregon 97703. The Company’s true legal name is, and has
been since its formation, as set forth in the preamble to this Agreement. The
Company’s jurisdiction of formation is and has been, as set forth in the
preamble to this Agreement. The Company does not do business under any trade
name or fictitious business name and has never used any other trade name or
fictitious business name. The Company will notify Secured Party, in writing,
within at least thirty (30) days of any change in its place of business or
jurisdiction of formation or the adoption or change of its legal name, any trade
name or fictitious business name, and will upon request of Secured Party,
execute or authenticate any additional financing statements or other
certificates or records necessary to reflect any change in its place of business
or jurisdiction of formation or the adoption or change in its legal name, trade
names or fictitious business name.

 

5. Protection of Collateral by The Company.

 

(a) The Company will not, without the prior written consent of Secured Party,
sell, transfer or dispose of any Collateral except for sales of inventory,
licenses or sublicenses of intellectual property to customers in the ordinary
course of The Company’s business. The Company shall keep the Collateral free
from any and all Liens. The Company shall, at its own expense, appear in and
defend any and all actions and proceedings which purport to affect title to the
Collateral, or any part thereof, or which purport to affect the security
interest of Secured Party therein under this Agreement.

 

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(b) The Company will keep the Collateral current, collected and/or in good
condition and repair, and will not misuse, abuse, allow to deteriorate, waste or
destroy the Collateral or any part thereof, except for ordinary wear and tear
resulting from its normal and expected use in the Company’s business and will
not use or permit any Collateral to be used in violation in any material respect
of any applicable law, rule or regulation, or in violation of any policy of
insurance covering the Collateral. Secured Party may examine and inspect the
Collateral at any reasonable time, wherever located. The Company shall perform,
observe, and comply in all material respects with all of the material terms and
provisions to be performed, observed or complied with by it under each contract,
agreement or obligation relating to the Collateral.

 

(c) The Company, in a timely manner, will execute or otherwise authenticate, or
obtain, any document or other record, give any notices, do all other acts, and
pay all costs associated with the foregoing, that Secured Party determines is
reasonably necessary to protect the Collateral against rights, claims or
interests of third parties, or otherwise to preserve the Collateral as security
hereunder.

 

(d) The Company shall promptly notify Secured Party of any claim against the
Collateral adverse to the interest of Secured Party therein.

 

(e) The Company shall promptly pay when due all taxes and other governmental
charges, all Liens and all other charges now or hereafter imposed upon or
affecting any Collateral.

 

6. Further Acts of The Company. The Company shall, at the request of Secured
Party, execute or otherwise authenticate and deliver to Secured Party any
financing statements, financing statement changes and any and all additional
instruments, documents and other records, and The Company shall perform all
actions, that from time to time Secured Party may reasonably deem necessary or
desirable to carry into effect the provisions of this Agreement or to establish
or maintain a perfected security interest in the Collateral having the priority
provided for herein or otherwise to protect Secured Party’s interest in the
Collateral.

 

7. Effect of Additional Security. If the performance of all or any portion of
the Obligation shall at any time be secured by any other collateral, the
exercise by Secured Party, in the event of a default in the performance of any
such obligation, of any right or remedy under any agreement or other record
granting a Lien on or security interest in such collateral shall not be
construed as or deemed to be a waiver of, or limitation upon, the right of
Secured Party to exercise, at any time and from time to time thereafter, any
right or remedy under this Agreement or under any other such agreement or
record.

 

8. Default. Upon the failure to comply with the terms and conditions of any Loan
Document and the continuance thereof beyond any applicable cure periods under
the Loan Documents (a “Default”), Secured Party shall have all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral) or, to the extent required by applicable
law, the Uniform Commercial Code as in effect in the jurisdiction where Secured
Party enforces such rights and remedies.

 

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9. No Implied Waivers. No delay or omission on the part of Secured Party in
exercising any right or remedy created by, connected with or provided for in
this Agreement or arising from any default by the Company or by any other person
or entity the performance of whose obligations is secured hereby, shall be
construed as or be deemed to be an acquiescence in or a waiver of such default
or a waiver of or limitation upon the right of Secured Party to exercise, at any
time and from time to time thereafter, any right or remedy under this Agreement.
No waiver of any breach of any of the covenants or conditions in this Agreement
shall be deemed to be a waiver of or acquiescence in or consent to any previous
or subsequent breach of the same or any other covenant or condition.

 

10. Entire Agreement. This Agreement, together with the Transfer Agreement and
the Note, contain the entire understanding and agreement of the Company and
Secured Party with respect to the subject matter hereof and may not be altered
or amended in any way except by a written agreement signed by the parties. No
provision of this Agreement or right of Secured Party hereunder can be waived,
nor shall the Company be released from its obligations hereunder, except by a
writing duly executed by Secured Party.

 

11. Transfer of Indebtedness. Upon the transfer by Secured Party of all or any
portion of the indebtedness secured hereby, Secured Party may transfer therewith
all or any portion of the security interest created hereunder, but Secured Party
shall retain all of its rights hereunder with respect to any part of such
indebtedness and any part of its security interest hereunder not so transferred.

 

12. Term; Binding Effect. This Agreement shall be and remain in full force and
effect until the Obligation has been fully performed and paid. Upon expiration
and payment or conversion in full of the Obligation, this Agreement shall
automatically terminate and the Company shall be permitted to file or cause
Secured Party to file one or more UCC termination statements with respect to the
Collateral. Each of the provisions hereof shall be binding upon the Company and
its legal representatives, successors and assigns and shall inure to the benefit
of Secured Party and its legal representatives, successors and assigns.

 

13. Rules of Construction. Terms used in the singular shall apply to the plural,
and vice versa, as the context requires; likewise masculine, feminine and neuter
genders shall be interchangeable as the context requires. The use of the
disjunctive term “or” does not imply an exclusion of the conjunctive, i.e., “or”
shall have the same meaning as the expression “and/or.” “Including” shall not be
limiting. Headings and section titles are for convenience of reference only and
are not substantive parts of this Agreement, and shall not be given effect in
construing the provisions of this Agreement. Each reference to a Loan Document
shall mean such Loan Document as from time to time extended, modified, renewed,
restated, reaffirmed, supplemented or amended.

 

14. Severability. If any provision of this Agreement, or the application thereof
to any person or circumstance, shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
to persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.

 

15. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.

 

16. Governing Law and Jurisdiction. This Agreement shall be deemed to be
executed and delivered in the State of Colorado. Each of the Company and Secured
Party: (i) agrees that this Agreement shall be construed according to and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of law (except to the extent governed by the UCC); (ii) consents to
personal jurisdiction in the State of Colorado in the state and United States
courts in the City of Denver, Colorado; and (iii) consents to venue in the City
of Denver, Colorado, for all actions and proceedings with respect to this
Agreement, the Transfer Agreement and the Note, and waives any right it may have
to assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 16.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned has executed this Security Agreement as of
the day and year first hereinabove written.

 

 

  COMPANY:

 

 

 

 

VIRIDIS ANALYTICS MA, LLC,

 

 

A Delaware limited liability company

 

        By: /s/ William Waldrop

 

 

William Waldrop       Manager  

 

Accepted and Agreed:

 

 

SECURED PARTY:

 

 

 

PALLIATECH, INC.

 

      By:

/s/ Michelle Bodner

 

Michelle Bodner    

Authorized Signatory

       

BUYER:

 

 

 

SIGNAL BAY, INC.

 

 

 

 

By:

/s/ William Waldrop

 

 

William Waldrop

 

 

Chief Executive Officer

 

 

 

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