Exhibit
10.2


 


Execution
Version


 


SECURITY
AGREEMENT


 


THIS
SECURITY AGREEMENT (this “Agreement”), dated as of December 22, 2017, is made among Marrone Bio Innovations,
Inc., a Delaware corporation (“MBI” or “Debtor”) and Dwight W. Anderson, an individual,
as the sole lender party to the Note referred to below (in such capacity, “Secured Party”).


 


Debtor
and Secured Party hereby agree as follows:


 


Section
1. Definitions; Interpretation.


 


(a)
All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the
Note referred to below.


 


(b)
As used in this Agreement, the following terms shall have the following meanings:


 


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


 


“Note”
means that certain Secured Promissory Note, dated as of the date hereof, made by the Debtor in favor of the Secured Party, as
amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“UCC”
means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York.


 


(c)
Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them
in the UCC.


 


(d)
In this Agreement, (i) the meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms
defined; and (ii) the captions and headings are for convenience of reference only and shall not affect the construction of this
Agreement.


 


Section
2. Security Interest.


 


(a)
As security for the payment and performance of the Obligations, Debtor hereby grants to Secured Party as collateral agent, for
itself and for the ratable benefit of the Lenders, a security interest in all of Debtor’s right, title and interest in,
to and under all of its (i) personal property, wherever located and whether now existing or owned or hereafter acquired or arising,
including all accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment (including all fixtures),
general intangibles, instruments, inventory, investment property, letter-of-credit rights, money, and other goods, and (ii) real
property and real property interests, appurtenances, and fixtures, including rights of possession and use under leases and licenses,
tenant improvements, and rights under options to lease or purchase and the like, and in the case of each of clauses (i) and (ii),
all products, proceeds and supporting obligations of any and all of the foregoing (collectively, the “Collateral”).


 




    	1 



    	 



    

 


(b)
This Agreement shall create a lien and continuing security interest in the Collateral which shall remain in effect until terminated
in accordance with Section 15 hereof.


 


(c)
Notwithstanding the foregoing provisions of this Section 2, the grant of a security interest as provided herein shall not extend
to, and the term “Collateral” shall not include, either of Debtor’s deposit account numbers 3207933 and
3208014 with Five Star Bank located in Rancho Cordova, California or any proceeds thereof, or any general intangibles of Debtor
(whether owned or held as licensee or lessee, or otherwise), to the extent that (i) such general intangibles are not assignable
or capable of being encumbered as a matter of law or under the terms of the license, lease or other agreement applicable thereto
(but solely to the extent that any such restriction shall be enforceable under applicable law), without the consent of the licensor
or lessor thereof or other applicable party thereto and (ii) such consent has not been obtained; provided, however,
that the foregoing grant of security interest shall extend to, and the term “Collateral” shall include, (A) any
general intangible which is an account receivable or a proceed of, or otherwise related to the enforcement or collection of, any
account receivable, or goods which are the subject of any account receivable, (B) any and all proceeds of any general intangibles
which are otherwise excluded to the extent that the assignment or encumbrance of such proceeds is not so restricted, and (C) upon
obtaining the consent of any such licensor, lessor or other applicable party’s consent with respect to any such otherwise
excluded general intangibles, such general intangibles as well as any and all proceeds thereof that might have theretofore have
been excluded from such grant of a security interest and the term “Collateral”.


 


(d)
Anything herein to the contrary notwithstanding, in no event shall the Collateral include, and Debtor shall not be deemed to have
granted a security interest in, any of Debtor’s right, title or interest in any of the outstanding voting capital stock
or other ownership interests of a Controlled Foreign Corporation (as defined below) in excess of 65% of the voting power of all
classes of capital stock or other ownership interests of such Controlled Foreign Corporation entitled to vote; provided
that (i) immediately upon the amendment of the Internal Revenue Code of 1986, as amended, to allow the pledge of a greater percentage
of the voting power of capital stock or other ownership interests in a Controlled Foreign Corporation without adverse tax consequences,
the Collateral shall include, and Debtor shall be deemed to have granted a security interest in, such greater percentage of capital
stock or other ownership interests of each Controlled Foreign Corporation; and (ii) if no adverse tax consequences to Debtor shall
arise or exist in connection with the pledge of any Controlled Foreign Corporation, the Collateral shall include, and Debtor shall
be deemed to have granted a security interest in, such Controlled Foreign Corporation. As used herein, “Controlled Foreign
Corporation” shall mean a “controlled foreign corporation” as defined in the Internal Revenue Code of 1986,
as amended.


