Document:

Exhibit 10.2

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT
(this “Agreement”) by and among Mount Tam Biotechnologies, Inc., a Nevada corporation (the “Debtor”)
on the one hand, and 0851229 BC Ltd. on the other hand (“Secured Party”)
is effective as of the 9th day of November 2015 (the “Agreement”). In consideration
of the financial accommodations extended to the Debtor by the Secured Party, the Debtor hereby agrees that the Secured Party shall
have all of the rights given herein against the Debtor in addition to those given by law or by the Secured Convertible Promissory
Note issued by the Debtor to the Secured Party effective as of November 9, 2015 (the “Note”) or any other agreement
or document underlying the Liabilities:

 

1.                  
The term “Liabilities” as herein used shall include all indebtedness, obligations and liabilities of any kind
of Debtor to the Secured Party, whether now existing or hereafter incurred, including without limitation those pursuant to or arising
under the Note and any other promissory notes (the Note and such other promissory notes, together with this Agreement, the “Loan
Documents”) executed between the Debtor and the Secured Party (as the same may be amended, modified or restated from
time to time and any Loan Documents exchanged or substituted for the Loan Documents). Except as set forth on Exhibit A hereto,
on March 18, 2016, there is currently no other indebtedness, obligations or known liabilities of the Debtor to the Secured Party.

 

2.                  
In order to secure the performance of the Debtor's payment and other obligations under the Loan Documents, the Debtor hereby grants
to the Secured Party a first priority security interest (the “Security Interest”), subject only to Permitted
Security Interests, in all of the present and future assets of the Debtor and all products and proceeds of those assets, including
but not limited to the following, to secure the Debtor's due and punctual payment of the Loan Documents (hereinafter referred to
collectively as the “Collateral”):

 

                      (a)
All equipment, including machinery, motor vehicles, office equipment, furniture, fixtures, along with all other parts, tools, trade-ins,
repairs, accessories, accessions, modifications, and replacements, whether now owned or subsequently acquired, constructed, or
attached or added to, or placed in, the foregoing;

 

                      (b)
All inventory, wherever located, including goods, merchandise and other personal property, held for sale or lease or furnished
or to be furnished under a contract of service, or constituting raw materials, work in process or materials used or consumed in
the Debtor's business, or consigned to others or held by others for return to the Debtor, whether now owned or subsequently acquired
or manufactured and wherever located;

 

                      (c)
All accounts receivable, including, without limitation, accounts, contracts, contract rights, chattel paper, instruments, rents,
deposits, general intangibles, and any other obligations of any kind whether now existing or hereafter arising out of or in connection
with the sale or lease of goods or the rendering of services, and all rights now or hereafter existing in and to all security agreements,
notes, leases, licenses, franchises, supply agreements, and other contracts securing or otherwise relating to any such accounts,
contracts, contract rights, chattel paper, instruments, rents, deposits, general intangibles, or obligations;

 

                      (d)
All general intangibles, including, but not limited to, corporate names, trade names, trademarks, service marks, trade secrets,
inventions, copyrights (including without limitation copyrights for computer programs) and all tangible property embodying copyrights,
patents and patent applications, license agreements relating to any of the foregoing and income therefrom, books and records, blue
prints and plans, computer programs, tapes and related electronic data processing software, and all corporate ledgers;

 

     

     

    

 

                      (e)
Any and all additions, accessions, substitutions or replacements to or for any of the foregoing;

 

                      (f)
Any and all products and proceeds of any or all of the foregoing, including, without limitation, cash, cash equivalents, tax refunds
and the proceeds of insurance policies providing coverage against the loss or destruction of or damage to any of the Collateral,
or any indemnity, warranty, or guarantee payable by reason of loss or damage to or otherwise with respect to any of the Collateral
(whether or not the Debtor is the loss payee thereof);

                       

                      (g)
All of the Debtor's after-acquired property of the kinds and types described in paragraphs (a) - (f) herein; and

 

                      (h)
All records and data relating to any of the property described above, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of the Debtor's right, title, and interest in and to all computer software required
to utilize, create, maintain and process any of such records or data or electronic media.

