Document:

NEITHER
THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE TO THE LENDER UPON CONVERSION HEREOF (COLLECTIVELY, THE “SECURITIES”)
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED: (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT AND COMPLIANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION
IS NOT REQUIRED UNDER THE 1933 ACT; OR (Il) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

BY
ACCEPTING THIS OBLIGATION, THE LENDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT
DESCRIBED IN SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF
OF A UNITES STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER).

 

SENIOR
SECURED REVOLVING CONVERTIBLE PROMISSORY NOTE

 

	Issuance
    Date: November 30, 2015	US$2,900,000
	 	 
	Effective
    Date: December 31, 2015	 

 

FOR
VALUE RECEIVED, BITZIO, INC., a corporation incorporated under the laws of the State of Nevada, whose address is 9625 Cozycroft
Avenue, Suite A, Chatsworth, CA 91311 (the “Borrower”), promises to pay to the order of TCA GLOBAL
CREDIT MASTER FUND, LP (hereinafter, together with any holder hereof, “Lender”), whose address is
3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, on or before the twelve (12) month anniversary of the Effective
Date or such later date as agreed upon after the date hereof in a signed writing by the Lender (the “Revolving Loan
Maturity Date”), the lesser of: (i) Two Million Nine Hundred Thousand and No/100 United States Dollars (US$2,900,000);
or (ii) the aggregate principal amount outstanding under and pursuant to that certain Senior Secured Revolving Credit Facility
Agreement, dated as of November 30, 2015 and effective as of December [●], 2015, executed by and among the Borrower, as
borrower, additional Credit Parties and the Lender, as lender (as amended, restated, supplemented or modified from time to time,
the “Credit Agreement”), together with interest (computed on the actual number of days elapsed on the
basis of a 360 day year) on the aggregate principal amount of all Revolving Loans outstanding from time to time, as provided in
the Credit Agreement. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the
Credit Agreement.

 

    	 

    	 

    

 

This
Revolving Convertible Promissory Note (the “Note”) evidences a portion of the aggregate Revolving Loans
incurred by Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms
and conditions under which the Revolving Loan Maturity Date or any payment hereon may be accelerated. The holder of this Note
is entitled to all of the benefits and security provided for in the Loan Documents, of even date herewith. All Revolving Loans
shall be repaid by Borrower, or any person liable for the payment of this Note, on the Revolving Loan Maturity Date, unless payable
sooner pursuant to the provisions of the Credit Agreement.

 

Principal
and interest shall be paid to Lender as set forth in the Credit Agreement, or at such other place as the holder of this Note shall
designate in writing to Borrower. Each Revolving Loan made by Lender, and all payments on account of the principal and interest
thereof shall be recorded on the books and records of Lender and the principal balance as shown on such books and records, or
any copy thereof certified by an officer of Lender, shall be rebuttable presumptive evidence of the principal amount owing hereunder.

 

Except
for such notices as may be required under the terms of the Credit Agreement, the Borrower, or any person liable for the payment
of this Note, waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery,
acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment
or any other indulgence.

 

Borrower
shall be solely responsible for the payment of any and all documentary stamps and other taxes applicable to the full face amount
of this Note.

 

The
Revolving Loan evidenced hereby has been made and/or issued and this Note has been delivered at Lender’s main office set
forth above. This Note shall be governed and construed in accordance with the laws of the State of Nevada, in which state it shall
be performed, and shall be binding upon Borrower, or any person liable for the payment of this Note, and its legal representatives,
successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited
by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity,
without invalidating the remaining provisions of the Credit Agreement or this Note.

 

Nothing
herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require the Borrower,
or any person liable for the payment of this Note, to pay interest in an amount or at a rate greater than the highest rate permissible
under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of
charging a usurious rate of interest. Should any interest or other charges paid by Borrower, or any parties liable for the payments
made pursuant to this Note result in the computation or earning of interest in excess of the highest rate permissible under applicable
law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the
Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in
excess of the amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of
the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by
the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto
that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess
of the highest rate permissible under applicable law.

 

    	 

    	 

    

 

THE
HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD
THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NONU.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE
THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX
LAW.

 

At
any time and from time to time while this Note is outstanding, this Note may be, at the sole option of the Lender upon an Event
of Default or if mutually agreed upon by the parties, convertible into shares of the common stock, par value $0.0001 per share
(the “Common Stock”) of Borrower, in accordance with the terms and conditions set forth below.

 

(a)
Voluntary Conversion. At any time while this Note is outstanding, the Lender may, at its sole option upon an Event of Default
or if mutually agreed upon by the parties, convert all or any portion of the outstanding principal, accrued and unpaid interest,
and any other sums due and payable hereunder or under the Credit Agreement (such total amount, the “Conversion Amount”)
into shares of Common Stock of the Borrower (the “Conversion Shares”) in an amount of shares equal to:
(i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest daily volume weighted
average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the Conversion Date,
which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit A, the “Conversion
Notice”) (the denominator) (the “Conversion Price”). The Lender shall submit a Conversion
Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion
Shares should be delivered.

 

(b)
The Lender’s Conversion Limitations. The Borrower shall not affect any conversion of this Note, and the Lender shall
not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on
the Conversion Notice submitted by the Lender, the Lender (together with the Lender’s Affiliates and any Persons acting
as a group together with the Lender or any of the Lender’s Affiliates) would beneficially own shares of Common Stock in
excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery
of any Conversion Notice, the Lender shall have the right to request that the Borrower provide to the Lender a written statement
of the percentage ownership of the Borrower’s Common Stock that would be beneficially owned by the Lender and its Affiliates
in the Borrower if the Lender converted such portion of this Note then intended to be converted by Lender. The Borrower shall,
within two (2) Business Days of such request, provide Lender with the requested information in a written statement, and the Lender
shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership
of the Borrower’s Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this
Section may be waived by Lender, in whole or in part, upon notice from the Lender to the Borrower to increase such percentage.

 

    	 

    	 

    

 

For
purposes of this Note, the “Beneficial Ownership Limitation” shall be 4.99% of the number of shares
of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Note. The limitations contained in this Section shall apply to a successor holder of this Note. For purposes of this Note,
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization or a government or any department or agency thereof.

 

(c)
Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:

 

(1)
To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Lender (the “Conversion
Date”), the Lender shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed
Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to
the Borrower’s transfer agent).

 

(2)
Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later
than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver)
a confirmation of receipt of such Conversion Notice (the “Conversion Confirmation”) to the Lender indicating
that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to
issue its Conversion Confirmation within said two (2) Business Day time period, the Lender shall have the absolute and irrevocable
right and authority to deliver the fully executed Conversion Notice to the Borrower’s transfer agent, and pursuant to the
terms of the Credit Agreement, the Borrower’s transfer agent shall issue the applicable Conversion Shares to Lender as hereby
provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if
the Borrower tails to issue the Conversion Confirmation), provided that the Borrower’s transfer agent is participating in
the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, the Borrower shall cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer
agent to so act, then pursuant to the Credit Agreement, the Lender may request and require the Borrower’s transfer agent
to) electronically transmit the applicable Conversion Shares to which the Lender shall be entitled by crediting the account of
the Lender’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system,
and provide proof satisfactory to the Lender of such delivery. In the event that the Borrower’s transfer agent is not participating
in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation
(or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct
and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then
pursuant to the Credit Agreement, the Lender may request and require the Borrower’s transfer agent to) issue and surrender
to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered
in the name of the Lender, or its designees, for the number of Conversion Shares to which the Lender shall be entitled. To effect
conversions hereunder, the Lender shall not be required to physically surrender this Note to the Borrower unless the entire principal
amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the
effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable Conversion Amount. The Lender
and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Lender,
and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following
conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated
on the face hereof.

