--------------------------------------------------------------------------------

SECURITY AND PLEDGE AGREEMENT

This SECURITY AND PLEDGE AGREEMENT, dated as of November 24, 2015 (this
“Agreement”), is among Viscount Systems, Inc., a Nevada corporation (the
“Company”), all of the subsidiaries of the Company (such subsidiaries, the
“Guarantors” and together with the Company, collectively, the “Debtors”) and the
holders of the Company’s (i) 14% Senior Secured Convertible Promissory A Notes
(the “A Notes”) and (ii) Senior Secured Convertible Promissory B Notes (the “B
Notes”, and collectively with the A Notes, the “Notes”) following their
issuance, signatory hereto, their respective endorsees, transferees and assigns
(each a Secured Party collectively, the “Secured Parties”).

W I T N E S S E T H:

WHEREAS, the Company is selling B Notes and issuing the A Notes as provided in
the Notes;

WHEREAS, pursuant to a certain Subsidiary Guarantee, dated as of the date hereof
(the “Guarantee”), the Guarantors have jointly and severally guaranteed and act
as surety for payment to the Secured Parties of the Notes including, but not
limited to all future Notes issued; and

WHEREAS, 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 and through the Agent (as defined in Section 17 hereof), a
security interest in all of the assets of each such Debtor to secure the prompt
payment, performance and discharge in full of each of the Debtor’s obligations
under the Notes and the other Transaction Documents (as defined in Section 1(e))
and the Guarantors’ obligations under the Guarantee.

NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto 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 Agent on behalf of the
Secured Parties is granted a security interest by this Agreement and which shall
include the following personal property of the Debtors, 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, and
all dividends, interest, cash, notes, securities, equity interest and/or other
property at any time and from time to time acquired, receivable or otherwise
distributed in respect of, or in exchange for, any and all of the following:

1

--------------------------------------------------------------------------------

(i)      All goods, including, without limitation, (A) all machinery, equipment,
computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and general tools, fixtures, test and quality control devices and other
equipment of every kind and nature and wherever situated, together with all
documents of title and documents representing the same, all additions and
accessions thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used and useful in
connection with any Debtor’s businesses and all improvements thereto; and (B)
all inventory;

(ii)      All contract rights and other general intangibles, including, without
limitation, all partnership interests, membership interests, stock or other
securities, rights under any of the Organizational Documents, agreements related
to the Pledged Securities, licenses, distribution and other agreements, computer
software (whether “off-the-shelf”, licensed from any third party or developed by
any Debtor), computer software development rights, leases, franchises, customer
lists, quality control procedures, grants and rights, goodwill, Intellectual
Property and income tax refunds;

(iii)      All accounts, together with all instruments, all documents of title
representing any of the foregoing, all rights in any merchandising, goods,
equipment, motor vehicles and trucks which any of the same may represent, and
all right, title, security and guaranties with respect to each account,
including any right of stoppage in transit;

(iv)      All documents, letter-of-credit rights, instruments and chattel paper;

(v)      All commercial tort claims;

(vi)      All deposit accounts and all cash (whether or not deposited in such
deposit accounts);

(vii)      All investment property;

(viii)      All supporting obligations; and

2

--------------------------------------------------------------------------------

(ix)      All files, records, books of account, business papers, and computer
programs;

(x)      the Pledged Securities; and

(xi)      the products and proceeds of all of the foregoing Collateral set forth
in clauses (i)-(x) above.

     Without limiting the generality of the foregoing, the “Collateral” shall
include all investment property and general intangibles respecting ownership
and/or other equity interests in each Subsidiary of each Debtor, including,
without limitation, the shares of capital stock and the other equity interests
listed on Schedule A hereto (as the same may be modified from time to time
pursuant to the terms hereof), and any other shares of capital stock and/or
other equity interests of any Subsidiary of any Debtor obtained in the future,
and, in each case, all certificates representing such shares and/or equity
interests and, in each case, all rights, options, warrants, stock, other
securities and/or equity interests that may hereafter be received, receivable or
distributed in respect of, or exchanged for, any of the foregoing and all rights
arising under or in connection with the Pledged Securities, including, but not
limited to, all dividends, interest and cash.

Notwithstanding the foregoing, nothing herein shall be deemed to constitute an
assignment of any asset which, 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, company names, 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.

3

--------------------------------------------------------------------------------

(c)      “Majority in Interest” means, at any time of determination, at least
50.01% of the then aggregate outstanding principal amount of Notes.

(d)      “Necessary Endorsement” means undated stock powers endorsed in blank
medallion guaranteed (or notarized for the Company’s wholly owned Canadian
subsidiary, Viscount Communication and Control Systems Inc.) or other proper
instruments of assignment duly executed and such other instruments or documents
as the Agent (as that term is defined below) may reasonably request.

(e)      “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 any
Debtor to the Secured Parties including, but not limited to all obligations
under the Transaction Documents for the A Notes and the Transaction Documents
for the B Notes (each as defined in the A Note and the B Note, respectively
(collectively, the “Transaction Documents”) 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 Parties 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; (ii) any and all other fees,
indemnities, costs, obligations and liabilities of the Debtors from time to time
under or in connection with the Transaction Documents and any other instruments,
agreements or other documents executed and/or delivered in connection herewith
or therewith including, but not limited to, liquidated damages, late fees,
default interest; 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 any Debtor.

4

--------------------------------------------------------------------------------

(f)      “Organizational Documents” means with respect to any Debtor, the
documents by which such Debtor was organized (such as a 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 which relate to the internal
governance of such Debtor (such as bylaws, a partnership agreement or an
operating, limited liability or members agreement).

(g)      “Pledged Interest” has the meaning set forth on Section 4(_) hereto.