 


(e)
Secured Party agrees that, notwithstanding the terms of any account control agreements, while no Event of Default exists, Secured
Party (i) shall refrain from exerting control over any deposit or securities accounts subject to such account control agreements,
(ii) shall defer to Debtor’s control over the assets and proceeds in such accounts, including Debtor’s ability to
withdraw from, or otherwise direct the disposition of funds from, deposit accounts for the payment of Debtor’s obligations
to third parties as they become due and payable, and including Debtor’s ability to withdraw from, designate investments
in, or otherwise direct activities in its securities accounts, and (iii) shall not send a “Notice of Exclusive Control”
(or similar notice pursuant to which Secured Party purports to exert exclusive control over any deposit or securities account
of Debtor) to the applicable bank, broker or other securities intermediary party to an account control agreement.


 




    	2 



    	 



    

 


Section
3. Financing Statements, Etc. Debtor hereby
authorizes Secured Party to file at any time and from time to time any financing statements describing the Collateral, and Debtor
shall execute and deliver to Secured Party, and Debtor hereby authorizes Secured Party to file (with or without Debtor’s
signature), at any time and from time to time, all amendments to financing statements, assignments, continuation financing statements,
termination statements, and other documents and instruments, in form reasonably satisfactory to Secured Party, as Secured Party
may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the security interest
of Secured Party in the Collateral and to accomplish the purposes of this Agreement.


 


Section
4. Representations and Warranties. Debtor
represents and warrants to Secured Party that:


 


(a)
Debtor is duly organized, validly existing and in good standing under the law of the jurisdiction of its organization and has
all requisite power and authority to execute, deliver and perform its obligations under this Agreement.


 


(b)
The execution, delivery and performance by Debtor of this Agreement have been duly authorized by all necessary action of Debtor,
and this Agreement constitutes the legal, valid and binding obligation of Debtor, enforceable against Debtor in accordance with
its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar debtor
relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability
of equitable remedies.


 


(c)
No authorization, consent, approval, license, exemption of, or filing or registration with, any governmental authority or agency,
or approval or consent of any other Person, is required for the due execution, delivery or performance by Debtor of this Agreement,
except for any filings necessary to perfect any Liens on any Collateral.


 


(d)
Debtor’s exact legal name is as set forth in the first paragraph of this Agreement.


 


(e)
Debtor has rights in or the power to transfer the Collateral, and Debtor is the sole and complete owner of the Collateral, free
from any lien other than liens existing on December 22, 2017.


 


Section
5. Covenants. So long as any of the Obligations
remain unsatisfied, Debtor agrees that:


 


(a)
Debtor shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve, and protect the Collateral.


 




    	3 



    	 



    

 


(b)
Debtor shall comply in all material respects with all laws, regulations and ordinances, and all policies of insurance, relating
in a material way to the possession, operation, maintenance and control of the Collateral.


 


(c)
Debtor shall give prompt written notice to Secured Party (and in any event not later than 60 days following any change described
below in this subsection) of: (i) any change in its name; (ii) any changes in its identity or structure in any manner which might
make any financing statement filed hereunder incorrect or misleading; (iii) any change in its registration as an organization
(or any new such registration); or (iv) any change in its jurisdiction of organization.


 


(d)
Debtor shall pay and discharge all material taxes, fees, assessments and governmental charges or levies imposed upon it with respect
to the Collateral prior to the date on which penalties attach thereto, except to the extent such taxes, fees, assessments or governmental
charges or levies are being contested in good faith by appropriate proceedings and are adequately reserved against in accordance
with GAAP; provided that the failure to make any such payments shall not constitute a breach of this covenant unless the
aggregate amount of such payments could reasonably be expected to exceed $200,000.


 


(e)
Debtor shall maintain and preserve its legal existence, its rights to transact business and all other rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and the ownership of the Collateral, except in connection
with any transactions expressly not expressly prohibited hereunder.


 


(f)
Upon the written request of Secured Party, Debtor shall promptly deliver to Secured Party, or an agent designated by it, appropriately
endorsed or accompanied by appropriate instruments of transfer or assignment, all documents and instruments, all certificated
securities with respect to any investment property, all letters of credit and all accounts and other rights to payment at any
time evidenced by promissory notes, trade acceptances or other instruments.


 


(g)
Upon Secured Party’s written request, Debtor shall promptly notify Secured Party if Debtor holds or acquires (i) any commercial
tort claims, (ii) any chattel paper, including any interest in any electronic chattel paper, or (iii) any letter-of-credit rights.