 

    	 

    	 

    

 

(3)
The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all
purposes as the record holder(s) of such shares of Common Stock as of the Conversion Date.

 

(4)
If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Lender by
the date required hereby, the Lender shall be entitled to elect by written notice to the Borrower at any time on or before its
receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return
to the Lender any original Note delivered to the Borrower and the Lender shall promptly return to the Borrower the Common Stock
certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

 

(5)
The Borrower’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or inaction by the Lender to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Lender or
any other person or entity of any obligation to the Borrower or any violation or alleged violation of law by the Lender or any
other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower
to the Lender in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate
as a waiver by the Borrower of any such action the Borrower may have against the Lender. In the event the Lender of this Note
shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance
with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Lender or anyone associated or
affiliated with the Lender has been engaged in any violation of law, agreement or for any other reason, unless an injunction from
a court, on notice to Lender, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained,
and the Borrower posts a surety bond for the benefit of the Lender in the amount of 150% of the outstanding principal amount of
this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Lender to the extent it obtains judgment. In the
absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower fails
for any reason to deliver to the Lender such certificate or certificates representing Conversion Shares pursuant to timing and
delivery requirements of this Note, the Borrower shall pay to such Lender, in cash, as liquidated damages and not as a penalty,
for each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should
have been delivered until such certificates are delivered. Nothing herein shall limit a Lender’s right to pursue actual
damages or declare an Event of Default pursuant to the Credit Agreement, this Note or any agreement securing the indebtedness
under this Note for the Borrower’s failure to deliver Conversion Shares within the period specified herein and such Lender
shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree
of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Lender from seeking to
enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Lender from having
the Conversion Shares issued directly by the Borrower’s transfer agent in accordance with the Credit Agreement, in the event
for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares
to the Lender upon exercise of Lender’s conversion rights hereunder.

 

    	 

    	 

    

 

(6)
The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Lender
hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable
in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower.

 

(7)
Upon the request of the Lender, Borrower shall take all action reasonably necessary to have authorized, and reserved for the purpose
of issuance, such number of shares of Common Stock as shall be necessary to effect the full conversion of the Note in accordance
with its terms (the “Share Reserve”). If Borrower does not have sufficient authorized and unissued shares
of Common Stock available to increase the Share Reserve, Borrower shall call and hold a special meeting of the shareholders within
forty-five (45) days of such occurrence, or take action by the written consent of the holders of a majority of the outstanding
shares of Common Stock, if possible, for the sole purpose of increasing the number of shares authorized to an amount of shares
equal to three (3) times the Conversion Shares. Borrower’s management shall recommend to the shareholders to vote in favor
of increasing the number of shares of Common Stock authorized.

 

(d)
Adjustments to Conversion Price.

 

(1)
If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions
payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into
a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital
stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number
of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator
of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination,
or re-classification.

 

    	 

    	 

    

 

(2)
If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into
another Person, (ii) the Borrower effects any sale of all or substantially all of its assets in one transaction or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv)
the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then upon any subsequent conversion of this Note, the Lender shall have the right to receive,
for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental
Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share
of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Lender shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions,
any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Lender a new note consistent
with the foregoing provisions and evidencing the Lender’s right to convert such note into Alternate Consideration. The terms
of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this Section and insuring that this Note (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

(3)
Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Lender
a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

 

    	 

    	 

    

 

(4)
If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower
shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the
granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially
all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the
purpose of conversion of this Note, and shall cause to be delivered to the Lender at its last address as it shall appear upon
the Borrower’s records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it
is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided
that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. The Lender is entitled to convert this Note during the 10-day period
commencing on the date of such notice through the effective date of the event triggering such notice.

 

(e)
Make-Whole Rights. Upon liquidation by the Lender of Conversion Shares issued pursuant to a Conversion Notice, provided
that the Lender realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant
Conversion Notice (such net realized amount, the “Realized Amount”), the Company shall issue to the
Lender additional shares of the Company’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion
Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Lender (a “Sale
Reconciliation”) showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the
average volume weighted average price of the Company’s Common Stock during the five (5) Business Days immediately prior
to the date upon which the Lender delivers notice (the “Make-Whole Notice”) to the Company that such
additional shares are requested by the Lender (the “Make-Whole Stock Price”) (such number of
additional shares to be issued, the “Make-Whole Shares”). Upon receiving the Make-Whole Notice and Sale
Reconciliation evidencing the number of Make-Whole Shares requested, the Company shall instruct its transfer agent to issue certificates
representing the Make-Whole Shares, which Make-Whole Shares shall be issued and delivered in the same manner and within the same
time frames as set forth herein. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable
shares of the Company’s Common Stock. Following the sale of the Make-Whole Shares by the Lender: (i) in the event that the
Lender receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice,
is less than the Conversion Amount specified in the relevant Conversion Notice, the Lender shall deliver an additional Make-Whole
Notice to the Company following the procedures provided previously in this paragraph, and such procedures and the delivery of
Make-Whole Notices and issuance of Make-Whole Shares shall continue until the Conversion Amount has been fully satisfied; and
(ii) in the event that the Lender received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount
specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder
in excess of the Conversion Amount specified in the relevant Conversion Notice.

  

[-signature
page follows-]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the Borrower has executed this Note as of the date set forth above.

 

	 	BITZIO,
    INC.
	 	 	 
	 	By:	/s/
    Marilu Brassington
	 	Name:
    	Marilu
    Brassington
	 	Title:
    	Chief
    Financial Officer

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Marilu Brassington, Chief
Financial Officer of Bitzio, Inc., a Nevada corporation, who is personally known to me to be the same person whose name is subscribed
to the foregoing, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument
as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein
set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	1 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	VIRIDIS
    CAPITAL LLC 	 
	 	 	 
	By:	/s/
    Kevin Kreisler	 
	Name:
    	Kevin
    Kreisler	 
	Title:
    	Manager	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kevin Kreisler, the Manager
of Viridis Capital LLC, a New Jersey limited liability company, who is personally known to me to be the same person whose name
is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and delivered
the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses
and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

  

    	2 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	FLUX
    CARBON CORPORATION 	 
	 	 	 
	By:	/s/
    Kevin Kreisler	 
	Name:
    	Kevin
    Kreisler	 
	Title:
    	Chief
    Executive Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kevin Kreisler, the Chief
Executive Officer of FLUX Carbon Corporation, a Delaware corporation, who is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and
delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	3 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	GREENSHIFT
    CORPORATION	 
	 	 	 
	By:	/s/
    Kevin Kreisler	 
	Name:
    	Kevin
    Kreisler	 
	Title:
    	Chief
    Executive Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kevin Kreisler, the Chief
Executive Officer of GreenShift Corporation, a Delaware corporation, who is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and
delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	4 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	GS
    CLEANTECH CORPORATION	 
	 	 	 
	By:	/s/
    Kevin Kreisler	 
	Name:
    	Kevin
    Kreisler	 
	Title:
    	Chief
    Executive Officer	 

 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kevin Kreisler, the Chief
Executive Officer of GS Cleantech Corporation, a Delaware corporation, who is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and
delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	5 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	GREENSHIFT
                                         ENGINEERING, INC.

