Exhibit 10.2


 


PLEDGE AND SECURITY
AGREEMENT


 


This PLEDGE AND SECURITY AGREEMENT,
dated as of June 9, 2022 (as amended, supplemented or otherwise modified from time to time, this “Security Agreement”),
is made by DARIOHEALTH CORP., a Delaware corporation (the “Borrower”), LabStyle
Innovation Ltd., an Israeli company, Upright Technologies Ltd., an Israeli company,
Upright Technologies Inc., a Delaware corporation, and PsyInnovations
Inc., a Delaware corporation (together with any other entity that may become party hereto as provided herein, each a “Grantor”
and, collectively, the “Grantors”) in favor of ORBIMED ROYALTY & CREDIT OPPORTUNITIES III, LP, a Delaware limited
partnership (together with its successors, transferees and assignees, the “Lender”).


 


W I T N E S S E T H :


 


WHEREAS, pursuant to the Credit
Agreement, dated as of June 9, 2022 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and between the Borrower and the Lender, the Lender has extended a Commitment to make Loans to the Borrower;


 


WHEREAS, as a condition precedent
to the making of the Initial Loan under the Credit Agreement, each Grantor is required to execute and deliver this Security Agreement;
and


 


WHEREAS, it is required under
the terms of the Credit Agreement that the Grantors shall have granted, pledged and assigned the security interests and undertaken the
obligations contemplated by this Security Agreement.


 


NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor agrees, for the benefit of the Lender,
as follows:


 


ARTICLE
I

DEFINITIONS


 


SECTION 1.1. Certain Terms.
The following terms (whether or not underscored) when used in this Security Agreement, including its preamble and recitals, shall have
the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):


 


“Borrower”
is defined in the preamble.


 


“Collateral”
is defined in Section 2.1.


 


“Collateral Accounts”
is defined in Section 4.3(b).


 


“Computer Hardware
and Software Collateral” means: (a) all of the Grantors’ computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape
drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories and all peripheral devices
and other related computer hardware, including all operating system software, utilities and application programs in whatsoever form; (b)
all software programs (including both source code, object code and all related applications and data files) designed for use on the computers
and electronic data processing hardware described in clause (a) above; (c) all firmware associated therewith; (d) all documentation
(including flow charts, logic diagrams, manuals, guides, specifications, training materials, charts and pseudo codes) with respect to
such hardware, software and firmware described in the preceding clauses (a) through (c); and (e) all rights with respect
to all of the foregoing, including copyrights, licenses, options, warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights and indemnifications and any substitutions, replacements, improvements, error
corrections, updates, additions or model conversions of any of the foregoing.


 






     


     


    

 


“Control Agreement”
means an authenticated record in form and substance reasonably satisfactory to the Lender, that provides for the Lender to have “control”
(as defined in the UCC) over certain Collateral.


 


“Copyright Collateral”
means all Copyrights, including the copyrights referred to in Item A of Schedule V, and registrations and recordings thereof
and all applications for registration thereof, whether pending or in preparation, all copyright licenses, including each copyright license
referred to in Item B of Schedule V, the right to sue for past, present and future infringements of any of the foregoing,
all rights corresponding thereto, all extensions and renewals of any thereof and all Proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and Proceeds of suit, which are owned or licensed by the Grantors.


 


“Credit Agreement”
is defined in the first recital.


 


“Distributions”
means all dividends paid on Capital Securities, liquidating dividends paid on Capital Securities, shares (or other designations) of Capital
Securities resulting from (or in connection with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends,
mergers, consolidations, and all other distributions (whether similar or dissimilar to the foregoing) on or with respect to any Capital
Securities constituting Collateral.


 


“Excluded Property”
is defined in Section 2.1.


 


“Financing Statements”
is defined in Section 3.7(b).


 


“General Intangibles”
means all “general intangibles” and all “payment intangibles,” each as defined in the UCC, and shall include all
interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and
all Intellectual Property Collateral (in each case, regardless of whether characterized as general intangibles under the UCC).


 


“Grantor”
and “Grantors” are defined in the preamble.


 


“Intellectual Property
Collateral” means, collectively, the Computer Hardware and Software Collateral, the Copyright Collateral, the Patent Collateral,
the Trademark Collateral, the Trade Secrets Collateral, Product Agreements and Regulatory Authorizations.


 






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“Intercompany Note”
means any promissory note evidencing loans made by any Grantor to any other Grantor.


 


“Investment Property”
means, collectively, (a) all “investment property” as such term is defined in Section 9-102(a)(49) of the UCC and (b) whether
or not constituting “investment property” as so defined, all Pledged Notes.


 


“Lender”
is defined in the preamble.


 


“Patent Collateral”
means:


 


(a)              
all of the Patents throughout the world, including all patent applications in preparation for filing and each patent and patent
application referred to in Item A of Schedule III;


 


(b)              
all patent licenses, and other agreements providing any Grantor with the right to use any items of the type referred to in clauses
(a) above, including each patent license referred to in Item B of Schedule III; and


 


(c)              
all Proceeds of, and rights associated with, the foregoing (including licenses, royalties income, payments, claims, damages and
Proceeds of infringement suits) and the right to sue third parties for past, present or future infringements of any Patent or patent application
and for breach or enforcement of any patent license.


 


“Permitted Liens”
means all Liens permitted by Section 8.3 of the Credit Agreement.


 


“Pledged Notes”
means all promissory notes listed on Item J of Schedule II (as such schedule may be amended or supplemented
from time to time), all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by
any Grantor.


 


“Securities Act”
is defined in Section 6.2(a).


 


“Security Agreement”
is defined in the preamble.


 


“Trade Secrets”
of a Person means all of such Person’s common law and statutory trade secrets and all other confidential, proprietary or useful
information, and all know-how obtained by or used in or contemplated at any time for use in the business of such Person.


 


“Trade Secrets Collateral”
means all of the Grantors’ Trade Secrets, whether or not such Trade Secret has been reduced to a writing or other tangible form,
including all documents and things embodying, incorporating or referring in any way to such Trade Secret, all Trade Secret licenses, including
each Trade Secret license referred to in Schedule VI, and including the right to sue for and to enjoin and to collect damages for
the actual or threatened misappropriation of any Trade Secret and for the breach or enforcement of any such Trade Secret license.


 






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“Trademark Collateral”
means:


 


(a)       (i)
all of the Grantors’ Trademarks and all goodwill of the business associated therewith, now existing or hereafter adopted or acquired
including those referred to in Item A of Schedule IV, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or filed, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any office or agency of the United States of America, or any state thereof or any
other country or political subdivision thereof or otherwise, and all common law rights relating to the foregoing, and (ii) the right to
obtain all reissues, extensions or renewals of the foregoing;


 


(b)       all
Trademark licenses for the grant by or to any Grantors of any right to use any Trademark, including each Trademark license referred to
in Item B of Schedule IV;


 


(c)       the
right to sue third parties for past, present and future infringements of any Trademark Collateral described in clause (a) and,
to the extent applicable, clause (b); and


 


(d)       all
Proceeds of, and rights associated with, the foregoing, including any claim by any Grantor against third parties for past, present or
future infringement or dilution of any Trademark, Trademark registration or Trademark license, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any Trademark license and all rights corresponding thereto throughout
the world.


 


SECTION 1.2. Credit Agreement
Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.


 


SECTION 1.3. UCC Definitions.
When used herein the terms “Account,” “Certificated Securities,” “Chattel Paper,” “Commercial
Tort Claim,” “Commodity Account,” “Commodity Contract,” “Deposit Account,” “Document,”
 “Electronic Chattel Paper,” “Equipment,” “Goods,” “Instrument,” “Inventory,”
 “Letter-of-Credit Rights,” “Payment Intangibles,” “Proceeds,” “Promissory Notes,” “Securities
Account,” “Security Entitlement,” “Supporting Obligations” and “Uncertificated Securities” have
the meaning provided in Article 8 or Article 9, as applicable, of the UCC. “Letters of Credit” has the meaning provided in
Section 5-102 of the UCC.


