EXHIBIT 10.94

 

EXECUTION COPY

 

SECURITY AGREEMENT

 

This Security Agreement (this "Agreement"), is made as of 4th day of December,
2015 by and between PositiveID Corporation, a Delaware corporation (the "Secured
Party"); and Thermomedics, Inc., a Nevada corporation ("Debtor") (together, the
"Parties").

 

RECITALS:

 

A. The Debtor, Secured Party and Sanomedics, Inc., a Delaware corporation and
sole owner of the Debtor ("Sano") have entered into that certain Management
Services and Control Agreement dated as of the date hereof ("MSA") in connection
with that certain Stock Purchase Agreement dated October 21, 2015 by and among
the Secured Party and Sano, as amended ("Purchase Agreement").

 

B. Pursuant to Sections 2.02(a) and 2.03(b)(i) of the Purchase Agreement, the
Secured Party agreed to advance the Cash Purchase Price less certain amounts as
set forth in the Purchase Agreement to Sano as of the date hereof (the "Purchase
Price Advance").

 

C. Pursuant to Section 5 of the MSA, the Secured Party has agreed to advance
funds (the "MSA Advance" and together with the Purchase Price Advance, the
"Advance") to the Debtor on an as needed basis.

 

D. The obligation of the Secured Party to make the Advance is subject to the
condition that the Debtor grant to and create in favor of the Secured Party a
security interest in and lien upon all business assets and rights of the Debtor
as hereinafter provided; and

 

E. In order to induce the Secured Party to make the Advance to Debtor, the
Debtor has agreed to the provisions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of and as an inducement to the Secured Party to
make the Advance to Debtor, the parties hereto, intending to be legally bound,
covenant and agree as follows:

 

Section 1. Definitions.

 

(a) Certain Definitions. In addition to the words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof otherwise clearly requires:

 

(i) "Collateral" shall mean all personal property and assets of Debtor,
including, without limitation, all of the following items, whether now owned or
now due, or in which the Debtor has an interest or hereafter, at anytime in the
future, acquired, arising or to become due, or in which the Debtor obtains an
interest, and all products, proceeds, replacements, substitutions and accessions
of or to any of the following, which to the extent not defined below, shall have
the meanings given to them under the Uniform Commercial Code as enacted in the
State of Florida or as enacted in the state in which such Collateral is located:

 

A.

all accounts and accounts receivable;

B.

all inventory (including raw materials, work-in-process, finished goods and
supplies;

 

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C.

all contract rights;

D.

all general intangibles (including, without limitation, payment intangibles,
software, trademarks, patents, copyrights or other intellectual property rights
of Debtor);

E.

all equipment (including all machinery, furniture and fixtures); F. all goods;

G.

all chattel paper (whether tangible or electronic); H. all fixtures;

I.

all investment property (including, without limitation, all financial assets,
certificated and uncertificated securities, securities accounts and security
entitlements);

J.

all letter-of-credit rights;

K.

all rights under judgments, all commercial tort claims and choses in action;

L.

all books, records and information relating to the Collateral and/or to the
operation of the Debtor's business and all rights of access to such books,
records and information and all property in which such books, records and
information are stored, recorded and maintained;

M.

all instruments, promissory notes, documents of title, documents, policies and
certificates of insurance, securities, deposits, deposit accounts, money, cash
or other property;

N.

all federal, state and local tax refunds and/or abatements to which the Debtor
is or becomes entitled no matter how or when arising, including not limited to
any loss carryback tax refunds;

O.

all insurance proceeds, refunds and premium rebates, including without
limitation proceeds of fire and credit insurance, whether any of such proceeds,
refunds and premium rebates arise out of any of the foregoing (A-P) or
otherwise; and

P.

all liens, guaranties, rights, remedies and privileges pertaining to any of the
foregoing (A-P) including the right of stoppage in transit.

 

(ii) "Obligations" means all indebtedness of the Debtor to the Secured Party
arising on or after the date hereof under the Advance, both principal and
interest, and any and all extensions, renewals, re-financing or re-funding, in
whole or in part, thereof.

 

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(iii) "Event(s) of Default" shall mean any default or material breach of the
terms, conditions or covenants of this Agreement, the MSA, or the Purchase
Agreement. The Secured Party and the Debtor agree and acknowledge that for
purposes of the Purchase Price Advance (as well as the MSA Advance as set forth
in the MSA), an Event of Default shall include the event described in Section 11
of the MSA.