        
	 
	 	 	 
	By:	/s/
    Kevin Kreisler	 
	Name:
    	Kevin
    Kreisler	 
	Title:
    	Chief
    Executive Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kevin Kreisler, the Chief
Executive Officer of GreenShift Engineering, Inc., a Delaware corporation, who is personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed
and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation,
for the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	6 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	GENAREX
    LLC	 
	 	 	 
	By:	/s/
    Kevin Kreisler	 
	Name:
    	Kevin
    Kreisler	 
	Title:
    	Manager	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kevin Kreisler, the Manager
of Genarex LLC, a Delaware limited liability company, who is personally known to me to be the same person whose name is subscribed
to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and delivered the said
instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes
therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	7 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	LEXI
    – LUU DESIGNS INC.	 
	 	 	 
	By:	/s/
    Marilu Brassington	 
	Name:
    	Marilu
    Brassington	 
	Title:
    	Chief
    Financial Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Marilu Brassington, the
Chief Financial Officer of Lexi – Luu Designs Inc., a Nevada corporation, who is personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed
and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation,
for the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	8 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	PUNKZ
    GEAR INC.	 
	 	 	 
	By:	/s/
    Marilu Brassington	 
	Name:
    	Marilu
    Brassington	 
	Title:
    	Chief
    Financial Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Marilu Brassington, the
Chief Financial Officer of Punkz Gear Inc., a Wyoming corporation, who is personally known to me to be the same person whose name
is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and delivered
the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses
and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	9 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	SKIPJACK
    DIVE & DANCE WEAR INC.	 
	 	 	 
	By:	/s/
    Marilu Brassington	 
	Name:
    	Marilu
    Brassington	 
	Title:
    	Chief
    Financial Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Marilu Brassington, the
Chief Financial Officer of Skipjack Dive & Dance Wear Inc., a Nevada corporation, who is personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that
he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	10 

    	 

    

 

CONSENT
AND AGREEMENT

 

The
undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents
and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein,
documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations
to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned
were a party to said senior secured revolving convertible promissory note.

 

	GUARANTOR:
    	 
	 	 
	E-MOTION
    APPAREL	 
	 	 	 
	By:	/s/
    Marilu Brassington	 
	Name:
    	Marilu
    Brassington	 
	Title:
    	Chief
    Financial Officer	 

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Marilu Brassington, the
Chief Financial Officer of E-Motion Apparel, a California corporation, who is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and
delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

    	11 

    	 

    

  

EXHIBIT
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal and/or interest under the Revolving Convertible Promissory Note (the “Note”)
of Bitzio, Inc., a corporation incorporated under the laws of the State of Nevada (the “Company”), into
shares of common stock, par value $0.0001 per share (the “Common Shares”), of the Company in accordance
with the conditions of the Note, as of the date written below.

 

Based
solely on information provided by the Company to Lender, the undersigned represents and warrants to the Company that its ownership
of the Common Shares does not exceed the Beneficial Ownership Limitation as specified under the Note.

 

Conversion
Calculations

	Effective
    Date of Conversion:	 
	Principal
    Amount and/or Interest to be Converted:	 
	Number
    of Common Shares to be Issued:	 

 

	 	[HOLDER]
	 	 	 
	 	By:
    	 
	 	 	 
	 	Name:
    	 
	 	 	 
	 	Title:
    	 
	 	 	 
	 	Address:
    	 
	 	 
	 	 

 

    	12SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT, dated as of November 30, 2015 and made effective as of December 31, 2015 (as amended, restated or modified
from time, the “Security Agreement”), is executed by and between BITZIO, INC., a corporation
incorporated under the laws of the State of Nevada (the “Grantor”), and TCA GLOBAL CREDIT MASTER
FUND, LP, a limited partnership organized and existing under the laws of the Cayman Islands (the “Secured Party”).

 

R
E C I T A L S:

 

WHEREAS,
the Grantor has entered into a senior secured revolving credit facility agreement, dated as of November 30, 2015 and made effective
as of the date hereof (as amended, restated or modified from time to time, the “Credit Agreement”),
by and among the Grantor, as borrower, additional Credit Parties, as joint and several guarantors, and the Secured Party, as lender,
pursuant to which the Secured Party shall advance an aggregate principal amount of up to Five Million and No/100 United States
Dollars (US$5,000,000) (the “Loan”), which Loan is further evidenced by a revolving promissory note
given by the Grantor in favor of the Secured Party (as may be amended, restated or modified from time to time, the “Note”);

 

WHEREAS,
in order to induce the Secured Party to make the Loan, and with full knowledge that the Secured Party would not make the Loan
without this Security Agreement, the Grantor has agreed to execute and deliver this Security Agreement to the Secured Party, for
the benefit of the Secured Party; and

 

NOW,
THEREFORE, in consideration of the credit extended now and in the future by Secured Party to the Grantor and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, Grantor and Secured Party hereby agree as follows:

 

A
G R E E M E N T S:

 

Section
1 DEFINITIONS.

 

1.1
Defined Terms. Capitalized terms used but not otherwise defined in this Security Agreement shall have the meanings ascribed
to them in the Credit Agreement. For the purposes of this Security Agreement, the following capitalized words and phrases shall
have the meanings set forth below.

 

“Capital
Securities” shall mean, with respect to any Person, all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after
the date hereof, including common shares, preferred shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership or any other equivalent of such ownership interest.

 

“Collateral”
shall have the meaning set forth in Section 2.1 hereof.

 

“Obligor”
shall mean Grantor, or any other party liable with respect to the Obligations.

 

    	 

    	 

    

 

“Taxes”
shall mean any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges or withholdings, and
any and all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing.

 

“Unmatured
Event of Default” shall mean any event which, with the giving of notice, the passage of time or both, would constitute
an Event of Default.

 

1.2
Other Terms Defined in UCC. All other capitalized words and phrases used herein and not otherwise specifically defined
herein or in the Credit Agreement shall have the respective meanings assigned to such terms in the UCC, to the extent the same
are used or defined therein.

 

1.3
Other Interpretive Provisions.

 

(a)
The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. Whenever the context
so requires, the neuter gender includes the masculine and feminine, the single number includes the plural, and vice versa, and
in particular the word “Grantor” shall be so construed.

 

(b)
Section and Schedule references are to this Security Agreement unless otherwise specified. The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Security Agreement shall refer to this Security Agreement
as a whole and not to any particular provision of this Security Agreement.

 

(c)
The term “including” is not limiting, and means “including, without limitation”.

 

(d)
In the computation of periods of time from a specified date to a later specified date, the word “from” means “from
and including”; the words “to” and “until” each mean “to but excluding”, and the word
“through” means “to and including”.

 

(e)
Unless otherwise expressly provided herein, (i) references to agreements (including this Security Agreement and the other Loan
Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and
other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including
all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.

 

(f)
To the extent any of the provisions of the other Loan Documents are inconsistent with the terms of this Security Agreement, the
provisions of this Security Agreement shall govern.

