Document:

Exhibit 10.04

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT,
dated as of May 27, 2016 (this “Agreement”), is among Discovery Energy Corp., a Nevada corporation (the “Company”),
all of the Subsidiaries of Company (such subsidiaries, the “Guarantors” and together with Company, the “Debtors”)
and Agent (as defined in Section 18 below), for the benefit of the holders of Company’s Senior Secured Convertible Debentures
due May 27, 2021 following their issuance, in the original aggregate principal amount of $3,500,000 (as increased from time to
time pursuant to the terms of the Transaction Documents) (collectively, as amended and in effect from time to time, the “Debentures”),
their endorsees, transferees and assigns (collectively, the “Secured Parties”).

 

WITNESSETH:

 

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

 

WHEREAS, in order
to induce Secured Parties to extend the loans evidenced by the Debentures, each Debtor has agreed to execute and deliver to Agent
this Agreement and grant Agent, for the benefit of Secured Parties, a security interest in certain property of such Debtor to
secure the prompt payment, performance and discharge in full of all of Company’s obligations under the Debentures.

 

NOW, THEREFORE, in
consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1.          Certain
Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used
but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”,
“fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”,
“investment property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the UCC. Terms used by not otherwise defined in this Agreement
shall have the meanings set forth in the Purchase Agreement.

 

a.           “Australian
Pledge Agreement” means the Specific Security Agreement (Shares) made by Company in favor of Agent with respect to Company’s
ownership interests in the Australian Subsidiary, dated as of the date hereof and as amended and in effect from time to time.

 

b.           “Australian
Security Agreement” means the General Security Agreement made by the Australian Subsidiary in favor of Agent, dated
as of the date hereof and as amended and in effect from time to time.

 

c.           “Australian
Subsidiary” means Discovery Energy SA Pty Ltd, a company formed under the laws of Australia.

 

d.           “Collateral”
means the collateral in which Agent, for the benefit of Secured Parties, are granted a security interest by this Agreement and
which shall include the following personal property of Debtors, whether presently owned or existing or hereafter acquired or coming
into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and
all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral
and of insurance covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities,
equity interest or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of,
or in exchange for, any or all of the Pledged Securities (as defined below), but which shall expressly exclude the Petroleum Exploration
License (as defined in the Purchase Agreement).

 

     

     

    

 

i.            All
goods, including, without limitation, (A) all machinery, equipment, computers, appliances, furniture, special and general tools,
fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all
documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts
therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with any Debtor’s
businesses and all improvements thereto; and (B) all inventory;

 

ii.           All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests,
stock or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses,
distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed
by any Debtor), computer software development rights, leases, franchises, customer lists, quality control procedures, grants and
rights, goodwill, trademarks, service marks, trade styles, trade names, patents, patent applications, copyrights, and income tax
refunds;

 

iii.          All
accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising,
goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties
with respect to each account, including any right of stoppage in transit;

 

iv.          All
documents, letter-of-credit rights, instruments and chattel paper;

 

v.           All
commercial tort claims;

 

vi.          All
deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

vii.         All
investment property;

 

viii.        All
supporting obligations;

 

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

 

x.            All
Intellectual Property; and

 

xi.           The
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(x) above.

 

Without limiting the
generality of the foregoing, the “Collateral” shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock
and the other equity interests listed in the Borrowing Certificate (defined below and as the same may be modified from time to
time pursuant to the terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or
indirect subsidiary of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or
equity interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter
be received, receivable or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in
connection with the Pledged Securities, including, but not limited to, all dividends, interest and cash. Notwithstanding the foregoing,
nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by
operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that
such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided,
however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such
asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of
such asset.

 

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e.           “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyright
rights throughout the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in
and to all original works of authorship fixed in any tangible medium of expression, acquired or used by Debtor, whether registered
or unregistered and whether published or unpublished, all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency
of the United States, any other union of countries, country or any political subdivision thereof), (ii) domestic and foreign letters
patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how, formulae, rights of publicity and other general intangibles of like
nature, now existing or hereafter acquired, all applications, registrations and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States Patent and Trademark Office, or in any similar office or agency
of the United States or union of countries, any other country or any political subdivision thereof), and all reissues, divisions,
continuations, continuations in part and extensions or renewals thereof, (iii) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business
identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, (including, without limitation, applications, registrations and recordings
in the United States Patent and Trademark Office, or in any similar office or agency of the United States or union of countries,
any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof, and all common law rights related thereto, together with all goodwill of the business symbolized
by such marks and all customer lists, formulae and other records of Debtor relating to the distribution of products and services
in connection with which any of such marks are used (iv) all trade secrets arising under the laws of the United States, any other
union of countries, country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions
of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

 

f.            “Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and
such other instruments or documents as Agent (as that term is defined below) may reasonably request.

 

g.           “Obligations”
means: (i) principal of, and interest on the Debentures and the loans extended pursuant thereto; (ii) any and all other fees,
indemnities, costs, obligations and liabilities (primary, secondary, direct, contingent, sole, joint or several, due or to become
due, or that are now or may be hereafter contracted or acquired, or owing) of Debtors from time to time under or in connection
with this Agreement, the Debentures, the Australian Security Agreement, the Australian Guarantee, the Australian Pledge Agreement
and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii)
all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the
fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving any Debtor, in each case whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred.

 

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h.           “Organizational
Documents” means with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate
of incorporation, certificate of limited partnership or articles of association, and including, without limitation, any certificates
of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor
(such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

 

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

 

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

 

k.          “Required
Parties” means, at any time of determination, 60% in interest (based on then-outstanding principal amounts of Debentures
at the time of such determination) of Secured Parties.

 

l.            “UCC”
means the Uniform Commercial Code of the State of New York and or any other applicable law of any state or states which has jurisdiction
with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that
defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed
in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions,
they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones
shall be controlling.

 

2.          Grant
of Security Interest in Collateral. As an inducement for Secured Parties to extend the loans as evidenced by the Debentures
and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations,
each Debtor hereby unconditionally and irrevocably grants to Agent, for the benefit of Secured Parties, a security interest in
and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature
in and to, the Collateral (a “Security Interest” and, collectively, the “Security Interests”).

 

3.          Delivery
of Certain Collateral. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to
be delivered to Agent (a) any and all certificates and other instruments representing or evidencing the Pledged Securities, and
(b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together
with all Necessary Endorsements. Debtors are, contemporaneously with the execution hereof, delivering to Agent, or have previously
delivered to Agent, a true and correct copy of each Organizational Document governing any of the Pledged Securities.

 

4.          Representations,
Warranties, Covenants and Agreements of Debtors. Except as set forth in the borrowing certificate delivered to Secured Parties
concurrently herewith (the “Borrowing Certificate”), which Borrowing Certificate shall be deemed a part hereof, each
Debtor represents and warrants to, and covenants and agrees with, Secured Parties as follows:

 

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

 

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b.           Debtors
have no place of business or offices where their respective books of account and records are kept (other than temporarily at the
offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth in the Borrowing
Certificate. Except as specifically set forth in the Borrowing Certificate, each Debtor is the record owner of the real property
where such Collateral is located, and there exist no mortgages or other liens on any such real property except for Permitted Liens
(as defined in the Debentures). Except as disclosed in the Borrowing Certificate, none of such Collateral is in the possession
of any consignee, bailee, warehouseman, agent or processor.

 

c.           Except
for Permitted Liens (as defined in the Debentures) and except as set forth in the Borrowing Certificate, Debtors are the sole
owner of the Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and
clear of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interests.
Except as set forth in the Borrowing Certificate, there is not on file in any governmental or regulatory authority, agency or
recording office an effective financing statement, security agreement, fixed or floating pledge, license or transfer or any notice
of any of the foregoing (other than those that will be filed in favor of Agent, for the benefit of Secured Parties, pursuant to
this Agreement) covering or affecting any of the Collateral. Except as set forth in the Borrowing Certificate and except pursuant
to this Agreement, as long as this Agreement shall be in effect, Debtors shall not execute and shall not knowingly permit to be
on file in any such office or agency any other financing statement or other document or instrument (except to the extent filed
or recorded in favor of Agent, for the benefit of Secured Parties, pursuant to the terms of this Agreement, the Australian Pledge
Agreement or the Australian Security Agreement or with respect to a Permitted Lien).

 

d.           Other
than as set forth in the Borrowing Certificate, no written claim has been received that any Collateral or any Debtor's use of
any Collateral violates the rights of any third party. There has been no adverse decision to any Debtor's claim of ownership rights
in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor's right to keep and maintain such Collateral
in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened
in writing before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.

 

e.           Each
Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business
and its Collateral at the locations set forth in the Borrowing Certificate and may not relocate such books of account and records
or tangible Collateral (other than in the ordinary course of business) unless it delivers to Secured Parties at least 30 days
prior to such relocation (i) written notice of such relocation and the new location thereof (which, in the case of Company, must
be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents
have been filed and recorded and other steps have been taken to perfect the Security Interests to create in favor of Agent, for
the benefit of Secured Parties, a valid, perfected and continuing perfected first priority lien (or valid, perfected and continuing
perfected first priority floating pledge or fixed pledge, as the case may be, pursuant to the Australian Pledge Agreement and
Australian Security Agreement) in the Collateral.

 

    	 	- 5 -	 

     

    

 

f.            This
Agreement creates in favor of Agent, for the benefit of Secured Parties, a valid security interest in the Collateral, subject
only to Permitted Liens (as defined in the Debentures), that secures the payment and performance of the Obligations. Upon making
the filings described in the immediately following paragraph, all security interests created hereunder in any Collateral which
may be perfected by filing Uniform Commercial Code financing statements shall have been duly perfected. Except for the filing
of the Uniform Commercial Code financing statements referred to in the immediately following paragraph, the recordation of the
Intellectual Property Security Agreement (as defined in Section 4(p) hereof) with respect to copyrights and copyright applications
in the United States Copyright Office, the execution and delivery of deposit account control agreements satisfying the requirements
of Section 9-104(a)(2) of the UCC with respect to each deposit account of Debtors, and the delivery of the certificates and other
instruments provided in Section 3, no action is necessary to create, perfect or protect the security interests created hereunder.
Except for the filing of said financing statements and the consent previously obtained by Agent, for the benefit of Secured Parties,
the recordation of said Intellectual Property Security Agreement, the execution and delivery of said deposit account control agreements,
and the execution and delivery of the Australian Pledge Agreement and Australian Security Agreement and the making of filings
required or contemplated thereunder, no consent of any third parties and no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is required for (i) the execution, delivery and performance
of this Agreement, (ii) the creation of the Security Interests created hereunder in the Collateral or (iii) the enforcement of
the rights of Agent.

 

g.           Each
Debtor hereby authorizes Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it. Each Debtor agrees that each such financing
statement may (a) indicate the Collateral (i) as all assets of such Debtor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) provide any other information required by part 5 of Article 9 of the UCC for the sufficiency
or filing office acceptance of any financing statement or amendment.

 

h.           The
capital stock and other equity interests listed in the Borrowing Certificate (the “Pledged Securities”) represent
all of the capital stock and other equity interests of the Guarantors, and represent all capital stock and other equity interests
owned, directly or indirectly, by Company. All of the Pledged Securities are validly issued, fully paid and nonassessable, and
Company is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other encumbrance
except for the security interests created by this Agreement and the Australian Pledge Agreement.

 

i.            Except
as set forth in the Borrowing Certificate, the ownership and other equity interests in partnerships and limited liability companies
(if any) included in the Collateral (the “Pledged Interests”) by their express terms do not provide that they
are securities governed by Article 8 of the UCC and are not held in a securities account or by any financial intermediary

 

j.            Except
for Permitted Liens (as defined in the Debentures), each Debtor shall at all times maintain the liens and Security Interests provided
for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of Agent, for the
benefit of Secured Parties, until this Agreement, the Australian Pledge Agreement, the Australian Security Agreement and the Security
Interest hereunder and thereunder shall be terminated pursuant to Section 14 hereof. Each Debtor hereby agrees to defend the Security
Interests provided for hereunder against the claims of any and all persons and entities. Each Debtor shall safeguard and protect
all Collateral for the account of Agent, for the benefit of Secured Parties. Without limiting the generality of the foregoing,
each Debtor shall pay all reasonable fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests
hereunder, and each Debtor shall obtain and furnish to Agent from time to time, upon demand, such releases and/or subordinations
of claims and liens which may be reasonably required to maintain the priority of the Security Interests hereunder.

 

    	 	- 6 -	 

     

    

 

k.          Except
with respect to Permitted Liens, no Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of
any of the Collateral (except for non-exclusive licenses granted by a Debtor in its ordinary course of business and sales of inventory
and disposal of obsolete or worn out equipment by a Debtor in its ordinary course of business) without the prior written consent
of the Required Parties.

 

l.            Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition (except to the extent
such equipment becomes worn out or obsolete), repair and order and shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance coverage.

 

m.           Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances
by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof. Beginning no later than 30 days after the date hereof, each Debtor shall use best efforts to
cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy to certify to Agent,
that (a) Agent, for the benefit of Secured Parties, will be named as lender loss payee and additional insured under each such
insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer
will promptly notify Agent and such cancellation or change shall not be effective as to Agent for at least thirty (30) days after
receipt by Agent of such notice, unless the effect of such change is to extend or increase coverage under the policy; and (c)
Agent will have the right (but no obligation) at its election to remedy any default in the payment of premiums within thirty (30)
days of notice from the insurer of such default. If no Event of Default (as defined in the Debentures) has occurred and is continuing
and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each instance
will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred
to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall
be payable to the applicable Debtor; provided, however, that payments received by any Debtor after an Event of Default
occurs and is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall be paid to Agent on
behalf of Secured Parties and, if received by such Debtor, shall be held in trust for Secured Parties and immediately paid over
to Agent unless otherwise directed in writing by Agent. Copies of such policies or the related certificates, in each case, naming
Agent as lender loss payee and additional insured shall be delivered to Agent at least annually and at the time any new policy
of insurance is issued.

 

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

 

o.           Each
Debtor shall promptly execute and deliver to Agent such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take such further action as Agent may from time to
time request and may in its sole discretion deem necessary to perfect, protect or enforce and exercise rights and remedies with
respect to Agent’s security interest (for the benefit of Secured Parties) in the Collateral, including, without limitation,
if applicable, the execution and delivery of a separate security agreement with respect to each Debtor’s Intellectual Property
(“Intellectual Property Security Agreement”) in which Agent, for the benefit of Secured Parties, has been granted
a security interest hereunder, substantially in a form reasonably acceptable to Agent, which Intellectual Property Security Agreement,
other than as stated therein, shall be subject to all of the terms and conditions hereof.

 

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p.           Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

 

q.           Each
Debtor shall promptly notify Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other information received by such Debtor that may materially
affect the value of the Collateral, the Security Interest or the rights and remedies of Agent and Secured Parties hereunder.

 

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

 

s.           Each
Debtor shall at all times preserve and keep in full force and effect its valid existence and good standing and any rights and
franchises material to its business, except to the extent a failure to preserve would not reasonably be expected to have a material
adverse effect on such Debtor.

 

t.            No
Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has
one), unless it provides at least 30 days prior written notice to Secured Parties of such change and, at the time of such written
notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue the perfection
of the Security Interests granted and evidenced by this Agreement.

 

u.           Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold,
sale or return, sale on approval, or other conditional terms of sale without the consent of Agent which shall not be unreasonably
withheld.

