Exhibit 10.3
SECURITY AGREEMENT
This Security Agreement (“Agreement”), is made as of the May 14, 2024, by and among ABOVE FOOD CORP. a corporation formed under the laws of Saskatchewan (“Parent”), ABOVE FOOD INGREDIENTS CORP., a Delaware corporation and wholly-owned subsidiary of Parent (“Subsidiary”, and together with Parent, “Debtor”), and Arcadia Biosciences, Inc., a Delaware corporation (“Secured Party”). Debtor and Secured Party are sometimes hereinafter referred to each as a “Party” and collectively, as the “Parties.” Capitalized terms not defined herein shall have the meaning ascribed to them in that certain Asset Purchase Agreement, of even date herewith, by and among Secured Party, Parent, Subsidiary and Arcadia Wellness, LLC, a Delaware limited liability company (“Asset Purchase Agreement”).
RECITALS
WHEREAS, this Agreement is entered into by the Parties in connection with the Promissory Note in the original principal amount of six million US dollars ($6,000,000 USD) made by Debtor in favor of Secured Party, dated of even date herewith (“Promissory Note”); and
WHEREAS, the security interest in the Collateral (as defined below) granted to Secured Party, as provided for in this Agreement, secures Debtor’s payment of all obligations under the Promissory Note.
NOW, THEREFORE, in consideration of the foregoing and of the mutual agreements, covenants, representations and warranties hereinafter contained, the Parties agree as follows:
AGREEMENT
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Debtor promises:
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Upon the occurrence and during the continuation of a Default or an Event of Default, Secured Party may notify obligors to make payments on Receivables Collateral at the place and in the manner specified by Secured Party.
Debtor hereby appoints Secured Party, or any other person whom Secured Party may designate, as Debtor’s attorney-in-fact, with the following powers:
Anything in this Section 5 to the contrary notwithstanding, Secured Party agrees that, except as provided in Sections 5(d) and 5(g), it will not exercise any rights under the power of attorney provided for in this Section 5 unless a Default or an Event of Default shall have occurred and be continuing. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until a Discharge of the Obligations.
Debtor warrants and represents to Secured Party as of the date hereof as follows:
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This Agreement will continue in effect until Discharge of the Obligations. At such time as there has been a Discharge of the Obligations, the Collateral shall be released from the liens created hereby, this Agreement will terminate and all obligations (other than those expressly stated to survive such termination) of the Debtor and Secured Party shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Debtor. Upon Discharge of the Obligations, Secured Party shall promptly sign and deliver a UCC Termination Statement to Debtor. Debtor agrees that to the extent that Secured Party receives any payment or benefit with respect to the Obligations and such payment or benefit, or any part thereof, is subsequently invalidated, declared to be fraudulent or preferential, set aside or is required to be repaid to a trustee, receiver, or any other Person under any debtor relief law, common law or equitable cause, then to the extent of such payment or benefit, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or benefit had not been made and, further, any such repayment by Secured Party, to the extent that Secured Party did not directly receive a corresponding cash payment, shall be added to and be additional Obligations payable upon demand by Secured Party and secured hereby, and, if the lien and security interest hereof shall have been released, such Lien and security interest shall be reinstated with the same effect and priority as on the date of execution hereof all as if no release of such Lien or security interest had ever occurred.
Debtor will be in Default under this Agreement if:
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When a Default or an Event of Default has occurred and is continuing:
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Notice given by personal delivery pursuant to this Section 10(a) shall be effective upon physical receipt. Notice given by electronic mail pursuant to this Section 10(a) shall be effective on the date sent by electronic mail and successfully delivered before 5:00 p.m. Pacific Time on any Business Day or the next succeeding Business Day if sent after 5:00 p.m. Pacific Time on any Business Day or during any non-Business Day. Notice given by mail or overnight courier pursuant to Section 10(a) shall be effective one (1) Business Day following sending. Each party may change the address by which proper notice shall be given pursuant to this Section 10(a) by providing notice to the other parties in accordance with this Section 10(a).
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have caused this Security Agreement to be duly executed as of the date first set forth above.
DEBTOR:
ABOVE FOOD INGREDIENTS CORP.
By:__/s/ Lionel Kambeitz___________
Lionel Kambeitz
Executive Chairman
ABOVE FOOD CORP.
By: /s/ Lionel Kambeitz
Lionel Kambeitz
Chief Executive Officer
SECURED PARTY:
ARCADIA BIOSCIENCES, INC.
By: /s/ Stanley Jacot, Jr.
Stanley Jacot, Jr.,
Chief Executive Officer
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