 

(g)
This Security Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate
the same or similar matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance
with its terms.

 

    	2 

    	 

    

 

Section
2 SECURITY FOR THE OBLIGATIONS.

 

2.1
Security for Obligations. As security for the payment and performance of the Obligations now existing or in the future,
Grantor does hereby pledge, assign, transfer, deliver and grant to Secured Party a continuing and unconditional first priority
security interest in and to any and all property of Grantor, of any kind or description, tangible or intangible, wheresoever located
and whether now existing or hereafter arising or acquired, including the following (all of which property for Grantor, along with
the products and proceeds therefrom, are individually and collectively referred to as the “Collateral”):

 

(a)
all property of, or for the account of, Grantor now or hereafter coming into the possession, control or custody of, or in transit
to, Secured Party or any agent or bailee for Secured Party or any parent, affiliate or subsidiary of Secured Party or any participant
with Secured Party in the Obligations (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise),
including all cash, earnings, dividends, interest, or other rights in connection therewith and the products and proceeds therefrom,
including the proceeds of insurance thereon; and

 

(b)
the additional property of Grantor, whether now existing or hereafter arising or acquired, and wherever now or hereafter located,
together with all additions and accessions thereto, substitutions, betterments and replacements therefor, products and Proceeds
therefrom, and all of Grantor’s books and records and recorded data relating thereto (regardless of the medium of recording
or storage), together with all of Grantor’s right, title and interest in and to all computer software required to utilize,
create, maintain and process any such records or data on electronic media, identified and set forth as follows:

 

(i)
All Accounts and all goods whose sale, lease or other disposition by Grantor has given rise to Accounts and have been returned
to, or repossessed or stopped in transit by, Grantor, or rejected or refused by any person who is or who may become obligated
under, with respect to, or on an Account (“Account Grantor”);

 

(ii)
All Inventory, including raw materials, work-in-process and finished goods;

 

(iii)
All goods (other than Inventory), including embedded software, Equipment, vehicles, furniture and Fixtures;

 

(iv)
All Software and computer programs;

 

(v)
All Securities, Investment Property, Financial Assets and Deposit Accounts;

 

(vi)
All Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter of Credit Rights, all proceeds of letters of credit,
Health-Care-Insurance Receivables, Supporting Obligations, notes secured by real estate, Commercial Tort Claims and General Intangibles,
including Payment Intangibles;

 

    	3 

    	 

    

 

(vii)
All real estate property owned by Grantor and the interest of Grantor in fixtures related to such real property; and

 

(viii)
All Proceeds (whether Cash Proceeds or Non-cash Proceeds) of the foregoing property, including all insurance policies and proceeds
of insurance payable by reason of loss or damage to the foregoing property, including unearned premiums, and of eminent domain
or condemnation awards.

 

2.2
Possession and Transfer of Collateral. Until an Event of Default has occurred and is continuing, Grantor shall be entitled
to possession and use of the Collateral (other than Instruments or Documents (including Tangible Chattel Paper and Investment
Property consisting of certificated securities) and other Collateral required to be delivered to Secured Party pursuant to this
Section 2). The cancellation or surrender of any promissory note evidencing an Obligation, upon payment or otherwise, shall
not affect the right of Secured Party to retain the Collateral for any other of the Obligations except upon payment in full of
the Obligations. Grantor shall not sell, assign (by operation of law or otherwise), license, lease or otherwise dispose of, or
grant any option with respect to any of the Collateral, except as permitted pursuant to the Credit Agreement.

 

2.3
Financing Statements. Grantor authorizes Secured Party to prepare and file such financing statements, amendments and other
documents and do such acts as Secured Party deems necessary in order to establish and maintain valid, attached and perfected,
first priority security interests in the Collateral in favor of Secured Party, free and clear of all Liens and claims and rights
of third parties whatsoever, except Permitted Liens. Grantor hereby irrevocably authorizes Secured Party at any time, and from
time to time, to file in any jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral
is comprised of all assets of Grantor (or words of similar effect), regardless of whether any particular asset comprising a part
of the Collateral falls within the scope of Article 9 of the UCC of the jurisdiction wherein such financing statement or amendment
is filed, and (b) contain any other information required by Section 5 of Article 9 of the UCC of the jurisdiction wherein such
financing statement or amendment is filed regarding the sufficiency or filing office acceptance of any financing statement or
amendment, including (i) whether Grantor is an organization, the type of organization, and (ii) in the case of a financing statement
filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of
the real property to which the Collateral relates. Grantor agrees to furnish any such information to Secured Party promptly upon
request. In addition, Grantor shall make appropriate entries on its books and records disclosing the security interests of Secured
Party in the Collateral. Grantor hereby agrees that a photogenic or other reproduction of this Security Agreement is sufficient
for filing as a financing statement and Grantor authorizes Secured Party to file this Security Agreement as a financing statement
in any jurisdiction.

 

    	4 

    	 

    

 

2.4
Preservation of the Collateral. Secured Party may, but is not required to, take such actions from time to time as Secured
Party reasonably deems appropriate to maintain or protect the Collateral. Secured Party shall have exercised reasonable care in
the custody and preservation of the Collateral if Secured Party takes such action as Grantor shall reasonably request in writing
which is not inconsistent with Secured Party’s status as a secured party, but the failure of Secured Party to comply with
any such request shall not be deemed a failure to exercise reasonable care; provided, however, Secured Party’s
responsibility for the safekeeping of the Collateral shall (i) be deemed reasonable if such Collateral is accorded treatment substantially
equal to that which Secured Party accords its own property, and (ii) not extend to matters beyond the control of Secured Party,
including acts of God, war, insurrection, riot or governmental actions. In addition, any failure of Secured Party to preserve
or protect any rights with respect to the Collateral against prior or third parties, or to do any act with respect to preservation
of the Collateral, not so requested by Grantor, shall not be deemed a failure to exercise reasonable care in the custody or preservation
of the Collateral. Grantor shall have the sole responsibility for taking such action as may be necessary, from time to time, to
preserve all rights of Grantor and Secured Party in the applicable Collateral against prior or third parties. Without limiting
the generality of the foregoing, where Collateral consists in whole or in part of Capital Securities, Grantor represents to, and
covenants with, Secured Party that Grantor has made arrangements for keeping informed of changes or potential changes affecting
the Capital Securities (including rights to convert or subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and Grantor agrees that Secured Party shall have no responsibility or liability for informing Grantor
of any such or other changes or potential changes or for taking any action or omitting to take any action with respect thereto.