 

(b) Other Definitions. Words and terms defined in the MSA shall, unless the
context hereof otherwise clearly requires, have the same meanings herein as
provided in the MSA.

 

(c) Construction. Unless the context of this Agreement otherwise clearly
requires, references to the plural include the singular, the singular the plural
and the part the whole, and "or" has the inclusive meaning represented by the
phrase "and/or". The words "hereof", "herein", "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect.
Section, subsection and exhibit references are to this Agreement unless
otherwise specified.

 

Section 2. Security Interest. Debtor, on the terms set forth in this Agreement
and as security for the full and timely payment of the Obligations in accordance
with the terms thereof and of the instruments now or hereafter evidencing the
Obligations, hereby grants to the Secured Party a continuing security interest,
under the Uniform Commercial Code (as in effect on the date hereof and as
amended from time to time hereafter) of each state having jurisdiction from time
to time with respect to all or any portion of the Collateral (the "Code"), in
and a lien on the Collateral. In addition to all the rights given to the Secured
Party by the MSA, the Purchase Agreement and this Agreement, the Secured Party
shall have all the rights and remedies of a secured party under the Code. In
connection with the grant of security interest made hereby, Debtor hereby
authorizes Secured Party to file or cause to be filed one or more financing
statements, amendments to financing statements and/or in lieu financing
statements with any filing office for the purpose of perfecting or continuing
the perfection of the security interest in the Collateral.

 

Section 3. Principles Applicable to the Collateral. The parties agree that, at
all times during the term of this Agreement, the following provisions shall be
applicable to the Collateral:

 

(a) The Debtor covenants and agrees that it will keep accurate and complete
books and records concerning the Collateral owned by it in accordance with
generally accepted accounting principles, consistently applied.

 

(b) The Secured Party shall have the right to review the books and records of
the Debtor pertaining to the Collateral and to copy and make excerpts therefrom,
all at such times and as often as the Secured Party may reasonably request.

 

(c) The Debtor shall keep (i) its principal place of business and its chief
executive office, (ii) its records concerning the Collateral, and (iii) its
Collateral at the address set forth on the first page of this Agreement and/or
at the address of the Collateral and at no other location without the prior
written consent of the Secured Party.

 

(d) Notwithstanding the security interest in the Collateral granted to and
created in favor of the Secured Party under this Agreement, the Debtor shall
have the right, until one or more Events of Default beyond any applicable grace
period shall occur and be continuing or shall exist, to sell, lease or otherwise
dispose of the Collateral in the ordinary course of the Debtor's business.

 

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(e) Notwithstanding the security interest in the Collateral granted to and
created in favor of the Secured Party under this Agreement and subject to the
terms of the MSA and the Purchase Agreement, the Debtor shall have the right,
until such time as the Secured Party shall have notified the Debtor that it has
revoked such right based upon an Event of Default beyond any applicable grace
period at its own cost and expense to collect any and all accounts of the Debtor
comprising the Collateral (the "Accounts").

 

(f) The Secured Party shall have the right after a default has occurred under
the MSA beyond applicable grace periods (i) to revoke the right of the Debtor
granted under subsection (e) of this Section 3 by written notice to the Debtor
to such effect, (ii) to take over and direct collection of any and all Accounts
and Collateral of the Debtor, as applicable, (iii) to give notice of the Secured
Party's security interest in such Accounts and Collateral to any or all persons
obligated to the Debtor thereon, (iv) to direct such persons to make payment of
such Accounts directly to the Secured Party and (v) to take control of such
Accounts and any proceeds thereof and Collateral.

 

(g) The Secured Party shall have the right after a default has occurred under
the MSA beyond applicable grace periods to cause a non-interest bearing bank
account entitled "Cash Collateral Account" (the "Collateral Account") to be
opened and maintained for the Debtor by the Secured Party at any bank of its
choosing. All cash proceeds received by the Secured Party from the Debtor
pursuant to subsection (h) of this Section 3 or directly from persons obligated
on Accounts pursuant to subsection (f) of this Section 3 shall be deposited in
the Collateral Account as further security for the payment of the Obligations.
The Secured Party shall have sole dominion and control over all funds deposited
in the Collateral Account, and such funds may be withdrawn therefrom only by the
Secured Party.

