CNS RESPONSE, INC.


 


SECOND AMENDED AND RESTATED SECURITY
AGREEMENT


 


This SECOND AMENDED
AND RESTATED SECURITY AGREEMENT (this “Agreement”), dated as of August ___, 2012, is entered into by
and between CNS Response, Inc., a Delaware corporation (the “Company”), and David B. Jones, as administrative
agent (in such capacity, the “Administrative Agent”) for the Secured Parties (as defined below).


 


WHEREAS, the Company
issued convertible promissory notes (including any subsequent amendments, the “October 2010 Notes”) pursuant
to a certain Note and Warrant Purchase Agreement (including any subsequent amendments, the “October 2010 Purchase Agreement”),
dated as of October 1, 2010, between the Company and the investors signatory thereto (such investors, the “October
2010 Noteholders”);


 


WHEREAS, the Company
issued convertible promissory notes (including any subsequent amendments, the “January 2011 Notes”) pursuant
to a certain Note and Warrant Purchase Agreement (including any subsequent amendments, the “January 2011 Purchase Agreement”),
dated as of January 20, 2011, between the Company and the investors party thereto (such investors, the “January 2011
Noteholders”);


 


WHEREAS, the Company
issued convertible promissory notes (including any subsequent amendments, the “November 2011 Notes”)
pursuant to a certain Amended and Restated Note and Warrant Purchase Agreement (including any subsequent amendments, the “November
2011 Purchase Agreement”), dated as of November 11, 2011, between the Company and the investors party thereto (such
investors, the “November 2011 Noteholders”);


 


WHEREAS, the Company
entered into a Security Agreement, dated as of October 1, 2010, between the Company and John Pappajohn, as administrative agent,
for the October 2010 Noteholders, as amended and restated by that certain Amended and Restated Security Agreement, dated as of
September 30, 2011, between the Company and Paul Buck, as administrative agent (together, the “Prior Security Agreement”),
which related to the October 2010 Notes, January 2011 Notes and November 2011 Notes;


 


WHEREAS, the Company
wishes to issue senior secured convertible promissory notes (the “Senior Notes”) in the aggregate principal
amount of $2 million to investors (the “Senior Noteholders”), such amount subject to increase at the
discretion of the Company’s Board of Directors, pursuant to a new Note and Warrant Purchase Agreement, dated on or about
the date hereof (the “New Purchase Agreement”);


 


WHEREAS, the October
2010 Noteholders, the January 2011 Noteholders, the November 2011 Noteholders and the Senior Noteholders are collectively referred
to herein as the “Investors”, the October 2010 Purchase Agreement, January 2011 Purchase Agreement, November
2011 Purchase Agreement and the New Purchase Agreement are collectively referred to herein as the “Purchase Agreements”
and the October 2010 Notes, the January 2011 Notes, the November 2011 Notes, and the Senior Notes are collectively referred to
herein as the “Notes”;


 



    	 



    	 



    

 


WHEREAS, the Company
wishes to amend and restate the Prior Security Agreement to provide for the grant of (i) a first position security interest in
the Collateral (as defined below) to the Senior Noteholders with respect to the Senior Notes, (ii) a second position security interest
in the Collateral to the October 2010 Noteholders with respect to the October 2010 Notes, which security interest will be subordinated
to the security interest in the Collateral granted to the Senior Noteholders, and (iii) a third position security interest in the
Collateral to the January 2011 Noteholders and the November 2011 Noteholders with respect to the January 2011 Notes and the November
2011 Notes, as applicable, which security interest will be subordinated to the security interest in the Collateral granted to the
Senior Noteholders and the October 2010 Noteholders.


 


WHEREAS, the
obligations of each Investor to the Company under the Purchase Agreements are conditioned upon, among other things, the execution
and delivery by the Company of an agreement in the form hereof to secure (a) the due and punctual payment of (i) the principal
of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including
fees (including fees and disbursements of counsel), costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Company to the Investors under
the Purchase Agreements and the other Transaction Documents and (b) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Company under or pursuant to the Purchase Agreements and the other Transaction Documents (all
of the obligations described in the preceding clauses (a) and (b) being referred to herein collectively as the “Obligations”).


 


NOW THEREFORE, in consideration
of these premises and in order to induce the Investors to enter into, or amend, the Purchase Agreements, as the case may be, the
Company and the Administrative Agent, for its benefit and for the ratable benefit of the Secured Parties, hereby agree as follows:


 


AMENDMENT AND RESTATEMENT


 


The Company and the
Administrative Agent, for the ratable benefit of the Senior Noteholders, hereby agree and acknowledge that this Agreement amends
and restates the Prior Security Agreement and that the Company’s and the Senior Noteholders’ rights and obligations
under the Prior Security Agreement shall hereby cease and that such agreement shall be of no further effect.


 



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ARTICLE
I



Definitions


 


SECTION 1.01.         Definition
of Terms Used Herein. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such
terms in the respective Purchase Agreement. All terms defined in the UCC (as defined herein) and not defined in this Agreement
shall have the meanings specified therein; the term “instrument” shall have the meaning specified in Article 9 of the
UCC.


 


SECTION 1.02.         Definition
of Certain Terms Used Herein. As used herein, the following terms shall have the following meanings:


 


“Account
Debtor” shall mean any person who is or who may become obligated to the Company under, with respect to, or on account
of, an Account.