 

v.           No
Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof
to Agent and Secured Parties.

 

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

 

x.           At
any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require
or permit possession by Secured Party to perfect the security interest created hereby, the applicable Debtor shall deliver such
Collateral to Agent.

 

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

 

z.           Each
Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to Agent, or, if such delivery is not possible,
then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created by this
Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the underlying
chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).

 

    	 	- 8 -	 

     

    

 

aa.         Within
30 days after issuance of any Debenture, including, without limitation, the Debentures issued on the date hereof, Company and
each Debtor shall cause each bank and other financial institution with an account referred to in the Borrowing Certificate to
execute and deliver to Agent a control agreement, in form and substance reasonably satisfactory to Agent, duly executed by Company
or such Guarantor and such bank or financial institution, or enter into other arrangements in form and substance reasonably satisfactory
to Agent, for the benefit of Secured Parties, pursuant to which such institution shall irrevocably agree, inter alia, that (i)
it will comply at any time with the instructions originated by Agent to such bank or financial institution directing the disposition
of cash, commodity contracts, securities, investment property and other items from time to time credited to such account, without
further consent of Debtor, which instructions Agent will not give to such bank or other financial institution in the absence of
a continuing Event of Default, and (ii) all cash, commodity contracts, securities, investment property and other items of Company
or such Guarantor deposited with such institution shall be subject to a perfected, first priority security interest in favor of
Agent, for the benefit of Secured Parties. Without the prior written consent of Agent, no Debtor shall make or maintain any deposit
account, commodity account or securities account except for the accounts set forth the Borrowing Certificate.

 

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

 

cc.         To
the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with Agent in notifying
such third party of Agent’s security interest (for the benefit of Secured Parties) in such Collateral and shall use its
reasonable best efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral, in form
and substance reasonably satisfactory to Agent.

 

dd.         If
any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify Secured Parties in a writing
signed by such Debtor of the particulars thereof and grant to Agent, for the benefit of Secured Parties, in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to Agent.

 

ee.          Each
Debtor shall promptly provide written notice to Secured Parties of any and all accounts which arise out of contracts with any
governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such
accounts and proceeds thereof, shall execute and deliver to Agent an assignment of claims for such accounts and cooperate with
Agent in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar federal,
state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds
thereof.

 

ff.           Each
Debtor shall cause each subsidiary of such Debtor within 15 days of its formation or acquisition by such Debtor to become a party
hereto (an “Additional Debtor”), by executing and delivering an Additional Debtor Joinder in substantially
the form of Annex A attached hereto and comply with the provisions hereof applicable to Debtors. Concurrent therewith,
the Additional Debtor shall deliver replacement schedules for, or supplements to all other Schedules to (or referred to in) this
Agreement, as applicable, which replacement schedules shall supersede, or supplements shall modify, the Schedules then in effect.
The Additional Debtor shall also deliver authorizing resolutions, good standing certificates, incumbency certificates, organizational
documents, and other information and documentation as Agent may reasonably request. Upon delivery of the foregoing to Agent, the
Additional Debtor shall be and become a party to this Agreement with the same rights and obligations as Debtors, for all purposes
hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations,
warranties and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all
references herein to the “Debtors” shall be deemed to include each Additional Debtor.

 

    	 	- 9 -	 

     

    

 

gg.         Each
Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Debentures.

 

hh.         Each
Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each
issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of Agent, for the benefit
of Secured Parties, on the books of such issuer. Further, except with respect to certificated securities delivered to Agent, the
applicable Debtor shall upon request of Agent deliver to Agent an acknowledgement of pledge (which, where appropriate, shall comply
with the requirements of the relevant UCC or with the requirements of Australian and other foreign laws with respect to perfection
by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement shall confirm that: (a) it has
registered the pledge on its books and records; and (b) at any time directed by Agent during the continuation of an Event of Default,
such issuer will transfer the record ownership of such Pledged Securities into the name of any designee of Agent, will take such
steps as may be necessary to effect the transfer, and will comply with all other instructions of Agent regarding such Pledged
Securities without the further consent of the applicable Debtor.

 

ii.           In
the event that, upon an occurrence and during the continuance of an Event of Default, Agent shall sell all or any of the Pledged
Securities to another party or parties (herein called the “Transferee”) or shall purchase or retain all or
any of the Pledged Securities, each Debtor shall, to the extent applicable: (i) deliver to Agent or the Transferee, as the case
may be, the articles association, certificate of incorporation, bylaws, minute books, stock certificate books, corporate seals,
deeds, leases, indentures, agreements, evidences of indebtedness, books of account, financial records and all other Organizational
Documents and records of Debtors and their direct and indirect subsidiaries; (ii) use its best efforts to obtain resignations
of the persons then serving as officers and directors of Debtors and their direct and indirect subsidiaries, if so requested;
and (iii) use its best efforts to obtain any approvals that are required by any governmental or regulatory body in order to permit
the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged Securities by Agent and allow
the Transferee or Agent to continue the business of Debtors and their direct and indirect subsidiaries.

 

jj.           Without
limiting the generality of the other obligations of Debtors hereunder, each Debtor shall promptly (i) cause to be registered at
the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with respect
to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office to
be duly recorded at the applicable office, and (iii) give Agent notice whenever it acquires (whether absolutely or by license)
or creates any additional material Intellectual Property.

 

    	 	- 10 -	 

     

    

 

kk.         The
Borrowing Certificate lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights,
and domain names owned by any of Debtors as of the date hereof. The Borrowing Certificate lists all material licenses in favor
of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof (each, a “License”).
All material patents and trademarks of Debtors have been duly recorded at the United States Patent and Trademark Office and all
material copyrights of Debtors have been duly recorded at the United States Copyright Office. Upon the occurrence and during the
continuance of any breach or default under any License by any party thereto other than the relevant Debtor, Debtor will, promptly
after obtaining knowledge thereof, give Agent written notice of the nature and duration thereof, specifying what action, if any,
it has taken and proposes to take with respect thereto and thereafter will take reasonable steps to protect and preserve its rights
and remedies in respect of such breach or default, or will obtain or acquire an appropriate substitute license. Each Debtor will,
at its expense, promptly deliver to Agent a copy of each notice or other communication received by it by which any other party
to any License purports to exercise any of its rights or affect any of its obligations thereunder, together with a copy of any
reply by Debtor thereto. Each Debtor will exercise promptly and diligently each and every right which it may have under each material
license (other than any right of termination) and will duly perform and observe in all respects all of its obligations under each
License and will take all action reasonably necessary to maintain such Licenses in full force and effect. No Debtor will, without
the prior written consent of Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any provision of, any
License which cancellation, termination, amendment, modification or waiver would materially adversely affect the value of the
License.

 

ll.           Except
as set forth in the Borrowing Certificate, none of the account debtors or other persons or entities obligated on any of the Collateral
is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local statute or
rule in respect of such Collateral.

 

mm.       Each
Debtor (either itself or through licensees) will, and will cause each licensee thereof to, take all action necessary to maintain
all of the Intellectual Property in full force and effect, including, without limitation, using the proper statutory notices and
markings and using the trademarks on each applicable trademark class of goods in order to so maintain the trademarks in full force
free, from any claim of abandonment for non-use, and each Debtor will not (nor permit any licensee thereof to) do any act or knowingly
omit to do any act whereby any Intellectual Property may become invalidated; provided, however, that so long as
no Event of Default has occurred and is continuing, each Debtor shall not have an obligation to use or to maintain any Intellectual
Property (A) that relates solely to any product or work, that has been, or is in the process of being, discontinued, abandoned
or terminated, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property that may
be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does not materially
adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property
is subject to the Security Interest created by this Agreement or (C) that is substantially the same as other Intellectual Property
that is in full force, so long the failure to use or maintain such Intellectual Property does not materially adversely affect
the validity of such replacement Intellectual Property and so long as such other Intellectual Property is subject to the Security
Interest created by this Agreement. Each Debtor will cause to be taken all necessary steps in any proceeding before the United
States Patent and Trademark Office and the United States Copyright Office or any similar office or agency in any other union of
countries, country or political subdivision thereof to maintain each registration of the Intellectual Property (other than the
Intellectual Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of
renewals, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment
of maintenance fees, filing fees, taxes or other governmental fees. If any Intellectual Property (other than Intellectual Property
described in the proviso to the first sentence of subsection (A) of this clause (mm)) is infringed, misappropriated, diluted or
otherwise violated in any material respect by a third party, each Debtor shall (x) upon learning of such infringement, misappropriation,
dilution or other violation, promptly notify Agent and (y) to the extent Debtor shall deem appropriate under the circumstances,
promptly sue for infringement, misappropriation, dilution or other violation, seek injunctive relief where appropriate and recover
any and all damages for such infringement, misappropriation, dilution or other violation, or take such other actions as Debtor
shall deem appropriate under the circumstances to protect such Intellectual Property. Each Debtor shall furnish to Agent from
time to time upon its request statements and schedules further identifying and describing the Intellectual Property and Licenses
and such other reports in connection with the Intellectual Property and Licenses as Agent may reasonably request, all in reasonable
detail and promptly upon request of Agent, following receipt by Agent of any such statements, schedules or reports, Debtor shall
modify this Agreement by amending the Borrowing Certificate, as the case may be, to include any Intellectual Property and License,
as the case may be, which becomes part of the Collateral under this Agreement and shall execute and authenticate such documents
and do such acts as shall be necessary or, in the judgment of Agent, desirable to subject such Intellectual Property and Licenses
to the Security Interest created by this Agreement. Notwithstanding anything herein to the contrary, upon the occurrence and during
the continuance of an Event of Default, no Debtor may abandon or otherwise permit any Intellectual Property to become invalid
without the prior written consent of Agent, and if any Intellectual Property is infringed, misappropriated, diluted or otherwise
violated in any material respect by a third party, each Debtor will take such action as Agent shall deem appropriate under the
circumstances to protect such Intellectual Property.

 

    	 	- 11 -	 

     

    

 

nn.         Each
Debtor shall, during normal business hours permit Agent and any Secured Party, or any agent or representatives thereof or such
professionals or other persons as Agent or such Secured Party may designate, not more than twice a year in the absence of an Event
of Default and at the expense of Agent or such Secured Party, (i) to examine and make copies of and abstracts from Debtor's records
and books of account, (ii) to visit and inspect its properties, (iii) to verify materials, leases, notes, accounts, inventory
and other assets of Debtor from time to time, (iii) to conduct audits, physical counts, appraisals and/or valuations, examinations
at the locations of Debtor. Debtor shall also permit Agent and any Secured Party, or any agent or representatives thereof or such
professionals or other persons as Agent or such Secured Party may designate to discuss Debtor's affairs, finances and accounts
with any of its directors, officers, managerial employees, independent accountants or any of its other representatives.

 

5.           Effect
of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership
interests (regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests
upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets
of the issuer), it is agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement
of any of Agent’s rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights
notwithstanding any provisions in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor
is party.

 

6.           Defaults.
The following events shall be “Events of Default”:

 

a.           The
occurrence and continuance of an Event of Default (as defined in the Debentures) under the Debentures; or

 

b.           If
any material provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or
enforceability thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor.

 

7.           Duty
To Hold In Trust.

 

a.           Upon
the occurrence and during the continuance of any Event of Default, each Debtor shall, upon receipt of any revenue, income, dividend,
interest or other sums subject to the Security Interests, whether payable pursuant to the Debentures or otherwise, or of any check,
draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for Secured
Parties and shall forthwith endorse and transfer any such sums or instruments, or both, to Secured Parties, pro-rata in proportion
to their respective then-currently outstanding principal amount of Debentures for application to the satisfaction of the Obligations
(and if any Debenture is not outstanding, pro-rata in proportion to the initial purchases of the remaining Debentures).

 

    	 	- 12 -	 

     

    

 

b.           If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation,
shares of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants,
rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of
its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in
exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as Agent of Secured Parties; (ii)
hold the same in trust on behalf of and for the benefit of Secured Parties; and (iii) to deliver any and all certificates or instruments
evidencing the same to Agent on or before the close of business on the fifth business day following the receipt thereof by such
Debtor, in the exact form received together with the Necessary Endorsements, to be held by Agent subject to the terms of this
Agreement as Collateral.

 

8.          Rights
and Remedies Upon Default.

 

a.           Upon
the occurrence and during the continuance of an Event of Default, Agent shall have the right to exercise all of the remedies conferred
hereunder and under the Debentures, and Agent, for the benefit of Secured Parties, shall have all the rights and remedies of a
secured party under the UCC. Without limitation, Agent, for the benefit of Secured Parties, shall have the following rights and
powers:

 

i.            Agent
shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person,
any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall assemble
the Collateral and make it available to Agent at places which Agent shall reasonably select, whether at such Debtor's premises
or elsewhere, and make available to Agent, without rent, all of such Debtor’s respective premises and facilities for the
purpose of Agent taking possession of, removing or putting the Collateral in saleable or disposable form.

 

ii.         Upon
notice to Debtors by Agent, all rights of each Debtor to exercise the voting and other consensual rights which it would otherwise
be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise be authorized
to receive and retain, shall cease. Upon such notice, Agent shall have the right to receive, for the benefit of Secured Parties,
any interest, cash dividends or other payments on the Collateral and, at the option of Agent, to exercise in such Agent’s
discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, Agent shall have the right
(but not the obligation) to exercise all rights with respect to the Collateral as if it were the sole and absolute owner thereof,
including, without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection
with a merger, reorganization, consolidation, recapitalization or other readjustment concerning or involving the Collateral or
any Debtor or any of its direct or indirect subsidiaries.

 

iii.         Agent
shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign, sell, lease
or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or
without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such
time or times and at such place or places, and upon such terms and conditions as Agent may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any Debtor
or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer
of Collateral, Agent, for the benefit of Secured Parties, may, unless prohibited by applicable law which cannot be waived, purchase
all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities
of any Debtor, which are hereby waived and released.

 

    	 	- 13 -	 

     

    

 

iv.         Agent
shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts to
make payments directly to Agent, on behalf of Secured Parties, and to enforce Debtors’ rights against such account debtors
and obligors.

 

v.           Agent,
for the benefit of Secured Parties, may (but is not obligated to) direct any financial intermediary or any other person or entity
holding any investment property to transfer the same to Agent, on behalf of Secured Parties, or its designee.

 

vi.         Agent
may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United States
Patent and Trademark Office and/or Copyright Office into the name of Agent, for the benefit of Secured Parties, or any designee
or any purchaser of any Collateral.

 

b.           Agent
shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral. Agent may sell the Collateral without giving
any warranties and may specifically disclaim such warranties. If Agent sells any of the Collateral on credit, Debtors will only
be credited with payments actually made by the purchaser. In addition, to the extent permitted under applicable law, each Debtor
waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of Agent’s rights
and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of
the Collateral and to exercise its rights and remedies with respect thereto.

 

c.           For
the purpose of enabling Agent to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement
or applicable law, each Debtor hereby grants to Agent, for the benefit of Agent and Secured Parties, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense upon the occurrence
and during the continuance of an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and
wherever the same may be located, and including in such license access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the compilation or printout thereof.