 

                      “Permitted
Security Interests” means (i) liens for taxes, fees, assessments, or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings; (ii) liens arising from judgments, decrees, or attachments;
(iii) liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; and (iv) purchase money security liens on equipment or vehicles that are hereafter acquired by the
Debtor.

 

3.                  
The Debtor shall preserve the Collateral, keep the Collateral in good repair, subject to ordinary wear and tear, and abstain from
and not permit the commission of waste with regard thereto. The Debtor shall maintain insurance coverage in accordance with good
business practice against loss or damage to the Collateral by fire and other hazards, with such insurance carriers as are reasonably
satisfactory to the Secured Party. In the event of loss or damage to the Collateral, the Debtor shall give immediate written notice
thereof to the Secured Party. In such event, if the Debtor fails promptly to adjust or compromise any loss claims under the insurance,
the Secured Party shall have the right, at their election, to adjust or compromise any such loss claims under such insurance.

 

4.                  
The Secured Party is hereby authorized to from time to time to file one or more financing statements (and extensions thereof) under
the Uniform Commercial Code (the “Code”), as in effect from time to time in the State of Delaware and/or any
such other jurisdiction as Secured Party may decide, naming the Debtor as Debtor and the Secured Party as Secured Party and indicating
therein the items of Collateral herein specified. The Debtor will from time to time execute such statements and such other notices,
affidavits or other documents as the Secured Party may reasonably deem necessary to protect its Collateral interest hereunder.
At this time, the Secured Party is not requesting that the Debtor enter into any agreements other than this Agreement with respect
to the Security Interest or the perfection of the Security Interest (such as landlord waivers, deposit account control agreements
and intellectual property security agreements) but it reserves the right to do so in its sole discretion to protect its rights
hereunder.

 

5.                  
The Debtor shall not, without at least thirty days prior written notice to the Secured Party, change its principal place of business,
change the location of the Collateral (excluding sales of inventory in the ordinary course of business), or change its name or
any trade name, in any such case which would require the filing of an additional financing statement or statements then or at any
time in the future to preserve the Secured Party’ Security Interest in the Collateral.

 

     

     

    

 

6.                  
Upon the occurrence of any Events of Default (as determined under the Loan Documents) as a result of which the Secured Party require
the payment of amounts due under the Loan Documents whether or not prior to the stated maturity date thereof, the Debtor shall,
at the request of the Secured Party, forthwith assemble the Collateral at such reasonable place or places as the Secured Party
designate in their request. In addition to any other rights granted by law or under this Agreement, the Secured Party shall have
the rights and remedies with respect to the Collateral of a secured party under the Code (whether or not the Code is in effect
in the jurisdiction where the rights and remedies are asserted). In addition, with respect to the Collateral or any part thereof
which shall then be or shall thereafter come into the possession or custody of the Debtor, the Secured Party may sell or cause
to be sold in Delaware or elsewhere, in one or more sales or parcels, at such price as the Secured Party may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk, all or any of the Collateral, at public or private
sale, without demand of performance or notice of intention to sell or of time or place of sale (provided that any such transactions
shall be in accordance with the Code and all other applicable laws), and to the extent permitted by law, the purchaser of any or
all of the Collateral so sold shall thereafter hold the same absolutely free from any claim or right of whatsoever kind, any such
demand, notice, claim or right being hereby expressly waived and released. Notwithstanding the foregoing, unless the Collateral
threatens to decline speedily in value or is of a type sold on a recognized market, the Secured Party will give the Debtor reasonable
notice of the time and place of any public sale thereof, or of the time after which any private sale or any intended disposition
is to be made. Any requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to Debtor at the address
given below, at least five days before the time of the sale or disposition. Secured Party may, in its own name, or in the name
of any designee, buy at any public sale and if the Collateral is of a type sold in a recognized market, or is of a type which is
the subject of widely distributed standard price quotations, buy at private sale. The Secured Party shall apply the net cash receipts
from any such sale of the Collateral to the payment of principal of and/or interest of all of the remaining Liabilities, whether
or not then due. Notwithstanding that the Secured Party, whether on its own behalf and/or on behalf of another or others, may continue
to hold any of the Collateral and regardless of the value thereof, the Debtor shall be and remain liable for the payment in full,
of principal and interest, of any balance of the unsatisfied Liabilities at any time unpaid.