 


“Collateral”
shall mean all right, title or interest now owned or at anytime hereafter acquired by the Company or in which the Company now has
or at any time in the future may acquire any right, title or interest in all (a) Accounts, (b)  Chattel Paper, (c) Commercial
Tort Claims, (d) Deposit Accounts, (e) Documents, (f) Electronic Chattel Paper, (g) Equipment, (h) General
Intangibles, (i) Instruments, (j) Inventory, (k) Investment Property, (l) Letter-of-Credit Rights, (m) Supporting
Obligations, (n) all books and records pertaining to the foregoing and (o) to the extent not otherwise included, all
Proceeds and products of any of the foregoing and all collateral security and guarantees given by any person with respect to any
of the foregoing.


 


“Copyright
License” shall mean any written agreement, now or hereafter in effect, granting any right to any third party under
any Copyright now or hereafter owned by the Company or which the Company otherwise has the right to license, or granting any right
to the Company under any Copyright now or hereafter owned by any third party, and all rights of the Company under any such agreement.


 


“Copyrights”
shall mean all of the following now owned or hereafter acquired by the Company: (a) all copyright rights in any work subject to
the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise and (b) all
registrations and applications for registration of any such copyright in the United States or any other country, including registrations,
recordings, supplemental registrations and pending applications for registration in the United States Copyright Office.


 


“Documents”
shall mean all instruments, files, records, ledger sheets and documents covering or relating to any of the Collateral.


 


“Event
of Default” shall have the meaning ascribed to such term in the Notes.


 


“Existing
Note Documents” shall mean (i) the October Purchase Agreement, (ii) the October 2010 Notes, (iii) the January 2011
Purchase Agreement, (iv) the January 2011 Notes, (v) the November 2011 Purchase Agreement, (vi) the November 2011 Notes, and (vii)
the four Guaranties, dated November 3, 2010, by SAIL Venture Partners, LP executed in favor of Deerwood Holdings, LLC and Deerwood
Partners, LLC, as holders of October 2010 Notes, as subsequently amended (the “Existing Guaranties”).


 



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“General
Intangibles” shall mean all choses in action and causes of action and all other assignable intangible personal property
of the Company of every kind and nature (other than Accounts) now owned or hereafter acquired by the Company, including interests
in any trust, corporate or other business records, contract rights, indemnification claims, Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted
to the Company to secure payment by an Account Debtor of any of the Accounts.


 


“Intellectual
Property” shall mean all intellectual and similar property of the Company of every kind and nature now owned or hereafter
acquired by the Company, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential
or proprietary technical and business information, know-how or other data or information, software and databases and all embodiments
or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the foregoing.


 


“License”
shall mean any Patent License, Trademark License, Copyright License or other license or sublicense to which the Company is a party.


 


“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.


 


“Transaction
Documents” shall mean (a) this Agreement, (b) the Purchase Agreements, (c) the Notes, (d) the Consent, Warrant Forfeiture
and Note Amendment Agreement, dated as of August _____, 2012, by and among the Company and the other parties signatory thereto,
and (e) the Existing Guaranties or any replacements thereof.


 


“Patent
License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to make,
use or sell any invention on which a Patent, now or hereafter owned by the Company or which the Company otherwise has the right
to license, is in existence, or granting to the Company any right to make, use or sell any invention on which a Patent, now or
hereafter owned by any third party, is in existence, and all rights of the Company under any such agreement.


 


“Patents”
shall mean all of the following now owned or hereafter acquired by the Company: (a) all letters patent of the United States or
any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or
any similar offices in any other country, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed
or claimed therein.


 



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“Perfection
Certificate” shall mean a certificate substantially in the form of Annex 1 hereto, completed and supplemented with
the schedules and attachments contemplated thereby, and duly executed by an officer of the Company.


 


“Secured
Parties” shall mean (a) the Investors, (b) the Administrative Agent and (c) the successors and assigns of each of
the foregoing.


 


“Trademark
License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to use
any Trademark now or hereafter owned by the Company or which the Company otherwise has the right to license, or granting to the
Company any right to use any Trademark now or hereafter owned by any third party, and all rights of the Company under any such
agreement.


 


“Trademarks”
shall mean all of the following now owned or hereafter acquired by the Company: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office, any State of the United States or any similar offices
in any other country or any political subdivision thereof, and all extensions or renewals thereof, (b) all goodwill associated
therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.


 


“UCC”
shall mean the Uniform Commercial Code as amended from time to time.