 

2.5
Other Actions as to any and all Collateral. Grantor further agrees to take any other action reasonably requested by Secured
Party to ensure the attachment, perfection and first priority of, and the ability of Secured Party to enforce, the security interest
of Secured Party in any and all of the Collateral including (a) causing Secured Party’s name to be noted as secured party
on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability
of the Secured Party to enforce, the security interest of Secured Party in such Collateral, (b) if within the control of the Grantor,
complying with, and, if not within the control of the Grantor, using best efforts to comply with, any provision of any statute,
regulation or treaty of the United States as to any material portion of the Collateral as soon as possible but not more than forty-five
(45) days after such request if compliance with such provision is a condition to attachment, perfection or priority of, or ability
of Secured Party to enforce, the security interest of Secured Party in such Collateral, (c) using best efforts to obtain governmental
and other third party consents and approvals, including without limitation any consent of any licensor, lessor or other Person
with authority or control over or an interest in any material portion of the Collateral as soon as possible but not more than
forty-five (45) days after such request, (d) using best efforts to obtain waivers from mortgagees and landlords in form and substance
reasonably satisfactory to Secured Party which affect any material portion of the Collateral as soon as possible but not more
than forty-five (45) days after such request, and (e) taking all actions required by the UCC in effect from time to time or by
other law, as applicable in any relevant UCC jurisdiction, or by other law as applicable in any foreign jurisdiction. Grantor
further agrees to indemnify and hold Secured Party harmless against claims of any Persons not a party to this Security Agreement
concerning disputes arising over the Collateral except to the extent resulting from the gross negligence or willful misconduct
of Secured Party or its Affiliates.

 

2.6
Collateral in the Possession of a Warehouseman or Bailee. If any material portion of the Collateral at any time is in the
possession of a warehouseman or bailee, Grantor shall promptly notify Secured Party thereof, and, as soon as possible but not
more than forty-five (45) days later, shall use best efforts to obtain a Collateral Access Agreement in form and substance reasonably
satisfactory to Secured Party from such warehouseman or bailee.

 

    	5 

    	 

    

 

2.7
Letter-of-Credit Rights. If Grantor at any time is a beneficiary under a letter of credit now or hereafter issued in favor
of Grantor, Grantor shall promptly notify Secured Party thereof and, at the request and option of Secured Party, Grantor shall,
pursuant to an agreement in form and substance reasonably satisfactory to Secured Party, either (i) arrange for the issuer and
any confirmer of such letter of credit to consent to an assignment to Secured Party of the proceeds of any drawing under the letter
of credit, or (ii) arrange for Secured Party to become the transferee beneficiary of the letter of credit, with Secured Party
agreeing, in each case, that the proceeds of any drawing under the letter to credit are to be applied as provided in the Credit
Agreement.

 

2.8
Commercial Tort Claims. If Grantor shall at any time hold or acquire a Commercial Tort Claim, Grantor shall promptly notify
Secured Party in writing signed by Grantor of the details thereof and grant to Secured Party in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Security Agreement, in each case in form and substance reasonably
satisfactory to Secured Party, and shall execute any amendments hereto deemed reasonably necessary by Secured Party to perfect
the security interest of Secured Party in such Commercial Tort Claim.

 

2.9
Electronic Chattel Paper and Transferable Records. If Grantor at any time holds or acquires an interest in any electronic
chattel paper or any “transferable record”, as that term is defined in Section 201 of the federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, Grantor shall promptly notify Secured Party thereof and, at the request of Secured Party, shall take such action
as Secured Party may reasonably request to vest in Secured Party control under Section 9-105 of the UCC of such electronic chattel
paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record.
Secured Party agrees with Grantor that Secured Party will arrange, pursuant to procedures reasonably satisfactory to Secured Party
and so long as such procedures will not result in Secured Party’s loss of control, for Grantor to make alterations to the
electronic chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act
for a party in control to make without loss of control.

 

Section
3 REPRESENTATIONS AND WARRANTIES.

 

Grantor
makes the following representations and warranties to Secured Party:

 

3.1
Grantor Organization and Name. Grantor is a corporation duly incorporated, existing and in good standing under the laws
of the State of Nevada, with full and adequate power to carry on and conduct its business as presently conducted. Grantor is duly
licensed or qualified in all foreign jurisdictions wherein the nature of its activities requires such qualification or licensing
except where the failure to be so licensed or qualified would not cause a Material Adverse Effect. The exact legal name of Grantor
is as set forth in the first paragraph of this Security Agreement and Grantor currently does not conduct, nor has it during the
last five (5) years, conducted business under any other name or trade name, except for Rocky Mountain Fudge Company, Inc.

 

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3.2
Authorization. Grantor has full right, power and authority to enter into this Security Agreement and to perform all of
its duties and obligations under this Security Agreement. The execution and delivery of this Security Agreement and the other
Loan Documents to which Grantor is a party will not, nor will the observance or performance of any of the matters and things herein
or therein set forth, violate or contravene any provision of law or of the articles of incorporation or by-laws of Grantor.
All necessary and appropriate action has been taken on the part of Grantor to authorize the execution and delivery of this Security
Agreement.

 

3.3
Validity and Binding Nature. This Security Agreement is the legal, valid and binding obligation of Grantor, enforceable
against Grantor in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability
of creditors’ rights generally and to general principles of equity.

 

3.4
Consent; Absence of Breach. The execution, delivery and performance of this Security Agreement and any other documents
or instruments to be executed and delivered by Grantor in connection herewith, do not and will not (a) require any consent, approval,
authorization, or filings with, notice to or other act by or in respect of, any governmental authority or any other Person (other
than filings or notices in connection with the Liens granted pursuant to his Security Agreement, or pursuant to federal or state
securities laws or other than any consent or approval which has been obtained and is in full force and effect); (b) conflict with
(i) any provision of law or any applicable regulation, order, writ, injunction or decree of any court or governmental authority
except for such conflicts which would not result in a Material Adverse Effect, (ii) the articles of incorporation, bylaws or other
organic document of Grantor, or (iii) any material agreement, indenture, instrument or other document, or any judgment, order
or decree, which is binding upon Grantor or any of its properties or assets except for such conflicts which would not result in
a Material Adverse Effect; or (c) require, or result in, the creation or imposition of any Lien on any asset of Grantor, other
than Liens in favor of Secured Party created pursuant to this Security Agreement and Permitted Liens.

 

3.5
Ownership of Collateral; Liens. Grantor is the sole owner of all of the Collateral, free and clear of all Liens, charges
and claims (including infringement claims with respect to patents, trademarks, service marks, copyrights and the like), other
than Permitted Liens.

 

3.6
Adverse Circumstances. No condition, circumstance, event, agreement, document, instrument, restriction, litigation or proceeding
(or, to Grantor’s knowledge, threatened litigation or proceeding or basis therefor) exists which (a) would have a Material
Adverse Effect upon Grantor, or (b) would constitute an Event of Default or an Unmatured Event of Default.

 

3.7
Security Interest. This Security Agreement creates a valid security interest in favor of Secured Party in the Collateral
and, when properly perfected by filing in the appropriate jurisdictions, or by possession or Control of such Collateral by Secured
Party or delivery of such Collateral to Secured Party, shall constitute a valid, perfected, first-priority security interest in
such Collateral.

 

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3.8
Place of Business. The principal place of business and books and records of Grantor is set forth in the preamble to this
Security Agreement, and the location of all Collateral, if other than at such principal place of business, is as set forth on
Schedule 3.8 attached hereto and made a part hereof, and Grantor shall promptly notify Secured Party of any change in such
locations. Grantor will not remove or permit the Collateral to be removed from such locations without the prior written consent
of Secured Party, except as permitted pursuant to the Credit Agreement.

 

3.9
Complete Information. This Security Agreement and all financial statements, schedules, certificates, confirmations, agreements,
contracts, and other materials and information heretofore or contemporaneously herewith furnished in writing by Grantor to Secured
Party for purposes of, or in connection with, this Security Agreement and the transactions contemplated hereby is, and all written
information hereafter furnished by or on behalf of Grantor to Secured Party pursuant hereto or in connection herewith will be,
true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information
is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of
the circumstances under which made (it being recognized by Secured Party that any projections and forecasts provided by Grantor
are based on good faith estimates and assumptions believed by Grantor to be reasonable as of the date of the applicable projections
or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from
projected or forecasted results).

