Exhibit 10.3

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT, dated as of April 26, 2017 (this “Agreement”), is among
Helix TCS, Inc., a Delaware corporation (the “Company”), all of the Subsidiaries
of the Company (such subsidiaries, the “Guarantors” and, together with the
Company, the “Debtors”) and RedDiamond Partners, LLC, its endorsees,
transferees, and assigns (collectively, the “Secured Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Company has executed and delivered a series of separate Convertible
Promissory Notes in the principal amount of $104,000 (“Note”) to the Secured
Parties;

 

WHEREAS, pursuant to a certain Subsidiary Guarantee, dated as of the date hereof
(the “Guarantee”), the Guarantors have jointly and severally agreed to guarantee
and act as surety for payment of such Notes and the other obligations
represented by the Transaction Documents; and

 

WHEREAS, in order to induce the Secured Parties to extend the loans evidenced by
the Notes and to enter into all of the other agreements to be entered into in
connection with the transactions contemplated thereby, each Debtor has agreed to
execute and deliver to the Secured Parties this Agreement and to grant the
Secured Parties, pari passu with each other Secured Party, a security interest
in certain property of such Debtor to secure the prompt payment, performance and
discharge in full of all of the Company’s obligations under the Notes and the
other Transaction Documents and the Guarantors’ obligations under the Guarantee.

 

NOW, THEREFORE, in consideration of the premises and for such other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto intending to be legally bound hereby agree as
follows:

 

1.           Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as “account”, “chattel paper”, “commercial tort claim”, “deposit account”,
“document”, “equipment”, “fixtures”, “general intangibles”, “goods”,
“instruments”, “inventory”, “investment property”, “letter-of-credit rights”,
“proceeds”, and “supporting obligations”) shall have the respective meanings
given such terms in Article 9 of the UCC.

 

(a)          “Collateral” means the collateral in which the Secured Party is
granted a security interest by this Agreement and that shall include the
following personal property of the Debtor, whether presently owned or existing
or hereafter acquired or coming into existence, wherever situated, and all
additions and accessions thereto and all substitutions and replacements thereof,
and all proceeds, products and accounts thereof, including, without limitation,
all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith:

 

(i)      all assets

 

(ii)     all revenue

 

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(iii)    all chattel paper

 

(iv)    all deposit accounts

 

(v)     all equipment

 

(vi)    all fixtures

 

(vii)    all general intangibles

 

(viii)  all goods

 

(ix)     all intellectual property

 

(x)      all inventory

 

(xi)     all other tangible and intangible personal property whatsoever of the
Debtors related to the Assets

 

(xii)    account receivables, together with all instruments, all documents of
title representing any of the foregoing, and all right, title, and security with
respect to each account;          

 

(xiii)  All supporting obligations;

 

(xiv)  the products and proceeds of all of the foregoing Collateral set forth in
clauses (i)-(xiii), above.

 

Notwithstanding the foregoing, nothing herein shall be deemed to constitute an
assignment of any asset that, in the event of an assignment, becomes void by
operation of applicable law or the assignment of which is otherwise prohibited
by applicable law (in each case to the extent that such applicable law is not
overridden by Sections 9-406, 9-407, and/or 9-408 of the UCC or other similar
applicable law); provided, however, that to the extent permitted by applicable
law, this Agreement shall create a valid security interest in such asset and, to
the extent permitted by applicable law, this Agreement shall create a valid
security interest in the proceeds of such asset.

 

(b)         “Intellectual Property” means the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, (ii) all letters patent of
the United States, any other country or any political subdivision thereof, all
reissues and extensions thereof, and all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, (iii) all trademarks, trade names, corporate
names, Helix TCS, Inc.s, business names, fictitious business names, trade dress,
service marks, logos, domain names and other source or business identifiers, and
all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and all
common law rights related thereto, (iv) all trade secrets arising under the laws
of the United States, any other country or any political subdivision thereof,
(v) all rights to obtain any reissues, renewals or extensions of the foregoing,
(vi) all licenses for any of the foregoing, and (vii) all causes of action for
infringement of the foregoing.

 

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(c)         “Obligations” means all of the liabilities and obligations (primary,
secondary, direct, contingent, sole, joint or several) due or to become due, or
that are now or may be hereafter contracted or acquired, or owing to, of the
Debtor to the Secured Party, including, without limitation, all obligations
under this Agreement, the Notes, the Guarantee and any other instruments,
agreements or other documents executed and/or delivered in connection herewith
or therewith, in each case, whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from any of the Secured Party as a preference, fraudulent transfer or
otherwise as such obligations may be amended, supplemented, converted, extended
or modified from time to time. Without limiting the generality of the foregoing,
the term “Obligations” shall include, without limitation: (i) principal of, and
interest on the Notes and the loan extended pursuant thereto; (ii) any and all
other fees, indemnities, costs, obligations and liabilities of the Debtor from
time to time under or in connection with this Agreement, the Notes, the
Guarantee, and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith; and (iii) all amounts
(including but not limited to post-petition interest) in respect of the
foregoing that would be payable but for the fact that the obligations to pay
such amounts are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization, or similar proceeding involving the Debtor.