 


ARTICLE
II

SECURITY INTEREST


 


SECTION 2.1. Grant of Security
Interest. Each Grantor hereby grants to the Lender, for the Lender’s benefit, a continuing security interest in all of such
Grantor’s right, title and interest in and to the following property, whether now or hereafter existing, owned or acquired by such
Grantor, and wherever located (collectively, the “Collateral”):


 


(a)        Accounts;


 






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(b)        Chattel Paper;


 


(c)        Commercial Tort Claims, including those listed on Item I of Schedule II (as such schedule may be amended or supplemented from time
to time);


 


(d)        Deposit Accounts;


 


(e)        Documents;


 


(f)         General Intangibles;


 


(g)        Goods (including Goods held on consignment with third parties);


 


(h)        Instruments;


 


(i)         Investment Property;


 


(j)         Letter-of-Credit Rights and Letters of Credit;


 


(k)        Supporting Obligations;


 


(l)         all books, records, writings, databases, information and other property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this Section 2.1;


 


(m)       all Proceeds of any of the foregoing and, to the extent not otherwise included, (i) all payments under insurance (whether or not
the Lender is the loss payee thereof) in respect of Collateral and (ii) all tort claims; and


 


(n)        all other property and rights of every kind and description and interests therein.


 


Notwithstanding anything to
the contrary, the term “Collateral” (and all relevant defined terms that are used in the definition of Collateral)
shall not include the following (collectively, the “Excluded Property”):


 


(i)      any General Intangibles or other rights or interests, in each case arising under any contracts, instruments, leases, licenses,
license agreement or other documents as to which the grant of a security interest would (A) constitute a violation of a valid and
enforceable restriction in favor of a third party on such grant, unless and until any required consents shall have been obtained, or (B) give
any other party to such contract, instrument, license or other document the right to terminate its obligations thereunder;


 


(ii)     Trademark applications filed in the United States Patent and Trademark Office on the basis of such Grantor’s “intent
to use” such trademark, unless and until acceptable evidence of use of the Trademark has been filed with the United States Patent
and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting
a Lien in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application;


 






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(iii)    any asset, the granting of a security interest in which would be void or illegal under any applicable Law or pursuant thereto would
result in, or permit the termination of, such asset (including, as of the Closing Date, the Capital Securities of the Excluded Indian
Subsidiary); or


 


(iv)   any asset subject to a Permitted Lien (other than Liens in favor of the Lender) securing obligations permitted under the Credit
Agreement to the extent that the grant of other Liens on such asset (A) would result in a breach or violation of, or constitute a default
under, the agreement or instrument governing such Permitted Lien, (B) would result in the loss of use of such asset or (C) would permit
the holder of such Permitted Lien to terminate the Grantor’s use of such asset;


 


(v)    the Excluded Accounts; and


 


(vi)   the Funded IP of any Grantor so long as the IIA Consent for the creation of a Lien over such Intellectual Property has
not been received from the Israel Innovation Authority;


 


provided that the property
described in each of clauses (i), (iii) and (iv) above shall only be excluded from the term “Collateral”
to the extent the conditions stated in such clauses are not rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC or any other applicable Law; provided further that the property described in clause (vi) above shall only be excluded
from the term “Collateral” until the IIA Consent from the Israel Innovation Authority is received by such Grantor.


 


SECTION 2.2. Security for
Obligations. This Security Agreement and the Collateral in which the Lender is granted a security interest hereunder by the Grantors
secure the payment and performance of all of the Obligations.


 


SECTION 2.3. Grantors Remain
Liable. Anything herein to the contrary notwithstanding:


 


(a)   the Grantors will remain liable under the contracts and agreements included in the Collateral to the extent set forth therein,
to the same extent as if this Security Agreement had not been executed;


 


(b)   the exercise by the Lender of any of its rights hereunder will not release any Grantor from any of its duties or obligations under
any such contracts or agreements included in the Collateral; and


 


(c)    the Lender will not have any obligation or liability under any contracts or agreements included in the Collateral by reason of
this Security Agreement, nor will the Lender be obligated to perform any of the obligations or duties of any Grantor thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.


 






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SECTION 2.4. Distributions
on Capital Securities; Payments on Pledged Notes. In the event that any (a) Distribution with respect to any Capital Securities or
(b) payment with respect to any Pledged Notes, in each case pledged hereunder, is permitted to be paid (in accordance with Section 8.6
of the Credit Agreement), such Distribution or payment may be paid directly to the applicable Grantor. If any Distribution or payment
is made in contravention of Section 8.6 of the Credit Agreement, such Grantor shall hold the same segregated and in trust for the Lender
until paid to the Lender in accordance with Section 4.1.5.


 


SECTION 2.5. Security Interest
Absolute, Etc. This Security Agreement shall in all respects be a continuing, absolute, unconditional and irrevocable grant of security
interest, and shall remain in full force and effect until the Termination Date. All rights of the Lender and the security interests granted
to the Lender hereunder, and all obligations of the Grantors hereunder, shall, to the fullest extent permitted by applicable Law, in each
case, be absolute, unconditional and irrevocable irrespective of:


 


(a)    
any lack of validity, legality or enforceability of any Loan Document (other than this Security Agreement);


 


(b)   
the failure of the Lender (i) to assert any claim or demand or to enforce any right or remedy against the Borrower or any of the
Subsidiaries or any other Person (including any other Grantor) under the provisions of any Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor (including any other Grantor) of, or Collateral securing, any Obligations;


 


(c)    any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other
extension, compromise or renewal of any Obligations;


 


(d)   
any reduction, limitation, impairment or termination of any Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and each Grantor hereby waives, until payment of all Obligations, any
right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Obligations or otherwise;


 


(e)    any amendment to, rescission, waiver, or other modification of, or any consent to or departure from, any of the terms of any Loan
Document (other than an amendment to or other modification of this Security Agreement that relates to any obligation of a Grantor, without
the written consent of such Grantor);


 


(f)     any addition, exchange or release of any Collateral or of any Person that is (or will become) a Grantor (including the Grantors
hereunder), or any surrender or non-perfection of any Collateral, or any amendment to or waiver or release or addition to, or consent
to or departure from, any other guaranty held by the Lender securing any of the Obligations; or


 






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(g)    any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of the Borrower
or any of the Subsidiaries, any surety or any guarantor.


 


SECTION 2.6. Postponement
of Subrogation. Each Grantor agrees that it will not exercise any rights against another Grantor which it may acquire by way of rights
of subrogation under any Loan Document to which it is a party until following the Termination Date. No Grantor shall seek or be entitled
to seek any contribution or reimbursement from the Borrower or any of the Subsidiaries, in respect of any payment made by such Grantor
under any Loan Document or otherwise, until following the Termination Date. Any amount paid to any Grantor on account of any such subrogation
rights prior to the Termination Date shall be held in trust for the benefit of the Lender and shall immediately be paid and turned over
to the Lender in the exact form received by such Grantor (duly endorsed in favor of the Lender, if required), to be credited and applied
against the Obligations, whether matured or unmatured, in accordance with Section 6.1(b); provided that, if such Grantor
has made payment to the Lender of all or any part of the Obligations and the Termination Date has occurred, then at such Grantor’s
request, the Lender will, at the expense of such Grantor, execute and deliver to such Grantor appropriate documents (without recourse
and without representation or warranty) necessary to evidence the transfer by subrogation to such Grantor of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior to the Termination Date, such Grantor shall refrain from
taking any action or commencing any proceeding against the Borrower or any of the Subsidiaries (or their successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts in respect of payments made under this Security Agreement
to the Lender.


