Document:

Exhibit 10.2

 

SUBSIDIARY GUARANTEE

 

Subsidiary Guarantee,
dated as of September 21, 2018 (this “Guarantee”), made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the “Guarantors”), in favor of the purchasers
signatory (together with their permitted assigns, the “Secured Parties”) to that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated as of the date hereof, among Dthera Sciences, a Nevada corporation
(the “Company”) and the Secured Parties.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to
the Purchase Agreement, the Company has agreed to sell and issue to the Secured Parties, and the Secured Parties have agreed to
purchase from the Company the Notes, subject to the terms and conditions set forth therein; and

 

WHEREAS, each Guarantor
will directly benefit from the extension of credit to the Company represented by the issuance of the Notes;

 

WHEREAS, as a material
inducement to the Secured Parties to enter into the Purchase Agreement and all the other agreements to be entered into in connection
therewith, the Secured Parties have requested the Guarantors and the Company enter into this Guarantee, and

 

NOW, THEREFORE, in
consideration of the premises, each Guarantor hereby agrees with the Secured Parties as follows:

 

1.                 
Definitions. Unless otherwise defined herein, terms defined in the Purchase Agreement and used herein shall have the meanings
given to them in the Purchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder”
and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision
of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to
terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The following terms shall
have the following meanings:

 

“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Obligations”
means, in addition to all other costs and expenses of collection incurred by Secured Parties in enforcing any of such Obligations
and/or this Guarantee, 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 the Company or any Guarantor
to the Secured Parties under this Guarantee, the Note, that certain Security Agreement (the “Security Agreement”),
dated as of the date hereof, among the Company, the Guarantors and the Secured Parties, 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 Company or any Guarantor
from time to time under or in connection with this Guarantee, the Notes, the Security Agreement, 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
the Company or any Guarantor.

 

 

 

    	 	1	 

     

    

 

2.                    
Guarantee.

 

(a)              
Guarantee.

 

(i)                
The Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Secured Parties and their respective
successors, endorsees, transferees and assigns, the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

 

(ii)             
Anything herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
the rights of creditors generally (after giving effect to the right of contribution established in Section 2(b)).

 

(iii)           
Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Secured Parties
hereunder.

 

(iv)            
The guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been satisfied by indefeasible payment in full.

 

(v)              
No payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the
Secured Parties from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are indefeasibly paid in full.

 

(vi)            
Notwithstanding anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific
performance of which by the Guarantors is not reasonably possible (e.g. the issuance of the Company's Common Stock), the Guarantors
shall only be liable for making the Secured Parties whole on a monetary basis for the Company's failure to perform such Obligations
in accordance with the Transaction Documents.

 

(b)              
Right of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that to the extent that a Guarantor shall have
paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right
of contribution shall be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect
limit the obligations and liabilities of any Guarantor to the Secured Parties and each Guarantor shall remain liable to the Secured
Parties for the full amount guaranteed by such Guarantor hereunder.

 

(c)              
No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Secured Parties, no Guarantor shall be entitled to be subrogated to any of the rights of the Secured Parties against
the Company or any other Guarantor or any collateral security or guarantee or right of offset held by the Secured Parties for the
payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company
or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Secured Parties
by the Company on account of the Obligations are indefeasibly paid in full. If any amount shall be paid to any Guarantor on account
of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held
by such Guarantor in trust for the Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Agent, if required), applied against the Obligations, whether matured or unmatured, in such order as the Secured Parties may
determine.

 

 

 

    	 	2	 

     

    

 

(d)              
Amendments, Etc. With Respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by the Secured Parties may be rescinded by the Secured Parties and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by the Secured Parties, and the Purchase Agreement
and the other Transaction Documents and any other documents executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Secured Parties may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Secured Parties for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. The Secured Parties shall have no obligation to protect, secure, perfect or insure
any Lien at any time held by them as security for the Obligations or for the guarantee contained in this Section 2 or any property
subject thereto.