 

(d)         “Organizational Documents” means with respect to the Debtor, the
documents by which the Debtor was organized (such as articles or certificate of
incorporation, certificate of limited partnership or articles of organization,
and including, without limitation, any certificates of designation for preferred
stock or other forms of preferred equity) and that relate to the internal
governance of the Debtor (such as bylaws, a partnership agreement or an
operating, limited liability or members agreement).

 

(e)         “Permitted Liens” shall be those liens evidenced by the security
interests listed on Exhibit A.

 

(f)         “Pledged Interests” shall have the meaning ascribed to such term in
Section 3(i).

 

(g)         “Pledged Securities” shall have the meaning ascribed to such term in
Section 1(a)(x).

 

(h)         “UCC” means the Uniform Commercial Code of the State of New York and
or any other applicable law of any state or states that has jurisdiction with
respect to all, or any portion of, the Collateral or this Agreement, from time
to time. It is the intent of the parties that defined terms in the UCC should be
construed in their broadest sense so that the term “Collateral” will be
construed in its broadest sense. Accordingly if there are, from time to time,
changes to defined terms in the UCC that broaden the definitions, they are
incorporated herein and if existing definitions in the UCC are broader than the
amended definitions, the existing ones shall be controlling.

 

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2.           Grant of Security Interest in Collateral. Subject to the Permitted
Liens, as an inducement for the Secured Party to extend the loan as evidenced by
the Notes and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations, the Debtor
hereby unconditionally and irrevocably pledges, grants and hypothecates to the
Secured Party a security interest in and to, a lien upon and a right of set-off
against all of their respective right, title and interest of whatsoever kind and
nature in and to, the Collateral (a “Security Interest” and, collectively, the
“Security Interests”).

 

3.           Representations, Warranties, Covenants, and Agreements of the
Debtor. Except as set forth under the corresponding section of the disclosure
schedules delivered to the Secured Party concurrently herewith (the “Disclosure
Schedules”), which Disclosure Schedules shall be deemed a part hereof, the
Debtor represents and warrants to, and covenants and agrees with, the Secured
Party as follows:

 

(a)         The Debtor has the requisite corporate, partnership, limited
liability company or other power and authority to enter into this Agreement and
otherwise to carry out its obligations hereunder. The execution, delivery, and
performance by the Debtor of this Agreement and the filings contemplated therein
have been duly authorized by all necessary action on the part of the Debtor and
no further action is required by the Debtor. This Agreement has been duly
executed by the Debtor. This Agreement constitutes the legal, valid, and binding
obligation of the Debtor, enforceable against the Debtor in accordance with its
terms except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, and similar laws of general application relating to
or affecting the rights and remedies of creditors and by general principles of
equity.

 

(b)         The Debtor has no place of business or offices where its books of
account and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or located,
except as set forth on Schedule A attached hereto. Except as specifically set
forth on Schedule A, the Debtor is the record owner of the real property where
such Collateral is located, and there exist no mortgages or other liens on any
such real property except for the Permitted Liens. Except as disclosed on
Schedule A, none of such Collateral is in the possession of any consignee,
bailee, warehouseman, agent, or processor.

 

(c)         Except for Permitted Liens and except as set forth on Schedule B
attached hereto, the Debtor are the sole owner of the Collateral (except for
non-exclusive licenses granted by the Debtor in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims, and are fully authorized to grant the Security Interests. Except as
set forth on Schedule C attached hereto, there is not on file in any
governmental or regulatory authority, agency, or recording office an effective
financing statement, security agreement, license or transfer or any notice of
any of the foregoing (other than those that will be filed in favor of the
Secured Party pursuant to this Agreement) covering or affecting any of the
Collateral. Except as set forth on Schedule C attached hereto and except
pursuant to this Agreement, as long as this Agreement shall be in effect, the
Debtor shall not execute and shall not knowingly permit to be on file in any
such office or agency any other financing statement or other document or
instrument (except to the extent filed or recorded in favor of the Secured Party
pursuant to the terms of this Agreement).

 

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(d)         No written claim has been received that any Collateral or the
Debtor’s use of any Collateral violates the rights of any third party. There has
been no adverse decision to the Debtor’s claim of ownership rights in or
exclusive rights to use the Collateral in any jurisdiction or to the Debtor’s
right to keep and maintain such Collateral in full force and effect, and there
is no proceeding involving said rights pending or, to the best knowledge of the
Debtor, threatened before any court, judicial body, administrative or regulatory
agency, arbitrator or other governmental authority.

 

(e)          The Debtor shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and its
Collateral at the locations set forth on Schedule A attached hereto and may not
relocate such books of account and records or tangible Collateral unless it
delivers to the Secured Party at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements under the UCC and other necessary documents have been filed and
recorded and other steps have been taken to perfect the Security Interests to
create in favor of the Secured Party a valid, perfected and continuing perfected
first priority lien in the Collateral.

 

(f)          This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral, subject only to Permitted Liens securing
the payment and performance of the Obligations. Upon making the filings
described in the immediately following paragraph, all security interests created
hereunder in any Collateral that may be perfected by filing Uniform Commercial
Code financing statements shall have been duly perfected. Except for the filing
of the Uniform Commercial Code financing statements referred to in the
immediately following paragraph, the execution and delivery of deposit account
control agreements satisfying the requirements of Section 9-104(a)(2) of the UCC
with respect to each deposit account of the Debtor, and the delivery of the
certificates and other instruments provided in Section 3, no action is necessary
to create, perfect or protect the security interests created hereunder. Without
limiting the generality of the foregoing, except for the filing of said
financing statements, and the execution and delivery of said deposit account
control agreements, no consent of any third parties and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for (i) the execution, delivery and
performance of this Agreement, (ii) the creation or perfection of the Security
Interests created hereunder in the Collateral or (iii) the enforcement of the
rights of the Secured Party hereunder.