 


ARTICLE
III

REPRESENTATIONS AND WARRANTIES


 


In order to induce the Lender
to enter into the Credit Agreement and make the Loans thereunder, the Grantors represent and warrant to the Lender as set forth below.


 


SECTION 3.1. As to Capital
Securities of the Subsidiaries, Investment Property.


 


(a)    With respect to any Subsidiary of any Grantor that is:


 


(i)    a corporation, business trust, joint stock company or similar Person, all Capital Securities issued by such Subsidiary are duly
authorized and validly issued, fully paid and non-assessable, and represented by a certificate or certificates; and


 


(ii)   a partnership or limited liability company, no Capital Securities issued by such Subsidiary (A) is dealt in or traded on securities
exchanges or in securities markets, (B) expressly provides that such Capital Securities is a security governed by Article 8
of the UCC or (C) is held in a Securities Account, except, with respect to this clause (a)(ii), Capital Securities (x) for
which the Lender is the registered owner or (y) with respect to which the issuer has agreed in an authenticated record with such Grantor
and the Lender to comply with any instructions of the Lender without the consent of such Grantor. Each Subsidiary party hereto that is
an issuer of any Capital Securities pledged hereunder described in clause (y) above agrees that it will comply with the instructions with
respect to such Capital Securities originated by Lender without the consent of any other Grantor.


 






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(b)     Each Grantor has delivered to the Lender all Certificated Securities constituting Collateral held by such Grantor in a Subsidiary
on the Closing Date (or the date such Grantor becomes a party to this Security Agreement, as applicable) to the Lender, together with
duly executed undated blank stock powers, or other equivalent instruments of transfer acceptable to the Lender.


 


(c)     With respect to Uncertificated Securities constituting Collateral owned by any Grantor in a Subsidiary on the Closing Date (or
the date such Grantor becomes a party to this Security Agreement, as applicable), such Grantor has caused the issuer thereof either to
(i) register the Lender as the registered owner of such security or (ii) agree in an authenticated record with such Grantor and the Lender
that such issuer will comply with instructions with respect to such security originated by the Lender without further consent of such
Grantor (which instructions the Lender agrees not to give unless an Event of Default is continuing). Each Subsidiary party hereto that
is an issuer of any Uncertificated Securities pledged hereunder above agrees that it will comply with the instructions with respect to
such Uncertificated Securities originated by Lender without the consent of any other Grantor (which instructions Lender hereby agrees
not to give unless an Event of Default has occurred and is continuing).


 


(d)     The percentage of the issued and outstanding Capital Securities of each Subsidiary pledged on the Closing Date (or the date such
Grantor becomes a party to this Security Agreement, as applicable) by each Grantor hereunder is as set forth on Schedule I. All
shares of such Capital Securities have been duly and validly issued and are fully paid and nonassessable.


 


(e)     Each of the Intercompany Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable
in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing.


 


SECTION 3.2. Grantor Name,
Location, Etc. In each case as of the date hereof (or on the date such Grantor becomes a party this Security Agreement as applicable):


 


(a)     (i) The jurisdiction in which each Grantor is located for purposes of Sections 9-301 and 9-307 of the UCC and (ii) the address
of each Grantor’s executive office and principal place of business is set forth in Item A of Schedule II.


 


(b)     The Grantors do not have any trade names other than those set forth in Item C of Schedule II.


 






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(c)     During the twelve months preceding the date hereof (or preceding the date such Grantor becomes a party to this Security Agreement,
as applicable), no Grantor has been known by any legal name different from the one set forth on the signature page hereto, nor has such
Grantor been the subject of any merger or other corporate reorganization, except as set forth in Item D of Schedule II.


 


(d)     Each Grantor’s federal taxpayer identification number (or foreign equivalent) is (and, during the twelve months preceding
the date hereof (or preceding the date such Grantor becomes a party to this Security Agreement, as applicable), such Grantor has not had
a federal taxpayer identification number (or equivalent) different from that) set forth in Item E of Schedule II.


 


(e)     No Grantor is a party to any federal, state or local government contract except as set forth in Item F of Schedule II.


 


(f)      No Grantor maintains any Deposit Accounts, Securities Accounts or Commodity Accounts with any Person, in each case, except as set
forth on Item G of Schedule II.


 


(g)     No Grantor is the beneficiary of any Letters of Credit, except as set forth on Item H of Schedule II.


 


(h)     No Grantor has Commercial Tort Claims except as set forth on Item I of Schedule II.


 


(i)      The name set forth on the signature page attached hereto (or the signature page of the supplement hereto by which such Grantor
has become a party to this Security Agreement, as applicable) is the true and correct legal name (as defined in the UCC) of each Grantor.


 


SECTION 3.3. Ownership,
No Liens, Etc. Each Grantor owns its Collateral free and clear of any Lien, except for (a) any security interest created by this Security
Agreement and (b) Permitted Liens. No effective UCC financing statement or other filing similar in effect covering all or any part of
the Collateral is on file in any recording office, except those filed in favor of the Lender relating to this Security Agreement, Permitted
Liens or as to which a duly authorized termination statement relating to such UCC financing statement or other instrument has been delivered
to the Lender on the Closing Date.


 


SECTION 3.4. Possession
of Inventory, Control, Etc.


 


(a)    Each Grantor has, and agrees that it will maintain, exclusive possession of its Documents, Instruments, Promissory Notes, Goods,
Equipment and Inventory, other than (i) Equipment and Inventory that is in transit in the ordinary course of business, (ii) Equipment
and Inventory that in the ordinary course of business is in the possession or control of a warehouseman, bailee agent or other Person
(other than a Person controlled by or under common control with such Grantor), it being understood that the Grantor shall, at the request
of the Lender, undertake reasonable efforts to obtain authenticated a record signed by such Person acknowledging that it holds possession
of such Collateral for the Lender’s benefit and waives any Lien held by it against such Collateral, (iii) Inventory that is in the
possession of a consignee in the ordinary course of business and (iv) Instruments or Promissory Notes that have been delivered to the
Lender pursuant to Section 3.5. In the case of Equipment or Inventory described in clause (ii) above, no lessor or warehouseman
of any premises or warehouse upon or in which such Equipment or Inventory is located has (w) issued any warehouse receipt or other receipt
in the nature of a warehouse receipt in respect of any such Equipment or Inventory, (x) issued any Document for any such Equipment or
Inventory, (y) received notification of the Lender’s interest (other than the security interest granted hereunder) in any such Equipment
or Inventory or (z) any Lien on any such Equipment or Inventory, except for Permitted Liens under Section 8.3(e) of the Credit Agreement.


 






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(b)    Each Grantor is the sole entitlement holder of its Deposit Accounts and no other Person (other than the Lender pursuant to this
Security Agreement or any other Person with respect to Permitted Liens) has control or possession of, or any other interest in, any of
its Deposit Accounts or any other securities or property credited thereto.


 


SECTION 3.5. Negotiable
Documents, Instruments and Chattel Paper. Each Grantor has delivered to the Lender possession of all originals of all Documents, Instruments,
Promissory Notes, and tangible Chattel Paper (other than any Document, Instrument, Promissory Note or tangible Chattel Paper not exceeding
$25,000 in principal amount individually or in the aggregate) owned or held by such Grantor on the Closing Date (or the date such Grantor
becomes a party to this Security Agreement, as applicable).