 

9.          Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on
account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by Agent in
enforcing its and Secured Parties’ rights hereunder and in connection with collecting, storing and disposing of the Collateral,
and then to satisfaction of the Obligations pro rata among Secured Parties (based on then-outstanding principal amounts of Debentures
at the time of any such determination), and to the payment of any other amounts required by applicable law, after which Secured
Parties shall pay to the applicable Debtor any surplus proceeds. To the extent permitted by applicable law, each Debtor waives
all claims, damages and demands against Secured Parties arising out of the repossession, removal, retention or sale of the Collateral,
unless due solely to the gross negligence or willful misconduct of Secured Parties as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.

 

    	 	- 14 -	 

     

    

 

10.         Securities
Law Provision. Each Debtor recognizes that Agent may be limited in its ability to effect a sale to the public of all or part
of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state
securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more sales
to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for
investment and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and
on terms less favorable than if the Pledged Securities were sold to the public, and that Agent has no obligation to delay the
sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the public under
the Securities Laws. Each Debtor shall cooperate with Agent in its attempt to satisfy any requirements under the Securities Laws
(including, without limitation, registration thereunder if requested by Agent) applicable to the sale of the Pledged Securities
by Agent.

 

11.         Costs
and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with
any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements,
partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by Agent. Debtors
shall also pay all other claims and charges which in the reasonable opinion of Agent is reasonably likely to prejudice, imperil
or otherwise affect the Collateral or the Security Interests therein. Subject to the terms of the Purchase Agreement (as such
term is defined in the Debentures), Debtors will also, upon demand, pay to Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and agents, which Agent, for the benefit of Secured
Parties, may incur in connection with the creation, perfection, protection, satisfaction, foreclosure, collection or enforcement
of the Security Interest and the preparation, administration, continuance, amendment or enforcement of this Agreement and pay
to Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts
and agents, which Agent, for the benefit of Secured Parties, and Secured Parties may incur in connection with (i) the enforcement
of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the
Collateral, or (iii) the exercise or enforcement of any of the rights of Secured Parties under the Debentures. Until so paid,
any fees payable hereunder shall be added to the principal amount of the Debentures.

 

12.         Responsibility
for Collateral. Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall
in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability
for any reason. Without limiting the generality of the foregoing, (a) neither Agent nor any Secured Party (i) has any duty (either
before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to
the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall
remain obligated and liable under each contract or agreement included in the Collateral to be observed or performed by such Debtor
thereunder. Neither Agent nor any Secured Party shall have any obligation or liability under any such contract or agreement by
reason of or arising out of this Agreement or the receipt by Agent or any Secured Party of any payment relating to any of the
Collateral, nor shall Agent or any Secured Party be obligated in any manner to perform any of the obligations of any Debtor under
or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by Agent
or any Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract
or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to Agent or to which Agent or any Secured Party may be entitled at any time or times.

 

    	 	- 15 -	 

     

    

 

13.         Security
Interests Absolute. All rights of Secured Parties and all obligations of Debtors hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement, the Debentures or any agreement entered into in
connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance
of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure
from the Debentures or any other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection
of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any
guarantee, or any other security, for all or any of the Obligations; (d) any action by Secured Parties to obtain, adjust, settle
and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any
other circumstance which might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all
or any part of the Security Interests granted hereby. Until the Obligations shall have been paid and performed in full, the rights
of Secured Parties shall continue to the fullest extent permitted by law even if the Obligations are barred for any reason, including,
without limitation, the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest,
notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any
Collateral or any payment received by Secured Parties hereunder shall be deemed by final order of a court of competent jurisdiction
to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall
be deemed to be otherwise due to any party other than Secured Parties, then, in any such event, each Debtor’s obligations
hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms
and provisions hereof. Each Debtor waives all right to require Secured Parties to proceed against any other person or entity or
to apply any Collateral which Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy. Each
Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

 

14.         Term
of Agreement. This Agreement and the Security Interests shall terminate with respect to each Debtor on the date on which all
payments under such Debtor’s Debentures have been paid in full other than contingent obligations against which no claim
has been asserted and all other Obligations (other than contingent obligations against which no claim has been asserted) have
been paid or discharged; provided, however, that all indemnities of Debtors contained in this Agreement (including, without limitation,
Annex B hereto) shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.

 

15.         Power
of Attorney; Further Assurances. Each Debtor authorizes Agent, and does hereby make, constitute and appoint Agent and its
officers, agents, successors or assigns with full power of substitution, as such Debtor’s true and lawful attorney-in-fact,
with power, in the name of Agent or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i)
endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect
of any policy of insurance) in respect of the Collateral that may come into possession of Agent; (ii) sign and endorse any financing
statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii)
pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against
the Collateral; (iv) demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v)
transfer any Intellectual Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option
of Agent, and at the expense of Debtors, at any time, or from time to time, execute and deliver any and all documents and instruments
and to do all acts and things which Agent deems necessary to protect, preserve and realize upon the Collateral and the Security
Interests granted therein in order to effect the intent of this Agreement and the Debentures all as fully and effectually as Debtors
might or could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long
as any of the Obligations shall be outstanding. The designation set forth herein shall be deemed to amend and supersede any inconsistent
provision in the Organizational Documents or other documents or agreements to which any Debtor is subject or to which any Debtor
is a party. Without limiting the generality of the foregoing, after the occurrence and during the continuance of an Event of Default,
Agent, for the benefit of each Secured Party, is specifically authorized to execute and file any applications for or instruments
of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United States Patent
and Trademark Office and the United States Copyright Office.

 

    	 	- 16 -	 

     

    

 

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

 

17.         Other
Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the
guarantee, endorsement or property of any other person, firm, corporation or other entity, then Agent shall have the right, in
its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any
way modifying or affecting any of Agent’s or Secured Parties’ rights and remedies hereunder.

 

18.         Appointment
of Agent. By its acceptance of its Debenture, each Secured Party appoints DEC Funding LLC to act as their agent (“DEC
Funding” or, in the capacity as agent, together with its successors and/or assigns, “Agent”) for
purposes of exercising any and all rights and remedies of Secured Parties hereunder. Such appointment shall continue until revoked
in writing by the Required Parties, at which time the Required Parties shall appoint a new Agent, provided that DEC Funding may
not be removed as Agent unless DEC Funding shall then hold less than $1,000,000 in principal amount of Debentures; provided,
further, that such removal may occur only if each of the other Secured Parties shall then hold not less than an aggregate
of $1,000,000 in principal amount of Debentures. Agent shall have the rights, responsibilities and immunities set forth in Annex
B hereto.

 

19.         Miscellaneous.

 

a.           No
course of dealing between Debtors and Agent or Secured Parties, nor any failure to exercise, nor any delay in exercising, on the
part of Agent or Secured Parties, any right, power or privilege hereunder or under the Debentures shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

b.           All
of the rights and remedies of Agent or Secured Parties with respect to the Collateral, whether established hereby or by the Debentures
or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

 

c.           This
Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by Debtors,
Agent and Secured Parties holding 60% or more of the principal amount of Debentures then outstanding, or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought. In the event of any contradiction between this Security
Agreement and the Australian Security Agreement, the provisions of this Security Agreement will prevail.

 

    	 	- 17 -	 

     

    

 

d.           If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

e.           No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

f.            This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Company and
the Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each
Secured Party (other than by merger). Any Secured Party may assign any or all of its rights under this Agreement to any Person
(as defined in the Purchase Agreement) to whom such Secured Party assigns or transfers any Obligations in accordance with the
Debenture, provided such transferee agrees in writing to be bound, with respect to the transferred Obligations, by the provisions
of this Agreement that apply to the “Secured Parties.”

 

g.           Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.

 

h.           Except
to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Except to the extent
mandatorily governed by the jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings concerning
the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the Debentures (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York, County of New York (the “New
York Courts”). Except to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located,
each Debtor hereby irrevocably submits to the exclusive jurisdiction of such New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives,
and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process
being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby.

 

    	 	- 18 -	 

     

    

 

i.            This
Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile
or other electronic transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such facsimile or other electronic signature were the
original thereof.

 

j.            All
Debtors shall jointly and severally be liable for the Obligations of each Debtor to Secured Parties hereunder.

 

k.           Each
Debtor shall indemnify, reimburse and hold harmless Agent and Secured Parties and their respective partners, members, shareholders,
officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively,
“Indemnitees”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses,
of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred
by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from this Agreement or the Collateral,
except any such losses, claims, liabilities, damages, penalties, suits, costs and expenses which result from the breach of contract
in bad faith, gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court
of competent jurisdiction. This indemnification provision is in addition to, and not in limitation of, any other indemnification
provision in the Debentures, the Purchase Agreement (as such term is defined in the Debentures) or any other agreement, instrument
or other document executed or delivered in connection herewith or therewith.

 

[SIGNATURE PAGES FOLLOW]

 

    	 	- 19 -	 

     

    

 

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

 

	 	DISCOVERY ENERGY CORP.
	 	 	 
	 	By:	 /s/ Keith D. Spickelmier
	 	 	Keith D. Spickelmier, Chairman
	 	 	 
	 	DEC FUNDING LLC, as Agent
	 	 	 
	 	By:	 /s/ Steven Webster
	 	 	Steven Webster, Manager

 

    	 	- 20 -	 

     

    

 

BORROWING CERTIFICATE

 

The undersigned, the
Chairman of Discovery Energy Corp. (the “Company”), hereby represents and warrants to you on behalf of Company
as follows:

 

		1.	NAMES OF COMPANY

 

a.           The
name of Company as it appears in its current Articles or Certificate of Incorporation is: Discovery Energy Corp.

 

b.           The
federal employer identification number of Company is: 98-0507846.

 

c.           Company is
formed under the laws of the state of Nevada.

 

d.           The
organizational identification number issued to Company under its jurisdiction of formation is: E0405612006-2.

 

e.           Company
transacts business in the following states (and/or countries) (list jurisdictions other than jurisdiction of formation): Texas.

 

f.            Company
is duly qualified to transact business as a foreign entity in the following states (and/or country) (list jurisdictions other
than jurisdiction of formation): Texas.

 

g.           The
following is a list of all other names (including fictitious names, d/b/a’s, trade names or similar names) currently used
by Company or used within the past five years:

 

	Name	 	Period of Use	 	Note whether prior legal name,
    

    fictitious name, d/b/a trade name, etc.
	Santos Resource Corp.	 	May 24, 2006 – May 7, 2012	 	Prior Legal Name

 

h.           The
following are the legal names and jurisdictions of formation of all entities which have been merged into Company during the past
five years:

 

	Legal Name of Merged Entity	 	Entity Jurisdiction of Formation	 	Year of Merger
	None	 	 	 	 

 

i.            The
following are the legal names and addresses (including jurisdictions of formation) of all entities from whom Company has acquired
any personal property in a transaction not in the ordinary course of business during the past five years, together with the date
of such acquisition and the type of personal property acquired (e.g., equipment, inventory, etc.):

 

	Legal Name	 	Jurisdiction of Formation / 

    Address	 	Date of Acquisition	 	Type of Property
	None	 	 	 	 	 	 

 

		2.	PARENT/SUBSIDIARIES OF COMPANY

 

a.           The
legal name of each subsidiary and parent of Company is as follows. (A “parent” is an entity directly owning more than
50% of the outstanding capital stock of Company. A “subsidiary” is an entity, 50% or more of the outstanding capital
stock of which is directly owned by Company.)

 

    	 	- 21 -	 

     

    

 

	Name	 	Subsidiary/Parent	 	Fed. Employer ID No.
	Discovery Energy SA Pty Ltd	 	Sub x Parent  ̈	 	None (Australian entity)

 

b.           The
following is a list of the respective jurisdictions and dates of formation of the parent and each subsidiary of Company:

 

	Name	 	Jurisdiction	 	Date of Formation
	Discovery Energy SA Pty Ltd	 	Australia	 	May 15, 2012

 

c.           The
following is a list of all other names (including fictitious names, d/b/a’s, trade names or similar names) currently used
by each subsidiary of Company or used during the past five years:

 

	Name	 	Subsidiary
	None	 	 

 

d.           The
following are the names of all entities which have been merged into a subsidiary of Company during the past five years:

 

	Name	 	Subsidiary
	None	 	 

 

e.           The
following are the names and addresses of all entities from whom each subsidiary of Company has acquired any personal property
in a transaction not in the ordinary course of business during the past five years, together with the date of such acquisition
and the type of personal property acquired (e.g., equipment, inventory, etc.):

 

	Name	 	Address	 	Date of 

    Acquisition	 	Type of Property	 	Subsidiary
	None	 	 	 	 	 	 	 	 

 

		3.	LOCATIONS OF COMPANY AND ITS SUBSIDIARIES

 

a.           Company
and each of its subsidiaries maintain books or records at the following addresses:

 

	Complete street and mailing address,
    including county	 	Name of Company/Subsidiary
	One Riverview Drive, Houston, Harris County, Texas 77056	 	Discovery Energy Corp.
	350 Collins Street, Level 8, Melbourne 3000 Australia	 	Discovery Energy SA Pty Ltd

 

b.           Company
and its subsidiaries own, lease, or occupy real property located at the following addresses and maintain equipment, inventory,
or other property at such address:

 

	Complete street and mailing address,
    including county	 	Name of Company/Subsidiary
	One Riverview Drive, Houston, Harris County, Texas 77056	 	Discovery Energy Corp.
	350 Collins Street, Level 8, Melbourne 3000 Australia	 	Discovery Energy SA Pty Ltd

 

c.           The
following are the names and addresses of all warehousemen, bailees, or other third parties who have possession of any of Company’s
inventory, equipment, or other property or that of its subsidiaries:

 

    	 	- 22 -	 

     

    

 

	Name and complete mailing address
    

    of third party	 	Description of assets held with
    third 

    party including estimated FMV	 	Name of 

    Company/Subsidiary
	None	 	 	 	 

 

		4.	SPECIAL TYPES OF COLLATERAL

 

a.           Company
and its subsidiaries own (or have any ownership interest in) the following kinds of assets.

 

	Copyrights or copyright applications registered with the U.S. Copyright
    Office	 	Yes  ̈ No x
	Software registered with the U.S. Copyright Office	 	Yes  ̈ No x
	Software not registered with the U.S. Copyright Office	 	Yes  ̈ No x
	Patents and patent applications	 	Yes  ̈ No x
	Trademarks or trademark applications (including any service marks, collective marks and
    certification marks)	 	Yes  ̈ No x
	Licenses to use trademarks, patents and copyrights of others	 	Yes  ̈ No x
	Material licenses, permits (including environmental), authorizations, or certifications
    issued by federal, state, or local governments issued to Company and/or its subsidiaries or with respect to their assets,
    properties, or businesses	 	Yes x No  ̈
	Stocks, bonds or other securities held by Company or its subsidiaries in other entities
    (Company or sub is the stock owner)	 	Yes  ̈ No x
	Promissory notes, or other instruments or evidence of indebtedness issued in favor of Company
    or any of its subsidiaries (Company or sub is the lender)	 	Yes  ̈ No x
	Leases of equipment, security agreements naming Company or its subsidiaries as secured party
    or other chattel paper (Company or sub is the lessor/secured party)	 	Yes  ̈ No x
	Aircraft	 	Yes  ̈ No x
	Vessels, Boats or Ships	 	Yes  ̈ No x
	Railroad Rolling Stock	 	Yes  ̈ No x
	Motor Vehicles	 	Yes  ̈ No x

 

If the answer is “yes”
to any of the above questions, attach a Schedule 4(a) listing each asset owned by Company and/or its subsidiaries (separately
identified and scheduled for each entity) and identifying which party owns the asset, the relevant jurisdiction (such as IP registered
in non-U.S. jurisdictions or the jurisdiction under which a motor vehicle is registered), each registration, application, or other
identification number, and all other relevant information. In the cases of licenses, include the relevant parties and the specific
property being licensed, and, if any licenses are material to Company’s and/or any of its subsidiaries’ business,
provide copies of such licenses.