 



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ARTICLE
II



Security Interest


 


SECTION 2.01.         Security
Interest. As security for the payment and performance in full of the Obligations, the Company hereby grants, mortgages, pledges,
hypothecates and transfers to the Administrative Agent, its successors and assigns, for the ratable benefit of the Secured Parties,
and hereby grants to the Administrative Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a continuing
security interest in all of the Company’s right, title and interest now owned or at any time hereafter acquired by the Company
or in which the Company now has or any time in the future may acquire any right, title or interest, in, to or under the Collateral
(the “Security Interest”). The Company hereby irrevocably authorizes the Administrative Agent at any
time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings), and
amendments thereto that contain the information required by the Uniform Commercial Code of each applicable jurisdiction for the
filing of any financing statement or amendment (without the signature of the Company), including (a) whether the Company is an
organization, the type of organization and any organizational identification number issued to the Company and (b) in the case of
a financing statement filed as a fixture filing or covering Collateral constituting minerals or the like to be extracted or timber
to be cut, a sufficient description of the real property to which such Collateral relates. The Company agrees to provide such information
to the Administrative Agent promptly upon request. The Company ratifies and authorizes the filing by the Administrative Agent of
any financing statement filed prior to the date hereof. Any person (other than the Administrative Agent) at any time and from time
to time holding all or any portion of the Collateral shall be deemed to, and shall, hold the Collateral as the agent of, and as
pledge holder for, the Administrative Agent. At any time and from time to time, the Administrative Agent may give notice to any
such person holding all or any portion of the Collateral that such person is holding the Collateral as the agent and bailee of,
and as pledge holder for, the Administrative Agent, and obtain such person’s written acknowledgment thereof. Without limiting
the generality of the foregoing, the Company will join with the Administrative Agent in notifying any person who has possession
of any Collateral of the Administrative Agent’s security interest therein and obtaining an acknowledgment from such person
that it is holding the Collateral for the benefit of the Administrative Agent.


 


The Administrative
Agent is further authorized to file filings with the United States Patent and Trademark Office or United States Copyright Office
(or any successor office or any similar office in any other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by the Company, without the signature of the Company, and naming
the Company as debtor and the Administrative Agent as secured party.


 


SECTION 2.02.         No
Assumption of Liability. The Security Interest is granted as security only and shall not subject the Administrative Agent or
any other Secured Party to, or in any way alter or modify, any obligation or liability of the Company with respect to or arising
out of the Collateral. In no event shall the Administrative Agent or any other Secured Party be deemed a trustee or become liable
as a trustee as a result of the grant of the Security Interest in any interest in any trust.


 


ARTICLE
III



Representations and Warranties


 


The Company represents
and warrants to the Administrative Agent and the other Secured Parties that:


 


SECTION 3.01.         Title
and Authority. The Company has good and valid rights in, and title to, the Collateral with respect to which it has purported
to grant a Security Interest hereunder and has full power and authority to grant to the Administrative Agent the Security Interest
in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement,
without the consent or approval of any other person other than any consent or approval which has been obtained.


 



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SECTION 3.02.         Filings.
(a) A Perfection Certificate has been duly prepared, completed and executed by the Company and the information set forth therein,
including the exact legal name of the Company, is correct and complete. Fully executed Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of
the Collateral have been delivered, or will be delivered promptly after execution hereof, to the Administrative Agent for filing
in each governmental, municipal or other office specified in the Perfection Certificate, which are all the filings, recordings
and registrations that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Administrative Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral
in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration
or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of
continuation statements or amendments.


 


(b)          The
Company represents and warrants that fully executed security agreements in the form hereof and containing a description of all
Collateral consisting of Intellectual Property with respect to United States Patents and United States registered Trademarks (and
Trademarks for which United States registration applications are pending) and United States registered Copyrights have been delivered
to the Administrative Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as applicable,
and otherwise as may be required pursuant to the laws of any other necessary jurisdiction, to protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Administrative Agent (for the benefit of the Secured Parties) in
respect of all Collateral consisting of Patents, Trademarks and United States registered Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories
and possessions, or in any other necessary jurisdiction, and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary (other than the financing statements referred to above in Section 3.02(a) and such
actions as are necessary to perfect the Security Interest with respect to any Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired or developed after the date hereof).


 


SECTION 3.03.         Validity
of Security Interest. The Security Interest constitutes (a) a legal and valid security interest in all the Collateral securing
the payment and performance of the Obligations, (b) a perfected security interest in all Collateral in which a security interest
may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such
jurisdictions and (c) a security interest that shall be perfected in all Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement with the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, within the three month period (commencing as of the date hereof) pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205 and otherwise as may be required pursuant to the laws of any other necessary jurisdiction.
The Security Interest is and shall be prior to any other Lien on any of the Collateral (now held or hereafter acquired).


 



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SECTION 3.04.         Absence
of Other Liens. The Collateral is owned by the Company free and clear of any Lien other than those arising under the Existing
Note Documents. Other than as contemplated by the Existing Note Documents, the Company has not filed or consented to the filing
of (a) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which the Company assigns any Collateral or any security agreement or similar instrument covering
any Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (c) any assignment in
which the Company assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar
instrument is still in effect. The Company does not hold any Commercial Tort Claim or Letter-of-Credit Right. Except with respect
to any rights arising under the Existing Note Documents, no person has control (as defined in the UCC) over the Company’s
Deposit Accounts, Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights.


 


ARTICLE
IV



Covenants


 


SECTION 4.01.         Change
of Name; Location of Collateral; Records; Place of Business. (a) The Company agrees promptly to notify the Administrative Agent
in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, its principal place of
business, any office in which it maintains books or records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new office or facility) other than with respect to Collateral
(A) consisting of goods in transit between facilities, whether in vehicles owned by the Company or on common carriers and (B) located
in temporary warehousing which will remain in such warehousing for no longer than one month, (iii) in its identity or type of organization
or legal structure, (iv) in its Federal Taxpayer Identification Number or organizational identification number, as applicable or
(v) in its jurisdiction of organization. The Company agrees promptly to provide the Administrative Agent with certified organizational
documents reflecting any of the changes described in the preceding sentence. The Company agrees not to effect or permit any change
referred to in the preceding sentences unless all filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times following such change to have a valid, legal and perfected
first priority security interest in all the Collateral. The Company agrees promptly to notify the Administrative Agent if any material
portion of the Collateral owned or held by the Company is damaged or destroyed.