(h)      “Pledged Securities” have the meaning set forth on Section 4(_) hereto.

(i)      “Subsidiary” means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person and “Subsidiaries”
means collectively each and every Subsidiary of a Person. The signature page
hereto of the Debtors lists, in addition to the Company, all Subsidiaries of the
Company.

(j) “UCC” means the Uniform Commercial Code of the State of New York and or any
other applicable law of any state or states which 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.

2.      Grant of Security Interest in Collateral. To secure the complete and
timely payment, performance and discharge in full, as the case may be, of all of
the Obligations, each Debtor hereby unconditionally and irrevocably pledges,
grants and hypothecates to the Agent, on behalf of the Secured Parties, 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”).

5

--------------------------------------------------------------------------------

3.      Delivery of Certain Collateral. Contemporaneously or prior to the
execution of this Agreement, each Debtor shall deliver or cause to be delivered
to the Agent (a) any and all certificates and other instruments representing or
evidencing the Pledged Securities, and (b) any and all certificates and other
instruments or documents representing any of the other Collateral, in each case,
together with all Necessary Endorsements. The Debtors are, contemporaneously
with the execution hereof, delivering to Agent, or have previously delivered to
Agent, a true and correct copy of each Organizational Document governing any of
the Pledged Securities.

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

(a)      Organization and Qualification. Each Debtor is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
applicable jurisdiction set forth on Schedule     , with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Each Debtor has no Subsidiaries other than
those identified as such on Schedule      hereto. Each Debtor is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or in
the aggregate, (x) adversely affect the legality, validity or enforceability of
any of this Guarantee in any material respect, (y) have a material adverse
effect on the results of operations, assets, prospects, or financial condition
of the Guarantor or (z) adversely impair in any material respect the Guarantor's
ability to perform fully on a timely basis its obligations under this Guarantee
(a “Material Adverse Effect”).

(b)      Authorization; Enforcement. Each Debtor has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement, and otherwise to carry out its obligations
hereunder . The execution, delivery and performance of this Agreement and the
other Transaction Documents by each Debtor and the consummation by such Debtor
of the transactions contemplated hereby (including all filings) have been duly
authorized by all requisite corporate action on the part of such Debtor. This
Agreement and the other Transaction Documents have been duly executed and
delivered by each Debtor and constitutes the valid and binding obligation of
each Debtor enforceable against such Debtor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.

6

--------------------------------------------------------------------------------

(c)      No Conflicts. The execution, delivery and performance of this Agreement
and the other Transaction Documents by each Debtor and the consummation by each
Debtor of the transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of any of its Organizational
Documents, each as amended, or (ii) conflict with, constitute a default (or an
event which with notice or lapse of time or both would become a default), and/or
event of default under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, credit facility or
instrument and/or other undersigned to which such Debtor is a party (evidencing
Debtor’s debt or otherwise) or by which any property and/or other assets are
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which such Debtor is subject (including Federal and
State securities laws and regulations), or by which any material property or
asset of such Debtor is bound or affected, except in the case of each of clauses
(ii) and (iii), such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as could not, individually or in the
aggregate, have or result in a Material Adverse Effect. The business of each
Debtor is not being conducted in violation of any law, ordinance or regulation
of any governmental authority, except for violations which, individually or in
the aggregate, do not have a Material Adverse Effect.

(d)      Consents and Approvals. No Debtor is required to obtain any consent,
approval, (including, but not limited to, from stockholder and/or creditors of
each Debtor) waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local, foreign or other
governmental authority or other person in connection with the execution,
delivery and performance by such Debtor of this Agreement and the other
Transaction Documents.

(e)      Transaction Documents. The representations and warranties of each
Debtor set forth in the Transaction Documents as they relate to such Debtor,
each of which is hereby incorporated herein by reference, are true and correct
as of each time such representations are deemed to be made pursuant to such
Transaction Documents, and the Secured Parties shall be entitled to rely on each
of them as if they were fully set forth herein, provided that each reference in
each such representation and warranty to the Company's knowledge shall, for the
purposes of this Section 4, be deemed to be a reference to such Debtor's
knowledge.

(f)      Foreign Law. Each Debtor has consulted with appropriate foreign legal
counsel with respect to any of the above representations for which non-U.S. law
is applicable. Such foreign counsel have advised each applicable Debtor that
such counsel knows of no reason why any of the above representations would not
be true and accurate. Such foreign counsel were provided with copies of this
Agreement and the other Transaction Documents prior to rendering their advice.

7

--------------------------------------------------------------------------------

(g)      Each Debtor has no place of business or offices where their respective
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      attached hereto. Except as specifically set
forth on Schedule     , Debtors are 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 as disclosed on Schedule     , none of such
Collateral is in the possession of any consignee, bailee, warehouseman, agent or
processor.

(h)      Except as set forth on Schedule     attached hereto, the Debtors are
the sole owner of the Collateral (except for non-exclusive licenses granted by
Debtors in the ordinary course of business), free and clear of any liens,
security interests, encumbrances, rights or claims, and is fully authorized to
grant the Security Interests. Except as set forth on Schedule      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 Parties pursuant to this Agreement)
covering or affecting any of the Collateral. Except as set forth on
Schedule      attached hereto and except pursuant to this Agreement and the
other Transaction Documents, as long as this Agreement and/or the other
Transaction Documents shall be in effect, the Debtors 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 Parties pursuant to the terms of this
Agreement).

(i)      Except as set forth on Schedule      attached hereto, no written claim
has been received that any Collateral or Debtors’ use of any Collateral violates
the rights of any third party. Except as set forth on Schedule      attached
hereto, there has been no adverse decision to Debtors’ claim of ownership rights
in or exclusive rights to use the Collateral in any jurisdiction or to Debtors’
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
Debtors, threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.