 


SECTION 3.6. Intellectual
Property Collateral. Except as disclosed on Schedules III through VI, with respect to any Intellectual Property Collateral:


 


(a)    any Intellectual Property Collateral owned by any Grantor is, to the extent applicable, valid, subsisting, unexpired and enforceable
and has not been abandoned or adjudged invalid or unenforceable, in whole or in part;


 


(b)    such Grantor is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to all Intellectual
Property Collateral owned by such Grantor and to the knowledge of such Grantor, no claim has been made that the use of such Intellectual
Property Collateral by such Grantor does or may, conflict with, infringe, misappropriate, dilute, misuse or otherwise violate in any material
respect, any of the rights of any third party;


 


(c)    such Grantor has made all necessary filings and recordations to protect its interest in any Intellectual Property Collateral owned
by such Grantor, including but not limited to filings and recordation to the extent such filing or recordation is necessary for the conduct
of the business substantially in the manner presently conducted, including recordations of all of its interests in the Patent Collateral
and Trademark Collateral in the United States Patent and Trademark Office (or foreign equivalent), and its claims to the Copyright Collateral
in the United States Copyright Office (or foreign equivalent), and, to the extent necessary, has used proper statutory notice in connection
with its use of any material Patent, Trademark and Copyright in any of the Intellectual Property Collateral;


 






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(d)    such Grantor has taken all reasonable steps to safeguard its Trade Secrets and to its knowledge (A) none of the Trade Secrets of
such Grantor has been used, divulged, disclosed or appropriated for the benefit of any other Person other than such Grantor; (B) to such
Grantor’s knowledge, no employee, independent contractor or agent of such Grantor has misappropriated any Trade Secrets of any other
Person in the course of performance of his or her duties as an employee, independent contractor or agent of such Grantor; and (C) no employee,
independent contractor or agent of such Grantor is in default or breach of any material term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement or contract relating in any material way to the protection, ownership,
development, use or transfer of such Grantor’s Intellectual Property Collateral;


 


(e)    to such Grantor’s knowledge, no third party is infringing upon any Intellectual Property owned or used by such Grantor;


 


(f)     no settlement or consents, covenants not to sue, nonassertion assurances, or releases have been entered into by such Grantor or
to which such Grantor is bound that adversely affects its rights to own or use any Intellectual Property;


 


(g)    such Grantor has not made a previous assignment, sale, transfer or agreement constituting a present or future assignment, sale
or transfer of any Intellectual Property for purposes of granting a security interest or as Collateral that has not been terminated or
released except as permitted under the Credit Agreement;


 


(h)    such Grantor has executed and delivered to the Lender Intellectual Property Collateral security agreements for all material United
States Copyrights, Patents and Trademarks owned by such Grantor, including all United States Copyrights, Patents and Trademarks on Schedule
III through VI (as such schedules may be amended or supplemented from time to time by notice by such Grantor to the Lender);


 


(i)     such Grantor uses commercially reasonable standards of quality in the manufacture, distribution and sale of all products sold and
in the provision of all services rendered under or in connection with all Trademarks and has taken all commercially reasonable action
necessary to ensure that all licensees of the Trademarks owned by such Grantor use such adequate standards of quality;


 


(j)     the consummation of the transactions contemplated by the Credit Agreement and this Security Agreement will not result in the termination
or material impairment of any of the Intellectual Property Collateral; and


 


(k)    to such Grantor’s knowledge, such Grantor owns or is entitled to use by license, lease or other agreement, all Patents, Trademarks,
Trade Secrets, Copyrights, mask works, licenses, technology, know-how, processes and rights with respect to any of the foregoing as necessary
to conduct the business and operations of such Grantor substantially in the manner presently conducted.


 






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SECTION 3.7. Validity,
Etc.


 


(a)   This Security Agreement creates a valid security interest in the Collateral securing the payment of the Obligations to the extent
such security interest may be created pursuant to Article 9 of the UCC.


 


(b)   As of the Closing Date (or the date such Grantor becomes a party to this Security Agreement, as applicable), each Grantor has filed
or caused to be filed all UCC-1 financing statements in the filing office for each Grantor’s jurisdiction of organization listed
in Item A of Schedule II (collectively, the “Financing Statements”) (or has delivered to the Lender the
Financing Statements suitable for timely and proper filing in such offices) and has taken all other actions necessary for the Lender to
obtain control of the Collateral as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC.


 


(c)   Upon the filing of the Financing Statements with the appropriate agencies therefor the security interests created under this Security
Agreement shall constitute a perfected security interest in the Collateral described on such Financing Statements in favor of the Lender
to the extent that a security interest therein may be perfected by filing a financing statement pursuant to the relevant UCC, prior to
all other Liens, except for Permitted Liens (in which case such security interest shall be second in priority of right only to the Permitted
Liens until the obligations secured by such Permitted Liens have been satisfied).


 


SECTION 3.8. Authorization,
Approval, Etc. Except as have been obtained or made and are in full force and effect, no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority or any other third party is required either:


 


(a)   for the grant by the Grantors of the security interest granted hereby or for the execution, delivery and performance of this Security
Agreement by the Grantors;


 


(b)   for the perfection or maintenance of the security interests hereunder including the first priority nature of such security interest
(to the extent same can be achieved by the filing of Financing Statements or, with respect to Intellectual Property Collateral, the recordation
of any agreements with the United States Patent and Trademark Office or the United States Copyright Office or, with respect to foreign
Intellectual Property Collateral and to the extent the Lender has requested that the Borrower take such action, the taking of appropriate
action under applicable foreign Law and, with respect to after-acquired Intellectual Property Collateral, any subsequent filings in such
applicable intellectual property offices) or the exercise by the Lender of its rights and remedies hereunder; or


 


(c)   for the exercise by the Lender of the voting or other rights provided for in this Security Agreement, except (i) with respect to
any securities issued by a Subsidiary of the Grantors, as may be required in connection with a disposition of such securities by Laws
affecting the offering and sale of securities generally, the remedies in respect of the Collateral pursuant to this Security Agreement
and (ii) any “change of control” or similar filings required by state licensing agencies.


 






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SECTION 3.9. Best Interests.
It is in the best interests of each Grantor (other than the Borrower) to execute this Security Agreement inasmuch as such Grantor will,
as a result of being an Affiliate of the Borrower, derive substantial direct and indirect benefits from the Loans made to the Borrower
by the Lender pursuant to the Credit Agreement, and each Grantor agrees that the Lender is relying on this representation in agreeing
to make such Loans pursuant to the Credit Agreement to the Borrower.


 


ARTICLE
IV

COVENANTS


 


Each Grantor covenants and
agrees that, until the Termination Date, such Grantor will perform, comply with and be bound by the obligations set forth below.


 


SECTION 4.1. As to Investment
Property, Etc.


 


SECTION 4.1.1. Capital
Securities of Subsidiaries. No Grantor will allow any of its Subsidiaries:


 


(a)     that is a corporation, business trust, joint stock company or similar Person, to issue Uncertificated Securities after the date
hereof;


 


(b)     that is a partnership or limited liability company, to (i) issue Capital Securities that are to be dealt in or traded on securities
exchanges or in securities markets,

(ii) expressly provide in its Organic Documents that its Capital Securities are securities governed by Article 8 of the UCC, or (iii) place
such Subsidiary’s Capital Securities in a Securities Account; and


 


(c)     to issue Capital Securities in addition to or in substitution for the Capital Securities pledged hereunder, except to such Grantor
(and such Capital Securities are immediately pledged and delivered to the Lender pursuant to the terms of this Security Agreement).


 


SECTION 4.1.2. Investment
Property (other than Certificated Securities).


 


(a)    With
respect to any Deposit Accounts, Securities Accounts, Commodity Accounts, Commodity Contracts or Security Entitlements constituting Investment
Property owned or held by any Grantor, such Grantor will cause (except for Excluded Accounts) the intermediary maintaining such Investment
Property to execute a Control Agreement relating to such Investment Property or other assets pursuant to which such intermediary agrees
to comply with the Lender’s instructions with respect to such Investment Property or other assets without further consent by such
Grantor.