 


(b)          The
Company agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned
by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries
that are the same as or similar to those in which the Company is engaged, but in any event to include complete accounting records
indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Administrative
Agent may reasonably request, promptly to prepare and deliver to the Administrative Agent a duly certified schedule or schedules
in form and detail satisfactory to the Administrative Agent showing the identity, amount and location of any and all Collateral.


 



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SECTION 4.02.         Changes
to Perfection Certificate. The Company shall notify the Administrative Agent promptly after any change to any of the information
set forth in the Perfection Certificate.


 


SECTION 4.03.         Protection
of Security. The Company shall, at its own cost and expense, take any and all actions necessary to defend title to the Collateral
against all persons and to defend the Security Interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien.


 


SECTION 4.04.         Further
Assurances. The Company agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Administrative Agent may from time to time reasonably request to better
assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith.
If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or
other instrument, such note or instrument shall be promptly pledged and delivered to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent. Without limiting the generality of the foregoing, the Company hereby authorizes
the Administrative Agent, with prompt notice thereof to the Company, to supplement this Agreement by adding additional schedules
hereto to specifically identify any asset or item that may constitute Copyrights, Patents or Trademarks; provided, however, that
the Company shall have the right, exercisable within 10 days after it has been notified by the Administrative Agent of the specific
identification of such Collateral, to advise the Administrative Agent in writing of any inaccuracy of the representations and warranties
made by the Company hereunder with respect to such Collateral. The Company agrees that it will use its reasonable best efforts
to take such action as shall be necessary in order that all representations and warranties hereunder shall be true and correct
with respect to such Collateral within 30 days after the date it has been notified by the Administrative Agent of the specific
identification of such Collateral. Upon the request of the Administrative Agent, the Company will cooperate with the Administrative
Agent in obtaining control (as defined in the UCC) of Collateral consisting of any Deposit Accounts, Electronic Chattel Paper,
Investment Property or Letter-of-Credit Rights. Upon the request of the Administrative Agent, the Company will (a) immediately
deliver to the Administrative Agent appropriately endorsed or accompanied by appropriate instruments of transfer or assignment,
all Instruments, Documents, Chattel Paper and certificated securities with respect to any Investment Property, all letters of credit,
and all other Accounts at any time evidenced by promissory notes, trade acceptances or other instruments, (b) cause any securities
intermediaries to show on their books that the Administrative Agent is the entitlement holder with respect to any Investment Property,
and/or obtain agreements to establish control (as defined in the UCC) in favor of the Administrative Agent from such securities
intermediaries, in form and substance satisfactory to the Administrative Agent with respect to any Investment Property, as requested
by the Administrative Agent and (c) provide such notice, obtain such acknowledgements and take all such other action, with respect
to any Chattel Paper, Documents and Letter-of-Credit Rights, as the Administrative Agent shall reasonably specify.


 



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SECTION 4.05.         Inspection
and Verification. The Administrative Agent and such persons as the Administrative Agent may reasonably designate shall have
the right to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises
upon which any of the Collateral is located, to discuss the Company’s affairs with the officers of the Company and their
independent accountants and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to, the Collateral, including, in the case of Accounts or Collateral in the possession
of any third person, by contacting Account Debtors or the third person possessing such Collateral for the purpose of making such
a verification. The Administrative Agent shall have the absolute right to share any information it gains from such inspection or
verification with any Secured Party.


 


SECTION 4.06.         Taxes;
Encumbrances. At its option and after notice to the Company, the Administrative Agent may discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Collateral and may pay for the
maintenance and preservation of the Collateral to the extent the Company fails to do so as required by this Agreement, and the
Company agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative
Agent pursuant to the foregoing authorization; provided, however, that nothing in this Section 4.06 shall be interpreted
as excusing the Company from the performance of, or imposing any obligation on the Administrative Agent or any Secured Party to
cure or perform, any covenants or other promises of the Company with respect to taxes, assessments, charges, fees, liens, security
interests or other encumbrances and maintenance as set forth herein or in the other Transaction Documents.


 


SECTION 4.07.         Assignment
of Security Interest. If at any time the Company shall take a security interest in any property of an Account Debtor or any
other person to secure payment and performance of an Account, the Company shall promptly assign such security interest to the Administrative
Agent. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest
against creditors of and transferees from the Account Debtor or other person granting the security interest.


 


SECTION 4.08.         Continuing
Obligations of the Company. The Company shall remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance with the
terms and conditions thereof, and the Company agrees to indemnify and hold harmless the Administrative Agent and the Secured Parties
from and against any and all liability for such performance.