(j)      The Debtors 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      attached hereto and may
not relocate such books of account and records or tangible Collateral unless it
delivers to the Secured Parties 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 Parties a valid, perfected and continuing
perfected first priority lien in the Collateral.

8

--------------------------------------------------------------------------------

(k)      This Agreement creates in favor of the Secured Parties a valid security
interest in the Collateral 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 which 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
recordation of the Intellectual Property Security Agreement and other required
documents with respect to, among other items, patents, patents pending,
trademarks and related items with the United States Patent and Trademark Office
and copyrights and copyright applications in the United States Copyright Office,
the execution and delivery of the Canadian Financing Statement to perfect the
security interest in any Collateral Located in Canada in favor of the Agent on
behalf of the Secured Parties satisfying the requirements of Section ___ of the
Canada’s Personal Property Security Act, the execution on delivery of the
Guarantee and the delivery of the certificates and other instruments provided in
Section 3 and delivery of the Pledged Securities to the Agent, no action is
necessary to create, perfect or protect the security interests created hereunder
and in the other Transaction Documents. Without limiting the generality of the
foregoing, except for the taking of the above actions, the filing of the
Canadian Financing Agreement with the Ministry of Finance and Corporate
Relations of British Columbia, 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 and/or the other Transaction
Documents, (ii) the creation or perfection of the Security Interests created
hereunder in the Collateral or (iii) the enforcement of the rights of the Agent
and the Secured Parties hereunder and thereunder.

(l)      Debtors hereby authorize the Agent to file one or more (i) financing
statements under the UCC or any other similar law (domestic and/or foreign) with
respect to the Obligations of the Debtors to the Secured Parties, (ii) amend and
restate all prior financing statements under the UCC, and (iii) take all such
other actions so that all Obligations hereunder are pari passu between each of
the Secured Parties with respect to the Security Interests, with the proper
filing and recording agencies in any jurisdiction deemed proper by it, including
foreign jurisdictions, including but not limited to filing a fixed and floating
charge over the Security Interests in the

9

--------------------------------------------------------------------------------

(m)      The capital stock and other equity interests listed on Schedule __
hereto (the “Pledged Securities”) represent all of the capital stock and other
equity interests of all of the subsidiaries of the Debtors, and represent all
capital stock and other equity interests owned, directly or indirectly, by the
Debtors. All of the Pledged Securities are validly issued, fully paid and
nonassessable, and except as set forth on Schedule __ attached hereto, the
Debtors are the legal and beneficial owner of the Pledged Securities, free and
clear of any lien, security interest or other encumbrance except for the
security interests created by this Agreement.

(n)      The ownership and other equity interests 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/or any other equivalent and/or similar law,
rule and/or regulation in Canada and are not held in a securities account or by
any financial intermediary.

(o)      Except as set forth on Schedule __, Debtors 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 Parties until this Agreement, the other Transaction Documents and the
Security Interests hereunder and thereunder shall be terminated in accordance
with and with the other Transaction Documents. Debtors hereby agree to defend
the same against the claims of any and all persons and entities. Debtors shall
safeguard and protect all Collateral for the account of the Secured Parties. At
the request of the Agent, Debtors will sign and deliver to the Agent on behalf
of the Secured Parties at any time or from time to time one or more financing
statements pursuant to the UCC in form reasonably satisfactory to the Agent and
will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Agent to be, necessary or desirable to effect the rights and
obligations provided for herein. Without limiting the generality of the
foregoing, Debtors shall pay all fees, taxes and other amounts necessary to
maintain the Collateral and the Security Interests hereunder and in the other
Transaction Documents, and Debtors shall obtain and furnish to the Agent from
time to time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security Interests
hereunder and thereunder.

(p)      Debtors will not transfer, pledge, hypothecate, encumber, license, sell
or otherwise dispose of any of the Collateral (except for non-exclusive licenses
granted by Debtors in their ordinary course of business (and sales of inventory
by Debtors in their ordinary course of business) without the prior written
consent as provided herein.

(q)      Debtors 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.

10

--------------------------------------------------------------------------------

(r)      Debtors 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. Debtors shall cause each insurance policy issued in
connection herewith to provide, and the insurer issuing such policy to certify
to the Agent, that (a) the Agent 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 Agent and such cancellation or change shall not
be effective as to the Agent for at least thirty (30) days after receipt by the
Agent of such notice, unless the effect of such change is to extend or increase
coverage under the policy; and (c) the Agent 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 $50,000, loss payments in
each instance will be applied by the Debtors 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 Debtors; provided, however, that
payments received by Debtors after an Event of Default occurs and is continuing
or in excess of $50,000 for any occurrence or series of related occurrences
shall be paid to the Agent on behalf of the Secured Parties and, if received by
Debtors, shall be held in trust for the Secured Parties and immediately paid
over to the Agent unless otherwise directed in writing by the Agent. Copies of
such policies or the related certificates, in each case, naming the Agent as
lender loss payee and additional insured shall be delivered to the Agent at
least annually and at the time any new policy of insurance is issued.

(s)      Debtors shall promptly but in no event later than two (2) days of
obtaining knowledge thereof, advise the Secured Parties, in sufficient detail,
of any material adverse change in the Collateral, and of the occurrence of any
event which would have a material adverse effect on the value of the Collateral
or on the Secured Parties’ security interest, through the Agent, therein.