 

Section
4 REMEDIES.

 

Upon
the occurrence and during the continuation of any Event of Default, Secured Party shall have all rights, powers and remedies set
forth in this Security Agreement or the other Loan Documents or in any other written agreement or instrument relating to any of
the Obligations or any security therefor, as a secured party under the UCC or as otherwise provided at law or in equity. Without
limiting the generality of the foregoing, Secured Party may, at its option upon the occurrence and during the continuation of
any Event of Default, declare its commitments to Grantor to be terminated and all Obligations to be immediately due and payable,
or, if provided in the Loan Documents, all commitments of Secured Party to Grantor shall immediately terminate and all Obligations
shall be automatically due and payable, all without demand, notice or further action of any kind required on the part of Secured
Party, except as required by the Credit Agreement. Grantor hereby waives any and all presentment, demand, notice of dishonor,
protest, and all other notices and demands, except as required by the Credit Agreement, in connection with the enforcement of
Secured Party’s rights under the Loan Documents, and hereby consents to, and waives notice of release, with or without consideration,
of any Collateral, notwithstanding anything contained herein or in the Loan Documents to the contrary. In addition to the foregoing
upon the occurrence and during the continuation of an Event of Default:

 

4.1
Possession and Assembly of Collateral. Secured Party may, without notice, demand or initiate legal process of any kind,
take possession of any or all of the Collateral (in addition to Collateral of which Secured Party already has possession), wherever
it may be found, and for that purpose may pursue the same wherever it may be found, and may at any time enter into any of Grantor’s
premises where any of the Collateral may be or is supposed to be, and search for, take possession of, remove, keep and store any
of the Collateral until the same shall be sold or otherwise disposed of and Secured Party shall have the right to store and conduct
a sale of the same in any of Grantor’s premises without cost to Secured Party. At Secured Party’s request, Grantor
will, at Grantor’s sole expense, assemble the Collateral and make it available to Secured Party at a place or places to
be designated by Secured Party which is reasonably convenient to Secured Party and Grantor.

 

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4.2
Sale of Collateral. Secured Party may sell any or all of the Collateral at public or private sale, upon such terms and
conditions as Secured Party may deem proper, and Secured Party may purchase any or all of the Collateral at any such sale. Grantor
acknowledges that Secured Party may be unable to effect a public sale of all or any portion of the Collateral because of certain
legal and/or practical restrictions and provisions which may be applicable to the Collateral and, therefore, may be compelled
to resort to one or more private sales to a restricted group of offerees and purchasers. Grantor consents to any such private
sale so made even though at places and upon terms less favorable than if the Collateral were sold at public sale. Secured Party
shall have no obligation to clean-up or otherwise prepare the Collateral for sale. Secured Party may apply the net proceeds, after
deducting all costs, expenses, attorneys’ and paralegals’ fees incurred or paid at any time in the collection, protection
and sale of the Collateral and the Obligations, to the payment of the Obligations, returning the excess proceeds, if any, to Grantor.
Grantor shall remain liable for any amount remaining unpaid after such application, with interest at the Default Rate. Any notification
of intended disposition of the Collateral required by law shall be conclusively deemed reasonably and properly given if given
by Secured Party at least ten (10) calendar days before the date of such disposition. Grantor hereby confirms, approves and ratifies
all acts and deeds of Secured Party relating to the foregoing, and each part thereof, and expressly waives any and all claims
of any nature, kind or description which it has or may hereafter have against Secured Party or its representatives, by reason
of taking, selling or collecting any portion of the Collateral other than in the event of any intentional misconduct or gross
negligence. Grantor consents to releases of the Collateral at any time (including prior to default) and to sales of the Collateral
in groups, parcels or portions, or as an entirety, as Secured Party shall deem appropriate. Grantor expressly absolves Secured
Party from any loss or decline in market value of any Collateral by reason of delay in the enforcement or assertion or non-enforcement
of any rights or remedies under this Security Agreement.

 

4.3
Standards for Exercising Remedies. To the extent that applicable law imposes duties on Secured Party to exercise
remedies in a commercially reasonable manner, Grantor acknowledges and agrees that it is not commercially unreasonable for Secured
Party (a) to incur expenses deemed necessary by Secured Party to prepare Collateral for disposition or otherwise to complete raw
material or work-in-process into finished goods or other finished products for disposition, (b) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental
or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise
collection remedies against Account Grantors or other Persons obligated on Collateral or to remove liens or encumbrances on or
any adverse claims against Collateral, (d) to exercise collection remedies against Account Grantors and other Persons obligated
on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions
of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature,
(f) to contact other Persons, whether or not in the same business as Grantor, for expressions of interest in acquiring all or
any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether
or not the collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers
and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties,
including any warranties of title, (k) to purchase insurance or credit enhancements to insure Secured Party against risks of loss,
collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection or disposition
of Collateral, or (l) to the extent deemed appropriate by Secured Party, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral. Grantor
acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by Secured
Party would not be commercially unreasonable in Secured Party’s exercise of remedies against the Collateral and that other
actions or omissions by Secured Party shall not be deemed commercially unreasonable solely on account of not being indicated in
this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights
to Grantor or to impose any duties on Secured Party that would not have been granted or imposed by this Security Agreement or
by applicable law in the absence of this Section.

 

    	9 

    	 

    

 

4.4
UCC and Offset Rights. Secured Party may exercise, from time to time, any and all rights and remedies available to it under
the UCC or under any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this
Security Agreement or in any other agreements between any Obligor and Secured Party, and may, without demand or notice of any
kind, appropriate and apply toward the payment of such of the Obligations, whether matured or unmatured, including costs of collection
and attorneys’ and paralegals’ fees and costs, and in such order of application as Secured Party may, from time to
time, elect, any indebtedness of Secured Party to any Obligor, however created or arising, including balances, credits, deposits,
accounts or moneys of such Obligor in the possession, control or custody of, or in transit to Secured Party. Grantor, on behalf
of itself and any Obligor, hereby waives the benefit of any law that would otherwise restrict or limit Secured Party in the exercise
of its right, which is hereby acknowledged, to appropriate at any time hereafter any such indebtedness owing from Secured Party
to any Obligor.