 



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SECTION 4.09.         Use
and Disposition of Collateral. The Company shall not make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral. The Company shall not make or permit to be made any transfer
of the Collateral and the Company shall remain at all times in possession of the Collateral owned by it. Without limiting the generality
of the foregoing, the Company agrees that it shall not permit any Inventory to be in the possession or control of any warehouseman,
bailee, agent or processor at any time unless such warehouseman, bailee, agent or processor shall have been notified of the Security
Interest and shall have agreed in writing to hold the Inventory subject to the Security Interest and the instructions of the Administrative
Agent and to waive and release any Lien held by it with respect to such Inventory, whether arising by operation of law or otherwise.


 


SECTION 4.10.         Limitation
on Modification of Accounts. The Company shall not, without the Administrative Agent’s prior written consent, grant any
extension of the time of payment of any of the Accounts included in the Collateral, compromise, compound or settle the same for
less than the full amount thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary
course of business and consistent with its current practices and in accordance with such prudent and standard practices used in
industries that are the same as or similar to those in which the Company is engaged.


 


SECTION 4.11.         Insurance.
The Company, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Collateral.
The Company irrevocably makes, constitutes and appoints the Administrative Agent (and all officers, employees or agents designated
by the Administrative Agent) as the Company’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance
of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing
the name of the Company on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance
and for making all determinations and decisions with respect thereto. In the event that the Company at any time or times shall
fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto,
the Administrative Agent may, without waiving or releasing any obligation or liability of the Company hereunder or any Event of
Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions
with respect thereto as the Administrative Agent deems advisable. All sums disbursed by the Administrative Agent in connection
with this Section 4.11, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Company to the Administrative Agent and shall be additional Obligations secured hereby.


 


SECTION 4.12.         Legend.
The Company shall legend, in form and manner satisfactory to the Administrative Agent, its Chattel Paper and its books, records
and documents evidencing or pertaining thereto with an appropriate reference to the fact that such Chattel Paper have been assigned
to the Administrative Agent for the benefit of the Secured Parties and that the Administrative Agent has a security interest therein.


 


SECTION 4.13.         Covenants
Regarding Patent, Trademark and Copyright Collateral.


 


(a)          The
Company agrees that it will not, nor will it permit any of its licensees to, do any act, or omit to do any act, whereby any Patent
may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by a Patent with
the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable laws.


 



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(b)          The
Company (either itself or through its licensees or its sublicensees) will, for each Trademark, (i) maintain such Trademark in full
force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered
under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient
to establish and preserve its maximum rights under applicable law and (iv) not knowingly use, or knowingly permit the use of, such
Trademark in violation of any third party rights.


 


(c)          The
Company (either itself or through licensees) will, for each work covered by a Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum
rights under applicable laws.


 


(d)          The
Company shall notify the Administrative Agent immediately if it knows, or has reason to know, that any Patent, Trademark or Copyright
may become abandoned, lost or dedicated to the public, or of any adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States
Copyright Office or any court or similar office of any country) regarding the Company’s ownership of any Patent, Trademark
or Copyright, its right to register the same, or to keep and maintain the same.


 


(e)          In
no event shall the Company, either itself or through any agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country
or any political subdivision thereof, unless it promptly informs the Administrative Agent, and, upon request of the Administrative
Agent, executes and delivers any and all agreements, instruments, documents and papers as the Administrative Agent may request
to evidence the Administrative Agent’s security interest in such Patent, Trademark or Copyright, and the Company hereby appoints
the Administrative Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable.


 


(f)          The
Company will take all necessary steps that are consistent with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in
any other country or any political subdivision thereof, to maintain and pursue each application relating to the Patents, Trademarks
and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of
the Trademarks and Copyrights, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation
proceedings against third parties.


 



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(g)          In
the event that the Company has reason to believe that any Collateral consisting of a Patent, Trademark or Copyright has been or
is about to be infringed, misappropriated or diluted by a third party, the Company promptly shall notify the Administrative Agent
and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution and to recover
any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the
circumstances to protect such Collateral.


 


(h)          Upon
and during the continuance of an Event of Default, the Company shall use its reasonable best efforts to obtain all requisite consents
or approvals by the licensor of each Copyright License, Patent License or Trademark License to effect the assignment of all of
the Company’s right, title and interest thereunder to the Administrative Agent or its designee.


 


(i)          The
Company shall ensure that fully executed security agreements in the form hereof and containing a description of all Collateral
consisting of Intellectual Property shall have been received and recorded within three months after the execution of this Agreement
with respect to United States Patents, United States registered Trademarks (and Trademarks for which United States registration
applications are pending) and United States registered Copyrights have been delivered to the Administrative Agent for recording
by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as applicable, and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction, to protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Administrative Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral consisting
of Patents, Trademarks and registered Copyrights in which a security interest may be perfected by filing, recording or registration
in the United States (or any political subdivision thereof) and its territories and possessions, or in any other necessary jurisdiction,
and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary (other than
such actions as are necessary to perfect the Security Interest with respect to any Collateral consisting of Patents, Trademarks
and Copyrights (or registration or application for registration thereof) acquired or developed after the date of this amendment
and restatement).


 


SECTION 4.14.         Other
Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Administrative
Agent to enforce, the Administrative Agent’s security interest in the Collateral, the Company agrees, in each case at the
Company’s own expense, to take the following actions with respect to the following Collateral:


 


(a)          Instruments
and Tangible Chattel Paper. If the Company shall at any time hold or acquire any Instruments or Tangible Chattel Paper,
the Company shall forthwith endorse, assign and deliver the same to the Administrative Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Administrative Agent may from time to time specify.