(t)      Debtors shall promptly execute and deliver to the Agent such further
deeds, mortgages, assignments, security agreements, financing statements or
other instruments, documents, certificates and assurances and take such further
action as the Agent may from time to time request and may in its sole discretion
deem necessary to perfect, protect or enforce the Secured Parties’ security
interest in the Collateral including, without limitation, if applicable, the
execution and delivery of a separate security agreement with respect to Debtors’
Intellectual Property in which the Secured Parties have been granted a security
interest hereunder, in form and substance acceptable to the Agent, which
Intellectual Property Security Agreement, other than as stated therein, shall be
subject to all of the terms and conditions hereof.

11

--------------------------------------------------------------------------------

(u)      Debtors shall permit the Agent 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 Agent from time to time (except upon an Event of
Default, an event of default (and/or an event of default or an event of default
that would occur upon the passage of time and/or the giving of notice), in which
event inspection shall be at any time as requested by all of the above parties.

(v)      Debtors 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.

(w)      Debtors shall promptly notify the Secured Parties 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
Debtors that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties hereunder.

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

(y)      The Debtors 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.

(z)      Debtors 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 30 days prior written notice to the Secured Parties of such
change and, at the time of such written notification, Debtors provide any
financing statements or fixture filings necessary to perfect and continue the
perfection of the Security Interests granted and evidenced by this Agreement.

(aa)      Except in the ordinary course of business, Debtors 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
Agent which shall not be unreasonably withheld.

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

12

--------------------------------------------------------------------------------

(cc)      (i) The actual name of Debtors are the name set forth in Schedule     
attached hereto; (ii) Debtors have no trade names except as set forth on
Schedule     attached hereto; (iii) Debtors have not used any name other than
that stated in the preamble hereto or as set forth on Schedule     for the
preceding five years; and (iv) no entity has merged into Debtors or been
acquired by Debtors within the past five years except as set forth on
Schedule     .

(dd)      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 Debtors shall deliver such Collateral to the Agent.

(ee)      Debtors, in their capacity as issuer, hereby agree to comply with any
and all orders and instructions of Agent regarding the Pledged Interests and
Pledged Securities consistent with the terms of this Agreement and the other
Transaction Documents without the further consent of Debtors as contemplated by
Section 8-106 (or any successor section) of the UCC and applicable Canadian law.
Further, Debtors agree that they shall not enter into a similar agreement (or
one that would confer “control” within the meaning of Article 8 of the UCC and
applicable Canadian law) with any other person or entity.

(ff)      Debtors shall cause all tangible chattel paper constituting Collateral
to be delivered to the Agent, 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 Debtors shall cause the
underlying chattel paper to be “marked” within the meaning of Section 9-105 of
the UCC (or successor section thereto).

(gg)      If there is any investment property or deposit account included as
Collateral that can be perfected by “control” through an account control
agreement, the Debtors shall cause such an account control agreement, in form
and substance in each case satisfactory to the Agent, to be entered into and
delivered to the Agent for the benefit of the Secured Parties.

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

(ii)      To the extent that any Collateral is in the possession of any third
party, the Debtors shall join with the Agent in notifying such third party of
the Secured Parties’ 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
Agent.

13

--------------------------------------------------------------------------------

(jj)      If Debtors shall at any time hold or acquire a commercial tort claim,
Debtors shall promptly notify the Secured Parties in a writing signed by Debtors
of the particulars thereof and grant to the Secured Parties 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 Agent.

(kk)      Debtors shall immediately provide written notice to the Secured
Parties of any and all accounts which 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 Agent an assignment of claims for such
accounts and cooperate with the Agent 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.

(ll)      Debtors shall cause each Subsidiary of Debtors to immediately become a
party hereto (an “Additional Debtor”), by executing and delivering an Additional
Debtor Joinder in substantially the form of Annex B attached hereto and comply
with the provisions hereof applicable to the Debtors. Concurrent therewith, the
Additional Debtor shall deliver replacement schedules for, or supplements to all
other Schedules to (or referred to in) this Agreement and the other Transaction
Documents, as applicable, which replacement schedules shall supersede, or
supplements shall modify, the Schedules then in effect. The Additional Debtor
shall also deliver such opinions of counsel, authorizing resolutions, good
standing certificates, incumbency certificates, organizational documents,
financing statements and other information and documentation as the Agent may
reasonably request. Upon delivery of the foregoing to the Agent, the Additional
Debtor shall be and become a party to this Agreement with the same rights and
obligations as the Debtors, for all purposes hereof as fully and to the same
extent as if it were an original signatory hereto and shall be deemed to have
made the representations, warranties and covenants set forth herein as of the
date of execution and delivery of such Additional Debtor Joinder, and all
references herein to the “Debtor” shall be deemed to include each Additional
Debtor.

(mm)      Debtors shall vote the Pledged Securities to comply with the covenants
and agreements set forth herein and in the Notes.

(nn)      Upon execution of this Agreement, Debtors shall provide the Agent (i)
undated Necessary Endorsements for the transfer to and in the name of the Agent
of all Pledged Securities so that all such Pledged Securities can be dealt with
by the Agent upon the occurrence and in the manner as provided herein, and (ii)
all Pledged Securities to the Agent. Upon execution of this Agreement register
the pledge of the applicable Pledged Securities on the books of Debtors. Debtors
shall notify each issuer of Pledged Securities to register the pledge of the
applicable Pledged Securities in the name of the Secured Parties on the books of
such issuer. Further, except with respect to certificated securities delivered
to the Agent, the Debtors shall deliver to Agent an acknowledgement of pledge
(which, where appropriate, shall comply with the requirements of the relevant
UCC and applicable Canadian law with respect to perfection by registration)
signed by the issuer of the applicable Pledged Securities, which acknowledgement
shall confirm that: (a) it has registered the pledge on its books and records;
and (b) at any time directed by Agent during the continuation of an Event of
Default, such issuer will transfer the record ownership of such Pledged
Securities into the name of any designee of Agent, will take such steps as may
be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without the further consent of the
Debtors.