 

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(g)         The Debtor hereby authorizes the Secured Party to file one or more
financing statements under the UCC, with respect to the Security Interests, with
the proper filing and recording agencies in any jurisdiction deemed proper by
it.

 

(h)         The execution, delivery and performance of this Agreement by the
Debtor does not (i) violate any of the provisions of any Organizational
Documents of the Debtor or any judgment, decree, order, or award of any court,
governmental body or arbitrator or any applicable law, rule or regulation
applicable to the Debtor or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing the Debtor’s debt or
otherwise) or other understanding to which the Debtor is a party or by which any
property or asset of the Debtor is bound or affected. If any, all required
consents (including, without limitation, from stockholders or creditors of the
Debtor) necessary for the Debtor to enter into and perform its obligations
hereunder have been obtained.

 

(i)          The ownership and other equity interests in the Debtor, including
the Pledged Securities, and in partnerships and limited liability companies (if
any) included in the Collateral (the “Pledged Interests”) by their express terms
do not provide that they are securities governed by Article 8 of the UCC and are
not held in a securities account or by any financial intermediary.

 

(j)           Except for Permitted Liens, the Debtor shall at all times maintain
the liens and Security Interests provided for hereunder as valid and perfected
first priority liens and security interests in the Collateral in favor of the
Secured Party until this Agreement and the Security Interest hereunder shall be
terminated pursuant to Section 14 hereof. The Debtor hereby agrees to defend the
same against the claims of any and all persons and entities. The Debtor shall
safeguard and protect all Collateral for the account of the Secured Party. At
the request of the Secured Party, the Debtor will sign and deliver to the
Secured Party at any time or from time to time one or more financing statements
pursuant to the UCC in form reasonably satisfactory to the Secured Party and
will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Secured Party to be, necessary or desirable to effect the
rights and obligations provided for herein. Without limiting the generality of
the foregoing, the Debtor shall pay all fees, taxes and other amounts necessary
to maintain the Collateral and the Security Interests hereunder, and the Debtor
shall obtain and furnish to the Secured Party from time to time, upon demand,
such releases and/or subordinations of claims and liens that may be required to
maintain the priority of the Security Interests hereunder.

 

(k)         The Debtor will not transfer, pledge, hypothecate, encumber,
license, sell or otherwise dispose of any of the Collateral (except for
non-exclusive licenses granted by the Debtor in its ordinary course of business
and sales of inventory by the Debtor in its ordinary course of business) without
the prior written consent of the Secured Party.

 

(l)          The Debtor shall keep and preserve its equipment, inventory and
other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.

 

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(m)        The Debtor shall maintain with financially sound and reputable
insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts
customarily insured against by entities of established reputation having similar
properties similarly situated and in such amounts as are customarily carried
under similar circumstances by other such entities and otherwise as is prudent
for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof. The Debtor shall cause each insurance policy
issued in connection herewith to provide, and the insurer issuing such policy to
certify to the Secured Party, that (a) the Secured Party will be named as lender
loss payee and additional insured under each such insurance policy; (b) if such
insurance be proposed to be cancelled or materially changed for any reason
whatsoever, such insurer will promptly notify the Secured Party and such
cancellation or change shall not be effective as to the Secured Party for at
least thirty (30) days after receipt by the Secured Party of such notice, unless
the effect of such change is to extend or increase coverage under the policy;
and (c) the Secured Party will have the right (but no obligation) at its
election to remedy any default in the payment of premiums within thirty (30)
days of notice from the insurer of such default. If no Event of Default (as
defined in the Notes) exists and if the proceeds arising out of any claim or
series of related claims do not exceed $104,000, loss payments in each instance
will be applied by the applicable Debtor to the repair and/or replacement of
property with respect to which the loss was incurred to the extent reasonably
feasible, and any loss payments or the balance thereof remaining, to the extent
not so applied, shall be payable to the applicable Debtor; provided, however,
that payments received by the Debtor after an Event of Default occurs and is
continuing or in excess of $104,000 for any occurrence or series of related
occurrences shall be paid to the Secured Party and, if received by the Debtor,
shall be held in trust for the Secured Party and immediately paid over to the
Secured Party unless otherwise directed in writing by the Secured Party. Copies
of such policies or the related certificates, in each case, naming the Secured
Party as lender loss payee and additional insured shall be delivered to the
Secured Party at least annually and at the time any new policy of insurance is
issued.

 

(n)         The Debtor shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient detail, of any
material adverse change in the Collateral, and of the occurrence of any event
that would have a material adverse effect on the value of the Collateral or on
the Secured Party’s security interest therein.

 

(o)         The Debtor shall promptly execute and deliver to the Secured Party
such further deeds, mortgages, assignments, security agreements, financing
statements, or other instruments, documents, certificates, and assurances and
take such further action as the Secured Party may from time to time request and
may in its sole discretion deem necessary to perfect, protect, or enforce the
Secured Party’s security interest in the Collateral including, without
limitation in which the Secured Party has been granted a security interest
hereunder substantially in a form reasonably acceptable to the Secured Party.