 



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(b)          Investment
Property. If the Company shall at any time hold or acquire any certificated securities, the Company shall forthwith
endorse, assign and deliver the same to the Administrative Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Administrative Agent may from time to time specify. If any securities now or hereafter acquired by the
Company are uncertificated and are issued to the Company or its nominee directly by the issuer thereof, the Company shall promptly
notify the Administrative Agent thereof and, at the Administrative Agent’s request and option, pursuant to an agreement in
form and substance satisfactory to the Administrative Agent, either (i) cause the issuer to agree to comply with instructions from
the Administrative Agent as to such securities, without further consent of the Company or such nominee or (ii) arrange for the
Administrative Agent to become the registered owner of the securities. If any securities, whether certificated or uncertificated,
or other investment property now or hereafter acquired by the Company are held by the Company or its nominee through a securities
intermediary or commodity intermediary, the Company shall promptly notify the Administrative Agent thereof and, at the Administrative
Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Administrative
Agent, either (A) cause such securities intermediary or commodity intermediary (as the case may be) to agree to comply with entitlement
orders or other instructions from the Administrative Agent to such securities intermediary as to such securities or other investment
property or to apply any value distributed on account of any commodity contract as directed by the Administrative Agent to such
commodity intermediary, in each case without further consent of the Company or such nominee or (B) in the case of Financial Assets
or other Investment Property held through a securities intermediary, arrange for the Administrative Agent to become the entitlement
holder with respect to such Investment Property, with the Company being permitted, only with the consent of the Administrative
Agent, to exercise rights to withdraw or otherwise deal with such Investment Property. The Administrative Agent agrees with the
Company that the Administrative Agent shall not give any such entitlement orders or instructions or directions to any such issuer,
securities intermediary or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing
rights by the Company, unless an Event of Default has occurred and is continuing, or, after giving effect to any such investment
and withdrawal rights would occur.


 


(c)          Electronic
Chattel Paper and Transferable Records. If the Company at any time holds or acquires an interest in any Electronic Chattel
Paper or any “transferable record,” as that term is defined in Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction,
the Company shall promptly notify the Administrative Agent thereof and, at the request of the Administrative Agent, shall take
such action as the Administrative Agent may reasonably request to vest in the Administrative Agent control under the UCC of such
Electronic Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act
or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable
record. The Administrative Agent agrees with the Company that the Administrative Agent will arrange, pursuant to procedures satisfactory
to the Administrative Agent and so long as such procedures will not result in the Administrative Agent’s loss of control,
for the Company to make alterations to the electronic chattel paper or transferable record permitted under the UCC or, as the case
may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing
or would occur after taking into account any action by the Company with respect to such Electronic Chattel Paper or transferable
record.


 



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(d)          Letter-of-Credit
Rights. If the Company is at any time a beneficiary under a letter of credit now or hereafter issued in favor of the Company,
the Company shall promptly notify the Administrative Agent thereof and, at the request and option of the Administrative Agent,
the Company shall, pursuant to an agreement in form and substance reasonably satisfactory to the Administrative Agent, either (i)
arrange for the issuer and any confirmed of such letter of credit to consent to an assignment to the Administrative Agent of the
proceeds of any drawing under the letter of credit or (ii) arrange for the Administrative Agent to become the transferee beneficiary
of the letter of credit.


 


(e)          Commercial
Tort Claims. If the Company shall at any time hold or acquire a Commercial Tort Claim, the Company shall promptly notify
the Administrative Agent in a writing signed by the Company of the brief details thereof and grant to the Administrative Agent
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 Administrative Agent.


 


ARTICLE
V



Collections 


 


SECTION 5.01.         Collections.
Upon the occurrence of and during the continuance of an Event of Default, the Administrative Agent shall have the right, at any
time and from time to time, (a) to notify the Account Debtors and other third parties holding or otherwise concerned with the Collateral
that the Accounts have been assigned to the Administrative Agent and that the Administrative Agent has a security interest therein;
(b) to direct all such persons to make payments to the Administrative Agent of all or any part of the sums owing to the Company
by such persons; (c) to enforce collection of any of the Accounts by suit or otherwise; (d) to surrender, release or exchange all
or any part of such Accounts; or (e) to compromise, settle, extend or renew for any period (whether or not longer than the original
period) any indebtedness thereunder or evidenced thereby.


 



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SECTION 5.02.         Power
of Attorney. The Company irrevocably makes, constitutes and appoints the Administrative Agent (and all officers, employees
or agents designated by the Administrative Agent) as the Company’s true and lawful agent and attorney-in-fact, and in such
capacity the Administrative Agent shall have the right, with full power of substitution for the Company and in the Company’s
name or otherwise, for the use and benefit of the Administrative Agent and the Secured Parties, upon the occurrence and during
the continuance of an Event of Default (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of the Company on any
invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts included in the Collateral to
any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require the Company to notify, Account Debtors to make payment directly to the Administrative
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely
as though the Administrative Agent were the absolute owner of the Collateral for all purposes; provided, however, that nothing
herein contained shall be construed as requiring or obligating the Administrative Agent or any Secured Party to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Administrative Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby, and no action taken or omitted to be taken by the
Administrative Agent or any Secured Party with respect to the Collateral or any part thereof shall give rise to any defense, counterclaim
or offset in favor of the Company or to any claim or action against the Administrative Agent or any Secured Party. It is understood
and agreed that the appointment of the Administrative Agent as the agent and attorney-in-fact of the Company for the purposes set
forth above is coupled with an interest and is irrevocable. The provisions of this Section shall in no event relieve the Company
of any of its obligations hereunder or under any other Transaction Document with respect to the Collateral or any part thereof
or impose any obligation on the Administrative Agent or any Secured Party to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by the Administrative Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter, whether hereunder, under any other Transaction Document,
by law or otherwise.