14

--------------------------------------------------------------------------------

(oo)      In the event that, upon an occurrence of an Event of Default, Agent
shall sell all or any of the Pledged Securities to another party or parties
(herein called the “Transferee”) or shall purchase or retain all or any of the
Pledged Securities, Debtors shall, to the extent applicable: (i) deliver to
Agent or the Transferee, as the case may be, the articles of incorporation,
bylaws, minute books, stock certificate books, corporate seals, deeds, leases,
indentures, agreements, evidences of indebtedness, books of account, financial
records and all other Organizational Documents and records of the Debtors and
their direct and indirect subsidiaries; (ii) use its best efforts to obtain
resignations of the persons then serving as officers and directors of the
Debtors and their direct and indirect subsidiaries, if so requested; and (iii)
use its best efforts to obtain any approvals that are required by any
governmental or regulatory body in order to permit the sale of the Pledged
Securities to the Transferee or the purchase or retention of the Pledged
Securities by Agent and allow the Transferee or Agent to continue the business
of the Debtors and their direct and indirect subsidiaries.

(pp)      Without limiting the generality of the other obligations of the
Debtors hereunder, Debtors shall promptly (i) cause to be registered at the
United States Copyright Office all of its material copyrights, (ii) cause the
security interest contemplated hereby with respect to all Intellectual Property
registered at the United States Copyright Office and the United States Patent
and Trademark Office to be duly recorded at the applicable office, and (iii)
give the Agent notice whenever it acquires (whether absolutely or by license) or
creates any additional material Intellectual Property.

(qq)      Debtors will from time to time 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 Parties 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.

15

--------------------------------------------------------------------------------

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

(ss)      Except as set forth on Schedule __ attached hereto, 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.

5.      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 Agent’s and/or
Secured Parties rights hereunder shall not be deemed to be the type of event
which would trigger such conversion rights notwithstanding any provisions in the
Organizational Documents or agreements to which any Debtor is subject or to
which any Debtor is party.

6.      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
and/or event of default under any other Transaction Documents; or

        (b)

Any representation or warranty of Debtors in this Agreement shall prove to have
been incorrect in any material respect when made;

        (c)

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

        (d)

Any material diminution in the value of the Collateral as determined by the
Agent in its reasonable discretion; or

16

--------------------------------------------------------------------------------

  (e)

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 any Debtor, or a proceeding shall be commenced by any Debtor, or by
any governmental authority having jurisdiction over any Debtor, seeking to
establish the invalidity or unenforceability thereof, or any Debtor shall deny
that any Debtor has any liability or obligation purported to be created under
this Agreement;

7.      Duty To Hold In Trust.

(a)      Upon the occurrence of any Event of Default and at any time thereafter,
each 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 Agent for the benefit of the Secured Parties and shall forthwith endorse
and transfer any such sums or instruments, or both, to the Agent for the benefit
of the Secured Parties pro-rata in proportion to their respective then-currently
outstanding aggregate principal amount of Notes for application to the
satisfaction of the Obligations (and if any Note is not outstanding, pro-rata in
proportion to the initial purchasers of the remaining Notes).

(b)      If any Debtor shall become entitled to receive or shall receive any
securities or other property (including, without limitation, shares of Pledged
Securities or instruments representing Pledged Securities acquired after the
date hereof, or any options, warrants, rights or other similar property or
certificates representing a dividend, or any distribution in connection with any
recapitalization, reclassification or increase or reduction of capital, or
issued in connection with any reorganization of such Debtor or any of its direct
or indirect subsidiaries) in respect of the Pledged Securities (whether as an
addition to, in substitution of, or in exchange for, such Pledged Securities or
otherwise), such Debtor agrees to (i) accept the same as the agent of the
Secured Parties; (ii) hold the same in trust for the Agent for the benefit of
the Secured Parties; and (iii) to deliver any and all certificates or
instruments evidencing the same to Agent on or before the close of business on
the fifth business day following the receipt thereof by such Debtor, in the
exact form received together with the Necessary Endorsements, to be held by
Agent subject to the terms of this Agreement as Collateral.

8.      Rights and Remedies Upon Default.

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

17

--------------------------------------------------------------------------------

(i)      The Agent 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 each Debtor shall assemble the Collateral and make it
available to the Agent at places which the Agent shall reasonably select,
whether at such Debtor's premises or elsewhere, and make available to the Agent,
without rent, all of such Debtor’s respective premises and facilities for the
purpose of the Agent taking possession of, removing or putting the Collateral in
saleable or disposable form.

(ii)      Upon notice to the Debtors by Agent, all rights of each Debtor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise and all rights of each Debtor to receive the dividends and
interest which it would otherwise be authorized to receive and retain, shall
cease. Upon such notice, Agent shall have the right to receive, for the benefit
of the Secured Parties, any interest, cash dividends or other payments on the
Collateral and, at the option of Agent, to exercise in such Agent’s discretion
all voting rights pertaining thereto. Without limiting the generality of the
foregoing, Agent shall have the right (but not the obligation) to exercise all
rights with respect to the Collateral as it were the sole and absolute owner
thereof, including, without limitation, to vote and/or to exchange, at its sole
discretion, any or all of the Collateral in connection with a merger,
reorganization, consolidation, recapitalization or other readjustment concerning
or involving the Collateral or any Debtor or any of its direct or indirect
subsidiaries.

(iii)      The Agent shall have the right to operate the business of each 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 Agent 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 any Debtor or right of redemption of a
Debtor, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Agent, for the benefit of the
Secured Parties, may, unless prohibited by applicable law which 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 any
Debtor, which are hereby waived and released.