 

(h) Upon notice by the Secured Party to the Debtor that the Collateral Account
has been opened in accordance with subsection (g) of this Section 3, the Debtor
shall cause all cash proceeds collected by it to be delivered to the Secured
Party forthwith upon receipt, in the original form in which received, bearing
such endorsements or assignments by the Debtor as may be necessary to permit
collection thereof by the Secured Party, and for such purpose the Debtor hereby
irrevocably authorizes and empowers the Secured Party, its officers, employees
and authorized agents, to endorse and sign the name of the Debtor on all checks,
drafts, money orders or other media of payment so delivered and such
endorsements or assignments shall, for all purposes, be deemed to have been made
by the Debtor prior to any endorsement or assignment thereof by the Secured
Party. The Secured Party may use any convenient or customary means for the
purpose of collecting such checks, drafts, money orders or other media of
payment.

 

Section 4. Certain Covenants. Until payment in full of the Obligations, the
Debtor agrees that:

 

(a) The Debtor has and will have good and marketable title to the Collateral
from time to time owned or acquired by it, free and clear of all liens,
encumbrances and security interests, except security interests granted to and
created in favor of the Secured Party. The Debtor will defend such title against
the claims and demands of all persons.

 

(b) The Debtor will not, without the prior written consent of the Secured Party:
(i) borrow against the Collateral from any person, firm or corporation other
than the Secured Party, (ii) create, incur, assume or suffer to exist any
mortgage, lien, charge or encumbrance on, or security interest in, or pledge of
or conditional sale or other title retention agreement with respect to any of
the Collateral, except the security interest created hereunder, (iii) permit any
levy or attachment to be made against any of the Collateral except a levy or
attachment relating to this Agreement unless removed within sixty (60) days
after written notice by Secured Party to Debtor, (iv) permit any financing
statement to be on file with respect to any of the Collateral, except financing
statements in favor of the Secured Party, or (v) permit any transfer of
Collateral without the consent of the Secured Party.

 

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(c) The Debtor will faithfully preserve and protect the Secured Party's security
interest in the Collateral and will, at its own cost and expense, cause said
security interest to be perfected and continued perfected, and for such purpose
the Debtor will from time to time at the request of the Secured Party execute
and file or record, or cause to be filed or recorded, such instruments,
documents and notices, including, without limitation, financing statements and
continuation statements, as the Secured Party may deem necessary or advisable in
order to perfect and continue perfected said security interest. The Debtor will
do all such other acts and things and execute and deliver all such other
instruments and documents, including, without limitation, further security
agreements, pledges and assignments, as the Secured Party may reasonably deem
necessary or advisable from time to time in order to perfect and preserve the
priority of said security interest as a first lien security interest in the
Collateral prior to the rights of all persons therein or thereto. The Secured
Party is hereby appointed attorney-in-fact for the Debtor to do all acts and
things which it may deem necessary or advisable to preserve, perfect and
continue perfected its security interest in the Collateral, including, without
limitation, the signing of financing and other similar statements.

 

Section 5. Events of Default.

 

(a) If one or more Events of Default shall occur, then the Secured Party may
forthwith proceed to exercise any one or more of the rights and remedies
afforded a secured party by the Code and such other rights and remedies which it
may have at law or in equity, under this Agreement, all of which rights and
remedies shall, to the full extent permitted by law, be cumulative. Without
limitation upon the foregoing, the Secured Party shall have the right without
demand or prior notice to the Debtor or any other person, except as otherwise
required by law (and if notice is required by law, after thirty (30) days' prior
written notice to the Debtor at its address hereinafter set forth) and without
prior judicial hearing or legal proceedings, all of which the Debtor hereby
expressly waives:

 

(i) to enter any premises where Collateral is located and to take possession and
control of the same;

 

(ii) to enforce collection, at the Debtor's expense and either in the name of
the Secured Party or the name of the Debtor, of any or all of the Accounts by
suit or otherwise, to surrender, release or exchange all or any part thereof, or
to compromise or extend or renew (whether or not longer than the original
period) any indebtedness thereunder;

 

(iii) to take over and perform any contract of the Debtor and to take control of
any and all Accounts and proceeds arising therefrom;

 

(iv) to sell all or any portion of the Collateral at public or private sale at
such place or places and at such time or times and in such manner and upon such
terms, whether for cash or credit, as the Secured Party in its sole discretion
may determine; and

 

(v) to endorse in the name of the Debtor any instrument, howsoever received by
the Secured Party, representing proceeds of any of the Collateral.