 


ARTICLE
VI



Remedies 


 


SECTION 6.01.         Remedies
upon Default. Upon the occurrence and during the continuance of an Event of Default, the Company agrees to deliver each item
of Collateral to the Administrative Agent on demand, and it is agreed that the Administrative Agent shall have the right to take
any of, or all, the following actions at the same or different times: (a) with respect to any Collateral consisting of Intellectual
Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Collateral
by the Company to the Administrative Agent, or to license or sublicense, whether general, special or otherwise, and whether on
an exclusive or non-exclusive basis, any such Collateral throughout the world on such terms and conditions and in such manner as
the Administrative Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained) and (b) with or without legal process and with or without prior notice or demand for performance, to
take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located
for the purpose of taking possession of or removing the Collateral and, generally, to exercise any and all rights afforded to a
secured party under the UCC or other applicable law. Without limiting the generality of the foregoing, the Company agrees that
the Administrative Agent may sell or otherwise dispose of all or any part of the Collateral, at public or private sale or at any
broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Administrative Agent shall
deem appropriate. The Administrative Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the
Administrative Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral
so sold. Each such purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part
of the Company, and the Company hereby waives all rights of redemption, stay, valuation and appraisal which the Company now has
or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.


 



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The Administrative
Agent shall give the Company 10 days’ written notice (which the Company agrees is reasonable notice within the meaning of
the UCC or its equivalent in other jurisdictions) of the Administrative Agent’s intention to make any sale of Collateral.
Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s
board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at
such time or times within ordinary business hours and at such place or places as the Administrative Agent may fix and state in
the notice of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Administrative Agent may (in its sole and absolute discretion) determine. The Administrative Agent
shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice
of sale of such Collateral shall have been given. The Administrative Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Administrative
Agent until the sale price is paid by the purchaser or purchasers thereof, but the Administrative Agent shall not incur any liability
in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant
to this Section, any Secured Party may bid for or purchase, free from any right of redemption, stay, valuation or appraisal on
the part of the Company (all said rights being also hereby waived and released), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from the Company as
a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to the Company therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the Administrative Agent shall be free to carry out such
sale pursuant to such agreement; and the Company shall not be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Administrative Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon
it, the Administrative Agent may proceed by a suit or suits at law or in equity to foreclose upon the Collateral and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant
to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 6.01 shall be deemed to conform
to the commercially reasonable standards as provided in the UCC or its equivalent in other jurisdictions.


 



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SECTION 6.02.         Application
of Proceeds. The Administrative Agent shall apply the proceeds of any collection or sale of Collateral, as well as any Collateral
consisting of cash, as follows:


 


FIRST, to
the payment of all costs and expenses incurred by the Administrative Agent (in its capacity as such hereunder or under any other
Transaction Document) in connection with such collection or sale or otherwise in connection with this Agreement, any other Transaction
Document or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment
of all advances made by the Administrative Agent hereunder or under any other Transaction Document on behalf of the Company and
any other costs or expenses incurred by the Administrative Agent in connection with the exercise of any right or remedy hereunder
or under any other Transaction Document;


 


SECOND, to
the payment in full of the Obligations with respect to the Senior Notes (the amounts so applied to be distributed among the Senior
Noteholders pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution);


 


THIRD, to
the payment in full of the Obligations with respect to the October 2010 Notes (the amounts so applied to be distributed among the
October 2010 Noteholders pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution);


 


FOURTH, to
the payment in full of the Obligations with respect to the January 2011 Notes and the November 2011 Notes (the amounts so applied
to be distributed among the January 2011 Noteholders and the November 2011 Noteholders pro rata in accordance with the amounts
of the Obligations owed to them on the date of any such distribution); and


 


FIFTH, to
the Company, its successors or assigns, or as a court of competent jurisdiction may otherwise direct.


 


The Administrative
Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Collateral by the Administrative Agent (including pursuant to a power of sale granted by statute
or under a judicial proceeding), the receipt of the purchase money by the Administrative Agent or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money paid over to the Administrative Agent or such officer
or be answerable in any way for the misapplication thereof.


 



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SECTION 6.03.         Grant
of License to Use Intellectual Property. For the purpose of enabling the Administrative Agent to exercise rights and remedies
under this Article at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, the
Company hereby grants to the Administrative Agent an irrevocable, non-exclusive license (exercisable without payment of royalty
or other compensation to the Company) to use, license or sub-license any of the Collateral consisting of Intellectual Property
now owned or hereafter acquired by the Company, and wherever the same may be located, and including in such license reasonable
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. The use of such license by the Administrative Agent shall be exercised, at the option
of the Administrative Agent, upon the occurrence and during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Administrative Agent in accordance herewith shall be binding upon the Company
notwithstanding any subsequent cure of an Event of Default.