 

b.           The
following are all banks, brokerages, or financial institutions at which Company and its subsidiaries maintain deposit or securities
accounts:

 

	Institution Name and Address	 	Account Name	 	Account Number	 	Name of Account Owner
	Wells Fargo Bank

        PO Box 40028

        Roanoke, VA 24022
	 	Gold Business Services Package – Checking	 	2757703489	 	Discovery Energy Corp.
	 	 	Business Market Rate Savings	 	7633038422	 	Discovery Energy Corp.
	Macquarie

        Level 24, 101 Collins Street

        Melbourne, VIC 3000
	 	Discovery Energy SA Pty Ltd	 	962118899	 	Discovery Energy SA Pty Ltd

 

    	 	- 23 -	 

     

    

 

c.             Does or is it contemplated
that Company will regularly receive letters of credit from customers or other third parties to secure payments of sums owed to
Company? The following is a list of letters of credit naming Company as “beneficiary” thereunder:

 

	LC Number	 	Name of LC Issuer	 	LC Applicant
	None	 	 	 	 

 

		5.	DEBT/ENCUMBRANCES

 

a.           Company
and its subsidiaries have the following outstanding debt for money borrowed:

 

	Name and Address of Lender	 	Original Principal

    Amount/Principal

    Outstanding	 	Date of Note

    Maturity Date	 	Secured/Unsecured (if

    secured, complete 6(b))
	EMTEECO Holdings Ltd.	 	$17,000/$17,000	 	December 20, 2013

        December 20, 2016
	 	Unsecured
	Liberty Petroleum Corporation	 	$542,294/$587,724	 	September 26, 2013

        July 20, 2016
	 	Unsecured
	Keith D. Spickelmier	 	$25,000/$25,000	 	March 31, 2014

        March 31, 2017
	 	Unsecured
	 	 	$3,100/$3,100	 	May 5, 2014

        May 5, 2016
	 	Unsecured
	 	 	$10,000/$10,000	 	July 16, 2014

        July 16, 2016
	 	Unsecured
	 	 	$16,000/$16,000	 	September 29, 2014

        September 29, 2016
	 	Unsecured
	 	 	$6,000/$6,000	 	December 17, 2014

        December 17, 2016
	 	Unsecured
	 	 	$2,500/$2,500	 	January 29, 2015

        January 29, 2017
	 	Unsecured
	 	 	$10,000/$10,000	 	November 20, 2015

        On Demand
	 	Unsecured
	 	 	$5,000/$5,000	 	January 15, 2016

        On Demand
	 	Unsecured
	 	 	$7,000/$7,000	 	February 2, 2016

        On Demand
	 	Unsecured
	 	 	$7,000/$7,000	 	February 4, 2016

        On Demand
	 	Unsecured
	 	 	$4,600/$4,600	 	May 13, 2016

        On Demand
	 	Unsecured
	William Begley	 	$4,000/$4,000	 	March 9, 2015

        March 9, 2017
	 	Unsecured
	 	 	$3,000/$3,000	 	August 11, 2015

        On Demand
	 	Unsecured
	 	 	$5,353/$5,353	 	December 16, 2015

        On Demand
	 	Unsecured
	 	 	$1,500/$1,500	 	January 15, 2016

        On Demand
	 	Unsecured
	 	 	$3,500/$3,500	 	January 19, 2016

        On Demand
	 	Unsecured
	 	 	$4,000/$4,000	 	February 3, 2016

        On Demand
	 	Unsecured
	 	 	$10,000/$10,000	 	February 4, 2016 

On Demand	 	Unsecured
	 	 	$1,800/$1,800	 	April 20, 2016

        On Demand
	 	Unsecured

 

    	 	- 24 -	 

     

    

 

b.           Company’s
and its subsidiaries’ properties are subject to the following liens or encumbrances:

 

	Name of Holder of 

    Lien/Encumbrance	 	Description of Property Encumbered	 	Name of 

    Company/Subsidiary
	None	 	 	 	 

 

		6.	REGULATION

 

With respect to material
regulatory matters, Company and its subsidiaries are subject to regulation by the following federal, state or local government
entity or any department, agency, or instrumentality thereof: Department for Manufacturing, Innovation, Trade, Resources and Energy,
Energy Resources Division (Australia)

 

		7.	LITIGATION

 

a.           The
following is a complete list of pending and threatened litigation or claims involving amounts claimed against Company in an indefinite
amount or in excess of $50,000 in each case:

 

None.

 

b.           The
following are the only claims which Company has against others (other than claims on accounts receivable), which Company is asserting
or intends to assert, and in which the potential recovery exceeds $50,000:

 

None.

 

		8.	TAXES

 

The following taxes
are currently outstanding and unpaid:

 

	Assessing Authority	 	Amount and Description
	None	 	 

 

    	 	- 25 -	 

     

    

 

		9.	OFFICERS OF COMPANY AND ITS SUBSIDIARIES

 

The following are
the names and titles of the officers of Company and its subsidiaries.

 

	Name of Company/Subsidiary	 	Name of Officer	 	Office	 	Director
	Discovery Energy Corp.	 	Keith D. Spickelmier	 	Chairman	 	Chairman
	 	 	Keith J. Mckenzie	 	CEO	 	Yes
	 	 	Michael D. Dahlke	 	President, COO	 	 
	 	 	William E. Begley	 	CFO	 	Yes
	 	 	Mark S. Thompson	 	Secretary	 	 
	Discovery Energy SA Pty Ltd	 	Andrew Adams	 	Executive Director	 	Yes
	 	 	Keith J. Mckenzie	 	Director	 	Yes
	 	 	Micheal D. Dahlke	 	Director	 	Yes
	 	 	William E. Begley	 	Director	 	Yes
	 	 	Melanie Leydin	 	Resident Director and Corporate Secretary	 	Yes

 

    	 	- 26 -	 

     

    

 

ANNEX A

to

SECURITY

AGREEMENT

FORM OF ADDITIONAL DEBTOR JOINDER

 

Security Agreement
dated as of May 27, 2016 made by Discovery Energy Corp. and its subsidiaries party thereto from time to time, as Debtors to and
in favor of Agent, for the benefit of Secured Parties identified therein (the “Security Agreement”).

 

Reference is made
to the Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings
given to such terms in, or by reference in, the Security Agreement.

 

The undersigned hereby
agrees that upon delivery of this Additional Debtor Joinder to Agent and Secured Parties referred to above, the undersigned shall
(a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of Debtors under the Security
Agreement as fully and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made
the representations and warranties set forth therein as of the date of execution and delivery of this Additional Debtor Joinder.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO AGENT, FOR THE BENEFIT OF SECURED PARTIES,
A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER
OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

 

Attached hereto is
a Borrowing Certificate with respect to the Additional Debtor.

 

An executed copy of
this Joinder shall be delivered to Agent and Secured Parties, and Agent and Secured Parties may rely on the matters set forth
herein on or after the date hereof. This Joinder shall not be modified, amended or terminated without the prior written consent
of Agent and Secured Parties.

 

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

 

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

 

    	 	- 27 -	 

     

    

 

ANNEX B

to

SECURITY AGREEMENT

 

AGENT

 

1. Appointment.
Secured Parties (all capitalized terms used herein and not otherwise defined shall have the respective meanings provided in the
Security Agreement to which this Annex B is attached (the “Agreement”)), by their acceptance of the benefits
of the Agreement, hereby designate DEC Funding LLC (“Agent”) as Agent to act as specified herein and in the
Agreement. Each Secured Party shall be deemed irrevocably to authorize Agent to take such action on its behalf under the provisions
of the Agreement and any other Transaction Document (as such term is defined in the Purchase Agreement) and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically delegated to or required of Agent by the terms hereof
and thereof and such other powers as are reasonably incidental thereto. Agent may perform any of its duties hereunder by or through
its agents or employees.

 

2. Nature of Duties.
Agent shall have no duties or responsibilities except those expressly set forth in the Agreement. Neither Agent nor any of
its partners, members, shareholders, officers, directors, employees or agents shall be liable for any action taken or omitted
by it as such under the Agreement or hereunder or in connection herewith or therewith, be responsible for the consequence of any
oversight or error of judgment or answerable for any loss, unless caused solely by its or their gross negligence or willful misconduct
as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction. The duties of Agent shall
be mechanical and administrative in nature; Agent shall not have by reason of the Agreement or any other Transaction Document
a fiduciary relationship in respect of any Debtor or any Secured Party; and nothing in the Agreement or any other Transaction
Document, expressed or implied, is intended to or shall be so construed as to impose upon Agent any obligations in respect of
the Agreement or any other Transaction Document except as expressly set forth herein and therein.

 

3. Lack of Reliance
on Agent. Independently and without reliance upon Agent, each Secured Party, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the financial condition and affairs of Company and its subsidiaries
in connection with such Secured Party’s investment in Debtors, the creation and continuance of the Obligations, the transactions
contemplated by the Transaction Documents, and the taking or not taking of any action in connection therewith, and (ii) its own
appraisal of the creditworthiness of Company and its subsidiaries, and of the value of the Collateral from time to time, and Agent
shall have no duty or responsibility, either initially or on a continuing basis, to provide any Secured Party with any credit,
market or other information with respect thereto, whether coming into its possession before any Obligations are incurred or at
any time or times thereafter. Agent shall not be responsible to Debtors or any Secured Party for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other writing delivered in connection herewith, or for
the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of the
Agreement or any other Transaction Document, or for the financial condition of Debtors or the value of any of the Collateral,
or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions
of the Agreement or any other Transaction Document, or the financial condition of Debtors, or the value of any of the Collateral,
or the existence or possible existence of any default or Event of Default under the Agreement, the Debentures or any of the other
Transaction Documents.

 

    	 	- 28 -	 

     

    

 

4. Certain Rights
of Agent. Agent shall have the right to take any action with respect to the Collateral, on behalf of all of Secured Parties;
provided that Agent shall not (x) release its interest in any material portion of the Collateral, unless (A) such Collateral
is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition
permitted hereunder or under any other Transaction Document, or (B) if approved, authorized or ratified in writing by the Required
Parties, or (y) subordinate its interests hereunder unless approved, authorized or ratified in writing by the Required Parties.
In addition to the foregoing, to the extent practical, Agent shall request instructions from Secured Parties with respect to any
other material act or action (including failure to act) in connection with the Agreement or any other Transaction Document, and
shall be entitled to act or refrain from acting in accordance with the instructions of the Required Parties; if such instructions
are not provided despite Agent’s request therefor, Agent shall be entitled to refrain from such act or taking such action,
and if such action is taken, shall be entitled to appropriate indemnification from Secured Parties in respect of actions to be
taken by Agent; and Agent shall not incur liability to any person or entity by reason of so refraining. Without limiting the foregoing,
(a) no Secured Party shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder in accordance with the terms of the Agreement or any other Transaction Document, and Debtors shall have no right to
question or challenge the authority of, or the instructions given to, Agent pursuant to the foregoing and (b) Agent shall not
be required to take any action which Agent believes (i) could reasonably be expected to expose it to personal liability or (ii)
is contrary to this Agreement, the Transaction Documents or applicable law.

 

5. Reliance.
Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, statement, certificate,
email, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent
or made by the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the other Transaction
Documents and its duties thereunder, upon advice of counsel selected by it and upon all other matters pertaining to this Agreement
and the other Transaction Documents and its duties thereunder, upon advice of other experts selected by it. Anything to the contrary
notwithstanding, Agent shall have no obligation whatsoever to any Secured Party to assure that the Collateral exists or is owned
by Debtors or is cared for, protected or insured or that the liens granted pursuant to the Agreement have been properly or sufficiently
or lawfully created, perfected, or enforced or are entitled to any particular priority.

 

6. Indemnification.
To the extent that Agent is not reimbursed and indemnified by Debtors, Secured Parties will jointly and severally reimburse
and indemnify Agent, in proportion to their initially purchased respective principal amounts of Debentures, from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder or
under the Agreement or any other Transaction Document, or in any way relating to or arising out of the Agreement or any other
Transaction Document except for those determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction
to have resulted solely from Agent's own gross negligence or willful misconduct. Prior to taking any action hereunder as Agent,
Agent may require each Secured Party to deposit with it sufficient sums as it determines in good faith is necessary to protect
Agent for costs and expenses associated with taking such action.

 

7. Resignation
by Agent.

 

(a) Agent may resign
from the performance of all its functions and duties under the Agreement and the other Transaction Documents at any time by giving
30 days' prior written notice (as provided in the Agreement) to Debtors and Secured Parties. Such resignation shall take effect
upon the appointment of a successor Agent pursuant to clauses (b) and (c) below.

 

(b) Upon any such
notice of resignation, the Required Parties shall appoint a successor Agent hereunder.

 

    	 	- 29 -	 

     

    

 

(c) If a successor
Agent shall not have been so appointed within said 30-day period, Agent shall then appoint a successor Agent who shall serve as
Agent until such time, if any, as Secured Parties appoint a successor Agent as provided above. If a successor Agent has not been
appointed within such 30-day period, Agent may petition any court of competent jurisdiction or may interplead Debtors and Secured
Parties in a proceeding for the appointment of a successor Agent, and all fees, including, but not limited to, extraordinary fees
associated with the filing of interpleader and expenses associated therewith, shall be payable by Debtors on demand.

 

(d) Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations under the Agreement. After any retiring Agent’s resignation or removal hereunder as Agent, the provisions
of the Agreement including this Annex B shall inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent.

 

8. Rights with
respect to Collateral. Each Secured Party agrees with all other Secured Parties and Agent (i) that it shall not, and
shall not attempt to, exercise any rights with respect the Collateral, whether pursuant to any other agreement or otherwise (other
than pursuant to this Agreement), or take or institute any action against Agent or any of the other Secured Parties in respect
of the Collateral or its rights hereunder (other than any such action arising from the breach of this Agreement) and (ii) that
such Secured Party has no other rights with respect to the Collateral other than as set forth in this Agreement and the other
Transaction Documents.

 

    	 	- 30 -Exhibit 10.05

 

 

Deed

 

	Specific Security

Agreement (Shares)	 

 

Discovery Energy Corp.