 


(b)    With
respect to any Uncertificated Securities (other than Uncertificated Securities credited to a Securities Account) constituting Investment
Property owned or held by any Grantor, such Grantor will cause the issuer of such securities that is not a party hereto to either (i)
register the Lender as the registered owner thereof on the books and records of the issuer or (ii) execute a Control Agreement relating
to such Investment Property pursuant to which the issuer agrees to comply with the Lender’s instructions with respect to such Uncertificated
Securities without further consent by such Grantor.


 






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SECTION 4.1.3. Certificated
Securities (Stock Powers). Each Grantor agrees that all Certificated Securities constituting Collateral, including the Capital Securities
delivered by such Grantor pursuant to this Security Agreement, will be accompanied by duly executed undated blank stock powers, or other
equivalent instruments of transfer reasonably acceptable to the Lender.


 


SECTION 4.1.4. Continuous
Pledge. Each Grantor will (subject to the terms of the Credit Agreement) (a) deliver to the Lender all Investment Property and all
Payment Intangibles to the extent that such Investment Property or Payment Intangibles are evidenced by a Document, Instrument, Promissory
Note or Chattel Paper (other than any Document, Instrument, Promissory Note or Chattel Paper not exceeding $25,000 in the principal amount,
individually or in the aggregate), and (b) at all times keep pledged to the Lender pursuant hereto, on a first-priority, perfected basis,
a security interest therein and in all interest and principal with respect to such Payment Intangibles, and all Proceeds and rights from
time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral. Each Grantor agrees that it will,
promptly following receipt thereof, deliver to the Lender possession of all originals of negotiable Documents, Instruments, Promissory
Notes and Chattel Paper that it acquires following the Closing Date (other than any Document, Instrument, Promissory Note or Chattel Paper
not exceeding $25,000 in the principal amount individually or in the aggregate).


 


SECTION 4.1.5. Voting Rights,
Dividends, Etc. Each Grantor agrees:


 


(a)     upon receipt of notice of the occurrence and continuance of an Event of Default from the Lender and without any request therefor
by the Lender, so long as such Event of Default shall continue, to deliver (properly endorsed where required hereby or requested by the
Lender) to the Lender all dividends and Distributions with respect to Investment Property; all interest, principal, other cash payments
on Payment Intangibles; and all Proceeds of the Collateral, in each case thereafter received by such Grantor, all of which shall be held
by the Lender as additional Collateral, except for payments made in accordance with Section 8.6 of the Credit Agreement; and


 


(b)     immediately upon the occurrence and during the continuance of an Event of Default and so long as the Lender has notified such Grantor
of the Lender’s intention to exercise its voting power under this clause (b),


 


(i)     with respect to Collateral consisting of general partner interests or limited liability company interests, to promptly modify its
Organic Documents to admit the Lender as a general partner or member, as applicable;


 


(ii)    that the Lender may exercise (to the exclusion of such Grantor) the voting power and all other incidental rights of ownership with
respect to any Investment Property constituting Collateral and such Grantor hereby grants the Lender an irrevocable proxy, exercisable
under such circumstances, to vote such Investment Property; and


 






    	 	15	 



     


    

 


(iii)    to promptly deliver to the Lender such additional proxies and other documents as may be necessary to allow the Lender to exercise
such voting power.


 


All dividends, Distributions, interest, principal,
cash payments, Payment Intangibles and Proceeds that may at any time and from time to time be held by such Grantor, but which such Grantor
is then obligated to deliver to the Lender, shall, until delivery to the Lender, be held by such Grantor separate and apart from its other
property in trust for the Lender. The Lender agrees that unless an Event of Default shall have occurred and be continuing and the Lender
shall have given the notice referred to in clause (b) above, such Grantor will have the exclusive voting power with respect to
any Investment Property constituting Collateral and the Lender will, upon the written request of such Grantor, promptly deliver such proxies
and other documents, if any, as shall be reasonably requested by such Grantor which are necessary to allow such Grantor to exercise that
voting power; provided that no vote shall be cast, or consent, waiver, or ratification given, or action taken by such Grantor that
would impair any such Collateral or be inconsistent with or violate any provision of any Loan Document.


 


SECTION 4.2. Change of
Name, Etc. No Grantor will change its name or place of incorporation or organization or federal taxpayer identification number except
as otherwise permitted by the Credit Agreement.


 


SECTION 4.3. As to Accounts.


 


(a)   Each Grantor shall have the right to collect all Accounts so long as no Event of Default shall have occurred and be continuing.


 


(b)   Upon (i) the occurrence and continuance of an Event of Default and (ii) the delivery of notice by the Lender to each Grantor, all
Proceeds of Collateral received by such Grantor shall be delivered in kind to the Lender for deposit in a Deposit Account of such Grantor
maintained with the Lender or that otherwise is a Controlled Account (together with any other Deposit Accounts or Controlled Accounts
pursuant to which any portion of the Collateral is deposited with the Lender, the “Collateral Accounts”), and such
Grantor shall not commingle any such Proceeds, and shall hold separate and apart from all other property, all such Proceeds in express
trust for the benefit of the Lender until delivery thereof is made to the Lender.


 


(c)   Following the delivery of notice pursuant to clause (b)(ii), the Lender shall have the right to apply any amount in the
Collateral Accounts to the payment of any Obligations which are then due and payable in accordance with Section 4.4(b) of the Credit Agreement.


 


(d)   With respect to each of the Collateral Accounts, it is hereby confirmed and agreed that (i) deposits in such Collateral Account
are subject to a security interest as contemplated hereby, (ii) such Collateral Account shall be under the control of the Lender and (iii),
following the delivery of notice pursuant to clause (b)(ii) above, the Lender shall have the sole right of withdrawal over such
Collateral Account.


 






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SECTION 4.4. As to Grantors’
Use of Collateral.


 


(a)   Subject to clause (b) below, each Grantor (i) may in the ordinary course of its
business, at its own expense, sell, lease or furnish under contracts of service any of the Inventory normally held by such Grantor for
such purpose, and use and consume, in the ordinary course of its business, any raw materials, work in process or materials normally held
by such Grantor for such purpose, (ii) will, at its own expense, endeavor to collect, as and
when due, all amounts due with respect to any of the Collateral, including the taking of such action with respect to such collection as
the Lender may reasonably request following the occurrence and during the continuance of an Event of Default or, in the absence of such
request, as such Grantor may deem advisable in accordance with its normal business practices, and (iii)
may grant, in the ordinary course of business, to any party obligated on any of the Collateral, any rebate, refund or allowance to which
such party may be lawfully entitled, and may accept, in connection therewith, the return of Goods, the sale or lease of which shall have
given rise to such Collateral.


 


(b)   At any time following the occurrence and during the continuance of an Event of Default, whether before or after the maturity of
any of the Obligations, the Lender may (i) revoke any or all of the rights of each Grantor set forth in clause (a) above, (ii)
notify any parties obligated on any of the Collateral to make payment to the Lender of any amounts due or to become due thereunder and
(iii) enforce collection of any of the Collateral by suit or otherwise and surrender, release, or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder or evidenced
thereby.


 


(c)   Upon the request of the Lender following the occurrence and during the continuance of an Event of Default, each Grantor will, at
its own expense, notify any parties obligated on any of the Collateral to make payment to the Lender of any amounts due or to become due
thereunder.


 


(d)   At any time following the occurrence and during the continuation of an Event of Default, the Lender may endorse, in the name of
such Grantor, any item, howsoever received by the Lender, representing any payment on or other Proceeds of any of the Collateral.