 

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(p)         The Debtor shall permit the Secured Party and its representatives
and agents to inspect the Collateral during normal business hours and upon
reasonable prior notice and to make copies of records pertaining to the
Collateral as may be reasonably requested by the Secured Party from time to
time.

 

(q)         The Debtor shall take all steps reasonably necessary to diligently
pursue and seek to preserve, enforce, and collect any rights, claims, causes of
action and accounts receivable in respect of the Collateral.

 

(r)         The Debtor shall promptly notify the Secured Party in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by the Debtor that may materially affect the value of the Collateral,
the Security Interest or the rights and remedies of the Secured Party hereunder.

 

(s)         All information heretofore, herein, or hereafter supplied to the
Secured Party by or on behalf of the Debtor with respect to the Collateral is
accurate and complete in all material respects as of the date furnished.

 

(t)          The Debtor shall at all times preserve and keep in full force and
effect their respective valid existence and good standing and any rights and
franchises material to its business.

 

(u)         The Debtor will not change its name, type of organization,
jurisdiction of organization, organizational identification number (if it has
one), legal or corporate structure, or identity, or add any new fictitious name
unless it provides at least thirty (30) days’ prior written notice to the
Secured Party of such change and, at the time of such written notification, the
Debtor provides any financing statements or fixture filings necessary to perfect
and continue the perfection of the Security Interests granted and evidenced by
this Agreement.

 

(v)         Except in the ordinary course of business, the Debtor may not
consign any of its inventory or sell any of its inventory on bill and hold, sale
or return, sale on approval, or other conditional terms of sale without the
consent of the Secured Party, which shall not be unreasonably withheld, delayed,
denied, or conditioned.

 

(w)        The Debtor may not relocate its chief executive office to a new
location without providing 30 days prior written notification thereof to the
Secured Party and so long as, at the time of such written notification, the
Debtor provides any financing statements or fixture filings necessary to perfect
and continue the perfection of the Security Interests granted and evidenced by
this Agreement.

 

(x)         The Debtor was organized and remains organized solely under the laws
of the state of Delaware.

 

(y)         The Debtor does not have any trade names except, has not used any
name other than that stated in the preamble hereto, and no entity has merged
into the Debtor or been acquired by the Debtor within the past five years.

 

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(z)         At any time and from time to time that any Collateral consists of
instruments, certificated securities or other items that require or permit
possession by the secured party to perfect the security interest created hereby,
the applicable Debtor shall deliver such Collateral to the Secured Party.

 

(aa)       The Debtor, in its capacity as issuer, hereby agrees to comply with
any and all orders and instructions of the Secured Party regarding the Pledged
Interests consistent with the terms of this Agreement without the further
consent of the Debtor as contemplated by Section 8-106 (or any successor
section) of the UCC. Further, the Debtor agrees that it shall not enter into a
similar agreement (or one that would confer “control” within the meaning of
Article 8 of the UCC) with any other person or entity.

 

(bb)       The Debtor shall cause all tangible chattel paper constituting
Collateral to be delivered to the Secured party, or, if such delivery is not
possible, then to cause such tangible chattel paper to contain a legend noting
that it is subject to the security interest created by this Agreement. To the
extent that any Collateral consists of electronic chattel paper, the applicable
Debtor shall cause the underlying chattel paper to be “marked” within the
meaning of Section 9-105 of the UCC (or successor section thereto).

 

(cc)        If there is any investment property or deposit account included as
Collateral that can be perfected by “control” through an account control
agreement, the applicable Debtor shall cause such an account control agreement,
in form and substance in each case satisfactory to the Secured Party, to be
entered into and delivered to the Secured Party.

 

(dd)      To the extent that any Collateral consists of letter-of-credit rights,
the applicable Debtor shall cause the issuer of each underlying letter of credit
to consent to an assignment of the proceeds thereof to the Secured Party.

 

(ee)       To the extent that any Collateral is in the possession of any third
party, the Debtor shall join with the Secured Party in notifying such third
party of the Secured Party’s security interest in such Collateral and shall use
its best efforts to obtain an acknowledgement and agreement from such third
party with respect to the Collateral, in form and substance reasonably
satisfactory to the Secured Party.

 

(ff)        If the Debtor shall at any time hold or acquire a commercial tort
claim, it shall promptly notify the Secured Party in a writing signed by the
Debtor 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.

 

(gg)       The Debtor shall immediately provide written notice to the Secured
Party of any and all accounts that arise out of contracts with any governmental
authority and, to the extent necessary to perfect or continue the perfected
status of the Security Interests in such accounts and proceeds thereof, shall
execute and deliver to the Secured Party an assignment of claims for such
accounts and cooperate with the Secured Party in taking any other steps
required, in its judgment, under the Federal Assignment of Claims Act or any
similar federal, state or local statute or rule to perfect or continue the
perfected status of the Security Interests in such accounts and proceeds
thereof.

 

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(hh)       The Debtor will from time to time, at its expense, promptly execute
and deliver all such further instruments and documents, and take all such
further action as may be necessary or desirable, or as the Agent may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to exercise and
enforce their rights and remedies hereunder and with respect to any Collateral
or to otherwise carry out the purposes of this Agreement.