 

4.5
Additional Remedies. Upon the occurrence and during the continuation of an Event of Default, Secured Party shall have the
right and power to:

 

(a)
instruct Grantor, at its own expense, to notify any parties obligated on any of the Collateral, including any Account Grantors,
to make payment directly to Secured Party of any amounts due or to become due thereunder, or Secured Party may directly notify
such obligors of the security interest of Secured Party, and/or of the assignment to Secured Party of the Collateral and direct
such obligors to make payment to Secured Party of any amounts due or to become due with respect thereto, and thereafter, collect
any such amounts due on the Collateral directly from such Persons obligated thereon;

 

(b)
enforce collection of any of the Collateral, including any Accounts, by suit or otherwise, or make any compromise or settlement
with respect to any of the Collateral, or surrender, release or exchange all or any part thereof, or compromise, extend or renew
for any period (whether or not longer than the original period) any indebtedness thereunder;

 

    	10 

    	 

    

 

(c)
take possession or control of any proceeds and products of any of the Collateral, including the proceeds of insurance thereon;

 

(d)
extend, renew or modify for one or more periods (whether or not longer than the original period) the Obligations or any obligation
of any nature of any other obligor with respect to the Obligations;

 

(e)
grant releases, compromises or indulgences with respect to the Obligations, any extension or renewal of any of the Obligations,
any security therefor, or to any other obligor with respect to the Obligations;

 

(f)
transfer the whole or any part of Capital Securities which may constitute Collateral into the name of Secured Party or Secured
Party’s nominee without disclosing, if Secured Party so desires, that such Capital Securities so transferred are subject
to the security interest of Secured Party, and any corporation, association, or any of the managers or trustees of any trust issuing
any of such Capital Securities, or any transfer agent, shall not be bound to inquire, in the event that Secured Party or such
nominee makes any further transfer of such Capital Securities, or any portion thereof, as to whether Secured Party or such nominee
has the right to make such further transfer, and shall not be liable for transferring the same;

 

(g)
vote the Collateral;

 

(h)
make an election with respect to the Collateral under Section 1111 of the Bankruptcy Code or take action under Section 364 or
any other section of Bankruptcy Code; provided, however, that any such action of Secured Party as set forth herein
shall not, in any manner whatsoever, impair or affect the liability of Grantor hereunder, nor prejudice, waive, nor be construed
to impair, affect, prejudice or waive Secured Party’s rights and remedies at law, in equity or by statute, nor release,
discharge, nor be construed to release or discharge, Grantor, any guarantor or other Person liable to Secured Party for the Obligations;
and

 

(i)
at any time, and from time to time, accept additions to, releases, reductions, exchanges or substitution of the Collateral, without
in any way altering, impairing, diminishing or affecting the provisions of this Security Agreement, the Loan Documents, or any
of the other Obligations, or Secured Party’s rights hereunder, under the Obligations.

 

Grantor
hereby ratifies and confirms whatever Secured Party may do with respect to the Collateral and agrees that Secured Party shall
not be liable for any error of judgment or mistakes of fact or law with respect to actions taken in connection with the Collateral
other than as a result of intentional misconduct or gross negligence.

 

    	11 

    	 

    

 

4.6
Attorney-in-Fact. Grantor hereby irrevocably makes, constitutes and appoints Secured Party (and any officer of Secured
Party or any Person designated by Secured Party for that purpose) as Grantor’s true and lawful proxy and attorney-in-fact
(and agent-in-fact) in Grantor’s name, place and stead, with full power of substitution, to (i) take such actions as are
permitted in this Security Agreement, (ii) execute such financing statements and other documents and to do such other acts as
Secured Party may require to perfect and preserve Secured Party’s security interest in, and to enforce such interests in
the Collateral, and (iii) upon the occurrence of an Event of Default, carry out any remedy provided for in this Security Agreement,
including endorsing Grantor’s name to checks, drafts, instruments and other items of payment, and proceeds of the Collateral,
executing change of address forms with the postmaster of the United States Post Office serving the address of Grantor, changing
the address of Grantor to that of Secured Party, opening all envelopes addressed to Grantor and applying any payments contained
therein to the Obligations. Grantor hereby acknowledges that the constitution and appointment of such proxy and attorney-in-fact
are coupled with an interest and are irrevocable. Grantor hereby ratifies and confirms all that such attorney-in-fact may do or
cause to be done by virtue of any provision of this Security Agreement.

 

4.7
No Marshaling. Secured Party shall not be required to marshal any present or future collateral security (including this
Security Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to
such collateral security or other assurances of payment in any particular order. To the extent that it lawfully may, Grantor hereby
agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement
of Secured Party’s rights under this Security Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof
is otherwise assured, and, to the extent that it lawfully may, Grantor hereby irrevocably waives the benefits of all such laws.

 

4.8
No Waiver. No Event of Default shall be waived by Secured Party except in writing. No failure or delay on the part of Secured
Party in exercising any right, power or remedy hereunder shall operate as a waiver of the exercise of the same or any other right
at any other time; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy hereunder. There shall be no obligation on the part of Secured Party
to exercise any remedy available to Secured Party in any order. The remedies provided for herein are cumulative and not exclusive
of any remedies provided at law or in equity. Grantor agrees that in the event that Grantor fails to perform, observe or discharge
any of its Obligations or liabilities under this Security Agreement or any other agreements with Secured Party, no remedy of law
will provide adequate relief to Secured Party, and further agrees that Secured Party shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual damages.

 

4.9
 Application of Proceeds. Secured Party will within three (3) Business Days after receipt of cash or solvent credits from
collection of items of payment, proceeds of Collateral or any other source, apply the whole or any part thereof against the Obligations
secured hereby. Secured Party shall further have the exclusive right to determine how, when and what application of such payments
and such credits shall be made on the Obligations, and such determination shall be conclusive upon Grantor. Any proceeds of any
disposition by Secured Party of all or any part of the Collateral may be first applied by Secured Party to the payment of expenses
incurred by Secured Party in connection with the Collateral, including reasonable attorneys’ fees and legal expenses and
costs as provided for in Section 5.13 hereof.

 

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Section
5 MISCELLANEOUS.

 

5.1
Entire Agreement. This Security Agreement and the other Loan Documents (i) are valid, binding and enforceable against Grantor
and Secured Party in accordance with their respective provisions and no conditions exist as to their legal effectiveness; (ii)
constitute the entire agreement between the parties with respect to the subject matter hereof and thereof; and (iii) are the final
expression of the intentions of Grantor and Secured Party. No promises, either expressed or implied, exist between Grantor and
Secured Party, unless contained herein or therein. This Security Agreement, together with the other Loan Documents, supersedes
all negotiations, representations, warranties, commitments, term sheets, discussions, negotiations, offers or contracts (of any
kind or nature, whether oral or written) prior to or contemporaneous with the execution hereof with respect to any matter, directly
or indirectly related to the terms of this Security Agreement and the other Loan Documents. This Security Agreement and the other
Loan Documents are the result of negotiations between Secured Party and Grantor and have been reviewed (or have had the opportunity
to be reviewed) by counsel to all such parties, and are the products of all parties. Accordingly, this Security Agreement and
the other Loan Documents shall not be construed more strictly against Secured Party merely because of Secured Party’s involvement
in their preparation.

 

5.2
Notices. Except as otherwise provided herein, Grantor waives all notices and demands in connection with the enforcement
of Secured Party’s rights hereunder. All notices, requests, demands and other communications provided for hereunder shall
be made in accordance with the terms of the Credit Agreement.

 

5.3
Amendments; Waivers. No delay on the part of Secured Party in the exercise of any right, power or remedy shall operate
as a waiver thereof, nor shall any single or partial exercise by Secured Party of any right, power or remedy preclude other or
further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this Security Agreement or the other Loan Documents shall in any event be effective unless the
same shall be in writing and acknowledged by Secured Party, and then any such amendment, modification, waiver or consent shall
be effective only in the specific instance and for the specific purpose for which given.