 

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The Secured Party shall apply the proceeds of any sale or other disposition of
any realization of the Collateral after default first to the payment of the
reasonable costs and expenses incurred by the Secured Party in connection with
such sale or other disposition or realization, including reasonable attorneys'
fees and legal expenses, second to the repayment of the Obligations to the
Secured Party, whether on account of principal or interest or otherwise as the
Secured Party in its sole discretion may elect, and then to the payment of the
balance, if any, as required by law. If the proceeds of any such sale or other
disposition of the Collateral are insufficient to pay the Obligations and the
Secured Party's reasonable costs hereunder or under the MSA, the Debtor shall be
liable for any deficiency.

 

(b) Upon the occurrence of any Event of Default, the Debtor shall promptly upon
demand by the Secured Party assemble the Collateral and make it available to the
Secured Party at a place to be designated by the Secured Party which shall be
reasonably convenient to both parties. The right of the Secured Party under this
Section to have the Collateral assembled and made available to it is the essence
of this Agreement and the Secured Party may, at its election, enforce such right
by any and all remedies available to the Secured Party, including a bill in
equity for specific performance.

 

Section 6. Defeasance. Upon payment in full of the Obligations and provided that
Debtor shall not have any right to future advances under the MSA, this Agreement
shall terminate and be of no further force or effect. Until such time, however,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

 

Section 7. Subrogation and Marshaling. The Debtor hereby waives, surrenders and
agrees not to claim or enforce, so long as the Obligations or any portion
thereof remains outstanding, (a) any right to be subrogated in whole or in part
to any right or claim of the holder of any part of the Obligations and (b) any
right to require marshaling of any assets of the Debtor which right of
subrogation or marshaling might otherwise arise from any payment to the holder
of any part of the Obligations arising out of the enforcement of the security
interest granted hereby, or any other mortgage or security interest granted by
the Debtor or any other person to the Secured Party, or the liquidation of or
the realization upon the Collateral, any other collateral granted by the Debtor
or any other person to the Secured Party, or any part thereof.

 

Section 8. Severability. If any provision of this Agreement shall for any reason
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof, but this Agreement shall be construed as if
such invalid or unenforceable provision had never been contained herein.

 

Section 9. No Waiver; Rights Cumulative. No failure or delay on the part of the
Secured Party in exercising any right, remedy, power or privilege hereunder
shall operate as a waiver thereof or of any other right, remedy, power or
privilege hereunder or under the MSA; nor shall any single or partial exercise
of any such right, remedy, power or privilege preclude any other or further
exercise thereof or of any other right, remedy, power or privilege. The rights
and remedies of the Secured Party under this Agreement are cumulative and not
exclusive of any rights or remedies which it may otherwise have. No modification
or waiver of any provision of this Agreement nor consent to any departure by the
Debtor therefrom shall be effective unless the same shall be in writing, and
then such waiver or consent shall be effective only in the specified instance
and for the specific purpose for which given.

 

Section 10. Notices. Any notice, request, demand or other communication required
or permitted hereunder shall be given in writing by delivering the same in
person to the intended addressee, by overnight courier service with guaranteed
next day delivery or by certified United States Mail, postage prepaid or
telegram sent to the intended addressee at the applicable address as set forth
within the Purchase Agreement or to such different address as either Debtor or
Secured Party shall have designated by written notice to the other sent in
accordance herewith. Such notices shall be deemed given when received or, if
earlier, in the case of delivery by courier service with guaranteed next day
delivery, the next day or the day designated for delivery, or in the case of
delivery by certified United States mail, two days after deposit therein.

 

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Section 11. Governing Law. The Code shall govern the attachment, perfection and
the effect of attachment and perfection of the Secured Party's interest in the
Collateral, and the rights, duties and obligations of the Debtor and the Secured
Party with respect thereto. This Agreement shall be deemed to be a contract
under the laws of the state of Florida and the execution and delivery hereof
and, to the extent not inconsistent with the preceding sentence, the terms and
provisions hereof, shall be governed by and construed in accordance with the
laws of the state of Florida.

 

Section 12. Survival. All representations, warranties, covenants and agreements
contained herein or made in writing in connection herewith shall survive the
execution and delivery of this Agreement and the extension of the MSA.

 

EXECUTED under seal as of the date first above written.

 

 

 

 

DEBTOR:

Thermomedics, Inc.

 

 

 

   

 

By:/s/ Keith Houlihan

 

Witness

 

Name:

Keith Houlihan

 

 

 

Title:

President

 

 

 

 

SECURED PARTY:

 

PositiveID Corporation

 

 

 

   

 

By:/s/ William J. Caragol

 

Witness

 

Name:

William J. Caragol

 

 

 

Title:

Chief Executive Officer

 

 

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