   

7.                  
Subsequent to the occurrence of an Event of Default under the Loan Documents, if, in its sole discretion, the Secured Party deem
it desirable, it may remove any Collateral held by it or its agents from the state, city, county or other governmental subdivision
or jurisdiction in which it may now or hereafter be held or deposited to any place which it designates and there deal with it as
herein provided and in accordance with applicable law.

 

8.                  
In the event that the Debtor fails to do so after 30 days written notice from the Secured Party, the Secured Party may, but shall
not be obligated to, contest, pay and/or discharge all liens, encumbrances, taxes or assessments on, or claims or demands against
(other than Permitted Security Interests), any of the Collateral without the consent of the Debtor and take all actions and proceedings
in its name or in the name of the Debtor or of any other appropriate person to remove or contest such liens, encumbrances, taxes
or assessments, claims or demands; and all sums advanced or paid by the Secured Party, and all reasonable costs, attorneys’
fees and expenses relating thereto, shall be Liabilities within the terms of this Agreement.

 

9.                  
The Secured Party shall not be deemed to have modified, discharged, terminated or waived any of its rights hereunder or any terms,
provisions or conditions hereof unless such modification, discharge, termination or waiver is in writing and signed by its duly
authorized officers or agents. No such modification, discharge, termination or waiver, unless so expressly stated therein, shall
be effective as to any transaction which occurs subsequent to the date thereof nor to any continuance thereof. This Agreement may
not be amended or modified without the prior written consent of the Debtor and the Secured Party.

 

     

     

    

 

10.                  
Upon reasonable notice during normal business hours, the Debtor agrees to allow any representative of the Secured Party (or any
agent or nominee of the Secured Party) to visit and inspect any of the Debtor’s properties relating to the Collateral, to
examine the books and records and accounts of the Debtor, all at such reasonable times and as often as the Secured Party may reasonably
request; provided that the Debtor shall not be obligated to provide information (i) that the Debtor reasonably determines in good
faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form reasonably
acceptable to the Debtor) or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Debtor
and its counsel; provided further that in each such case, the Debtor shall inform the Secured Party in writing of its reliance
on sub-clause (i) or (ii). The Secured Party agrees, and shall cause each of its agents or nominees, to hold in confidence and
trust and not to use (except in connection with monitoring its investment and prospects of repayment) or disclose any information
provided to or learned by it in connection with its rights under the Loan Documents, unless required by applicable law, a court
order or any other governmental authority or to exercise or enforce any of its rights under the Loan Documents.

 

11.                  
This Agreement shall inure to the benefit of the parties hereto, and their respective successors and assigns; provided that no
party shall assign its rights hereunder or delegate its obligations hereunder without the prior written consent of the other party.
No delay on the part of a party in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any power or right hereunder preclude other or further exercise thereof or the exercise of any other power
or right. All rights and remedies of the Secured Party with respect to the Liabilities or the Collateral, whether evidenced hereby
or by any other instrument of paper, shall be cumulative and may be exercised singularly or concurrently.

 

12.                  
All notices, requests, instructions and documents, hereunder shall be in writing and delivered personally or sent by registered
or certified mail, postage prepaid, as follows:

 

	 	(1)	if to the Debtor:

Mount Tam Biotechnologies, Inc.

8001 Redwood Blvd.

Novato, CA 94945

Attn: President

 

	 	(2)	if to the Secured Party:

 

c/o US Equity Holdings

336 Bon Air Center #418

Greenbrae, CA 94904

Attn: Chester P. Aldridge

 

or at such other address as either party
may by written notice to the other designate for this purpose. If delivered personally, the date on which a notice, request, instruction
or document is delivered shall be the date on which such delivery is made, and if delivered by mail, the date on which such notice,
request, instruction or document is deposited in the mail shall be the date of delivery.