 

(ii)         Exhibit B attached hereto lists all of the patents, patent
applications, trademarks, trademark applications, registered copyrights, and
domain names owned by any of the Debtor as of the date hereof. Exhibit B lists
all material licenses in favor of the Debtor for the use of any patents,
trademarks, copyrights and domain names as of the date hereof. All material
patents and trademarks of the Debtor have been duly recorded at the United
States Patent and Trademark Office and all material copyrights of the Debtor
have been duly recorded at the United States Copyright Office.

 

(jj)         None of the account debtors or other persons or entities obligated
on any of the Collateral is a governmental authority covered by the Federal
Assignment of Claims Act or any similar federal, state or local statute or rule
in respect of such Collateral.

 

4.           Effect of Pledge on Certain Rights. If any of the Collateral
subject to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted
into voting equity or ownership interests upon the occurrence of certain events
(including, without limitation, upon the transfer of all or any of the other
stock or assets of the issuer), it is agreed that the pledge of such equity or
ownership interests pursuant to this Agreement or the enforcement of any of the
Secured Party’s rights hereunder shall not be deemed to be the type of event
that would trigger such conversion rights notwithstanding any provisions in the
Organizational Documents or agreements to which the Debtor is subject or to
which the Debtor is party.

 

5.           Defaults. The following events shall be “Events of Default”:

 

(a)         The occurrence of an Event of Default (as defined in the Notes)
under the Notes;

 

(b)         Any representation or warranty of the Debtor in this Agreement shall
prove to have been incorrect in any material respect when made;

 

(c)         The failure by the Debtor to observe or perform any of its
obligations hereunder for five (5) days after delivery to it of notice of such
failure by or on behalf of the Secured Party unless such default is capable of
cure but cannot be cured within such time frame and the Debtor is using best
efforts to cure same in a timely fashion; or

 

(d)         If any provision of this Agreement shall at any time for any reason
be declared to be null and void, or the validity or enforceability thereof shall
be contested by the Debtor, or a proceeding shall be commenced by the Debtor, or
by any governmental authority having jurisdiction over the Debtor, seeking to
establish the invalidity or unenforceability thereof, or the Debtor shall deny
that the Debtor has any liability or obligation purported to be created under
this Agreement.

 

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6.           Duty to Hold in Trust. Upon the occurrence of any Event of Default
and at any time thereafter, the Debtor shall, upon receipt of any revenue,
income, dividend, interest or other sums subject to the Security Interests,
whether payable pursuant to the Notes or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any
such sum, hold the same in trust for the Secured Party and shall forthwith
endorse and transfer any such sums or instruments, or both, to the Secured
Party, pro-rata in proportion to their respective then-currently outstanding
principal amount of Notes for application to the satisfaction of the Obligations
(and if the Notes are not outstanding, pro-rata in proportion to the initial
purchases of the remaining Notes).

 

7.           Rights and Remedies Upon Default.

 

(a)       Upon the occurrence of any Event of Default and at any time
thereafter, the Secured Party, shall have the right to exercise all of the
remedies conferred hereunder and under the Notes, and the Secured Party shall
have all the rights and remedies of a secured party under the UCC. Without
limitation, the Secured Party shall have the following rights and powers:

 

(i)      The Secured Party shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Debtor shall assemble the Collateral and
make it available to the Secured Party at places that the Debtor shall
reasonably select, whether at the Debtor’s premises or elsewhere, and make
available to the Debtor, without rent, all of the Debtor’s respective premises
and facilities for the purpose of the Debtor taking possession of, removing or
putting the Collateral in saleable or disposable form.

 

(ii)      The Secured Party shall have the right to operate the business of the
Debtor using the Collateral and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Debtor may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Debtor or right of redemption of
the Debtor, that are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Debtor, for the benefit of the
Secured Party, may, unless prohibited by applicable law that cannot be waived,
purchase all or any part of the Collateral being sold, free from and discharged
of all trusts, claims, right of redemption and equities of the Debtor, that are
hereby waived and released.

 

 11 

 

 

(iii)     The Secured Party shall have the right (but not the obligation) to
notify any account Debtor and any obligors under instruments or accounts to make
payments directly to the Secured Party, and to enforce the Debtor’s rights
against such account Debtor and obligors.

 

(iv)     The Secured Party, may (but is not obligated to) direct any financial
intermediary or any other person or entity holding any investment property to
transfer the same to the Secured Party, or its designee.

 

b)          The Secured Party shall comply with any applicable law in connection
with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
The Secured Party may sell the Collateral without giving any warranties and may
specifically disclaim such warranties. If the Secured Party sells any of the
Collateral on credit, the Debtor will only be credited with payments actually
made by the purchaser. In addition, the Debtor waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of the
Secured Party’s rights and remedies hereunder, including, without limitation,
its right following an Event of Default to take immediate possession of the
Collateral and to exercise its rights and remedies with respect thereto.

 

(c)         For the purpose of enabling the Secured Party to further exercise
rights and remedies under this Section 8 or elsewhere provided by agreement or
applicable law, the Debtor hereby grants to the Secured Party, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to the Debtor) to use, license or sublicense following an Event of
Default, any Intellectual Property now owned or hereafter acquired by the
Debtor, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof.