 

(e)              
Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the Secured Parties upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in
this Section 2; and all dealings between the Company and any of the Guarantors, on the one hand, and the Secured Parties, on the
other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in
this Section 2. Each Guarantor waives to the extent permitted by law diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor understands
and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee
of payment and performance without regard to (a) the validity or enforceability of the Purchase Agreement or any other Transaction
Document, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto
at any time or from time to time held by the Secured Parties, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance or fraud by Secured Parties) which may at any time be available to or be asserted by the Company or any
other Person against the Secured Parties, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the
Company or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Company
for the Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Secured Parties
may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as they may have
against the Company, any other Guarantor or any other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the Secured Parties to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Company, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset, or any release of the Company, any other Guarantor
or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation
or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter
of law, of the Secured Parties against any Guarantor. For the purposes hereof, “demand” shall include the commencement
and continuance of any legal proceedings.

 

(f)               
Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may
be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned
by the Secured Parties upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor,
or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Company
or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

(g)              
Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Secured Parties without set-off or
counterclaim in U.S. dollars at the address set forth or referred to in the Signature Pages to the Purchase Agreement.

 

 

 

    	 	3	 

     

    

 

3.                 
Representations and Warranties. Each Guarantor hereby makes the following representations and warranties to Secured Parties
as of the date hereof:

 

(a)              
Purchase Agreement. The representations and warranties of the Company set forth in the Purchase Agreement as they relate
to such Guarantor, each of which is hereby incorporated herein by reference, are true and correct as of each time such representations
are deemed to be made pursuant to such Purchase Agreement, and the Secured Parties shall be entitled to rely on each of them as
if they were fully set forth herein, provided that each reference in each such representation and warranty to the Company's knowledge
shall, for the purposes of this Section 3, be deemed to be a reference to such Guarantor's knowledge.

 

4.                 
Covenants.

 

(a)        
Each Guarantor covenants and agrees with the Secured Parties that, from and after the date of this Guarantee until the Obligations
shall have been indefeasibly paid in full, such Guarantor shall take, and/or shall refrain from taking, as the case may be, each
commercially reasonable action that is necessary to be taken or not taken, as the case may be, so that no Event of Default (as
defined in the Notes) is caused by the failure to take such action or to refrain from taking such action by such Guarantor.

 

		(a)	So long as any of the Obligations are outstanding, unless Secured Parties holding the
                                                             majority-in interest (based on then-outstanding principal amounts of Notes at the time of such determination) of the then
                                                             outstanding Notes (a “Majority-in-Interest”) shall otherwise consent in writing, each Guarantor will not
                                                             directly or indirectly on or after the date of this Guarantee:

 

i.                       
Incur or permit to exist any Indebtedness, other than in respect of Permitted Indebtedness, or any other Indebtedness otherwise
outstanding as of the date hereof and disclosed in the Purchase Agreement or the SEC Reports;

 

ii.                       
Create or permit to exist any Liens or security interests with respect to any assets, whether now or hereinafter acquired or owned,
other than Permitted Liens;

 

iii.                       
Amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of any Secured Party;

 

iv.                       
Repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its securities
or debt obligations;

 

v.                       
Pay cash dividends on any equity securities of the Company;

 

vi.                       
Enter into any transaction with any Affiliate of the Guarantor which would be required to be disclosed in any public filing of
the Company with the Commission, unless such transaction is approved by a majority of the disinterested directors of the Company
(even if less than a quorum otherwise required for board approval); or

 

vii.                       
Enter into any agreement with respect to any of the foregoing.

 

5.                 
Miscellaneous.

 

(a)              
Amendments in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise
modified except in writing signed by the Guarantors and the Secured Parties holding two-thirds (2/3rds) 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.

 

 

 

    	 	4	 

     

    

 

(b)              
Notices. All notices, requests and demands to or upon the Secured Parties or any Guarantor hereunder shall be effected in
the manner provided for in the Purchase Agreement, provided that any such notice, request or demand to or upon any Guarantor shall
be addressed to such Guarantor at its notice address set forth on Schedule 5(b).

