Exhibit 10.4


 


EXECUTION VERSION


 


SECURITY AGREEMENT


 


This SECURITY AGREEMENT,
dated as of April 14, 2016 (this “Agreement”), is among Amarantus Bioscience Holdings, Inc., a Nevada corporation
(the “Company”), all of the Subsidiaries of the Company (such subsidiaries, the “Guarantors”
and together with the Company, the “Debtors”) and the holders of the Company’s 12% Original Issue Discount
Senior Secured Convertible Promissory Notes, in the original aggregate principal amount of up to $[_______] (the “Notes”)
signatory hereto, their endorsees, transferees and assigns (collectively, the “Secured Parties”).


 


W I T N E S S E T H:


 


WHEREAS, pursuant to the
Purchase Agreement (as defined in the Notes), the Secured Parties have severally agreed to extend the loans to the Company evidenced
by the Notes;


 


WHEREAS, pursuant to a certain
Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors have jointly and
severally agreed to guarantee and act as surety for payment of such Notes; and


 


WHEREAS, in order to induce
the Secured Parties to extend the loans evidenced by the Notes, 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 18 hereof), a security interest in certain property of such Debtor to secure the prompt payment,
performance and discharge in full of all of the Company’s obligations under the Notes 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 Secured Parties are 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 or other property at any time and from time to time acquired,
receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined
below):


 


(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;


  


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


 


(x) the products and
proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) 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 Guarantor, including, without limitation, the shares of capital stock and the other
equity interests listed on Schedule H 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 other direct or indirect 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.


 



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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.


 


(c) “Majority
in Interest” means, at any time of determination, the majority in interest (based on then-outstanding principal
amounts of Notes at the time of such determination) of the Secured Parties.


 


(d)
“Necessary Endorsement” means undated stock powers endorsed in blank 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.


 






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(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, without limitation, all obligations under this Agreement, the Notes, the Guarantee
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 and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from
time to time under or in connection with this Agreement, the Notes, the Guarantee and any other instruments, agreements or
other documents executed and/or delivered in connection herewith or therewith; 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.


 


(f)
“Organizational Documents” means with respect to any Debtor, the documents by which such Debtor was
organized (such as a articles of incorporation, 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) “Permitted
Liens” means the following:


 


(i) Liens
imposed by law for taxes that are not yet due or are being contested in good faith, which in each case, have been
appropriately reserved for;


 


(ii)
Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty
(30) days or are being contested in good faith;


 


(iii) Pledges
and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance
and other social security laws or regulations;


 


(iv) Deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course of business;


 






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(v) Liens under
this Agreement; and


 


(vi) Any other
liens in favor of the Lender.


 


(h) “Pledged
Interests” shall have the meaning ascribed to such term in Section 4(j).


 


(i) “Pledged
Securities” shall have the meaning ascribed to such term in Section 4(i).


 


(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. As an inducement for the Secured Parties to extend the loans as evidenced by the Notes
and 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 Secured Parties a
perfected, first priority 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”).


 


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 (the “Disclosure Schedules”),
which Disclosure Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees
with, the Secured Parties as follows:


 


(a)  Each
Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement
and the filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further
action is required by such Debtor.  This Agreement has been duly executed by each Debtor.  This Agreement constitutes
the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application
relating to or affecting the rights and remedies of creditors and by general principles of equity.


 



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(b) The Debtors
have 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 A attached hereto.  Except as specifically set forth
on Schedule A, each Debtor is 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 for Liens (as defined in the Notes) as set forth on Schedule A.  Except
as disclosed on Schedule A, none of such Collateral is in the possession of any consignee, bailee,
warehouseman, agent or processor.


 


(c) Except as set forth on Schedule B attached hereto, the Debtors are the sole owners
of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear
of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interests.  Except
as set forth on Schedule C 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 C attached hereto and except pursuant
to this Agreement, as long as this Agreement 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).


 


(d) No written claim
has been received that any Collateral or any Debtor's use of any Collateral violates the rights of any third party. There has
been no adverse decision to any Debtor's claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to any Debtor's 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 any Debtor, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental authority.


 


(e) Each
Debtor 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 A attached hereto and may not relocate such books
of account and records or tangible Collateral unless it delivers to the Secured Parties at least thirty (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.