 

DEC Funding LLC

 

	ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia

GPO Box 4227 Sydney NSW 2001 Australia	T +61 2 9225 5000  F +61 2 9322 4000

herbertsmithfreehills.com  DX 361 Sydney

 

     

     

    

 

 

Contents

 

	 	Table of contents	 
	 	 	 	 
	 	 	 	 
	1	Definitions, interpretation and deed components	2
	 	 	 
	 	1.1	Definitions	2
	 	1.2	Interpretation	6
	 	1.3	Interpretation of inclusive expressions	8
	 	1.4	Business Day	8
	 	1.5	Incorporated definitions	8
	 	1.6	Deed components	8
	 	 	 	 
	2	Mortgage	8
	 	 	 
	 	2.1	Security interest	8
	 	2.2	Priority	8
	 	2.3	Authorisation	9
	 	 	 	 
	3	Discharge of the Mortgage	9
	 	 	 
	 	3.1	Discharge	9
	 	3.2	Final discharge	9
	 	 	 	 
	4	Representations and warranties	9
	 	 	 
	 	4.1	Representations and warranties	9
	 	4.2	Survival of representations and warranties	10
	 	4.3	Reliance	10
	 	 	 	 
	5	Undertakings of the Grantor	10
	 	 	 
	 	5.1	Dividends and voting	10
	 	5.2	Proxies and authorised representatives	11
	 	5.3	Exceptional Distributions	11
	 	5.4	Controlled Account	11
	 	5.5	Distributions	12
	 	5.6	Other Additional Rights	12
	 	5.7	Performance under the Finance Documents	12
	 	5.8	Notices to the Secured Party	13
	 	5.9	Negative pledge	13
	 	5.10	Further assurances	13
	 	5.11	Title Documents for Certificated Securities	13
	 	5.12	Irrevocable direction for Certificated Securities	14
	 	5.13	Perfection, registration and protection of security	14
	 	5.14	Term of undertakings	15
	 	 	 	 
	6	Enforcement	15
	 	 	 
	 	6.1	When enforceable	15
	 	6.2	Assistance in realisation	15
	 	6.3	Postponing or delaying realisation or enforcement	16
	 	 	 	 
	7	Receiver	16
	 	 	 
	 	7.1	Appointment of Receiver	16
	 	7.2	Agency of Receiver	16
	 	7.3	Powers of Receiver	16
	 	7.4	Nature of Receiver’s Powers	18
	 	7.5	Status of Receiver after commencement of winding up	18

 

    	 	Specific Security Agreement (Shares)    Contents 1

     

    

 

 

Contents

	 	 	 	 
	 	7.6	Powers exercisable by the Secured Party	18
	 	7.7	Set off	19
	 	7.8	Notice of exercise of rights	19
	 	7.9	Termination of receivership and possession	19
	 	 	 	 
	8	Application and receipts of money	19
	 	 	 
	 	8.1	Order of application	19
	 	8.2	Money actually received	20
	 	8.3	Amounts contingently due	20
	 	8.4	Notice of an Encumbrance	20
	 	8.5	Secured Party’s statement of indebtedness	21
	 	8.6	Secured Party’s receipts	21
	 	8.7	Conversion of currencies on application	21
	 	8.8	Amounts payable on demand	21
	 	 	 	 
	9	Power of Attorney	22
	 	 	 
	 	9.1	Appointment of Attorney	22
	 	9.2	Purposes of appointment	22
	 	9.3	Exercise after Event of Default	22
	 	9.4	Delegation and substitution	22
	 	 	 	 
	10	Protection	23
	 	 	 
	 	10.1	Protection of third parties	23
	 	10.2	Protection of the Secured Party, Receiver and Attorney	23
	 	 	 	 
	11	Saving provisions	23
	 	 	 
	 	11.1	Statutory powers	23
	 	11.2	No notice required unless mandatory	24
	 	11.3	Continuing security	24
	 	11.4	No merger of security	24
	 	11.5	Exclusion of moratorium	24
	 	11.6	Exclusion of PPSA provisions	25
	 	11.7	Conflict	25
	 	11.8	Consent of Secured Party	25
	 	11.9	Completion of blank securities	25
	 	11.10	Principal obligations	26
	 	11.11	No obligation to marshal	26
	 	11.12	Non-avoidance	26
	 	11.13	Increase in financial accommodation	26
	 	 	 	 
	12	General	26
	 	 	 
	 	12.1	Confidential information	26
	 	12.2	Performance by Secured Party of the Grantor’s obligations	27
	 	12.3	Grantor to bear cost	27
	 	12.4	Notices	27
	 	12.5	Governing law and jurisdiction	27
	 	12.6	Prohibition and enforceability	27
	 	12.7	Waivers	27
	 	12.8	Variation	28
	 	12.9	Cumulative rights	28
	 	12.10	Assignment	28
	 	12.11	Counterparts	28
	 	12.12	Attorneys	28

 

    	 	Specific Security Agreement (Shares)    Contents 2

     

    

 

 

Contents

	 	 
	Schedules	 
	 	 
	Schedule 1	 
	Notice details	30
	 	 
	Schedule 2	 
	Notice of lodgment of Deposit Documents	31
	 	 
	Schedule 3	 
	Irrevocable direction from Grantor	32
	 	 
	Signing page	33

 

Herbert Smith Freehills owns the copyright in this document
and using it without permission is strictly prohibited.

 

    	 	Specific Security Agreement (Shares)    Contents 3

     

    

 

 

	Specific Security Agreement (Shares)

 

Date ►27
May 2016

 

Between the parties

	 	 
	Grantor	
        Discovery Energy Corp.

         

        of One Riverway Drive, Suite 1700, Houston, Texas 77056

         

        (Discovery)

	 	 
	 	 
	Secured Party	
        DEC Funding LLC

         

        Company number 802464276 (Texas) c/o Avista Capital Partners,
        1000 Louisiana Street, Suite 3700, Houston, Texas 77002

         

        (DEC)

	 	 
	 	 
	Recitals	
        1    The
        Grantor is the legal and beneficial owner of the Mortgaged Property.

         

        2    The
        Grantor has agreed to grant a security interest in the Mortgaged Property to the Secured Party to secure the payment of the Secured
        Moneys.

	 	 
	 	 
	This deed witnesses 	that, for valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows: 
	 	 

 

    	 	Specific Security Agreement (Shares)    page 1

     

    

 

 

		1	Definitions, interpretation and deed
                                         components

 

		1.1	Definitions

 

The meanings of the terms used in this deed are
set out below.

 

	 	Term	Meaning
	 	 	 
	 	 	 
	 	Additional Rights	
        all present and future rights and property interests attaching
        to or arising out of or otherwise in respect of the holding of an interest in the Shares including:

         

        1    any
        Distributions paid or payable, any bonus shares or other Marketable Securities issued, and any rights to take up Marketable Securities,
        in respect of the Shares;

         

        2    any
        proceeds of, or from the disposal of or other dealing with, any Shares;

         

        3    any
        rights or Marketable Security resulting from the conversion, consolidation, subdivision, redemption, cancellation, reclassification
        or forfeiture of any Share;

         

        4    any
        in specie distribution in respect of any Shares; and

         

        5    rights
        consequent upon a reduction of capital, buy back, liquidation or scheme or arrangement,

         

        and any present or future rights and property interests attaching
        to or arising out of or otherwise in respect of any interest in any of the property specified in items 1 to 5 inclusive of this
        definition.

	 	 	 
	 	 	 
	 	Australian Guarantee	the document entitled ‘Deed of Guarantee and Indemnity’ between the Guarantor and the Secured Party dated on or about the date of this deed.
	 	 	 
	 	 	 
	 	Australian Security Agreement	the document entitled ‘General Security Deed’ between the Guarantor and the Secured Party dated on or about the date of this deed.
	 	 	 
	 	 	 
	 	Attorney	an attorney appointed under any Finance Document.
	 	 	 
	 	 	 
	 	Business Day	
        1    for
        the purposes of clause 12.4, a day on which banks are open for business in the city where the notice or other communication is
        received excluding a Saturday, Sunday or public holiday; and

         

        2    for
        all other purposes, a day on which banks are open for business in New York excluding a Saturday, Sunday or public holiday.

	 	 	 

 

    	 	Specific Security Agreement (Shares)    page 2

     

    

 

		1    Definitions, interpretation and deed components

 

	 	Term	Meaning
	 	 	 
	 	 	 
	 	Certificated Security	a Marketable Security title to which is evidenced by a Title Document.
	 	 	 
	 	 	 
	 	Collateral Security	any present or future Encumbrance, Guarantee or other document or agreement created or entered into by a Transaction Party or any other person as security for, or to credit enhance, the payment of any of the Secured Moneys.
	 	 	 
	 	 	 
	 	Controlled Account	a bank account opened by the Grantor in accordance with clause 5.4.
	 	 	 
	 	 	 
	 	Corporations Act	the Corporations Act 2001 (Cth).
	 	 	 
	 	 	 
	 	Deposit Document	in respect of the Guarantor, the Title Documents in respect of the relevant Marketable Securities in it.
	 	 	 
	 	 	 
	 	Designated Bank	the bank with which the Controlled Account is maintained.
	 	 	 
	 	 	 
	 	Distribution	any money owing now or in the future in respect of the Mortgaged Property and includes a cash dividend or other monetary distribution whether of an income or capital nature.
	 	 	 
	 	 	 
	 	Event of Default	an Event of Default as defined in the Principal Agreement and any other event of default (however described) under, or as defined in, any Finance Document.
	 	 	 
	 	 	 
	 	Exceptional Distribution	
        a Distribution of the following kind:

         

        1    a
        reduction of capital;

         

        2    a
        buy-back of shares under a buy-back scheme or otherwise; or

         

        3    any
        Distribution under a scheme of arrangement.

	 	 	 
	 	 	 
	 	Finance Document	
        1   this deed;

         

        2   each Collateral Security;

         

        3   the Principal Agreement;

	 	 	 

 

    	 	Specific Security Agreement (Shares)    page 3

     

    

 

		1    Definitions, interpretation and deed components

 

	 	Term	Meaning
	 	 	 
	 	 	 
	 	 	
        4    the
        Australian Guarantee;

         

        5    the
        Australian Security Agreement;

         

        6    the
        US Security Agreement;

         

        7    the
        Securities Purchase Agreement;

         

        8    any
        other Finance Document as defined in the Principal Agreement;

         

        9    any
        document which the Grantor and the Secured Party agree, now or in the future, is a Finance Document for the purposes of this deed,

         

        or any document or agreement
        entered into or given under any of the above.

	 	 	 
	 	 	 
	 	Guarantor	Discovery Energy SA Pty Ltd, ABN 89 158 204 052
	 	 	 
	 	 	 
	 	Marketable Securities	
        1    marketable
        securities as defined in section 9 of the Corporations Act;

         

        2    any
        option or right in respect of an unissued share;

         

        3    any
        convertible note; and

         

        4    any
        instrument or security which is a combination of any of the above.

	 	 	 
	 	 	 
	 	Mortgage	the security created or expressed to be created by this deed.
	 	 	 
	 	 	 
	 	Mortgaged Property	
        all of the Grantor’s
        present and future interest in:

         

        1    the
        Shares;

         

        2    the
        Additional Rights;

         

        3    the
        Controlled Account and any chose in action in respect of the Controlled Account; and

         

        4    any
        cash or other assets deposited by the Grantor at any time with or at the direction of the Secured Party under clause Error!
        Reference source not found..

	 	 	 
	 	 	 
	 	Permitted Encumbrance	has the same meaning as Permitted Lien in the Principal Agreement.
	 	 	 
	 	 	 
	 	Power	any right, power, authority, discretion or remedy conferred on the Secured Party, Receiver or an Attorney by any Finance Document or any applicable law.
	 	 	 

 

    	 	Specific Security Agreement (Shares)    page 4

     

    

 

		1    Definitions, interpretation and deed components

 

	 	Term	Meaning
	 	 	 
	 	 	 
	 	PPSA	the Personal Property Securities Act 2009 (Cth).
	 	 	 
	 	 	 
	 	Principal Agreement	the terms of the Senior Secured Convertible Debentures issued by the Grantor to the Secured Party on 27 May 2016.
	 	 	 
	 	 	 
	 	Receiver	a receiver or receiver and manager appointed under this deed.
	 	 	 
	 	 	 
	 	Related Corporation	a related body corporate as defined in section 9 of the Corporations Act. 
	 	 	 
	 	 	 
	 	Relevant Corporation	any company, corporation, body corporate or other entity whose Marketable Securities form part of the Mortgaged Property.
	 	 	 
	 	 	 
	 	Secured Moneys	
        all debts and monetary liabilities of the Grantor to the Secured
        Party under or in relation to any Finance Document and in any capacity and irrespective of whether the debts or liabilities:

         

        1    are
        present or future;

         

        2    are
        actual, prospective, contingent or otherwise;

         

        3    are
        at any time ascertained or unascertained;

         

        4    are
        owed or incurred by or on account of the Grantor alone, or severally or jointly with any other person;

         

        5    are
        owed to or incurred for the account of the Secured Party alone, or severally or jointly with any other person;

         

        6    are
        owed to any other person as agent (whether disclosed or not) for or on behalf of the Secured Party;

         

        7    are
        owed or incurred as principal, interest, fees, charges, Taxes, damages (whether for breach of contract or tort or incurred on any
        other ground), losses, costs or expenses, or on any other account;

         

        8    are
        owed to or incurred for the account of the Secured Party directly or as a result of:

         

        ·    the
        assignment and transfer to the Secured Party of any debt or liability of the Grantor; or

         

        ·    any
        other dealing with any such debt or liability;

         

        9    are
        owed to or incurred for the account of the Secured Party before the date of this deed or before the date of any assignment of this
        deed to the Secured Party by any other person or otherwise; or

         

        10  comprise
        any combination of the above.

	 	 	 

 

    	 	Specific Security Agreement (Shares)    page 5

     

    

 

		1    Definitions, interpretation and deed components

 

	 	Term	Meaning
	 	 	 
	 	 	 
	 	Securities Purchase Agreement	the purchase agreement for the Senior Secured Convertible Debentures dated 27 May 2016 between the Grantor and the Secured Party.
	 	 	 
	 	 	 
	 	Security Agreement	the security agreement for the Senior Secured Convertible Debentures dated 27 May 2016 between the Grantor and the Secured Party.
	 	 	 
	 	 	 
	 	Security Value	the value attributed to the Marketable Securities by the Secured Party in its absolute discretion.
	 	 	 
	 	 	 
	 	Shares	any Marketable Security registered in the name of the Grantor in the Guarantor in respect of which the Deposit Document is deposited by the Grantor with the Secured Party for the purposes of this deed.
	 	 	 
	 	 	 
	 	Title Document	any original, duplicate or counterpart certificate or document evidencing title or ownership of an asset including, but not limited to, any contract note, entitlement notice, marked transfer or share certificate.
	 	 	 
	 	 	 
	 	Transaction Party	
        1    the Grantor; or

         

        2    the Guarantor.

	 	 	 
	 	 	 
	 	US Security Agreement	the security agreement for the Senior Secured Convertible Debentures dated 27 May 2016 between the Grantor, all of the Grantor’s subsidiaries and the Secured Party.
	 	 	 

 

		1.2	Interpretation

 

In this deed:

 

		(a)	Headings and bold type are for convenience only and do not affect the interpretation of this deed.

 

		(b)	The singular includes the plural and the plural includes the singular.

 

		(c)	Words of any gender include all genders.

 

		(d)	Other parts of speech and grammatical forms of a word or phrase defined in this deed have a corresponding meaning.

 

		(e)	An expression importing a person or entity includes any body corporate, partnership, trust, joint venture or other association,
or any Governmental Agency as well as an individual.

 

    	 	Specific Security Agreement (Shares)    page 6

     

    

 

		1    Definitions, interpretation and deed components

 

		(f)	A reference to any thing (including any right) includes a part of that thing but nothing in this clause 1.2(f) implies that
performance of part of an obligation constitutes performance of the obligation.

 

		(g)	A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment
or exhibit to, this deed.

 

		(h)	A reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements
or re-enactments of any of them.

 

		(i)	A reference to a document includes all amendments or supplements to, or replacements or novations of, that document.

 

		(j)	A reference to a party to a document includes that party’s successors and permitted assignees.

 

		(k)	A promise on the part of 2 or more persons binds them jointly and severally.