 

(c)              
No Waiver By Course Of Conduct; Cumulative Remedies. The Secured Parties shall not by any act (except by a written instrument
pursuant to Section 5(a), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any default under the Transaction Documents or Event of Default. No failure to exercise, nor any delay
in exercising, on the part of the Secured Parties, any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Secured Parties of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Secured Parties would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.

 

(d)              
Enforcement Expenses; Indemnification.

 

(i)                
Each Guarantor agrees to pay, or reimburse the Secured Parties for, all its reasonable costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee
and the other Transaction Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and
disbursements of counsel to the Secured Parties.

 

(ii)             
Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection
with any of the transactions contemplated by this Guarantee.

 

(iii)           
Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Guarantee to the extent the Company would be required to do so pursuant
to the Purchase Agreement.

 

(iv)            
The agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Purchase Agreement
and the other Transaction Documents.

 

(e)              
Successor and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure
to the benefit of the Secured Parties and their respective successors and assigns; provided that no Guarantor may assign, transfer
or delegate any of its rights or obligations under this Guarantee without the prior written consent of the Secured Parties.

 

(f)               
Set-Off. Each Guarantor hereby irrevocably authorizes the Secured Parties at any time and from time to time while an Event
of Default under any of the Transaction Documents shall have occurred and be continuing, without notice to such Guarantor or any
other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits,
credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by the Secured Parties to or for the credit or the account of such Guarantor, or any part thereof in
such amounts as the Secured Parties may elect, against and on account of the obligations and liabilities of such Guarantor to the
Secured Parties hereunder and claims of every nature and description of the Secured Parties against such Guarantor, in any currency,
whether arising hereunder, under the Purchase Agreement, any other Transaction Document or otherwise, as the Secured Parties may
elect, whether or not the Secured Parties have made any demand for payment and although such obligations, liabilities and claims
may be contingent or unmatured. The Secured Parties shall notify such Guarantor promptly of any such set-off and the application
made by the Secured Parties of the proceeds thereof, provided that the failure to give such notice shall not affect the validity
of such set-off and application. The rights of the Secured Parties under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Secured Parties may have.

 

 

 

    	 	5	 

     

    

 

(g)              
Counterparts. This Guarantee may be executed by two or more of the parties to this Guarantee on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(h)              
Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

 

(i)                
Section Headings. The Section headings used in this Guarantee are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation hereof.

 

(j)                
Integration. This Guarantee and the other Transaction Documents represent the agreement of the Guarantors and the Secured
Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Secured Parties relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other
Transaction Documents.

 

(k)              
Governing Laws. All questions concerning the construction, validity, enforcement and interpretation of this Guarantee 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. Each of the Company and the Guarantors agree that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Guarantee (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. Each of the Company and the Guarantors 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 Guarantee 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 Guarantee or the transactions contemplated hereby.

 

(l)                
Acknowledgements. Each Guarantor hereby acknowledges that:

 

(i)                
It has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents
to which it is a party;

 

(ii)             
The Secured Parties have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee
or any of the other Transaction Documents, and the relationship between the Guarantors, on the one hand, and the Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(iii)           
No joint venture is created hereby or by the other Transaction Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Guarantors and the Secured Parties.

 

(m)            
Additional Guarantors. The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date
hereof to become a Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form
of Annex 1 hereto.

 

 

 

    	 	6	 

     

    

 

(n)              
Release of Guarantors. Each Guarantor will be released from all liability hereunder concurrently with the indefeasible repayment
in full of all amounts owed under the Purchase Agreement, the Notes and the other Transaction Documents.

 

(o)              
Seniority. The Obligations of each of the Guarantors hereunder rank senior in priority to any other Indebtedness (as defined
in the Purchase Agreement) of such Guarantor.

 

(p)              
WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

 

[Signature
Pages Follow]

 

 

 

    	 	7	 

     

    

 

IN WITNESS WHEREOF,
each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

 

	
        DTHERA SCIENCES OPERATIONS, INC.