 



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(f) This
Agreement creates in favor of the Secured Parties a valid first priority 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 (i) the filing of the Uniform Commercial Code financing statements referred
to in the immediately following paragraph, (ii) the recordation of the Intellectual Property Security Agreement (as defined
in Section 4(p) hereof) with respect to copyrights and copyright applications in the United States Copyright Office referred
to in paragraph (mm), (iii) the recordation of the Intellectual Property Security Agreement (as defined in Section 4(p)
hereof) with respect to patents and trademarks of the Debtors in the United States Patent and Trademark Office referred to in paragraph
(oo), (iv) the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2)
of the UCC with respect to each deposit account of the Debtors, (v) if there is any investment property or deposit account
included as Collateral that can be perfected by “control” through an account control agreement, the execution and delivery
of securities account control agreements satisfying the requirements of 9-106 of the UCC with respect to each such investment property
of the Debtors, and (vi) the delivery of the certificates and other instruments provided in Section 3, Section 4(aa)
and Section 4(cc), no action is necessary to create, perfect or protect the security interests created hereunder.  Without
limiting the generality of the foregoing, except for the foregoing, 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 (x) the execution,
delivery and performance of this Agreement, (y) the creation or perfection of the Security Interests created hereunder in
the Collateral or (z) the enforcement of the rights of the Agent and the Secured Parties hereunder.


 


(g) Each Debtor
hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.


 


(h) The execution,
delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational Documents
of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule
or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor's
debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound
or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any Debtor) necessary
for any Debtor to enter into and perform its obligations hereunder have been obtained.


 


(i) The capital
stock and other equity interests listed on Schedule H hereto (the “Pledged
Securities”) represent all of the capital stock and other equity interests of the Guarantors, and represent all
capital stock and other equity interests owned, directly or indirectly, by the Company.  All of the Pledged
Securities are validly issued, fully paid and nonassessable, and the Company is 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.


 



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(j) 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 are not
held in a securities account or by any financial intermediary.


 


(k) Each Debtor 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 and the Security Interest
hereunder shall be terminated pursuant to Section 14 hereof.  Each Debtor hereby agrees to defend the same
against the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the
account of the Secured Parties.  At the request of the Agent, each Debtor 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, each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral
and the Security Interests hereunder, and each Debtor 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.


  


(l) No Debtor
will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for non-exclusive
licenses granted by a Debtor in its ordinary course of business, sales of inventory by a Debtor in its ordinary course of business
and the replacement of worn-out or obsolete equipment by a Debtor in its ordinary course of business) without the prior written
consent of a Majority in Interest.


 


(m) Each Debtor 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.


 


(n) Each Debtor 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.  Each Debtor 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 $100,000, loss payments in each instance will be
applied by the applicable Debtor 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 applicable Debtor; provided, however, that payments received by any Debtor after an
Event of Default occurs and is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall
be paid to the Agent on behalf of the Secured Parties and, if received by such Debtor, 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.


 



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(o) Each Debtor shall,
within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, 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.


  


(p) Each Debtor
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 each Debtor’s Intellectual Property (“Intellectual Property Security
Agreement”) in which the Secured Parties have been granted a security interest hereunder, substantially in a form
reasonably 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.


 


(q) Upon reasonable
prior notice (so long as no Event of Default has occurred or continuing, which in either such event, no prior notice is
required), each Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during normal
business hours and to make copies of records pertaining to the Collateral as may be reasonably requested by the Agent from
time to time.


 


(r) Each Debtor
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.


 


(s) Each Debtor 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 such Debtor that may materially
affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.


 






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


 


(u) 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.


 


(v) No Debtor will
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 thirty (30) days prior
written notice to the Secured Parties of such change and, at the time of such written notification, such Debtor provides any
financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests granted
and evidenced by this Agreement.


  


(w) Except in the
ordinary course of business, no Debtor may 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.


 


(x) No
Debtor may relocate its chief executive office to a new location without providing thirty (30) days prior written notification
thereof to the Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements
or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.


 


(y) Each Debtor
was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name
in Schedule D attached hereto, which Schedule D sets forth each Debtor’s
organizational identification number or, if any Debtor does not have one, states that one does not exist.


 


(z) (i) The actual name
of each Debtor is the name set forth in Schedule D attached hereto; (ii) no Debtor has any trade names except
as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other than that stated in the
preamble hereto or as set forth on Schedule E for the preceding five (5) years; and (iv) no entity has merged
into any Debtor or been acquired by any Debtor within the past five years except as set forth on Schedule E.