 


Section
6. Events of Default. An “Event
of Default” under the Note shall constitute an Event of Default hereunder.


 


Section
7. Remedies.


 


(a)
Upon the occurrence and during the continuance of any Event of Default, Secured Party may, by notice to Debtor, declare any of
the Obligations to be immediately due and payable and shall have, in addition to all other rights and remedies granted to it in
this Agreement, all rights and remedies of a secured party under the UCC and other applicable laws.


 


(b)
The cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received
in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied to the payment of
the Obligations as set forth in the Note. Any surplus thereof which exists after payment and performance in full of the Obligations
shall be promptly paid over to Debtor or otherwise disposed of in accordance with the UCC or other applicable law.


 




    	4 



    	 



    

 


Section
8. Notices. All notices or other communications
hereunder shall be provided in accordance with Section X.2 of the Note


 


Section
9. No Waiver; Cumulative Remedies. No
failure on the part of Secured Party or any Lender to exercise, and no delay in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and
remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise
be available to Secured Party and the Lenders.


 


Section
10. Binding Effect. This Agreement shall
be binding upon, inure to the benefit of and be enforceable by Debtor, Secured Party, each Lender and their respective successors
and assigns and shall bind any Person who becomes bound as a debtor to this Agreement.


 


Section
11. Governing Law. This Agreement shall
be governed by, and construed in accordance with, the law of the State of New York, except as required by mandatory provisions
of law and to the extent the validity or perfection of the security interests hereunder, or the remedies hereunder, in respect
of any Collateral are governed by the law of a jurisdiction other than New York.


 


Section
12. Entire Agreement; Amendment. This
Agreement, the Note and any other Note Document, taken together, contain the entire agreement of the parties with respect to the
subject matter hereof and shall not be amended except by the written agreement of the parties.


 


Section
13. Severability. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations.
If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if
for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity
without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other
jurisdiction.


 


Section
14. Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.


 


Section
15. Termination. Upon payment and performance
in full of all Obligations, the security interest created under this Agreement shall terminate and Secured Party shall promptly
execute and deliver to Debtor such documents and instruments reasonably requested by Debtor as shall be necessary or appropriate
to evidence termination of all security interests given by Debtor to Secured Party hereunder.


 




    	5 



    	 



    

 


Section
16. Joint and Several Liability. If Debtor
consists of more than one Person, the liability of each Person comprising Debtor shall be joint and several, and each reference
herein to “Debtor” shall mean and be a reference to each such Person comprising Debtor. The Debtors agree that any
and all of their obligations hereunder shall be the joint and several responsibility of each of them notwithstanding any absence
herein of a reference such as “jointly and severally” with respect to any such obligation. The compromise of any claim
with, or the release of, any Debtor shall not constitute a compromise with, or a release of, any other Debtor.


 


Section
17. Conflicts; Intercreditor Agreement.
In the event of any conflict or inconsistency between this Agreement and the Note, the terms of this Agreement shall control.
In the event of any conflict or inconsistency between this Agreement and the terms of the Intercreditor Agreement, the terms of
the Intercreditor Agreement shall control.


 


Section
18. Confidentiality. Secured Party covenants
and agrees, on a continuing basis, to use reasonable efforts to maintain the confidentiality of and not to disclose to any person
other than its officers, directors, attorneys and accountants and subsidiaries and affiliates, and such other persons to whom
Secured Party shall at any time be required to make such disclosure in accordance with applicable law, any and all proprietary,
trade secret or confidential information provided to or received by Secured Party from or on account of Debtor or any subsidiary
or affiliate of Debtor, including business plans and forecasts, non-public financial information, confidential or secret processes,
formulae, devices or contractual information, customer lists, employee relation matters, and any other information the disclosure
of which could reasonably be expected to have a material adverse impact on the business, finances or operations of Debtor or its
subsidiaries and affiliates; provided, however, the foregoing provisions shall not be effective regarding the disposition
of Collateral after an Event of Default.


 


[remainder
of page intentionally left blank]







    	6 



    	 



    

 


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


 


 


	 	MARRONE
    BIO INNOVATIONS, INC., a Delaware corporation 
	 	 
	 	By:	/s/
    Pamela G. Marrone
	 	Name:	  Pamela
    G. Marrone
	 	Title:	  Chief
    Executive Officer


 





[Signature
Page to Security Agreement]



 




    	 



    	 



    







 


	 	Secured
    Party:
	 	 
	 	/s/
    Dwight W. Anderson
	 	DWIGHT
    W. ANDERSON


 


[Signature
Page to Security Agreement]