18

--------------------------------------------------------------------------------

(iv)      The Agent shall have the right (but not the obligation) to notify any
account debtors and any obligors under instruments or accounts to make payments
directly to the Agent, on behalf of the Secured Parties, and to enforce the
Debtors’ rights against such account debtors and obligors.

(v)      The Agent, for the benefit of the Secured Parties, 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 Agent, on behalf of
the Secured Parties, or its designee.

(vi)      The Agent may (but is not obligated to) transfer any or all
Intellectual Property registered in the name of any Debtor at the United States
Patent and Trademark Office and/or Copyright Office into the name of the Secured
Parties or any designee or any purchaser of any Collateral.

(b)      The Agent 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 Agent
may sell the Collateral without giving any warranties and may specifically
disclaim such warranties. If the Agent sells any of the Collateral on credit,
the Debtors will only be credited with payments actually made by the purchaser.
In addition, each Debtor waives any and all rights that it may have to a
judicial hearing in advance of the enforcement of any of the Agent’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 Agent to further exercise rights and
remedies under this Section 8 or elsewhere provided by agreement or applicable
law, each Debtor hereby grants to the Agent, for the benefit of the Agent and
the Secured Parties, an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to such Debtor) to use, license or
sublicense following an Event of Default, any Intellectual Property now owned or
hereafter acquired by such 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.

9.      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 Agent in enforcing the
Secured Parties’ 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 Parties (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 Parties 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 Parties are legally entitled, the Debtors will be
jointly and severally liable for the deficiency, together with interest thereon,
at the rate of 22% per annum or the lesser amount permitted by applicable law
(the “Default Rate”), and the reasonable fees and expenses of any attorneys
employed by the Secured Parties to collect such deficiency. To the extent
permitted by applicable law, each Debtor waives all claims, damages and demands
against the Secured Parties 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 Parties as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.

19

--------------------------------------------------------------------------------

10.      Securities Law Provision. Each Debtor recognizes that Agent may be
limited in its ability to effect a sale to the public of all or part of the
Pledged Securities by reason of certain prohibitions in the Securities Act of
1933, as amended, or other federal or state securities laws (collectively, the
“Securities Laws”), and may be compelled to resort to one or more sales to a
restricted group of purchasers who may be required to agree to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. Each Debtor agrees that sales so made may be
at prices and on terms less favorable than if the Pledged Securities were sold
to the public, and that Agent has no obligation to delay the sale of any Pledged
Securities for the period of time necessary to register the Pledged Securities
for sale to the public under the Securities Laws. Each Debtor shall cooperate
with Agent in its attempt to satisfy any requirements under the Securities Laws
(including, without limitation, registration thereunder if requested by Agent)
applicable to the sale of the Pledged Securities by Agent.

11.      Responsibility for Collateral. The Debtors 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) neither the Agent nor any Secured
Party (i) has any 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) has any obligation to clean-up or otherwise prepare the
Collateral for sale, and (b) each Debtor shall remain obligated and liable under
each contract or agreement included in the Collateral to be observed or
performed by such Debtor thereunder. Neither the Agent nor any Secured Party
shall 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 Agent or any
Secured Party of any payment relating to any of the Collateral, nor shall the
Agent or any Secured Party be obligated in any manner to perform any of the
obligations of any 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
Agent or any 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 which may have been assigned to the Agent or to which
the Agent or any Secured Party may be entitled at any time or times.

20

--------------------------------------------------------------------------------

12.      Security Interests Absolute. All rights of the Secured Parties and all
obligations of the Debtors 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 Parties 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 which 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 Parties shall continue even if the Obligations are barred for any
reason, including, without limitation, the running of the statute of limitations
or bankruptcy. Each 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 Parties 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 Parties, then, in any such
event, each 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. Each
Debtor waives all right to require the Secured Parties to proceed against any
other person or entity or to apply any Collateral which the Secured Parties may
hold at any time, or to marshal assets, or to pursue any other remedy. Each
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 Debtors contained in
this Agreement (including, without limitation, Annex A hereto) shall survive and
remain operative and in full force and effect regardless of the termination of
this Agreement.

21

--------------------------------------------------------------------------------

14.      Power of Attorney; Further Assurances.

(a)      Each Debtor authorizes the Agent, and does hereby make, constitute and
appoint the Agent and its officers, agents, successors or assigns with full
power of substitution, as such Debtor’s true and lawful attorney-in-fact, with
power, in the name of the Agent or such 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 Agent; (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 debtors,
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 Agent, and at
the expense of the Debtors, 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
which the Agent 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
Debtors might or could do; and each 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 any Debtor is subject or to which any 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.

(b)      On a continuing basis, each 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 Schedule __ attached hereto, all such instruments,
and take all such action as may reasonably be deemed necessary or advisable, or
as reasonably requested by the Agent, 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 Agent the grant or perfection of a
perfected security interest in all the Collateral under the UCC.

22

--------------------------------------------------------------------------------

(c)      Each Debtor hereby irrevocably appoints the Agent as such Debtor’s
attorney-in-fact, with full authority in the place and instead of such Debtor
and in the name of such Debtor, from time to time in the Agent’s discretion, to
take any action and to execute any instrument which the Agent 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
such 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 Agent. 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 Agent 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 Parties’ rights and
remedies hereunder.

17.      Appointment of Agent. By execution of this Agreement, each Secured
Party hereby appoint One East Capital Advisors, L.P. to act as their agent
(“Agent”) for purposes of exercising any and all rights and remedies of the
Secured Parties hereunder, in Annex A hereto, in the Intellectual Property
Security Agreement, the Guaranty and in any other documents, instruments and/or
agreements relating to securing all obligations of each Debtor to any Secured
Party under the Transaction Documents by all of the assets of each Debtor and
perfecting such security interests. Such appointment shall continue until
revoked in writing by a Majority in Interest, at which time a Majority in
Interest shall appoint a new Agent. In addition to those hereunder, the Agent
shall have the rights, responsibilities and immunities set forth in Annex A
hereto.