	 
	 
	 
	
        By:     /s/ Edward Cox               

         

            
         Name: Edward Cox

         

             
        Title:   Chief Financial Officer

 

 

Consented and agreed to:

 

	
        DTHERA
        SCIENCES

	 
	 
	 
	
        By:     /s/ Edward Cox               

         

             
        Name: Edward Cox

         

             
        Title:   Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

    	 	8	 

     

    

 

SCHEDULE 1

 

GUARANTORS

 

The following are the
names, notice addresses and jurisdiction of organization of each Guarantor.

 

	NAME/ADDRESS	JURISDICTION OF INCORPORATION	COMPANY PERCENTAGE OWNERSHIP
	
        Dthera Sciences Operations, Inc.

        7310 Miramar Rd., Suite 350

        San Diego, CA 92126
	Delaware	100%
	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	9Exhibit 10.3

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT,
dated as of September 21, 2018 (this “Agreement”), is among Dthera Sciences, 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 Original Issue Discount Senior Secured Convertible Promissory
Notes due four months following their issuance, in the aggregate principal amount of up to $1,100,000.00 (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 (as defined in the Purchase Agreement), 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 comprise all
the assets of the Debtors, including, without limitation, 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;

 

 

 

    	 	1	 

     

    

 

(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 G 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.

 

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.

 

 

 

    	 	2	 

     

    

 

(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.

 

(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 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 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;

 

(v)      Liens
under this Agreement; and

 

(vi)     Any
other liens in favor of the Secured Parties.

 

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

 

 

 

    	 	3	 

     

    

 

(i)       “UCC”
shall have the meaning ascribed to such term in the Purchase Agreement.  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)       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 Permitted
Liens 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.

 

(b)       Except
for Permitted Liens and 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).

 

(c)       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.

 

(d)       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 (to the extent such Collateral can be perfected by the filing of a UCC financing
statement).

 

 

 

    	 	4	 

     

    

 

(e)       This
Agreement creates in favor of the Secured Parties a valid first priority security interest in the Collateral, subject only to Permitted
Liens, 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 UCC financing statements
shall have been duly perfected. Except for (i) the recordation of the Intellectual Property Security Agreement (as defined
in Section 4(dd) hereof) with respect to copyrights and copyright applications referred to in paragraph (z) in the United
States Copyright Office, (ii) the recordation of the Intellectual Property Security Agreement (as defined in Section 4(dd)
hereof) with respect to patents and trademarks of the Debtors referred to in paragraph (bb) in the United States Patent and Trademark
Office, and (iii) the delivery of the certificates and other instruments provided in Section 3, 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 (to the extent such Collateral
can be perfected by the filing of a UCC financing statement) or (z) the enforcement of the rights of the Agent and the Secured
Parties hereunder.

 

(f)       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.

 

(g)       The
capital stock and other equity interests listed on Schedule G 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 and other Permitted Liens.

 

(h)       Except
for Permitted Liens, each Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and
perfected, first priority (to the extent that such liens and Security Interests can be perfected by the filing of a UCC financing
statement) 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 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. In addition to the foregoing, 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.

 

(i)       No
Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for Permitted
Liens or 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.

 

(j)       Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order (other
than ordinary use wear and tear) and shall not operate or locate any such Collateral (or cause to be operated or located) in any
area excluded from insurance coverage.

 

 

 

    	 	5	 

     

    

 

(k)       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.   Loss 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, upon approval by Agent, which approval shall not be unreasonably withheld, delayed, denied or conditioned, 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 paid to the Agent on behalf of the Secured Parties.

 

(l)       Each
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties, in sufficient detail, of any material
adverse change in the Collateral, and of the occurrence of any event that would have a material adverse effect on the value of
the Collateral or on the Secured Parties’ security interest, through the Agent, therein.

 

(m)      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.

 

(n)       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 material portion of the 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.

 

(o)       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.

 

(p)       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. 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.