 

8.           Applications of Proceeds. The proceeds of any such sale, lease or
other disposition of the Collateral hereunder or from payments made on account
of any insurance policy insuring any portion of the Collateral shall be applied
first, to the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, any taxes, fees
and other costs incurred in connection therewith) of the Collateral, to the
reasonable attorneys’ fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations pro
rata among the Secured Party (based on then-outstanding principal amounts of
Notes at the time of any such determination), and to the payment of any other
amounts required by applicable law, after which the Secured Party shall pay to
the applicable Debtor any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Party is legally entitled, the Debtor will be
liable for the deficiency, together with interest thereon, at the rate of
twenty-four percent (24%) per annum or the lesser amount permitted by applicable
law (the “Default Rate”), and the reasonable fees of any attorneys employed by
the Secured Party to collect such deficiency. To the extent permitted by
applicable law, the Debtor waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal, retention or sale of the
Collateral, unless due solely to the gross negligence or willful misconduct of
the Secured Party as determined by a final judgment (not subject to further
appeal) of a court of competent jurisdiction.

 

 12 

 

 

10.         Costs and Expenses. The Debtor agrees to pay all reasonable
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements
pursuant to the UCC, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party. The Debtor shall also pay all other
claims and charges that in the reasonable opinion of the Secured Party are
reasonably likely to prejudice, imperil, or otherwise affect the Collateral or
the Security Interests therein. The Debtor will also, upon demand, pay to the
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Secured Party may incur in connection with the creation, perfection,
protection, satisfaction, foreclosure, collection or enforcement of the Security
Interest and the preparation, administration, continuance, amendment or
enforcement of this Agreement and pay to the Secured Party the amount of any and
all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that the Secured Party may incur in
connection with (i) the enforcement of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral, or (iii) the exercise or enforcement of any of the rights of
the Secured Party under the Notes. Until so paid, any fees payable hereunder
shall be added to the principal amount of the Notes and shall bear interest at
the Default Rate.

 

11.         Responsibility for Collateral. The Debtor assume all liabilities and
responsibility in connection with all Collateral, and the Obligations shall in
no way be affected or diminished by reason of the loss, destruction, damage, or
theft of any of the Collateral or its unavailability for any reason. Without
limiting the generality of the foregoing, (a) the Secured Party does not have
any (i) duty (either before or after an Event of Default) to collect any amounts
in respect of the Collateral or to preserve any rights relating to the
Collateral or (ii) obligation to clean-up or otherwise prepare the Collateral
for sale and (b) the Debtor shall remain obligated and liable under each
contract or agreement included in the Collateral to be observed or performed by
it. The Secured Party shall not have any obligation or liability under any such
contract or agreement by reason of or arising out of this Agreement or the
receipt by the Secured Party of any payment relating to any of the Collateral,
nor shall the Secured Party be obligated in any manner to perform any of the
obligations of the Debtor under or pursuant to any such contract or agreement,
to make inquiry as to the nature or sufficiency of any payment received by the
Secured Party in respect of the Collateral or as to the sufficiency of any
performance by any party under any such contract or agreement, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts that may have been assigned to the Secured Party or to
which the Secured Party may be entitled at any time or times.

 

 13 

 

 

12.         Security Interests Absolute. All rights of the Secured Party and all
obligations of the Debtor hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Notes, or any agreement entered into in connection with the foregoing, or
any portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Notes or any other agreement entered into in connection with the
foregoing; (c) any exchange, release, or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guarantee, or any other security, for all or any of the
Obligations; (d) any action by the Secured Party to obtain, adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance that might
otherwise constitute any legal or equitable defense available to a debtor, or a
discharge of all or any part of the Security Interests granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy. The Debtor expressly waives presentment, protest, notice of protest,
demand, notice of nonpayment and demand for performance. In the event that at
any time any transfer of any Collateral or any payment received by the Secured
Party hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise due to any party other than the Secured Party, then, in any such
event, the Debtor’s obligations hereunder shall survive cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and provisions hereof. The
Debtor waives all right to require the Secured Party to proceed against any
other person or entity or to apply any Collateral that the Secured Party may
hold at any time, or to marshal assets, or to pursue any other remedy. The
Debtor waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.

 

13.         Term of Agreement. This Agreement and the Security Interests shall
terminate on the date on which all payments under the Notes have been
indefeasibly paid in full and all other Obligations have been paid or
discharged; provided, however, that all indemnities of the Debtor contained in
this Agreement shall survive and remain operative and in full force and effect
regardless of the termination of this Agreement.

 

14.         Power of Attorney; Further Assurances.

 

(a)        The Debtor authorizes the Secured Party and does hereby make,
constitute and appoint the Secured Party, its officers, agents, successors or
assigns with full power of substitution, as the Debtor’s true and lawful
attorney-in-fact, with power, in the name of the Secured Party or the Debtor,
to, after the occurrence and during the continuance of an Event of Default, (i)
endorse any note, checks, drafts, money orders or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any financing statement pursuant to the UCC or any
invoice, freight or express bill, bill of lading, storage or warehouse receipts,
drafts against Debtor, assignments, verifications and notices in connection with
accounts, and other documents relating to the Collateral; (iii) to pay or
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Collateral; (v) to transfer any Intellectual Property or provide licenses
respecting any Intellectual Property; and (vi) generally, at the option of the
Secured Party and at the expense of the Debtor, at any time, or from time to
time, to execute and deliver any and all documents and instruments and to do all
acts and things that the Secured Party deems necessary to protect, preserve and
realize upon the Collateral and the Security Interests granted therein in order
to effect the intent of this Agreement and the Notes all as fully and
effectually as the Debtor might or could do; and the Debtor hereby ratifies all
that said attorney shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable for the
term of this Agreement and thereafter as long as any of the Obligations shall be
outstanding. The designation set forth herein shall be deemed to amend and
supersede any inconsistent provision in the Organizational Documents or other
documents or agreements to which the Debtor is subject or to which the Debtor is
a party. Without limiting the generality of the foregoing, after the occurrence
and during the continuance of an Event of Default, each Secured Party is
specifically authorized to execute and file any applications for or instruments
of transfer and assignment of any patents, trademarks, copyrights or other
Intellectual Property with the United States Patent and Trademark Office and the
United States Copyright Office.