18.      Costs and Expenses. Each Debtor agree that it is jointly and severally
obligated to pay and shall pay upon demand by the Agent and/or the Secured
Parties 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 and Canadian law, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Agent. The Debtors shall
also pay all other claims and charges which in the reasonable opinion of the
Agent is reasonably likely to prejudice, imperil or otherwise affect the
Collateral or the Security Interests therein. The Debtors will also, upon
demand, pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Agent, for the benefit of the Secured Parties, 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 Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Agent, for the benefit of the Secured Parties, and the Secured Parties 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 Parties under the Notes and/or the other Transaction Documents.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Notes and shall bear interest at the highest default rate provided in any
of the Notes.

23

--------------------------------------------------------------------------------

19.      Miscellaneous.

(a)      No course of dealing between the Debtors and the Secured Parties and/or
the Agent, nor any failure to exercise, nor any delay in exercising, on the part
of the Secured Parties and/or the Agent, 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 Agent, on behalf of the Secured
Parties, 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 exhibits and schedules 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 exhibits and schedules 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 Debtors and the
Agent, 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.

24

--------------------------------------------------------------------------------

(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. No Debtor may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Secured Party (other than by merger). Any Secured Party may
assign any or all of its rights under this Agreement to any Person (as defined
in the Notes) to whom such 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 Parties.”

(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, each Debtor agrees that all proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement, the Notes and/or the other Transaction Documents (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, Borough of Manhattan. Except to the extent mandatorily governed by the
jurisdiction or situs where the Collateral is located, each Debtor hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan 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.

25

--------------------------------------------------------------------------------

(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)      Each Debtor shall be jointly and severally liable for all Obligations.

(k)      Each Debtor shall indemnify, reimburse and hold harmless the Agent and
the Secured Parties and their respective partners, successors, predecessors,
Affiliates (as defined under the Federal Securities Laws) members, shareholders,
attorneys, officers, directors, employees, representatives and agents (and any
other persons with other titles that have similar functions) (collectively,
“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 which 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 (including, but not limited to the other
Transaction Documents).

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

26

--------------------------------------------------------------------------------

(m)      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 any Debtor or any direct or indirect
subsidiary of any Debtor or compliance with any provisions of any of the
Organizational Documents, the Debtors hereby grant such consent and approval and
waive any such noncompliance with the terms of said documents.

20.      Seniority, Etc. Except for the right of each holder of B Notes to
allocate certain payments related to their B Notes to the A Notes owned by the
holder, if any, as provided and to the extent so provided in the B Notes, all
payments under this Agreement, the Notes and the other Transaction Documents to
be made and/or required to be made to the Secured Parties (or the Agent on
behalf of itself and the other Secured Parties) shall be paid pari passu to each
Secured Party on a pro-rated basis based upon the accrued but unpaid principal
amount of each holder’s Note on the date of determination, and senior in all
respects to all other Indebtedness of any Debtors including, but not limited to
any Permitted Indebtedness (as both terms are defined in the Notes).

[SIGNATURE PAGES FOLLOW]

27

--------------------------------------------------------------------------------

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

VISCOUNT SYSTEMS, INC. (a Nevada corporation)     By:           Name:          
Title:  

VISCOUNT COMMUNICATION AND CONTROL SYSTEMS INC.   By:           Name:          
Title:  

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

28

--------------------------------------------------------------------------------

[SIGNATURE PAGE OF SECURED PARTIES TO SECURITY AND PLEDGE AGREEMENT]     Name of
Investing Entity:       Signature of Authorized Signatory of Investing entity:  
    Name of Authorized Signatory:       Title of Authorized Signatory:      
Aggregate Principal Amount of A Notes owned: $       Aggregate Principal Amount
of B Notes owned: $  

Appointment as Collateral Agent accepted and agreed to:       ONE EAST CAPITAL
ADVISORS, L.P.       Signature of Authorized Signatory of Investing entity:    
  Name of Authorized Signatory:       Title of Authorized Signatory:  

29

--------------------------------------------------------------------------------

ANNEX A
to
SECURITY
AGREEMENT

THE AGENT

1. Appointment. The Secured Parties (all capitalized terms used herein and not
otherwise defined shall have the respective meanings provided in the Security
and Pledge Agreement dated as of November 24, 2015 to which this Annex A is
attached (the "Agreement")), by their acceptance of the benefits of the
Agreement, hereby designate One East Capital Advisors L.P. (“Agent”) as the
Agent to act as specified herein and in the Agreement. Each Secured Party shall
be deemed irrevocably to authorize the Agent to take such action on its behalf
under the provisions of the Agreement and the Notes and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder by or through its agents or employees.

2. Nature of Duties. The Agent shall have no duties or responsibilities except
those expressly set forth in the Agreement. Neither the Agent nor any of its
partners, members, shareholders, officers, directors, employees or agents shall
be liable for any action taken or omitted by it as such under the Agreement or
hereunder or in connection herewith or therewith, be responsible for the
consequence of any oversight or error of judgment or answerable for any loss,
unless caused solely by its or their gross negligence or willful misconduct as
determined by a final judgment (not subject to further appeal) of a court of
competent jurisdiction. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of the Agreement or
any other Transaction Document a fiduciary relationship in respect of any Debtor
or any Secured Party; and nothing in the Agreement or any other Transaction
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of the Agreement or any other
Transaction Document except as expressly set forth herein and therein.