 

		(l)	A reference to an agreement other than this deed includes a deed and any legally enforceable undertaking, agreement, arrangement
or understanding, whether or not in writing.

 

		(m)	A reference to an asset includes all property of any nature, including a business, and all rights, revenues and benefits.

 

		(n)	A reference to liquidation or insolvency includes appointment of an administrator, compromise, arrangement, merger, amalgamation,
reconstruction, winding-up, dissolution, deregistration, assignment for the benefit of creditors, scheme, composition or arrangement
with creditors, insolvency, bankruptcy, or any similar procedure or, where applicable, changes in the constitution of any partnership
or person, or death.

 

		(o)	A reference to a document includes any agreement in writing, or any certificate, notice, deed, instrument or other document
of any kind.

 

		(p)	No provision of this deed will be construed adversely to a party because that party was responsible for the preparation of
this deed or that provision.

 

		(q)	A reference to a body, other than a party to this deed (including an institute, association or authority), whether statutory
or not:

 

		(1)	which ceases to exist; or

 

		(2)	whose powers or functions are transferred to another body,

	 	 	 
	 	is a reference to the body which replaces it or which
substantially succeeds to its powers or functions.

 

		(r)	References to time are to New York time.

 

		(s)	Where this deed confers any power or authority on a person that power or authority may be exercised by that person acting personally
or through an agent or attorney.

 

		(t)	A reference to drawing, accepting, endorsing or other dealing with a bill refers to drawing, accepting, endorsing or dealing
within the meaning of the Bills of Exchange Act 1909 (Cth).

 

		(u)	An Event of Default is ‘continuing’ or ‘subsisting’ if it has not been:

 

		(1)	remedied to the satisfaction of the Secured Party before a Power relating to that Event of Default is exercised; or

 

		(2)	waived by the Secured Party in accordance with this deed.

 

    	 	Specific Security Agreement (Shares)    page 7

     

    

 

		2    Mortgage

 

		1.3	Interpretation of inclusive expressions

 

Specifying anything in this deed after the words
‘includes’ or ‘for example’ or similar expressions does not limit what else is included unless there is
express wording to the contrary.

 

		1.4	Business Day

 

Where the day on or by which any thing is to be
done is not a Business Day, that thing must be done on or by the next Business Day.

 

		1.5	Incorporated definitions

 

A word or phrase (other than one defined in clause
1.1) defined in the Principal Agreement has the same meaning in this deed.

 

		1.6	Deed components

 

This deed includes any schedule.

 

		2	Mortgage

 

		2.1	Security interest

 

		(a)	The Grantor as beneficial owner grants a security interest in the Mortgaged Property to the Secured Party to secure payment
of the Secured Moneys.
	 	 	 
	 	 	This security interest is a mortgage.

 

		(b)	A security interest in specific Shares and other related Mortgaged Property is only created under this deed when the Grantor
deposits with the Secured Party:

 

		(1)	a certified copy of the Deposit Documents in respect of Guarantor which has issued those Shares; and

 

		(2)	a notice in the form of, and completed in accordance with, Schedule 2 signed by the Grantor stating that those Deposit Documents
are lodged with the Secured Party for the purposes of this deed, whereupon a security interest in those Shares and related Mortgaged
Property is created.

 

		2.2	Priority

 

		(a)	The parties intend that the Mortgage take priority over all other Encumbrances and other interests in the Mortgaged Property
at any time other than any Permitted Encumbrance mandatorily preferred by law.

 

		(b)	Nothing in this deed will be construed as an agreement by the Secured Party to subordinate the Mortgage to any other Encumbrance
or interest affecting the Mortgaged Property at any time.

 

    	 	Specific Security Agreement (Shares)    page 8

     

    

 

		3    Discharge of the Mortgage

 

		2.3	Authorisation

 

The Grantor must ensure that it obtains all Authorisations
necessary to permit the grant of the Mortgage in respect of any asset before it acquires any rights in that asset.

 

		3	Discharge of the Mortgage

 

		3.1	Discharge

 

Subject to clause 3.2, at the written request of
the Grantor, the Secured Party must discharge the Mortgage if:

 

		(a)	the Secured Moneys have been paid in full; and

 

		(b)	the Grantor and each other Transaction Party has fully observed and performed its respective obligations under this deed and
each other Finance Document.

 

		3.2	Final discharge

 

		(a)	The Secured Party is not obliged to discharge the Mortgage under clause 3.1 if, at the time the requirements of clause 3.1
are satisfied, the Secured Party is of the opinion (acting reasonably) that the Grantor or any other Transaction Party owes further
Secured Moneys contingently or otherwise to the Secured Party.

 

		(b)	Clause 3.2(a) overrides any other clause to the contrary in this deed.

 

		4	Representations and warranties

 

		4.1	Representations and warranties

 

The Grantor represents and warrants to and for the
benefit of the Secured Party that:

 

		(a)	representations true: each of its representations and warranties contained in the Finance Documents is correct and not
misleading when made or repeated;

 

		(b)	legal and beneficial owner:

 

		(1)	it is the legal and beneficial owner of the Mortgaged Property and

 

		(2)	on it acquiring any property forming part of the Mortgaged Property, it will be the legal and beneficial owner of that property

 

		(c)	no other interests:

 

		(1)	there is no Encumbrance over any of the Mortgaged Property other than an Encumbrance created by a Finance Document and a Permitted
Encumbrance;

 

		(2)	no person other than the Secured Party holds or has the benefit of an Encumbrance or other interest in the Mortgaged Property
other than under a Permitted Encumbrance; and

 

		(3)	there is no agreement, filing or registration that would enable another person to obtain a priority over the Mortgage which
is inconsistent with the priority contemplated by the Mortgage;

 

    	 	Specific Security Agreement (Shares)    page 9

     

    

 

		5    Undertakings of the Grantor

 

		(d)	Security:

 

		(1)	this deed creates the Encumbrance purported to be created by it over the assets purported to be encumbered by it; and

 

		(2)	the Mortgage has been or, in the case of after-acquired property (as defined in the PPSA) subject to the Mortgage on its acquisition,
will be perfected; and

 

		(3)	the Mortgage has the priority contemplated by this deed;

 

		(e)	securities fully paid: all Marketable Securities forming part of the Mortgaged Property are, or upon acquisition will
be, fully paid;

 

		(f)	registers: the
                                         share register and any branch register for each Relevant Corporation:

 

		(1)	is located in Australia on the date of this deed; and

 

		(2)	will be located in Australia on the date on which the security interest created under this deed attaches to the Mortgaged Property;

 

		(g)	no further securities: the equity capital in each Relevant Corporation is as notified to the Secured Party in writing
before, or at the same time as, the Mortgage is given, and there is no agreement, arrangement or understanding under which further
Marketable Securities with rights of conversion to shares in a Relevant Corporation may be issued to any person; and

 

		(h)	Finance Documents representations and warranties: to the extent not already provided by this clause 4, any representations
and warranties made by the Grantor in the Finance Documents are taken to be made again for the purposes of this deed.

 

		4.2	Survival of representations and warranties

 

The representations and warranties
in clause 4.1 survive the execution of this deed.

 

		4.3	Reliance

 

		(a)	The Grantor acknowledges that it has not entered into this deed or any other Finance Document in reliance on any representation,
warranty, promise or statement made by or on behalf of the Secured Party or of any person on behalf of the Secured Party.

 

		(b)	The Grantor acknowledges that the Secured Party has entered into each Finance Document in reliance on the representations and
warranties given by the Grantor under this deed.

 

		5	Undertakings
                                         of the Grantor

 

		5.1	Dividends and voting

 

		(a)	Until an Event of Default occurs:

 

		(1)	the Grantor may receive all Distributions, other than Exceptional Distributions, in respect of the Mortgaged Property;
and

 

    	 	Specific Security Agreement (Shares)    page 10

     

    

 

		5    Undertakings of the Grantor

 

		(2)	the Grantor may exercise all voting powers in respect of the Mortgaged Property,

	 	 	 
	 	without the need for any consent or direction from
the Secured Party.

 

		(b)	The Grantor must not, exercise any voting powers in respect of the Mortgaged Property under clause 5.1(a)(2) in any way which
might adversely affect the value of the Mortgaged Property.

 

		(c)	If an Event of Default occurs, the rights of the Grantor under clause 5.1(a) immediately cease and the Secured Party, Receiver
or Attorney is entitled to receive all Distributions and exercise all voting powers in respect of the Mortgaged Property to the
exclusion of the Grantor.

 

		5.2	Proxies and authorised representatives

 

		(a)	The Grantor must not:

 

		(1)	appoint any proxy in respect of the Mortgaged Property without the prior written consent of the Secured Party;

 

		(2)	appoint any authorised representative under section 250D of the Corporations Act or any attorney in respect of the Mortgaged
Property without the prior written consent of the Secured Party.

 

		(b)	The Grantor must ensure that any proxy, authorised representative or attorney:

 

		(1)	complies with any conditions specified by the Secured Party in respect of the appointment of the proxy, authorised representative
or attorney; and

 

		(2)	complies with the Finance Documents.

 

		5.3	Exceptional Distributions

 

The Grantor must promptly after receipt pay all
Exceptional Distributions to the Secured Party.

 

		5.4	Controlled Account

 

		(a)	The Secured Party may require the Grantor to promptly after
                                         being requested to do so by the Secured Party open and maintain a bank account at a bank
                                         and branch approved by the Secured Party on terms that:

 

		(1)	nominated Officers of the Secured Party must be signatories to the Controlled Account;

 

		(2)	no withdrawals can be made from the Controlled Account without the signature of one of those Officers;

 

		(3)	funds may be disposed of from the Controlled Account at the direction of the Secured Party without further consent by the Grantor;
and

 

		(4)	depositing an amount in the Controlled Account will not result in any person coming under a present liability (within the meaning
of section 341(3)(d) of the PPSA) to pay:

 

		·	the Grantor; or

 

		·	a Related Corporation of the Grantor.

 

    	 	Specific Security Agreement (Shares)    page 11

     

    

 

		5    Undertakings of the Grantor

 

		(b)	If the Secured Party is not the Designated Bank, the Grantor must cause the Designated Bank to enter into an agreement between
the Designated Bank, the Grantor and the Secured Party in form and substance satisfactory to the Secured Party in which the Designated
Bank agrees that:

 

		(1)	it will comply with and give effect to the terms set out in clause 5.4(a);

 

		(2)	it has no Encumbrance or other interest in the Controlled Account and it waives all rights of set-off and combination in respect
of the Controlled Account; and

 

		(3)	if despite clause 5.4(b)(2) it has any Encumbrance or other interest in the Controlled Account, that Encumbrance or other interest
is subordinated in right and priority of payment to the Secured Party's Encumbrance or other interest and will not be exercised
without the Secured Party’s consent; and

 

		(4)	it agrees that the laws specified in clause 12.5 will govern the Secured Party’s security Interest in the Controlled
Account.

 

		5.5	Distributions

 

		(a)	If an Event of Default occurs, the Grantor must deposit, or cause to be deposited, all Distributions in the Controlled Account.

 

		(b)	The Grantor must give all notices and directions and execute all necessary documents as requested by the Secured Party to ensure
clause 5.5(a) is complied with.

 

		(c)	A Power created under this clause 5.5 is not waived by any failure or delay in exercise, or by the partial exercise, of that
Power.

 

		5.6	Other Additional Rights

 

		(a)	The Grantor must acquire, at its own cost, any Additional Rights (other than Distributions) it is entitled to acquire.

 

		(b)	The Grantor must immediately notify the Secured Party as soon as the Grantor becomes aware of any entitlement to any Additional
Rights.

 

		5.7	Performance under the Finance Documents

 

		(a)	The Grantor must fully and punctually perform its obligations under each Finance Document.

 

		(b)	Without limiting clause 5.7(a), the Grantor must pay the Secured Moneys to the Secured Party in accordance with this deed,
each other Finance Document and each other obligation under which the Secured Moneys are payable.

 

		(c)	The Grantor must ensure that no Event of Default occurs. Without affecting the liability of the Grantor or the Powers in any
other respect (including where a breach of this clause 5.7(c) is also a breach of another provision of a Finance Document), the
Grantor is not liable in damages for breach of this clause 5.7(c) but the Secured Party may exercise its Powers consequent upon
or following that breach.

 

    	 	Specific Security Agreement (Shares)    page 12

     

    

 

		5    Undertakings of the Grantor

 

		5.8	Notices to the Secured Party

 

In addition to its obligations in any other Finance
Document, the Grantor must notify the Secured Party as soon as the Grantor becomes aware of any data contained in a registration
under the PPSA with respect to the Mortgage being or becoming incorrect.

 

		5.9	Negative pledge

 

The Grantor must not:

 

		(a)	sell, assign, transfer or otherwise dispose of or part with possession of;

 

		(b)	create or allow to exist or agree to any Encumbrance over; or

 

		(c)	attempt to do anything listed in clause 5.9(a) and 5.9(b) in respect of,

 

any of the Mortgaged Property
except to the extent expressly permitted by any Finance Document.

 

		5.10	Further assurances

 

The Grantor must:

 

		(a)	do anything which the Secured Party reasonably requests to:

 

		(1)	ensure, or enable the Secured Party to ensure, that this deed, the Mortgage, or any Power is fully effective, enforceable and
perfected with the contemplated priority;

 

		(2)	more satisfactorily assure, mortgage or secure to the Secured Party the Mortgaged Property in a manner consistent with the
Finance Documents; or

 

		(3)	aid the exercise of any Power,

 

including executing any document,
delivering Title Documents, executing and delivering blank transfers or giving notice of the Mortgage to any third party;

 

		(b)	without limiting clause 5.10(a), when the Secured Party requests, execute:

 

		(1)	a legal mortgage in favour of the Secured Party over any of the Mortgaged Property which is a Certificated Security; and

 

		(2)	any other form of security which the Secured Party considers appropriate for the Mortgaged Property,
	 	 	 
	 	each in form and substance required by the Secured
Party;

 

		(c)	without limiting clause 5.10(a), cause a third party to provide any Authorisation or take any other action (including executing
any document) required to give effect to clause 5.10(a).

 

		5.11	Title Documents for Certificated Securities

 

		(a)	The Grantor must deposit with the Secured Party, or as the Secured Party directs:

 

		(1)	all the Title Documents in respect of any of the Mortgaged Property which is a Certificated Security immediately after the
creation of the Mortgage over that Mortgaged Property or the acquisition of any asset which forms part of the Mortgaged Property
and which is a Certificated Security; and

 

    	 	Specific Security Agreement (Shares)    page 13

     

    

 

		5    Undertakings of the Grantor

 

		(2)	transfers in a form and of substance acceptable to the Secured Party, of such of the Mortgaged Property that constitutes Certificated
Securities executed by the Grantor with the name of the transferee, the consideration and the date of transfer and execution left
blank.

 

		(b)	Subject to clause 5.11(c), the Secured Party may retain the Title Documents and transfers deposited with the Secured Party
until the Mortgage is discharged under clause 3.

 

		(c)	If the Mortgage is enforced by the Secured Party, the Secured Party, a Receiver or Attorney is entitled:

 

		(1)	to deal with the Title Documents and to complete any transfers as if it was the absolute and unencumbered owner of the Mortgaged
Property to which the Title Documents relate; and

 

		(2)	in exercising a power of sale, to deliver any Title Document or transfers to a purchaser of the Mortgaged Property to which
it relates.