 





 


SECTION 4.5. As to Intellectual
Property Collateral. Each Grantor covenants and agrees to comply with the following provisions as such provisions relate to any Intellectual
Property Collateral material to the operations or business of such Grantor:


 


(a)     such Grantor will not (i) do or fail to perform any act whereby any of the Patent Collateral may lapse or become abandoned or dedicated
to the public or unenforceable, (ii) permit any of its licensees to (A) fail to continue to use any of the Trademark Collateral in order
to maintain all of the Trademark Collateral in full force free from any claim of abandonment for non-use, (B) fail to maintain the quality
of products and services offered under all of the Trademark Collateral at a level substantially consistent with the quality of products
and services offered under such Trademark as of the date hereof, (C) fail to employ all of the Trademark Collateral registered with any
federal or state or foreign authority with an appropriate notice of such registration, (D) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark Collateral, (E) use any of the Trademark Collateral registered with any federal,
state or foreign authority except for the uses for which registration or application for registration of all the Trademark Collateral
has been made or (F) do or permit any act or knowingly omit to do any act whereby any of the Trademark Collateral may become invalid or
unenforceable, or (iii) do or permit any act or knowingly omit to do any act whereby any of the Copyright Collateral or any of the Trade
Secrets Collateral may lapse or become invalid or unenforceable or placed in the public domain except upon expiration of the end of an
unrenewable term of a registration thereof, unless, in the case of any of the foregoing requirements in clauses (i), (ii)
and (iii), such Grantor reasonably and in good faith determines that either (x) such Intellectual Property Collateral is of negligible
economic value to such Grantor or (y) the loss of such Intellectual Property Collateral would not be material to such Grantor;


 






    	 	17	 



     


    

 


(b)     such Grantor shall promptly notify the Lender if it knows that any application or registration relating to any material item of
the Intellectual Property Collateral may, in the Grantor’s reasonable commercial judgment, become abandoned or dedicated to the
public or placed in the public domain or invalid or unenforceable, or of any adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright
Office or any foreign counterpart thereof or any court) regarding such Grantor’s ownership of any of the Intellectual Property Collateral,
its right to register the same or to keep and maintain and enforce the same;


 


(c)     [Reserved];


 


(d)     such Grantor will take all reasonable and necessary steps, including in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof (subject
to the terms of the Credit Agreement), to maintain and pursue any material application (and to obtain the relevant registration) filed
with respect to, and to maintain any registration of, material Intellectual Property Collateral, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and the payment
of fees and taxes (except to the extent that dedication, abandonment or invalidation is permitted under the foregoing clauses (a)
or (b) or such Grantor reasonably and in good faith determines that the failure to take any such step would not have a material
adverse effect on the interests of the Lender taken as a whole); and


 


(e)     such Grantor will promptly (but no less than quarterly, insofar as any new Intellectual Property Collateral arises or such Grantor
(or its agents, employees, designees or licensees) files an application for registration of such Intellectual Property Collateral in such
quarter) execute and deliver to the Lender (as applicable) a Patent Security Agreement, Trademark Security Agreement and/or Copyright
Security Agreement, as the case may be, in the forms of Exhibit A, Exhibit B and Exhibit C hereto, respectively,
following its obtaining an interest in, or filing an application for registration of, any Patent, Trademark or Copyright, and shall execute
and deliver to the Lender any other document reasonably required to evidence the Lender’s interest in any part of such item of Intellectual
Property Collateral unless such Grantor shall determine in good faith (with the consent of the Lender) that any Intellectual Property
Collateral is of negligible economic value to such Grantor.


 






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SECTION 4.6. As to Letter-of-Credit
Rights.


 


(a)       Each
Grantor, by granting a security interest in its Letter-of-Credit Rights to the Lender, intends to (and hereby does) collaterally assign
to the Lender its rights (including its contingent rights) to the Proceeds of all Letter-of-Credit Rights of which it is or hereafter
becomes a beneficiary or assignee.


 


(b)       Upon
the occurrence and during the continuance of an Event of Default, such Grantor will, promptly upon request by the Lender, (i) notify (and
such Grantor hereby authorizes the Lender to notify) the issuer and each nominated Person with respect to each of the Letters of Credit
of such Grantor that the Proceeds thereof have been assigned to the Lender hereunder and any payments due or to become due in respect
thereof are to be made directly to the Lender and (ii) arrange for the Lender to become the transferee beneficiary of each such Letter
of Credit.


 


SECTION 4.7. As to Commercial
Tort Claims. Each Grantor covenants and agrees that, until the Termination Date, with respect to any Commercial Tort Claim hereafter,
it shall deliver to the Lender a supplement in form and substance reasonably satisfactory to the Lender, together with all supplements
to schedules thereto, identifying such new Commercial Tort Claim.


 


SECTION 4.8. Electronic
Chattel Paper and Transferable Records. If any Grantor at any time holds or acquires an interest in any Electronic Chattel Paper or
any “transferable record,” as that term is defined in Section 201 of the U.S. Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the U.S. Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, with
a value in excess of $25,000, such Grantor shall promptly notify the Lender thereof and, at the request of the Lender, shall take such
action as the Lender may reasonably request to vest in the Lender control under Section 9-105 of the UCC of such Electronic Chattel Paper
or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Lender agrees with
such Grantor that the Lender will arrange, pursuant to procedures satisfactory to the Lender and so long as such procedures will not result
in the Lender’s loss of control, for the Grantor to make alterations to the Electronic Chattel Paper or transferable record permitted
under Section 9-105 of the UCC or, as the case may be, Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce
Act or Section 16 of the U.S. Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event
of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such Electronic
Chattel Paper or transferable record.


  


SECTION 4.9. Landlord Access
Agreements. Each Grantor shall furnish to the Lender landlord access agreements as to United States locations (and at the request
of the Lender, shall use reasonable efforts to furnish to the Lender landlord access agreements as to non-United States locations) where
any books and records, or more than $100,000 of other Collateral, is stored, in form and substance reasonably satisfactory to the Lender,
from each landlord to such Grantor for each real property lease entered into by such Grantor after the date hereof.


 






    	 	19	 



     


    

 


SECTION 4.10. Further Assurances,
Etc. Each Grantor agrees that, from time to time at its own expense, it will, subject to the terms of this Security Agreement, promptly
execute and deliver all further instruments and documents, and take all further action that may be necessary or that the Lender may reasonably
request, in order to perfect, preserve and protect any security interest granted or purported to be granted hereby or to enable the Lender
to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing,
such Grantor will:


 


(a)     from time to time upon the request of the Lender, promptly deliver to the Lender such stock powers, instruments and similar documents,
reasonably satisfactory in form and substance to the Lender, with respect to such Collateral as the Lender may request and will, from
time to time upon the request of the Lender, after the occurrence and during the continuance of any Event of Default, promptly transfer
any securities constituting Collateral into the name of any nominee designated by the Lender; if any Collateral shall be evidenced by
an Instrument, negotiable Document, Promissory Note or tangible Chattel Paper, deliver and pledge to the Lender hereunder such Instrument,
negotiable Document, Promissory Note or tangible Chattel Paper (other than any Instruments, negotiable Documents, Promissory Notes or
tangible Chattel Paper in principal amount less than $25,000 individually or in the aggregate) duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably satisfactory to the Lender;


 


(b)     file (and such Grantor hereby authorizes the Lender to file) such Financing Statements or continuation statements, or amendments
thereto, and such other instruments or notices (including any assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. § 3727, any successor or amended version thereof or any regulation promulgated under or pursuant to any
version thereof), as may be necessary or that the Lender may reasonably request in order to perfect and preserve the security interests
and other rights granted or purported to be granted to the Lender hereby;


 


(c)     at all times keep pledged to the Lender pursuant hereto, on a first-priority, perfected basis, all Investment Property constituting
Collateral, all dividends and Distributions with respect thereto, and all interest and principal with respect to Promissory Notes constituting
Collateral, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing
Collateral;


 


(d)     not take or omit to take any action the taking or the omission of which would result in any impairment or alteration of any obligation
of the maker of any Payment Intangible or other Instrument constituting Collateral, except as provided in Section 4.4;


 






    	 	20	 



     


    

 


(e)     not create any tangible Chattel Paper without placing a legend on such tangible Chattel Paper reasonably acceptable to the Lender
indicating that the Lender has a security interest in such Chattel Paper;


 


(f)      furnish to the Lender, from time to time at the Lender’s request, statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the Lender may reasonably request, all in reasonable detail;
and


 


(g)     do all things reasonably requested by the Lender in accordance with this Security Agreement in order to enable the Lender to have
and maintain control over the Collateral consisting of Investment Property, Deposit Accounts (other than Excluded Accounts), Letter-of-Credit-Rights
and Electronic Chattel Paper.