3. Lack of Reliance on the Agent. Independently and without reliance upon the
Agent, each Secured Party, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of the Company and its subsidiaries in connection with
such Secured Party’s investment in the Debtors, the creation and continuance of
the Obligations, the transactions contemplated by the Transaction Documents, and
the taking or not taking of any action in connection therewith, and (ii) its own
appraisal of the creditworthiness of each Debtor, and of the value of the
Collateral from time to time, and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Secured Party with any credit, market or other information with respect thereto,
whether coming into its possession before any Obligations are incurred or at any
time or times thereafter. The Agent shall not be responsible to the Debtors or
any Secured Party for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith, or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Agreement or any other Transaction Document, or for the financial condition of
the Debtors or the value of any of the Collateral, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction Document, or
the financial condition of the Debtors, or the value of any of the Collateral,
or the existence or possible existence of any default or Event of Default under
the Agreement, the Notes or any of the other Transaction Documents.

30

--------------------------------------------------------------------------------

4. Certain Rights of the Agent. The Agent shall have the right to take any
action with respect to the Collateral, on behalf of all of the Secured Parties.
To the extent practical, the Agent shall request instructions from the Secured
Parties with respect to any material act or action (including failure to act) in
connection with the Agreement or any other Transaction Document, and shall be
entitled to act or refrain from acting in accordance with the instructions of a
Majority in Interest; if such instructions are not provided despite the Agent’s
request therefor, the Agent shall be entitled to refrain from such act or taking
such action, and if such action is taken, shall be entitled to appropriate
indemnification from the Secured Parties in respect of actions to be taken by
the Agent; and the Agent shall not incur liability to any person or entity by
reason of so refraining. Without limiting the foregoing, (a) no Secured Party
shall have any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting hereunder in accordance with the terms of
the Agreement or any other Transaction Document, and the Debtors shall have no
right to question or challenge the authority of, or the instructions given to,
the Agent pursuant to the foregoing and (b) the Agent shall not be required to
take any action which the Agent believes (i) could reasonably be expected to
expose it to personal liability or (ii) is contrary to this Agreement, the
Transaction Documents or applicable law.

5. Reliance. The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, statement, certificate, telex,
teletype or telecopier message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to the Agreement and the other
Transaction Documents and its duties thereunder, upon advice of counsel selected
by it and upon all other matters pertaining to this Agreement and the other
Transaction Documents and its duties thereunder, upon advice of other experts
selected by it. Anything to the contrary notwithstanding, the Agent shall have
no obligation whatsoever to any Secured Party to assure that the Collateral
exists or is owned by the Debtors or is cared for, protected or insured or that
the liens granted pursuant to the Agreement have been properly or sufficiently
or lawfully created, perfected, or enforced or are entitled to any particular
priority.

31

--------------------------------------------------------------------------------

6. Indemnification. To the extent that the Agent is not reimbursed and
indemnified by the Debtors, the Secured Parties will jointly and severally
reimburse and indemnify the Agent, in proportion to their initially purchased
respective principal amounts of Notes, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in performing its duties hereunder
or under the Agreement or any other Transaction Document, or in any way relating
to or arising out of the Agreement or any other Transaction Document except for
those determined by a final judgment (not subject to further appeal) of a court
of competent jurisdiction to have resulted solely from the Agent's own gross
negligence or willful misconduct. Prior to taking any action hereunder as Agent,
the Agent may require each Secured Party to deposit with it sufficient sums as
it determines in good faith is necessary to protect the Agent for costs and
expenses associated with taking such action.

7. Resignation by the Agent.

(a) The Agent may resign from the performance of all its functions and duties
under the Agreement and the other Transaction Documents at any time by giving 30
days' prior written notice (as provided in the Agreement) to the Debtors and the
Secured Parties. Such resignation shall take effect upon the appointment of a
successor Agent pursuant to clauses (b) and (c) below.

(b) Upon any such notice of resignation, the Secured Parties, acting by a
Majority in Interest, shall appoint a successor Agent hereunder.

(c) If a successor Agent shall not have been so appointed within said 30-day
period, the Agent shall then appoint a successor Agent who shall serve as Agent
until such time, if any, as the Secured Parties appoint a successor Agent as
provided above. If a successor Agent has not been appointed within such 30-day
period, the Agent may petition any court of competent jurisdiction or may
interplead the Debtors and the Secured Parties in a proceeding for the
appointment of a successor Agent, and all fees, including, but not limited to,
extraordinary fees associated with the filing of interpleader and expenses
associated therewith, shall be payable by the Debtors on demand.

8. Rights with respect to Collateral. Each Secured Party agrees with all other
Secured Parties and the Agent (i) that it shall not, and shall not attempt to,
exercise any rights with respect to its security interest in the Collateral,
whether pursuant to any other agreement or otherwise (other than pursuant to
this Agreement), or take or institute any action against the Agent or any of the
other Secured Parties in respect of the Collateral or its rights hereunder
(other than any such action arising from the breach of this Agreement) and (ii)
that such Secured Party has no other rights with respect to the Collateral other
than as set forth in this Agreement and the other Transaction Documents. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations under the Agreement.
After any retiring Agent’s resignation or removal hereunder as Agent, the
provisions of the Agreement including this Annex A shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent.

32

--------------------------------------------------------------------------------

ANNEX B
to
SECURITY
AGREEMENT

FORM OF ADDITIONAL DEBTOR JOINDER

Security and Pledge Agreement dated as of November 24, 2015 made by
VISCOUNT SYSTEMS INC (a Nevada corporation)
and each of 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 Debtor 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.

33

--------------------------------------------------------------------------------

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

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

34

--------------------------------------------------------------------------------