 

     

     

    

 

13.                  
If any term, condition or provision of this Agreement or of any other agreement or document executed and/or delivered pursuant
hereto is determined to be invalid or unenforceable, such determination shall not affect the validity or enforceability of any
other term, condition or provision of this Agreement.

 

14.                  
(a) This Agreement and the Loan Documents contain the entire agreement between the Party hereto with respect to the transactions
contemplated.

 

                       (b)
This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable in the case
of contracts made and to be performed entirely within that state.

                  

                       (c) Each
party hereto shall cooperate with and shall take such further action and shall execute and deliver such further documents as may
be reasonably requested by the other party in order to carry out the provisions and purposes of this Agreement (including but not
limited to any actions necessary to release the Security Interest upon the conversion, repayment or termination of the Note).

 

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

 

***

 

     

     

    

 

IN WITNESS WHEREOF, this
Agreement has been duly executed by the Party hereto as of the date first above written.

 

	SECURED PARTY:	 
	 	 	 
	0851229 BC LTD.	 
	 	 	 
	By: 	/s/ Doug Froese	 	 
	Name: Doug Froese	 
	Title: Director	 
	 	 	 
	DEBTOR:	 
	 	 	 
	Mount Tam Biotechnologies, Inc.	 
	 	 	 
	By: 	/s/ David R. Wells	 	 
	Name: David R. Wells	 
	Title: Interim Chief Financial Officer	 

 

     

     

    

 

Exhibit A

 

Loans evidenced by the Note in the following amounts on the
following dates:

 

	Date	 	Amount	 
	11/9/15	 	$	66,004.25	 
	11/19/15	 	$	25,000	 
	12/17/15	 	$	50,000	 
	1/15/16	 	$	35,000	 
	2/2/16	 	$	40,000Exhibit 10.3

 

Mount Tam Biotechnologies, Inc.

8001 Redwood Blvd.

Novato, CA 94945

 

March 30, 2016

 

0851229 BC Ltd.

c/o US Equity Holdings

336 Bon Air Center #418

Greenbrae, CA 94904

Attn: Chester P. Aldridge

 

Re: Letter Agreement

 

This letter agreement
is intended to describe in writing an agreement between Mount Tam Biotechnologies, Inc. (the “Maker”) and 0851229
BC Ltd. (the “Holder”) regarding the aggregate principal amount of indebtedness which may be outstanding pursuant
to that certain Secured Convertible Promissory Note issued by the Maker to the Holder effective as of November 9, 2015 (the “Secured
Note”). The Maker and the Holder hereby agree that the aggregate principal amount of all outstanding loans made under
the Secured Note shall not exceed $1,000,000 at any time, provided that for the avoidance of doubt, no obligation of Holder to
lend any funds is implied hereby. Except as expressly provided herein, the Secured Note shall remain in full force and effect following
the date hereof.

 

All rights and obligations
hereunder shall be governed by the laws of the State of California (without giving effect to principles of conflicts or choices
of law). This letter agreement may not be amended or modified without the prior written consent of the Maker and the Holder. Neither
the Maker nor the Holder may assign, sell or otherwise transfer this letter agreement or any of their respective rights and duties
hereunder without the prior written consent of the other party hereto; provided that the rights and obligations hereunder shall
automatically be assigned to any person to whom the Maker or the Holder transfer the Secured Note in compliance with the terms
of the Secured Note. This letter agreement may be executed in any number of counterparts, each of which need not contain the signature
of more than one party but all such counterparts taken together shall constitute one and the same agreement. Nothing in this letter
agreement, express or implied, is intended to confer upon any party other than the parties hereto or their permitted successors
and assigns any rights, remedies, obligations or liabilities under or by reason of this letter agreement.

 

	 	MOUNT TAM BIOTECHNOLOGIES, INC.
	 	 
	 	By: 	/s/ Richard B. Marshak	 
	 	Print Name:  Richard B. Marshak
	 	Title:  Chief Executive Officer

 

	0851229 BC LTD.	 
	 	 	 
	By: 	/s/ Doug Froese	 	 
	Print Name:  Doug Froese	 
	Title:  Director

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