 


With respect to the foregoing
and the grant of the security interest hereunder, each Grantor hereby authorizes the Lender to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the Collateral. Each Grantor agrees that a carbon, photographic or
other reproduction of this Security Agreement or any UCC financing statement covering the Collateral or any part thereof shall be sufficient
as a UCC financing statement where permitted by Law. Each Grantor hereby authorizes the Lender to file financing statements describing
as the collateral covered thereby “all of the debtor’s personal property or assets” or words to that effect, notwithstanding
that such wording may be broader in scope than the Collateral described in this Security Agreement. Notwithstanding anything else herein,
the Lender shall not be liable for the preparation, filing or maintenance of any UCC or other applicable financing statements or instruments,
all of which shall be duties of the Grantors.


 


ARTICLE
V

THE LENDER


 


SECTION 5.1. Lender Appointed
Attorney-in-Fact. Each Grantor hereby irrevocably designates and appoints the Lender as its attorney-in-fact, with full authority
in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Lender’s discretion,
but only following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument
which the Lender may deem reasonably necessary or advisable to accomplish the purposes of this Security Agreement, and:


 


(a)    to demand, collect, settle, compromise and adjust, and give discharges and releases concerning the Collateral, all as the Lender
may deem reasonably appropriate;


 


(b)    to commence and prosecute any actions at any court for the purposes of collecting any of the Collateral and enforcing any other
right in respect thereof;


 


(c)    to defend, settle or compromise any action brought in respect of the Collateral and, in connection therewith, give such discharge
or release as the Lender may deem reasonably appropriate;


 






    	 	21	 



     


    

 


(d)    to pay or discharge taxes, liens, security interest or other encumbrances levied or placed on or threatened against the Collateral;


 


(e)    to direct any parties liable for any payment in connection with any of the Collateral to make payment of any and all monies due
and to become due thereunder directly to the Lender or as the Lender shall direct;


 


(f)     to receive payment of and receipt for any and all monies, claims and other amounts due and to become due at any time in respect
of or arising out of any Collateral;


 


(g)    to sign and endorse, any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the
Collateral;


 


(h)    to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security and
pledge agreements, affidavits, notices and other agreements, instruments and documents that the Lender may deem reasonably appropriate
in order to perfect and maintain the security interests and liens granted in this Security Agreement and in order to fully consummate
all of the transactions contemplated herein;


 


(i)     to exchange any of the Collateral or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment
of the issuer thereof and, in connection therewith, deposit any of the Collateral with any committee, depository, transfer agent, registrar
or other designated agency upon such term as the Lender may deem reasonably appropriate;


 


(j)     to vote for a shareholder or member resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of
the Collateral into the name of the Lender (or its designee) or into the name of any transferee to whom the Collateral or any part thereof
may be sold pursuant to Article VI hereof; and


 


(k)    to perform the affirmative obligations of such Grantor hereunder.


 


Each Grantor hereby acknowledges, consents and
agrees that the power of attorney granted pursuant to this Section 5.1 is irrevocable and coupled with an interest.


 


SECTION 5.2. Lender May
Perform. If any Grantor fails to perform any agreement contained herein, during the period of such failure the Lender may itself perform,
or cause performance of, such agreement, that the Lender deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein to the extent provided for herein, and the expenses of the Lender incurred in connection
therewith shall be payable by such Grantor pursuant to Section 10.3 of the Credit Agreement.


 


SECTION 5.3. Lender Has
No Duty. The powers conferred on the Lender hereunder are solely to protect its interest in the Collateral and shall not impose any
duty on it to exercise any such powers. Except for reasonable care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Lender shall have no duty as to any Collateral or responsibility for:


 






    	 	22	 



     


    

 


(a)     ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any
Investment Property, whether or not the Lender has or is deemed to have knowledge of such matters; or


 


(b)     taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.


 


SECTION 5.4. Reasonable
Care. The Lender is required to exercise reasonable care in the custody and preservation of any of the Collateral in its possession;
provided that the Lender shall be deemed to have exercised reasonable care in the custody and preservation of any of the Collateral,
if it takes such action for that purpose as each Grantor reasonably requests in writing at times other than upon the occurrence and during
the continuance of any Event of Default, but failure of the Lender to comply with any such request at any time shall not in itself be
deemed a failure to exercise reasonable care.


 


ARTICLE
VI

REMEDIES


 


SECTION 6.1. Certain Remedies.
If any Event of Default shall have occurred and be continuing:


 


(a)     The Lender may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of the Lender on default under the UCC (whether or not the UCC applies to the affected Collateral)
and also may:


 


(i)    take possession of any Collateral not already in its possession without demand and without legal process;


 


(ii)   require each Grantor to, and each Grantor hereby agrees that it will, at its expense and upon request of the Lender forthwith,
assemble all or part of the Collateral as directed by the Lender and make it available to the Lender at a place to be designated by the
Lender that is reasonably convenient to both the Lender and such Grantor;


 


(iii)    enter onto the property where any Collateral is located and take possession thereof without demand and without legal process; and


 


(iv)    without notice except as specified below, lease, license, sell or otherwise dispose of the Collateral or any part thereof in one
or more parcels at any public or private sale, at any of the Lender’s offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Lender may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale shall
be required by Law, at least ten (10) days’ prior notice to such Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. The Lender shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Lender may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.


 






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(b)     All cash Proceeds received by the Lender in respect of any sale of, collection from, or other realization upon, all or any part
of the Collateral shall be applied by the Lender against all or any part of the Obligations as set forth in Section 4.4(b) of the Credit
Agreement.


 


(c)     The Lender may:


 


(i)      transfer all or any part of the Collateral into the name of the Lender or its nominee, with or without disclosing that such Collateral
is subject to the Lien hereunder;


 


(ii)     notify the parties obligated on any of the Collateral to make payment to the Lender of any amount due or to become due thereunder;


 


(iii)    withdraw, or cause or direct the withdrawal, of all funds with respect to any Collateral Account;


 


(iv)    enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party
with respect thereto;


 


(v)     endorse any checks, drafts, or other writings in any Grantor’s name to allow collection of the Collateral;


 


(vi)    take control of any Proceeds of the Collateral; and


 


(vii)   execute (in the name, place and stead of any Grantor) endorsements, assignments, stock powers and other instruments of conveyance
or transfer with respect to all or any of the Collateral.


 


SECTION 6.2. Securities
Laws. If the Lender shall determine to exercise its right to sell all or any of the Collateral that are Capital Securities pursuant
to Section 6.1(a)(iv), each Grantor agrees that upon request of the Lender, such Grantor will, at its own expense:


 


(a)    execute and deliver, and cause (or, with respect to any issuer which is not a Subsidiary of such Grantor, use its best efforts
to cause) each issuer of the Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts and things, as may be reasonably necessary or, in the opinion
of the Lender, advisable to register such Collateral under the provisions of the Securities Act of 1933, as from time to time amended,
and the rules and regulations of the SEC thereunder (the “Securities Act”), and cause the registration statement relating
thereto to become effective and to remain effective for such period as prospectuses are required by Law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus which, in the opinion of the Lender, are reasonably necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto;


 






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(b)     use its best efforts to exempt the Collateral under the state securities or “Blue Sky” laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as reasonably requested by the Lender;


 


(c)     cause (or, with respect to any issuer that is not a Subsidiary of such Grantor, use its best efforts to cause) each such issuer
to make available to its security holders, as soon as practicable, an earnings statement that will satisfy the provisions of Section
11(a) of the Securities Act; and


 


(d)      do or cause to be done all such other acts and things as may be necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable Law.