 


(aa) 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 applicable Debtor shall deliver such
Collateral to the Agent.


 



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(bb) Each Debtor, in
its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Agent regarding the Pledged
Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by
Section 8-106 (or any successor section) of the UCC.  Further, each Debtor agrees that it shall not enter into
a similar agreement (or one that would confer “control” within the meaning of Article 8 of the UCC) with any
other person or entity.


 


(cc) Each Debtor 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 applicable Debtor
shall cause the underlying chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or
successor Section thereto).


 


(dd) If there is any
investment property or deposit account included as Collateral that can be perfected by “control” through an
account control agreement, the applicable Debtor 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.


 


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


 


(ff) To the extent
that any Collateral is in the possession of any third party, the applicable Debtor 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.


 


(gg) If any Debtor
shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in a writing
signed by such Debtor 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.


 


(hh) Each Debtor 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.


 



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(ii) Each Debtor
shall cause each subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”), by
executing and delivering an Additional Debtor Joinder in substantially the form of Annex A 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, 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 “Debtors” shall be deemed to include each Additional Debtor.


  


(jj) Each
Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Notes.


 


(kk) Each Debtor shall
register the pledge of the applicable Pledged Securities on the books of such Debtor.  Each Debtor 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 applicable Debtor shall deliver to Agent an acknowledgement of pledge (which, where appropriate, shall comply with
the requirements of the relevant UCC 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 applicable Debtor.


 


(ll) 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,
each Debtor 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 (but not including any items subject to the attorney-client privilege related to this Agreement or any of the transactions
hereunder); (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.


 



    	 	12	 



     

    

 


(mm) Without
limiting the generality of the other obligations of the Debtors hereunder, each Debtor 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 or 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.


  


(nn) Each Debtor will
from time to time, at the joint and several expense of the Debtors, 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.


 


(oo) Schedule F attached
hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain
names owned by any of the Debtors as of the date hereof.  Schedule F lists all material licenses
in favor of any Debtor 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.


 


(pp) Except as set
forth on Schedule G 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.


 


(qq) Until the
Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct or
indirect subsidiary of the Company formed or acquired after the date hereof to enter into a Subsidiary Guarantee in favor of
the Secured Party, in the form of attached as an exhibit to the Purchase Agreement.


 


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 by Debtors that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement
of any of Agent’s 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.


 



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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;


  


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


 


(c) The failure by any Debtor
to observe or perform any of its obligations hereunder for five (5) days after delivery to such Debtor 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 such Debtor
is using best efforts to cure same in a timely fashion; or


 


(d)  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 Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both,
to the Agent, pro-rata in proportion to their respective then-currently outstanding principal amount of Notes for application to
the satisfaction of the Obligations (and if any Notes is not outstanding, pro-rata in proportion to the initial purchases 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 on behalf of and 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.


  



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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 Secured Parties 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:


 


(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.


 


(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.


 



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(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 (except as shall be required by applicable statute and cannot be waived) 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 liable for the deficiency, together with interest thereon, at
the rate of 18% per annum or the lesser amount permitted by applicable law (the “Default Rate”), and the
reasonable fees 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.


 



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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. Costs and Expenses.
Each Debtor agrees to pay 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, 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. Until so paid, any fees payable hereunder shall be added to the principal
amount of the Notes and shall bear interest at the Default Rate.


 



    	 	17	 



     

    

 


12. 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 and except as required by applicable law, (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.


 


13. Security
Interests Absolute. All rights of the Secured Parties and all obligations of each Debtor 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, against any other Debtor or Guarantor; (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.  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.


 



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14. 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 B hereto) shall survive and remain operative and in full force and effect
regardless of the termination of this Agreement.


 


15. 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 C 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.


 






    	 	19	 



     

    

 


(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.


 


16. Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement
(as such term is defined in the Notes).


 


17. 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.


 


18. Appointment of Agent.  The
Secured Parties hereby appoint                               to act as their agent (“             ” or “Agent”) for purposes of exercising
any and all rights and remedies of the Secured Parties hereunder. 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, provided that                         may not be removed
as Agent unless                      shall then hold less than $100,000 in principal amount of Notes; provided, further,
that such removal may occur only if each of the other Secured Parties shall then hold not less than an aggregate of $250,000 in
principal amount of Notes. The Agent shall have the rights, responsibilities and immunities set forth in Annex B hereto.