 

 14 

 

 

(b)        On a continuing basis, the Debtor will make, execute, acknowledge,
deliver, file and record, as the case may be, with the proper filing and
recording agencies in any jurisdiction, including, without limitation, the
jurisdictions indicated on Exhibit C attached hereto, all such instruments, and
take all such action as may reasonably be deemed necessary or advisable, or as
reasonably requested by the Secured Party, to perfect the Security Interests
granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Party the grant or
perfection of a perfected security interest in all the Collateral under the UCC.

 

(c)        The Debtor hereby irrevocably appoints the Secured Party as the
Debtor’s attorney-in-fact, with full authority in the place and instead of the
Debtor and in the name of the Debtor, from time to time in the Secured Party’s
discretion, to take any action and to execute any instrument that the Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Debtor where permitted by law, which
financing statements may (but need not) describe the Collateral as “all assets”
or “all personal property” or words of like import, and ratifies all such
actions taken by the Secured Party. This power of attorney is coupled with an
interest and shall be irrevocable for the term of this Agreement and thereafter
as long as any of the Obligations shall be outstanding.

 

15.         Notices. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the Notes.

 

16.        Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party’s rights and
remedies hereunder.

 

 15 

 

 

17.         Miscellaneous.

 

(a)        No course of dealing between the Debtor and the Secured Party, nor
any failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder or under the Notes shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

(b)        All of the rights and remedies of the Secured Party with respect to
the Collateral, whether established hereby or by the Notes or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

 

(c)         This Agreement, together with the exhibit hereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into this
Agreement and the exhibit hereto. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Debtor and the Secured Party or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought.

 

(d)         If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

(e)         No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition, or requirement hereof, nor shall any delay or omission of any party
to exercise any right hereunder in any manner impair the exercise of any such
right.

 

(f)         This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The Debtor may not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Secured Party. The Secured Party may assign any or all of its
rights under this Agreement to any entity or person to whom the Secured Party
assigns or transfers any Obligations, provided such transferee agrees in writing
to be bound, with respect to the transferred Obligations, by the provisions of
this Agreement that apply to the Secured Party.

 

 16 

 

 

(g)         Each party shall take such further action and execute and deliver
such further documents as may be necessary or appropriate in order to carry out
the provisions and purposes of this Agreement.

 

(h)         Except to the extent mandatorily governed by the jurisdiction or
situs where the Collateral is located, all questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Except to the extent mandatorily governed by the jurisdiction or situs
where the Collateral is located, the Debtor agrees that all proceedings
concerning the interpretations, enforcement, and defense of the transactions
contemplated by this Agreement and the Notes (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York, County of New York.
Except to the extent mandatorily governed by the jurisdiction or situs where the
Collateral is located, the Debtor hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.

 

(i)        This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

 

(j)        The Debtor shall indemnify, reimburse and hold harmless the Secured
Party and its partners, members, shareholders, officers, directors, employees
and agents (and any other persons with other titles that have similar functions)
(collectively, the “Indemnitees”) from and against any and all losses, claims,
liabilities, damages, penalties, suits, costs and expenses, of any kind or
nature, (including fees relating to the cost of investigating and defending any
of the foregoing) imposed on, incurred by or asserted against such Indemnitee in
any way related to or arising from or alleged to arise from this Agreement or
the Collateral, except any such losses, claims, liabilities, damages, penalties,
suits, costs, and expenses that result from the gross negligence or willful
misconduct of the Indemnitee as determined by a final, nonappealable decision of
a court of competent jurisdiction. This indemnification provision is in addition
to, and not in limitation of, any other indemnification provision in the Notes
or any other agreement, instrument or other document executed or delivered in
connection herewith or therewith.

 

(k)        Nothing in this Agreement shall be construed to subject the Secured
Party to liability as a partner in the Debtor or any of its direct or indirect
subsidiaries that is a partnership or as a member in the Debtor or any of its
direct or indirect subsidiaries that is a limited liability company, nor shall
the Secured Party be deemed to have assumed any obligations under any
partnership agreement or limited liability company agreement, as applicable, of
the Debtor or any of its direct or indirect subsidiaries or otherwise, unless
and until the Secured Party exercises its right to be substituted for the Debtor
as a partner or member, as applicable, pursuant hereto.

 

(l)        To the extent that the grant of the security interest in the
Collateral and the enforcement of the terms hereof require the consent, approval
or action of any partner or member, as applicable, of the Debtor or any direct
or indirect subsidiary of the Debtor or compliance with any provisions of any of
the Organizational Documents, the Debtor hereby grant such consent and approval
and waive any such noncompliance with the terms of said documents.