 


SECTION 6.3. Compliance
with Restrictions. Each Grantor agrees that in any sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Lender is hereby authorized to comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable Law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications,
and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account
for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and such Grantor further agrees that such compliance shall not result
in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Lender be liable nor
accountable to such Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.


 


SECTION 6.4. Protection
of Collateral. The Lender may from time to time, at its option, perform any act which any Grantor fails to perform after being requested
in writing so to perform (it being understood that no such request need be made after the occurrence and during the continuance of an
Event of Default) and the Lender may from time to time take any other action which the Lender deems necessary for the maintenance, preservation
or protection of any of the Collateral or of its security interest therein.


 


ARTICLE
VII

MISCELLANEOUS PROVISIONS


 


SECTION 7.1. Loan Document.
This Security Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein)
be construed, administered and applied in accordance with the terms and provisions thereof, including Article X thereof.


 






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SECTION 7.2. Binding on
Successors, Transferees and Assigns; Assignment. This Security Agreement shall remain in full force and effect until the Termination
Date has occurred, shall be binding upon the Grantors and their successors, permitted transferees and permitted assigns and shall inure
to the benefit of and be enforceable by the Lender; provided that no Grantor may assign or transfer any of its rights or obligations
hereunder without the prior consent of the Lender.


 


SECTION 7.3. Amendments,
Etc. No amendment or modification to or waiver of any provision of this Security Agreement, nor consent to any departure by any Grantor
from its obligations under this Security Agreement, shall in any event be effective unless the same shall be in writing and signed by
the Lender and the Grantors and then such waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given.


 


SECTION 7.4. Notices.
All notices and other communications provided for hereunder shall be delivered or made as provided in Section 10.2 of the Credit Agreement.


 


SECTION 7.5. Release of
Liens. Upon (a) the sale of Collateral to Persons who are not the Borrower or any Subsidiary thereof in accordance with the Credit
Agreement or (b) the occurrence of the Termination Date, the security interests granted herein in such Collateral shall automatically
terminate with respect to (i) such Collateral (in the case of clause (a)) or (ii) all Collateral (in the case of clause (b)).
Upon any such sale or termination, the Lender will, at the Grantors’ sole expense, deliver to the Grantors, without any representations,
warranties or recourse of any kind whatsoever, all such Collateral held by the Lender hereunder, and execute and deliver to the Grantors
such documents as the Grantors shall reasonably request to evidence such termination.


 


SECTION 7.6. Additional
Grantors. Upon the execution and delivery by any other Person of a supplement in the form of Annex I hereto, such Person shall
become a “Grantor” hereunder with the same force and effect as if it were originally a party to this Security Agreement and
named as a “Grantor” hereunder. The execution and delivery of such supplement shall not require the consent of any other Grantor
hereunder, and the rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition
of any new Grantor as a party to this Security Agreement. Any schedules delivered by any additional Grantor pursuant to such supplement
shall supplement the relevant schedules to this Security Agreement.


 


SECTION 7.7. No Waiver;
Remedies. In addition to, and not in limitation of Section 2.5, no failure on the part of the Lender to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by Law.


 


SECTION 7.8. Severability.
Any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions
of this Security Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.


 






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SECTION 7.9. Governing
Law, Entire Agreement, Etc. THIS SECURITY AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR
TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREBY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Security Agreement, along with the other Loan Documents, constitutes the
entire understanding among the parties hereto with respect to the subject matter thereof and supersedes any prior agreements, written
or oral, with respect thereto.


 


SECTION 7.10. Forum Selection
and Consent to Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECURITY
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR ANY GRANTOR IN
CONNECTION HEREWITH SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN THE STATE OF
NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL
OR OTHER PROPERTY MAY BE FOUND. EACH GRANTOR IRREVOCABLY APPOINTS THE BORROWER AS ITS AUTHORIZED AGENT UPON WHICH PROCESS MAY BE SERVED
IN ANY SUCH SUIT OR PROCEEDING, AND AGREES THAT SERVICE OF PROCESS UPON THE BORROWER, AND WRITTEN NOTICE OF SAID SERVICE TO SUCH GRANTOR,
BY THE PERSON SERVING THE SAME TO THE ADDRESS PROVIDED IN SECTION 10.2 OF THE CREDIT AGREEMENT, SHALL CONSTITUTE EFFECTIVE SERVICE OF
PROCESS UPON THE GRANTOR IN ANY SUCH SUIT OR PROCEEDING. EACH GRANTOR FURTHER AGREES TO TAKE ANY AND ALL ACTION AS MAY BE NECESSARY TO
MAINTAIN SUCH DESIGNATION AND APPOINTMENT OF THE BORROWER AS ITS AGENT FOR SERVICE OF PROCESS IN FULL FORCE AND EFFECT UNTIL ALL OBLIGATIONS
HAVE BEEN PAID IN FULL. THE LENDER, BY ACCEPTANCE OF THIS SECURITY AGREEMENT, AND EACH GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 10.2 OF THE CREDIT AGREEMENT. THE LENDER, BY ACCEPTANCE OF THIS SECURITY AGREEMENT, AND EACH GRANTOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE LENDER, BY ACCEPTANCE OF THIS SECURITY AGREEMENT, OR ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE LENDER BY, ACCEPTANCE OF THIS SECURITY AGREEMENT,
AND SUCH GRANTOR, EACH ON ITS OWN BEHALF, HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS SECURITY AGREEMENT.


 






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SECTION 7.11. Counterparts.
This Security Agreement may be executed by the parties hereto in several counterparts, each of which shall be an original and all of which
shall constitute together but one and the same agreement. This Security Agreement shall become effective when counterparts hereof executed
on behalf of all of the signatories hereto, shall have been received by the Lender. Delivery of an executed counterpart of a signature
page to this Security Agreement by email (e.g. “pdf” or “tiff”) or telecopy shall be effective as delivery of
a manually executed counterpart of this Security Agreement.


 


[Signature Page Follows]


 




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IN WITNESS WHEREOF, each of
the parties hereto has caused this Security Agreement to be duly executed and delivered by its Authorized Officer as of the date first
above written.


 





	 	DARIOHEALTH CORP.
	 	 	 
	 	By: 	/s/ Erez Raphael
	 	 	Name: Erez Raphael
	 	 	Title: Chief Executive Officer
	 	 	 
	 	 	 
	 	LABSTYLE INNOVATION LTD.
	 	 	 
	 	By:	/s/ Zvi Ben David
	 	 	Name: Zvi Ben David
	 	 	Title: Director
	 	 	 
	 	 	 
	 	UPRIGHT TECHNOLOGIES INC.
	 	 	 
	 	By:	/s/ Zvi Ben David
	 	 	Name: Zvi Ben David
	 	 	Title: Director
	 	 	 
	 	 	 
	 	PSYINNOVATIONS INC.
	 	 	 
	 	By:	/s/ Zvi Ben David
	 	 	Name: Zvi Ben David
	 	 	Title: Director
	 	 	 
	 	 	 
	 	ORBIMED ROYALTY & CREDIT OPPORTUNITIES III, LP, as the Lender
	 	 	 
	 	By: 	/s/ Matthew Rizzo
	 	 	Name: Matthew Rizzo
	 	 	Title: Member



 



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