 







19. Miscellaneous.


 


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


 



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(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 Secured Parties holding 67% or more of the principal amount of Notes then outstanding, 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.


 


(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.  The Company
and the Guarantors may not 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 Purchase Agreement) 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.


 



    	 	21	 



     

    

 


(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 and the Notes (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.


 


(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) All
Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.


 


(k) Each Debtor shall
indemnify, reimburse and hold harmless the Agent and the Secured Parties and their respective partners, members,
shareholders, officers, directors, employees 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, the Purchase Agreement (as
such term is defined in the Notes) or any other agreement, instrument or other document executed or delivered in
connection herewith or therewith.


 



    	 	22	 



     

    

 


(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.


 


(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 represent that all such consents
and approvals have been obtained.


 


[SIGNATURE PAGE OF DEBTORS
FOLLOWS]


 






    	 	23	 



     

    

 


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


 


Amarantus Bioscience Holdings, Inc.


 





	By:		 
	 	Name:	 
	 	Title:	 
	 	 	 
	AMARANTUS THERAPEUTICS, INC.	 
	 	 	 
	By:		 
	 	Name:	 
	 	Title:	 
	 	 	 
	AMARANTUS THERAPEUTICS, INC.	 
	 	 	 
	By:	
	 
	 	Name:	 
	 	Title:	 
	 	 	 
	Amarantus MA, Inc.	 
	 	 	 
	By:		 
	 	Name:	 
	 	Title:	 
	 	 	 
	CUTANOGEN CORPORATION	 
	 	 	 
	By:		 
	 	Name:	 
	 	Title:	 



 


[SIGNATURE PAGE OF HOLDERS
FOLLOWS]


 






    	 	24	 



     

    

 



[SIGNATURE PAGE OF HOLDERS
TO SECURITY AGREEMENT]


 


Name of Investing Entity:
__________________________


 


Signature of Authorized
Signatory of Investing entity: _________________________


 


Name of Authorized Signatory:
_________________________


 


Title of Authorized Signatory:
__________________________


 






    	 	25	 



     

    

 


DISCLOSURE SCHEDULES


(Security Agreement)


 


The following are the Disclosure
Schedules (the “Disclosure Schedules”) referred to in that certain Security Agreement, dated as of April 14,
2016 (the “Agreement”), by and between Amarantus Bioscience Holdings, Inc., a Nevada corporation (the “Company”),
all of the Subsidiaries of the Company (such subsidiaries, the “Guarantors” and together with the Company, the
“Debtors”) and the holders of the Company’s 12% Original Issue Discount Senior Secured Convertible Promissory
Notes, in the original aggregate principal amount of up to $[______] (the “Notes”) signatory thereto, their
endorsees, transferees and assigns (collectively, the “Secured Parties”).


 


Schedule 4(d)


 


Schedule A


Principal Place of Business
of Debtors:


Locations Where Collateral
is Located or Stored


 


Schedule B


Ownership Interest to Collateral


 


Schedule C


Filing Jurisdictions


 


Schedule D


Legal Names and Organizational
Identification Numbers


 


Schedule E


Names; Mergers and Acquisitions


 


Schedule F


Intellectual Property


 


Patents/Patent Applications


 


Domain Names


 


Copyrights


 


Trademarks/Trademark Applications


 


Schedule G


Account Debtors


 



    	 	26	 



     

    

 


Schedule H


Pledged Securities


 


The Company is the sole
owner 100% of the membership interests of its subsidiaries, as follows:


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


  


 






    	 	27	 



     

    

 


ANNEX A


to


SECURITY


AGREEMENT


 


FORM OF ADDITIONAL DEBTOR
JOINDER


 


Security Agreement dated
as of April [__], 2016 made by Amarantus Bioscience Holdings, Inc. and 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 Debtors 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.


 


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


 


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


Dated:




 






    	 	28	 



     

    

 


ANNEX B


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 Agreement to which this Annex B is attached (the "Agreement")), by their acceptance of the benefits
of the Agreement, hereby designate                (“           ”
or “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 any other
Transaction Document (as such term is defined in the Purchase Agreement) 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 the Company and its subsidiaries, 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,
collectability, 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.


 



    	 	29	 



     

    

 


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.


 


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.


 



    	 	30	 



     

    

 


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
B shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent.


 


 


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