 

		(d)	While Title Documents for Mortgaged Property are, or in accordance with this deed, should be lodged with the Secured Party,
the Grantor must not elect to convert evidence of the Mortgaged Property from certificates to an uncertificated mode for the purposes
of any automated transfer system operated by ASX Limited or for any other purpose.

 

		(e)	If the Grantor makes any election referred to in clause 5.11(d), the Secured Party may treat it as having no effect.

 

		(f)	The Grantor must ensure that the share register and any branch register for each Relevant Corporation is located in Australia.

 

		5.12	Irrevocable direction for Certificated Securities

 

The Grantor must execute and deliver to the Secured
Party on the date of this deed (or before such later date as the Secured Party may agree in writing) the document in the form and
substance of Schedule 3 in respect of the Mortgaged Property which is constituted by Certificated Securities.

 

		5.13	Perfection, registration and protection of security

 

		(a)	The Grantor must ensure that:

 

		(1)	the Mortgage is perfected in relation to all the Mortgaged Property subject to it in all jurisdictions; and

 

		(2)	this deed and the Mortgage are registered and filed in all registers in all jurisdictions
	 	 	 
	 	in which it must be perfected, registered and filed,
to ensure its enforceability, validity, perfection and priority against all persons and to be effective as a security.

 

		(b)	Whenever the Secured Party requires that a Mortgage be perfected in a particular way in relation to any part of the Mortgaged
Property, the Grantor must ensure that the Mortgage is perfected in that way.

 

		(c)	The Grantor will not be in breach of its obligation under this clause 5.13 and its representation and warranty under clause
4.1(d)(2) will not be incorrect or misleading if the Secured Party fails to take any action which can only be taken by the Secured
Party to enable the Mortgage to be perfected as required under this clause 5.13, after written request from the Grantor to take
that action.

 

    	 	Specific Security Agreement (Shares)    page 14

     

    

 

		6    Enforcement

 

		(d)	Whenever any part of the Mortgaged Property is transferred to or retained in a place where this deed or the Mortgage, because
of an increase in the Secured Moneys or otherwise, bears insufficient stamp duty or is not registered or recorded, or for any other
reason is of limited or of no force or effect, unenforceable, inadmissible in evidence or of reduced priority, the Grantor must
within 14 days after that transfer or retention ensure that:

 

		(1)	this deed is stamped to the satisfaction of the Secured Party;

 

		(2)	this deed is in full force and effect, enforceable, perfected, admissible in evidence and not of reduced priority; and

 

		(3)	this deed and the Mortgage are registered in that place, or that part of the Mortgaged Property is removed from that place.

 

		5.14	Term of undertakings

 

Each of the Grantor’s undertakings in this
clause 5 continues in full force and effect from the date of this deed until the Mortgage in respect of all the Mortgaged Property
is discharged under clause 3.

 

		6	Enforcement

 

		6.1	When enforceable

 

		(a)	If an Event of Default occurs:

 

		(1)	the Mortgage and each Collateral Security are immediately enforceable without the need for any demand or notice to be given
to the Grantor or any other person;

 

		(2)	the Secured Moneys are immediately due and payable without the need for any demand or notice to be given to the Grantor or
any other person other than a notice expressly required by a Finance Document; and

 

		(3)	the right of the Grantor to deal, for any purpose, with any of the Mortgaged Property, other than by or through a Receiver
appointed under this deed, immediately ceases without the need for any demand or notice to be given to the Grantor or any other
person.

 

		(b)	The Secured Party agrees that it will not exercise any Power to enforce the Mortgage under Chapter 4 of the PPSA until an Event
of Default occurs.

 

		6.2	Assistance in realisation

 

After the Mortgage has become enforceable, the Grantor
must take all action required by the Secured Party, Receiver or Attorney to assist any of them to realise the Mortgaged Property
and exercise any Power including:

 

		(a)	executing all transfers, conveyances, assignments and assurances of any of the Mortgaged Property;

 

    	 	Specific Security Agreement (Shares)    page 15

     

    

 

		7    Receiver

 

		(b)	doing anything necessary or desirable under the law in force in any place where the Mortgaged Property is situated ; and

 

		(c)	giving all notices, orders, directions and consents which the Secured Party, Receiver or Attorney thinks expedient.

 

		6.3	Postponing or delaying realisation or enforcement

 

The Secured Party, a Receiver or Attorney may postpone
or delay the exercise of any Power for such period as the Secured Party, Receiver or Attorney may in its absolute discretion decide.

 

		7	Receiver

 

		7.1	Appointment of Receiver

 

If an Event of Default occurs, the Secured Party
may at any time after its occurrence:

 

		(a)	appoint any person or any 2 or more persons jointly, or severally, or jointly and severally to be a receiver or a receiver
and manager of the Mortgaged Property;

 

		(b)	remove any Receiver and on the removal, retirement or death of any Receiver, appoint another Receiver; and

 

		(c)	fix the remuneration and direct payment of that remuneration and any costs, charges and expenses of the Receiver out of the
proceeds of any realisation of the Mortgaged Property.

 

		7.2	Agency of Receiver

 

		(a)	Subject to clause 7.5, each Receiver is the agent of the Grantor.

 

		(b)	The Grantor is responsible for the acts, defaults and remuneration of the Receiver.

 

		7.3	Powers of Receiver

 

Subject to any express exclusion by the terms of
the Receiver’s appointment, the Receiver has, in addition to any powers conferred on the Receiver by applicable law, and
whether or not in possession of the Mortgaged Property or any part of it, the following powers:

 

		(a)	Manage, possession or control: to manage, take possession of Title Documents or assume control of any of the Mortgaged
Property;

 

		(b)	sale: to sell or concur in selling any of the Mortgaged Property to any person:

 

		(1)	by auction, private treaty or tender;

 

		(2)	on such terms and special conditions as the Secured Party or the Receiver thinks fit;

 

		(3)	for cash or for a deferred payment of the purchase price, in whole or in part, with or without interest or security;

 

		(4)	in conjunction with the sale of any property by any other person; and

 

		(5)	in one lot or in separate parcels,

 

    	 	Specific Security Agreement (Shares)    page 16

     

    

 

		7    Receiver

 

	 	 	and to complete a share transfer in favour of the
Secured Party or any other person designated by the Secured Party;
	 	 	 

		(c)	grant options to purchase: to grant to any person an option to purchase any of the Mortgaged Property;

 

		(d)	acquire property: to acquire any interest in any property, in the name or on behalf of the Grantor, which on acquisition
forms part of the Mortgaged Property;

 

		(e)	borrowings and security:

 

		(1)	to raise or borrow any money, in its name or the name, or on behalf of the Grantor, from the Secured Party or any person approved
by the Secured Party in writing; and

 

		(2)	to secure money raised or borrowed under clause 7.3(e)(1) by an Encumbrance over any of the Mortgaged Property, ranking in
priority to, equal with, or after, the Mortgage or any Collateral Security;

 

		(f)	income and bank accounts: to do anything to manage or obtain income from any of the Mortgaged Property including operating
any bank account which forms part of the Mortgaged Property or opening and operating a new bank account;

 

		(g)	compromise: to make or accept any compromise or arrangement;

 

		(h)	surrender Mortgaged Property: to surrender or transfer any of the Mortgaged Property to any person;

 

		(i)	exchange Mortgaged Property: to exchange with any person any of the Mortgaged Property for any other property whether
of equal value or not;

 

		(j)	employ or discharge: to employ or discharge any person as an employee, contractor, agent or professional advisor for
any of the purposes of this deed;

 

		(k)	delegate: to delegate to any person any Power of the Receiver;

 

		(l)	perform or enforce documents: to observe, perform, enforce, exercise or refrain from exercising any right, power, authority,
discretion or remedy of the Grantor under, or otherwise obtain the benefit of:

 

		(1)	any document, agreement or right which attaches to or forms part of the Mortgaged Property; and

 

		(2)	any document or agreement entered into in exercise of any Power by the Receiver;

 

		(m)	receipts: to give receipts for all moneys and other assets which may come into the hands of the Receiver;

 

		(n)	take proceedings: to commence, discontinue, prosecute, defend, settle or compromise in its name or the name or on behalf
of the Grantor, any proceedings including proceedings in relation to any insurance in respect of any of the Mortgaged Property;

 

		(o)	insolvency proceedings: to make any debtor bankrupt, wind-up any company, corporation or other entity and do all things
in relation to any bankruptcy or winding-up which the Receiver thinks necessary or desirable including attending and voting at
creditors’ meetings and appointing proxies for those meetings;

 

		(p)	execute documents: to enter into and execute any document or agreement in the name of the Receiver or the name or on
behalf of the Grantor for any of the purposes of this deed;

 

    	 	Specific Security Agreement (Shares)    page 17

     

    

 

		7    Receiver

 

		(q)	rights: to exercise any right, power, authority, discretion or remedy in respect of the Mortgaged Property including:

 

		(1)	any voting right or power;

 

		(2)	the acceptance of any rights issue or other Additional Right;

 

		(3)	proving in any liquidation, scheme of arrangement or other composition for or arrangement with a member or any secured or unsecured
creditor and whether or not under an order of the court;

 

		(4)	consenting on behalf of the Grantor in respect of the proof referred to in clause 7.3(q)(3); and

 

		(5)	receiving all Distributions;

 

		(r)	ability of Grantor: to do anything the Grantor could do in relation to the Mortgaged Property; and

 

		(s)	incidental power: to do anything necessary or incidental to the exercise of any Power of the Receiver.

 

		7.4	Nature of Receiver’s Powers

 

The Powers of the Receiver must be construed independently
and no one Power limits the generality of any other Power. Any dealing under any Power of the Receiver will be on the terms and
conditions the Receiver thinks fit.

 

		7.5	Status of Receiver after commencement of winding up

 

		(a)	The power to appoint a Receiver under clause 7.1 may be exercised even if, at the time an Event of Default occurs or at the
time when a Receiver is appointed, an order has been made or a resolution has been passed for the winding-up of the Grantor.

 

		(b)	If for any reason, including operation of law, a Receiver:

 

		(1)	appointed in the circumstances described in clause 7.5(a); or

 

		(2)	appointed at any other time,

	 	 	 
	 	ceases to be the agent of the Grantor upon or by
virtue of, or as a result of, an order being made or a resolution being passed for the winding up of the Grantor, then the Receiver
immediately becomes the agent of the Secured Party.

 

		7.6	Powers exercisable by the Secured Party

 

		(a)	Whether or not a Receiver is appointed under clause 7.1, the Secured Party may, on or after the occurrence of an Event of Default
and without giving notice to any person, exercise any Power that could be conferred on a Receiver in addition to any Power of the
Secured Party.

 

		(b)	The exercise of any Power by the Secured Party, Receiver or Attorney does not cause or deem the Secured Party, Receiver or
Attorney:

 

		(1)	to be a mortgagee in possession;

 

		(2)	to account as mortgagee in possession; or

 

		(3)	to be answerable for any act or omission for which a mortgagee in possession is liable.

 

    	 	Specific Security Agreement (Shares)    page 18

     

    

 

		8    Application and receipts of money

 

		7.7	Set off

 

If any Event of Default is subsisting, the Secured
Party may apply any credit balance in any currency in any of the Grantor’s accounts with the Secured Party in and towards
satisfaction of any of the Secured Moneys.

 

		7.8	Notice of exercise of rights

 

The Secured Party, Receiver or Attorney is not required:

 

		(a)	to give notice of the Mortgage or any Collateral Security to any debtor or creditor of the Grantor or to any other person;

 

		(b)	to enforce payment of any money payable to the Grantor including any of the debts or monetary liabilities charged by this deed
or by any Collateral Security; or

 

		(c)	to obtain the consent of the Grantor to any exercise of a Power.

 

		7.9	Termination of receivership and possession

 

The Secured Party may, at any time, terminate the
appointment of a Receiver and may, at any time, give up, or re-take, possession of the Mortgaged Property.

 

		8	Application and receipts of money

 

		8.1	Order of application

 

		(a)	At any time after the Mortgage is enforceable, all money received by the Secured Party, Receiver, Attorney or any other person
acting on their behalf under this deed or any Collateral Security may be appropriated and applied towards any amount and in any
order that the Secured Party, Receiver, Attorney or that other person determines in its absolute discretion, to the extent not
prohibited by law.

 

		(b)	Failing a determination under clause 8.1(a), the money must be applied in the following manner and order:

 

		(1)	first, in payment of all costs, charges and expenses (including any GST) of the Secured Party, Receiver or Attorney incurred
in or incidental to the exercise or performance or attempted exercise or performance of any Power;

 

		(2)	second, in payment of any other outgoings the Secured Party, Receiver or Attorney thinks fit to pay;

 

		(3)	third, in payment to the Receiver of his remuneration;

 

		(4)	fourth, in payment and discharge, in order of their priority, of any Encumbrances of which the Secured Party, Receiver or Attorney
is aware and which have priority to the Mortgage;

 

		(5)	fifth, in payment to the Secured Party towards satisfaction of the Secured Moneys and applied against interest, principal or
any other amount the Secured Party, Receiver or Attorney thinks fit;

 

    	 	Specific Security Agreement (Shares)    page 19

     

    

 

		8    Application and receipts of money

 

		(6)	sixth, in payment only to the extent required by law, in order of their priority, of other Encumbrances in respect of the Mortgaged
Property of which the Secured Party, Receiver or Attorney is aware and which are due and payable in accordance with their terms;

 

		(7)	seventh, in payment of the surplus, if any, without interest to the Grantor, and the Secured Party, Receiver or Attorney may
pay the surplus to the credit of an account in the name of the Grantor in the books of any bank carrying on business within Australia
and having done so is under no further liability in respect of that surplus.

 

		(c)	Any amount required by law to be paid in priority to any amount specified in clause 8.1(b) must be paid before any money is
applied in payment of the amount specified in clause 8.1(b).

 

		8.2	Money actually received

 

In applying any money towards satisfaction of the
Secured Moneys the Grantor is to be credited only with so much of the money which is available for that purpose (after deducting
any GST imposed) and which is actually received by the Secured Party, Receiver or Attorney. The credit dates from the time of receipt.

 

		8.3	Amounts contingently due

 

		(a)	If at the time of a distribution of any money under clause 8.1 any part of the Secured Moneys is contingently owing to the
Secured Party, the Secured Party, Receiver or Attorney may retain an amount equal to the amount contingently owing or any part
of it.

 

		(b)	If the Secured Party, Receiver or Attorney retains any amount under clause 8.3(a), it must place that amount on short-
term interest bearing deposit until the amount contingently owing becomes actually due and payable or otherwise ceases to be contingently
owing at which time the Secured Party, Receiver or Attorney must:

 

		(1)	pay to the Secured Party the amount which has become actually due to it; and

 

		(2)	apply the balance of the amount retained, together with any interest on the amount contingently owing, in accordance with clause
8.1.

 

		8.4	Notice of an Encumbrance

 

		(a)	If the Secured Party receives actual or constructive notice of an Encumbrance over the Mortgaged Property or of the perfection
of an Encumbrance, the Secured Party:

 

		(1)	may open a new account in the name of the Grantor in its books; or

 

		(2)	is regarded as having opened a new account in the name of the Grantor in its books,

	 	 	 
	 	on the date it received or was regarded as having
received notice of the Encumbrance or perfection.