 

[Signature Page to Follow.]

 

 17 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed on the day and year first above written.

 

HELIX TCS, INC.          By:      

Name:

Title:

        HELIX TCS, LLC           By:      

Name:

Title:

        SECURITY CONSULTANTS GROUP, LLC          By:      

Name:

Title:

        BOSS SECURITY SOLUTIONS, INC.          By:      

Name:

Title:

 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 18 

 

 

 

[SIGNATURE PAGE OF HOLDERS TO SECURITY AGREEMENT]

 

Name of Investing Entity: RedDiamond Partners LLC

 

Signature of Authorized Signatory of Investing entity: _________________________

 

Name of Authorized Signatory: _________________________

 

Title of Authorized Signatory: __________________________

 

 19 

 

 

DISCLOSURE SCHEDULES

(Security Agreement)

 

The following are the Disclosure Schedules (the “Disclosure Schedules”) referred
to in that certain Security Agreement, dated as of April 26, 2017 (the “Security
Agreement”), by and between Helix TCS, Inc., a Delaware corporation (the
“Company”), all of the Subsidiaries of the Company (such subsidiaries, the
“Guarantors”; and, together with the Company, the “Debtors”) and RedDiamond
Partners LLC, its endorsees, transferees, and assigns (collectively, the
“Secured Parties”).

 

 20 

 

 

Schedule A

Principal Place of Business of Debtors:

Locations Where Collateral is Located or Stored

  

Debtor Name Address of Business and Collateral Location     Helix TCS Inc 5300
DTC Parkway, Greenwood Village, CO 80111 Helix TCS LLC 5300 DTC Parkway,
Greenwood Village, CO 80111 Security Consultants Group LLC 5300 DTC Parkway,
Greenwood Village, CO 80111 BOSS Security Solutions Inc 5300 DTC Parkway,
Greenwood Village, CO 80111

 

 21 

 

 

Schedule B

Ownership Interest to Collateral

 

Helix TCS Inc owns 100% of the membership interests of Helix TCS LLC.

Helix TCS LLC owns 100% of the membership interests of Security Consultants
Group LLC

Helix TCS LLC owns 100% of the outstanding shares of BOSS Security Solutions Inc

 

 22 

 

 

Schedule C

Filing Jurisdictions

 

Delaware

 

 23 

 

 

Schedule D

Legal Names and Organizational Identification Numbers

 

Entity Name EIN     Helix TCS Inc 81-4046024 Helix TCS LLC 47-3748821 Security
Consultants Group LLC 38-3972837 BOSS Security Solutions Inc 46-3610250

 

 24 

 

 

Schedule E

Names; Mergers and Acquisitions

 

N/A

 

 25 

 

 

Schedule F

Intellectual Property

 

Patents/Patent Applications

 

N/A

 

Domain Names

 

www.helixtcs.com

  

Copyrights

 

N/A

 

Trademarks/Trademark Applications

 

86617890 Cannabase

86617897 Cannalytics

 

 26 

 

 

Schedule G

Account Debtors

  

Helix TCS Inc, U.S. Bank, Account #103683951075

Helix TCS LLC, Citizens Bank, Account #6300700767

Security Consultants Group LLC, Chase Bank, Account #831301788

BOSS Security Solutions Inc, Wells Fargo Bank, Account #8413359566

 

 27 

 

Schedule H

Pledged Securities

 

The Company is the sole owner of the membership interests/stock of its
subsidiaries, as follows:

 

Helix TCS Inc owns 100% of the membership interests of Helix TCS LLC.

Helix TCS LLC owns 100% of the membership interests of Security Consultants
Group LLC

Helix TCS LLC owns 100% of the outstanding shares of BOSS Security Solutions Inc

  

 28 

 

 

ANNEX A

to

SECURITY AGREEMENT

FORM OF ADDITIONAL DEBTOR JOINDER

 

Security Agreement dated as of February [__], 2017 made by Helix TCS, Inc. and
its subsidiaries party thereto from time to time, as Debtors to and in favor of
the Secured Parties identified therein (the “Security Agreement”).

 

Reference is made to the Security Agreement as defined above; capitalized terms
used herein and not otherwise defined herein shall have the meanings given to
such terms in, or by reference in, the Security Agreement.

 

The undersigned hereby agrees that, upon delivery of this Additional Debtor
Joinder to the Secured Parties referred to above, the undersigned shall (a) be
an Additional Debtor under the Security Agreement, (b) have all the rights and
obligations of the Debtors under the Security Agreement as fully and to the same
extent as if the undersigned was an original signatory thereto and (c) be deemed
to have made the representations and warranties set forth therein as of the date
of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE
SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN
THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL
PROVISIONS SET FORTH THEREIN.

 

Attached hereto are supplemental and/or replacement Schedules to the Security
Agreement, as applicable.

 

An executed copy of this Joinder shall be delivered to the Secured Parties, and
the Secured Parties may rely on the matters set forth herein on or after the
date hereof. This Joinder shall not be modified, amended, or terminated without
the prior written consent of the Secured Parties.

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in
the name and on behalf of the undersigned.

 

  [Name of Additional Debtor]       By:   Name:   Title:       Address:

 

Dated:

 

 

30