 

(q)       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,
delayed, denied, or conditioned.

 

(r)       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.

 

(s)       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.

 

(t)       (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.

 

 

 

    	 	6	 

     

    

 

(u)       Each
Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Agent regarding the Pledged
Securities 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.

 

(v)       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. Concurrently therewith, the Additional Debtor shall
deliver replacement schedules for, or supplements to all other Disclosure Schedules to (or referred to in) this Agreement, as applicable,
which replacement schedules shall supersede, or supplements shall modify, the Disclosure Schedules then in effect.  The
Additional Debtor shall also deliver such 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.

 

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

 

(x)       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.

 

(y)      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.

 

(z)       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) following an Event of Default, upon the written request
of the Agent, 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.

 

(aa)    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 (to the extent such security interest can be perfected by the filing of a UCC financing statement) 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.

 

 

 

    	 	7	 

     

    

 

(bb)    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.

 

(cc)     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.

 

(dd)    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 pursuant to Section 4(z), 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.

 

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.

 

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 fifteen (15) 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 material 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 and during the continuance of any Event of Default, 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).

 

 

 

    	 	8	 

     

    

 

(b)      If
any Debtor shall become entitled to receive or shall receive any material 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 (5th) business day following
the receipt thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by Agent subject
to the terms of this Agreement as Collateral.

 

8.       Rights
and Remedies Upon Default.

 

(a)       Upon
the occurrence and during the continuance of any Event of Default, 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
written 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 written 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.

 

(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.

 

 

 

    	 	9	 

     

    

 

(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. Upon the occurrence and during the continuance of any Event of Default, the proceeds of any sale, lease or other
disposition by the Agent of the Collateral hereunder or from payments made to the Agent 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 all 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.

 

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.

 

 

 

    	 	10	 

     

    

 

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 (other than contingent obligations for which no claim has been made), 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.

 

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 (other than contingent obligations for which no claim has been made) 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.

 

 

 

    	 	11	 

     

    

 

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)       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.

 

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.  If and as applicable, the Secured Parties hereby appoint Ionic Ventures LLC to act as their agent (“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 Ionic
Ventures LLC may not be removed as Agent unless Ionic Ventures LLC 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.

 

 

 

    	 	12	 

     

    

 

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.

 

(c)       This
Agreement, together with the exhibits and schedules hereto, contains 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 two-thirds (2/3rds) 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 the Agent (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.

 

(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, 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.

 

 

 

    	 	13	 

     

    

 

(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 agrees to indemnify, pay and hold harmless the Agent and the Secured Parties and their respective assignees and affiliates
and their respective officers, directors, employees, agents, consultants, auditors, and attorneys of any of them (collectively,
“Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Purchaser Indemnitee shall be designated a party thereto) 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; provided that the Debtors
shall not be obligated to indemnify the Indemnitees, or have any liability, in excess of the aggregate Purchase Price (as defined
in the Purchase Agreement).  This indemnification provision is in addition to, and not in limitation of, any other indemnification
provision in the Notes, the Purchase Agreement or any other agreement, instrument or other document executed or delivered in connection
herewith or therewith.

 

(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]

 

 

 

    	 	14	 

     

    

 

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

 

DTHERA SCIENCES

 

 

 

By:     /s/ Edward Cox               

Name: Edward Cox

Title: Chief Executive Officer

 

 

DTHERA SCIENCES OPERATIONS, INC.

 

 

 

By:     /s/ Edward Cox                

Name: Edward Cox

Title: Chief Executive Officer

 

 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

 

 

    	 	15	 

     

    

 

[SIGNATURE PAGE OF HOLDERS TO SECURITY AGREEMENT]

 

 

Name of Investing Entity:     Ionic
Ventures LLC               

 

Signature of Authorized Signatory of
Investing entity:    /s/ Keith Coulston    

 

Name of Authorized Signatory:    Keith
Coulston               

 

Title of Authorized Signatory:      Partner               

 

 

 

 

 

 

 

 

 

 

    	 	16

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