 


ARTICLE
VII



Miscellaneous 


 


SECTION 7.01.         Notices.
All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided
in the Purchase Agreements.


 


SECTION 7.02.         Security
Interest Absolute. All rights of the Administrative Agent hereunder, the Security Interest and all obligations of the Company
hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Purchase Agreements,
any other Transaction Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating
to any of the foregoing, (b) any change in the time, manner or place of payment 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 Purchase Agreements, any other Transaction
Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of
the Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company
in respect of the Obligations or in respect of this Agreement.


 


SECTION 7.03.         Survival
of Agreement. All covenants, agreements, representations and warranties made by the Company herein and in the certificates
or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Transaction Document shall
be considered to have been relied upon by the Secured Parties and shall survive the Closing, regardless of any investigation made
by the Investors or on their behalf.


 


SECTION 7.04.         Binding
Effect; Several Agreement. This Agreement shall become effective as to the Company when a counterpart hereof executed on behalf
of the Company shall have been delivered to the Administrative Agent and a counterpart hereof shall have been executed on behalf
of the Administrative Agent, and thereafter shall be binding upon the Company and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, the Administrative Agent and the other Secured Parties and
their respective successors and assigns, except that the Company shall not have the right to assign or transfer its rights or obligations
hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated
by this Agreement and the other Transaction Documents.


 



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SECTION 7.05.         Successors
and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include
the successors and permitted assigns of such party; and all covenants, promises and agreements by or on behalf of the Company that
are contained in this Agreement shall bind and inure to the benefit of its successors and permitted assigns.


 


SECTION 7.06.         Administrative
Agent’s Fees and Expenses; Indemnification. (a) The Company agrees to pay upon demand to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees, other charges and disbursements of its counsel and of
any experts or agents, which the Administrative Agent may incur in connection with (i) the administration of this Agreement, (ii)
the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise,
enforcement or protection of any of the rights of the Administrative Agent hereunder or (iv) the failure of the Company to perform
or observe any of the provisions hereof.


 


(b)          Without
limitation of its indemnification obligations under the other Transaction Documents, the Company agrees to indemnify the Administrative
Agent and the other Secured Parties against, and hold each Secured Party harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, other charges and disbursements, incurred by or asserted against any Secured
Party arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or
any other Transaction Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations thereunder or the consummation of the transactions contemplated hereby and thereby and the other
transactions contemplated thereby or any claim, litigation, investigation or proceeding relating to any of the foregoing or to
the Collateral, whether or not any Secured Party is a party thereto.


 


(c)          Any
amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Transaction Documents. The
provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the termination of this Agreement
or any other Transaction Document, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations,
the invalidity or unenforceability of any term or provision of this Agreement or any other Transaction Document, or any investigation
made by or on behalf of the Administrative Agent or any other Secured Party. All amounts due under this Section 7.06 shall be payable
on written demand therefor.


 


SECTION 7.07.         GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.


 



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SECTION 7.08.         Waivers;
Amendment. (a) No failure or delay of the Administrative Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Administrative Agent hereunder and of the other Secured Parties under the other Transaction Documents
are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this
Agreement or any other Transaction Document or consent to any departure by the Company therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances.


 


(b)          Neither
this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into
between the Administrative Agent and the Company.


 


SECTION 7.09.         WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OF THE OTHER TRANSACTION DOCUMENTS.


 


SECTION 7.10.         Severability.
In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected
or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).


 


SECTION 7.11.         Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute a single contract and shall become effective as provided in Section 7.04. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile or PDF transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.


 


SECTION 7.12.         Headings.
Article and Section headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.


 



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SECTION
7.13.         Termination or Release. This Agreement and the Security Interest
shall terminate at the earliest of (i) the date when all of the Obligations have been indefeasibly paid in full or (ii) (A) with
respect to the Senior Notes, the date that holders of a majority of the aggregate principal amount of the Senior Notes issued have
converted their Senior Notes in accordance with the terms of such notes, (B) with respect to the October 2010 Notes, the date that
holders of a majority of the aggregate principal amount of the October 2010 Notes issued have converted their October 2010 Notes
in accordance with the terms of such notes and (C) with respect to the January 2011 Notes and the November 2011 Notes, the date
that holders of a majority of the aggregate principal amount issued of January
2011 Notes and November 2011 Notes (on a combined basis) have converted such January
2011 Notes and November 2011 Notes, as the case may be, in accordance with the terms of such notes, at
which time the Administrative Agent shall execute and deliver to the Company, at the Company’s expense, all Uniform Commercial
Code termination statements and similar documents which the Company shall reasonably request to evidence such termination. Any
execution and delivery of termination statements or documents pursuant to this Section 7.13 shall be without recourse to or warranty
by the Administrative Agent. 


 


[Signatures on following
page]


 



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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of
the date first written above.


  


	 	CNS RESPONSE, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	ADMINISTRATIVE AGENT
	 	 
	 	 
	 	David B. Jones


 


[SIGNATURE
PAGE TO SECURITY AGREEMENT] 


 



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