 

5.4
WAIVER OF DEFENSES. GRANTOR WAIVES EVERY PRESENT AND FUTURE DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH GRANTOR
MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY SECURED PARTY IN ENFORCING THIS SECURITY AGREEMENT. PROVIDED SECURED PARTY
ACTS IN GOOD FAITH, GRANTOR RATIFIES AND CONFIRMS WHATEVER SECURED PARTY MAY DO PURSUANT TO THE TERMS OF THIS SECURITY AGREEMENT.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY GRANTING ANY FINANCIAL ACCOMMODATION TO GRANTOR.

 

5.5
MANDATORY FORUM SELECTION. Any dispute arising under, relating to, or in connection
with the Agreement or related to any matter which is the subject of or incidental to the Agreement (whether or not such claim
is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state and/or federal
courts located in Broward County, Florida. This provision is intended to be a “mandatory” forum selection clause and
governed by and interpreted consistent with Florida law.

 

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5.6
WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS UNDER THIS SECURITY AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL,
OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY COURSE OF CONDUCT
OR COURSE OF DEALING IN WHICH SECURED PARTY AND GRANTOR ARE ADVERSE PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY GRANTING ANY FINANCIAL
ACCOMMODATION TO GRANTOR.

 

5.7
Assignability. Secured Party, prior to the occurrence of an Event of Default and with the consent of Grantor, which consent
will not be unreasonably withheld, and after the occurrence and during the continuation of an Event of Default without consent
from or notice to anyone, may at any time assign Secured Party’s rights in this Security Agreement, the other Loan Documents,
the Obligations, or any part thereof and transfer Secured Party’s rights in any or all of the Collateral, and Secured Party
thereafter shall be relieved from all liability with respect to such Collateral. This Security Agreement shall be binding upon
Secured Party and Grantor and its respective legal representatives and successors. All references herein to Grantor shall be deemed
to include any successors, whether immediate or remote. In the case of a joint venture or partnership, the term “Grantor”
shall be deemed to include all joint venturers or partners thereof, who shall be jointly and severally liable hereunder.

 

5.8
Binding Effect. This Security Agreement shall become effective upon execution by Grantor and Secured Party.

 

5.9
Governing Law. Except in the case of the Mandatory Forum Selection clause set forth in Section 5.5 hereof, this
Security Agreement shall be delivered and accepted in and shall be deemed to be a contract made under and governed by the internal
laws of the State of Nevada, without regard to conflict of laws principles.

 

5.10
Enforceability. Wherever possible, each provision of this Security Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Security Agreement shall be prohibited by, unenforceable
or invalid under any jurisdiction, such provision shall as to such jurisdiction, be severable and be ineffective to the extent
of such prohibition or invalidity, without invalidating the remaining provisions of this Security Agreement or affecting the validity
or enforceability of such provision in any other jurisdiction.

 

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5.11
Time of Essence. Time is of the essence in making payments of all amounts due Secured Party under the Loan Documents and
in the performance and observance by Grantor of each covenant, agreement, provision and term of this Security Agreement and the
other Loan Documents.

 

5.12
Counterparts; Facsimile Signatures. This Security Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Security Agreement. Receipt of an executed signature page to this Security Agreement
by facsimile or other electronic transmission shall constitute effective delivery thereof. Electronic records of executed Loan
Documents maintained by Secured Party shall be deemed to be originals thereof.

 

5.13
Costs, Fees and Expenses. Grantor shall pay or reimburse Secured Party for all reasonable costs, fees and expenses incurred
by Secured Party or for which Secured Party becomes obligated in connection with the enforcement of this Security Agreement, including
search fees, costs and expenses and attorneys’ fees, costs and time charges of counsel to Secured Party and all taxes payable
in connection with this Security Agreement. In furtherance of the foregoing, Grantor shall pay any and all stamp and other taxes,
UCC search fees, filing fees and other costs and expenses in connection with the execution and delivery of this Security Agreement
and the other Loan Documents to be delivered hereunder, and agrees to save and hold Secured Party harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or omission to pay such costs and expenses. That portion
of the Obligations consisting of costs, expenses or advances to be reimbursed by Grantor to Secured Party pursuant to this Security
Agreement or the other Loan Documents which are not paid on or prior to the date hereof shall be payable by Grantor to Secured
Party on demand. If at any time or times hereafter Secured Party: (a) employs counsel for advice or other representation (i) with
respect to this Security Agreement or the other Loan Documents, (ii) to represent Secured Party in any litigation, contest, dispute,
suit or proceeding or to commence, defend, or intervene or to take any other action in or with respect to any litigation, contest,
dispute, suit, or proceeding (whether instituted by Secured Party, Grantor, or any other Person) in any way or respect relating
to this Security Agreement, or (iii) to enforce any rights of Secured Party against Grantor or any other Person under of this
Security Agreement; (b) takes any action to protect, collect, sell, liquidate, or otherwise dispose of any of the Collateral;
and/or (c) attempts to or enforces any of Secured Party’s rights or remedies under this Security Agreement, the costs and
expenses incurred by Secured Party in any manner or way with respect to the foregoing, shall be part of the Obligations, payable
by Grantor to Secured Party on demand.

 

5.14
Termination. This Security Agreement and the Liens and security interests granted hereunder shall not terminate until the
termination of the Credit Agreement and the commitments to make Loans thereunder and the full and complete performance and satisfaction
and payment in full of all the Obligations (other than contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted). Upon termination of this Security Agreement, Secured Party shall also deliver to Grantor (at the sole
expense of Grantor) such UCC termination statements and such other documentation, without recourse, warranty or representation
whatsoever, as shall be reasonably requested by Grantor to effect the termination and release of the Liens and security interests
in favor of Secured Party affecting the Collateral.

 

    	15 

    	 

    

  

5.15
Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition
be filed by or against Grantor for liquidation or reorganization, should Grantor become insolvent or make an assignment for the
benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of Grantor’s
assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored
or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,”
or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof,
is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

 

[-Remainder
of Page Deliberately Left Blank-]

 

    	16 

    	 

    

 

IN
WITNESS WHEREOF, Grantor and Secured Party have executed this Security Agreement as of the date first above written.

 

	 	GRANTOR:
	 	 
	 	BITZIO,
    INC.
	 	 
	 	By:	/s/
    Marilu Brassington
	 	Name:	Marilu
    Brassington
	 	Title:	Chief
    Financial Officer

 

	STATE
    OF 	 	 	 	)
	 	 	 	 	)
    SS.
	COUNTY
    OF 	 	 	 	)

 

The
undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Marilu Brassington, Chief
Financial Officer of Bitzio, Inc., a Nevada corporation, who is personally known to me to be the same person whose name is subscribed
to the foregoing, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument
as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein
set forth.

 

GIVEN
under my hand and notarial seal this _____ day of ________________, 20____.

 

	 	 
	 	Notary
    Public
	 	 
	 	My
    Commission Expires:
	 	 

 

[signature
page to Security Agreement (parent)]

 

    	 

    	 

    

 

	 	SECURED
    PARTY:
	 	 
	 	TCA
    GLOBAL CREDIT MASTER FUND, LP
	 	 	 	 
	 	 	By:	TCA
    Global Credit Fund GP, Ltd.
	 	 	Its:	General
    Partner
	 	 	 	 
	 	 	By:	/s/
    Robert Press
	 	 	Name:	Robert
    Press
	 	 	Title:	Director

 

[signature
page to Security Agreement (parent)]

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