 

		(b)	From the date on which that new account is opened or regarded as opened:

 

		(1)	all payments made by the Grantor to the Secured Party; and

 

    	 	Specific Security Agreement (Shares)    page 20

     

    

 

		8    Application and receipts of money

 

		(2)	all financial accommodation and advances by the Secured Party to the Grantor,

	 	 	 
	 	are or are regarded as credited and debited, as the
case may be, to the new account unless otherwise specified by the Secured Party.

 

		(c)	The payments by the Grantor under clause 8.4(b) must be applied in the manner determined by the Secured Party or, failing a
determination:

 

		(1)	first, in reduction of the debit balance, if any, in the new account; and

 

		(2)	second, if there is no debit balance in the new account, in reduction of the Secured Moneys which have not been debited or
regarded as debited to the new account.

 

		8.5	Secured Party’s statement of indebtedness

 

A certificate signed by any Officer of the Secured
Party stating:

 

		(a)	the amount of the Secured Moneys due and payable; or

 

		(b)	the amount of the Secured Moneys, whether currently due and payable or not,

 

is sufficient evidence of that amount as at the
date stated on the certificate, or failing that as at the date of the certificate, unless the contrary is proved.

 

		8.6	Secured Party’s receipts

 

		(a)	The receipt of any Officer of the Secured Party for any money payable to or received by the Secured Party under this deed exonerates
the payer from all liability to enquire whether any of the Secured Moneys have become payable.

 

		(b)	Every receipt of an Officer of the Secured Party effectually discharges the payer from:

 

		(1)	any future liability to pay the amount specified in the receipt; and

 

		(2)	being concerned to see to the application of, or being answerable or accountable for any loss or misapplication of, the amount
specified in the receipt.

 

		8.7	Conversion of currencies on application

 

In making an application under clause 8.1, the Secured
Party, Receiver or Attorney may itself, or through its bankers, purchase one currency with another, whether or not through an intermediate
currency, whether spot or forward, in the manner and amounts and at the times it thinks fit.

 

		8.8	Amounts payable on demand

 

If an amount payable under a Finance Document is
not expressed to be payable on a specified date, that amount is payable by the Grantor on demand by the Secured Party.

 

    	 	Specific Security Agreement (Shares)    page 21

     

    

 

		9    Power of Attorney

 

		9	Power of Attorney

 

		9.1	Appointment of Attorney

 

In consideration of the Secured Party entering into
the Finance Documents and for other consideration received, the Grantor irrevocably appoints the Secured Party and each Receiver
severally its Attorney for the purposes set out in clause 9.2.

 

		9.2	Purposes of appointment

 

The Attorney may, in its name or in the name of
the Grantor, Secured Party or Receiver do any of the following:

 

		(a)	do any thing which ought to be done by the Grantor under this deed or any other Finance Document;

 

		(b)	exercise any right, power, authority, discretion or remedy of the Grantor under:

 

		(1)	this deed;

 

		(2)	any other Finance Document; or

 

		(3)	any agreement forming part of the Mortgaged Property;

 

		(c)	do any thing which in the opinion of the Secured Party, Receiver or Attorney is necessary or expedient for securing or perfecting
the Mortgage and any Collateral Security;

 

		(d)	execute in favour of the Secured Party any legal mortgage, transfer, assignment and any other assurance of any of the Mortgaged
Property;

 

		(e)	execute deeds of assignment, composition or release;

 

		(f)	do all things necessary to enable a transfer to be registered in favour of the Secured Party, its nominee or any other person
as the Secured Party directs and deliver any Title Documents as the Secured Party directs;

 

		(g)	sell or otherwise part with the possession of any of the Mortgaged Property; and

 

		(h)	generally, do any other thing, whether or not of the same kind as those set out in clause 9.2(a) to 9.2(g), which in the opinion
of the Secured Party, Receiver or Attorney is necessary or expedient:

 

		(1)	to more satisfactorily secure to the Secured Party the payment of the Secured Moneys; or

 

		(2)	in relation to any of the Mortgaged Property.

 

		9.3	Exercise after Event of Default

 

An Attorney must not exercise any Power under clause
9.2 until an Event of Default occurs but a breach of this clause 9.3 does not affect the validity of the Attorney’s act.

 

		9.4	Delegation and substitution

 

The Attorney may appoint a substitute attorney.

 

    	 	Specific Security Agreement (Shares)    page 22

     

    

 

		10    Protection

 

		10	Protection

 

		10.1	Protection of third parties

 

		(a)	No person dealing with the Secured Party, Receiver or Attorney is bound to enquire whether:

 

		(1)	the Mortgage has become enforceable;

 

		(2)	the Receiver or Attorney is duly appointed; or

 

		(3)	any Power has been properly or regularly exercised.

 

		(b)	No person dealing with the Secured Party, Receiver or Attorney is affected by express notice that the exercise of any Power
was unnecessary or improper.

 

		(c)	The irregular or improper exercise of any Power is, as regards the protection of any person, regarded as authorised by the
Grantor and this deed and is valid.

 

		10.2	Protection of the Secured Party, Receiver and Attorney

 

		(a)	The Secured Party, Receiver or Attorney is not liable for any loss or damage, including consequential loss or damage, arising
directly or indirectly from:

 

		(1)	any omission or delay in the exercise or non exercise of any Power; or

 

		(2)	the neglect, default or dishonesty of any manager, Officer, employee, agent, accountant, auctioneer or solicitor of the Grantor,
the Secured Party, the Receiver or Attorney.

 

		(b)	Clause 10.2(a) does not apply:

 

		(1)	in respect of the Secured Party, to any loss or damage which arises from the wilful default, fraud or gross negligence of the
Secured Party; and

 

		(2)	in respect of a Receiver or Attorney, to any loss or damage which arises from the wilful default, fraud or gross negligence
of the Receiver or Attorney.

 

		11	Saving provisions

 

		11.1	Statutory powers

 

		(a)	Subject to clause 11.1(b), the powers of the Secured Party under this deed or any Collateral Security are in addition to any
powers the Secured Party has under applicable law.

 

		(b)	If the Secured Party exercises a Power in connection with this deed, that exercise is taken not to be an exercise of a Power
under the PPSA unless the Secured Party states otherwise at the time of exercise. However, this clause 11.1(b) does not apply to
a right, power or remedy which can only be exercised under the PPSA.

 

    	 	Specific Security Agreement (Shares)    page 23

     

    

 

		11    Saving provisions

 

		11.2	No notice required unless mandatory

 

To the extent the law permits, the Grantor waives:

 

		(a)	its rights to receive any notice that is required by:

 

		(1)	any provision of the PPSA (including a notice of a verification statement); or

 

		(2)	any other law, before a secured party or Receiver exercises a right, power or remedy; and

 

		(b)	any time period that must otherwise lapse under any law before a secured party or receiver exercises a right, power or remedy.

 

If the law which requires a period of notice or
a lapse of time cannot be excluded, but the law provides that the period of notice or lapse of time may be agreed, that period
or lapse is one day or the minimum period the law allows to be agreed (whichever is the longer).

 

However, nothing in this clause prohibits the Secured
Party or any Receiver from giving a notice under the PPSA or any other law.

 

		11.3	Continuing security

 

The Mortgage is a continuing security despite:

 

		(a)	any settlement of account; or

 

		(b)	the occurrence of any other thing,

 

and remains in full force and effect until the Secured
Party has given a discharge of the Mortgage in respect of all the Mortgaged Property under clause 3.

 

		11.4	No merger of security

 

		(a)	Nothing in this deed merges, extinguishes, postpones, lessens or otherwise prejudicially affects:

 

		(1)	any Encumbrance or indemnity in favour of the Secured Party contained in any Finance Document; or

 

		(2)	any Power.

 

		(b)	No other Encumbrance or Finance Document which the Secured Party has the benefit of in any way prejudicially affects any Power.

 

		11.5	Exclusion of moratorium

 

Without limiting clause 11.6 to the extent not excluded
by law, a provision of any legislation (other than a provision of the PPSA mentioned in section 115(1) of the PPSA) which directly
or indirectly:

 

		(a)	lessens, varies or affects in favour of the Grantor any obligations under this deed or any Finance Document;

 

		(b)	stays, postpones or otherwise prevents or prejudicially affects the exercise by the Secured Party, Receiver or Attorney of
any Power; or

 

		(c)	confers any right on the Grantor or imposes any obligation on the Secured Party or a Receiver or Attorney in connection with
the exercise of any Power,

 

    	 	Specific Security Agreement (Shares)    page 24

     

    

 

		11    Saving provisions

 

is negatived and excluded from this deed and any
Finance Document and all relief and protection conferred on the Grantor by or under that legislation is also negatived and excluded.

 

		11.6	Exclusion of PPSA provisions

 

To the extent the law permits:

 

		(a)	the provisions of the PPSA specified in section 115(1) of that Act (except sections 121(4) (enforcement of security interests
in liquid assets-notice to higher priority parties and grantor), 123 (right to seize collateral), 128 (secured party may dispose
of collateral), 129 (disposal by purchase), 134 (retention of collateral), 135 (notice of retention)) are excluded in full and
will not apply to the Mortgage;

 

		(b)	in the circumstances permitted under section 115(7) of the PPSA, sections 132 (secured party to give statement of account)
and 137(3) (obligation to sell) of the PPSA are also excluded and will not apply to the Mortgage; and

 

		(c)	the Grantor agrees not to exercise its rights to make any request of the Secured Party under section 275 of the PPSA, to authorise
the disclosure of any information under that section or to waive any duty of confidence that would otherwise permit non-disclosure
under that section.

 

		11.7	Conflict

 

Where any right, power, authority, discretion or
remedy of the Secured Party, Receiver or an Attorney under this deed or any Finance Document is inconsistent with the powers conferred
by applicable law then, to the extent not prohibited by that law, the powers conferred by applicable law are regarded as negatived
or varied to the extent of the inconsistency.

 

		11.8	Consent of Secured Party

 

		(a)	Whenever the doing of any thing by the Grantor is dependent upon the consent or approval of the Secured Party, the Secured
Party may withhold its consent or give it conditionally or unconditionally in its absolute discretion unless expressly stated otherwise
in a Finance Document.

 

		(b)	Any conditions imposed on the Grantor under clause 11.8(a) must be complied with by the Grantor.

 

		11.9	Completion of blank securities

 

		(a)	The Secured Party, a Receiver, Attorney or any Officer of the Secured Party may complete, in favour of the Secured Party, any
appointee of the Secured Party or any purchaser, any instrument executed in blank by or on behalf of the Grantor and deposited
with the Secured Party as security under this deed or under any Collateral Security.

 

		(b)	The Secured Party, a Receiver, Attorney or any Officer of the Secured Party must not exercise any Power under clause 11.9(a)
until an Event of Default occurs but a breach of this clause 11.9(b) does not affect the validity of the act of the Secured Party,
Receiver, Attorney or Officer of the Secured Party.

 

    	 	Specific Security Agreement (Shares)    page 25

     

    

 

		12    General

 

		11.10	Principal obligations

 

The Mortgage and each Collateral Security is:

 

		(a)	a principal obligation and is not ancillary or collateral to any other Encumbrance (other than another Collateral Security)
or other obligation; and

 

		(b)	independent of, and unaffected by, any other Encumbrance or other obligation which the Secured Party may hold at any time in
respect of the Secured Moneys.

 

		11.11	No obligation to marshal

 

Before the Secured Party enforces the Mortgage,
it is not required, to marshal or to enforce or apply under, or appropriate, recover or exercise:

 

		(a)	any Encumbrance or Collateral Security held, at any time, by the Secured Party; or

 

		(b)	any moneys or assets which the Secured Party, at any time, holds or is entitled to receive.

 

		11.12	Non-avoidance

 

If any payment by the Grantor to the Secured Party
is at any time avoided for any reason including any legal limitation, disability or incapacity of or affecting the Grantor or any
other thing, and whether or not:

 

		(a)	any transaction relating to the Secured Moneys was illegal, void or substantially avoided; or

 

		(b)	any thing was or ought to have been within the knowledge of the Secured Party,
	 	 	 
	 	 	the Grantor:

 

		(c)	as an additional, separate and independent obligation, indemnifies the Secured Party against that avoided payment; and

 

		(d)	acknowledges that any liability of the Grantor under the Finance Documents and any Power is the same as if that payment had
not been made.

 

		11.13	Increase in financial accommodation

 

The Secured Party may at any time increase the financial
accommodation provided under any Finance Document or otherwise provide further financial accommodation.

 

		12	General

 

		12.1	Confidential information

 

The Secured Party must not disclose to any person:

 

		(a)	this Deed; or

 

		(b)	any information about the Grantor,

 

except as permitted in the Principal Agreement.

 

    	 	Specific Security Agreement (Shares)    page 26

     

    

 

		12    General

 

		12.2	Performance by Secured Party of the Grantor’s obligations

 

If the Grantor defaults in fully and punctually
performing any obligation contained or implied in any Finance Document, the Secured Party may, without prejudice to any Power,
do all things necessary or desirable, in the opinion of the Secured Party, to make good or attempt to make good that default to
the satisfaction of the Secured Party.

 

		12.3	Grantor to bear cost

 

Any thing which must be done by the Grantor under
this deed, whether or not at the request of the Secured Party, must be done at the cost of the Grantor.

 

		12.4	Notices

 

Any notice or other communication including any
request, demand, consent or approval, to or by a party to this deed must be given in accordance with the notice requirements of
the Principal Agreement.

 

		12.5	Governing law and jurisdiction

 

		(a)	This deed is governed by the laws of Victoria, Australia.

 

		(b)	The parties irrevocably submit to the non exclusive jurisdiction of the courts of Victoria, Australia.

 

		(c)	The parties irrevocably waive any objection to the venue of any legal process on the basis that the process has been brought
in an inconvenient forum.

 

		(d)	The parties irrevocably waive any immunity in respect of its obligations under this deed that it may acquire from the jurisdiction
of any court or any legal process for any reason including the service of notice, attachment before judgment, attachment in aid
of execution or execution.

 

		(e)	The Grantor appoints Discovery Energy SA Pty Ltd of Level 8, 350 Collins Street, Melbourne, 3000  in relation to proceedings
in Victoria as its agent to receive service of any legal process on its behalf without excluding any other means of service permitted
by the law of the relevant jurisdiction.

 

		12.6	Prohibition and enforceability

 

		(a)	Any provision of, or the application of any provision of, any Finance Document or any Power which is prohibited in any jurisdiction
is, in that jurisdiction, ineffective only to the extent of that prohibition.

 

		(b)	Any provision of, or the application of any provision of, any Finance Document which is void, illegal or unenforceable in any
jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining
provisions in that or any other jurisdiction.

 

		12.7	Waivers

 

		(a)	Waiver of any right arising from a breach of this deed or of any Power arising upon default under this deed or upon the occurrence
of an Event of Default must be in writing and signed by the party granting the waiver.

 

		(b)	A failure or delay in exercise, or partial exercise, of:

 

    	 	Specific Security Agreement (Shares)    page 27

     

    

 

		12    General

 

		(1)	a right arising from a breach of this deed or the occurrence of an Event of Default; or

 

		(2)	a Power created or arising upon default under this deed or upon the occurrence of an Event of Default,

 

does not result in a waiver of that right or Power.

 

		(c)	A party is not entitled to rely on a delay in the exercise or non exercise of a right or Power arising from a breach of this
deed or on a default under this deed or on the occurrence of an Event of Default as constituting a waiver of that right or Power.

 

		(d)	A party may not rely on any conduct of another party as a defence to exercise of a right or Power by that other party.

 

		(e)	This clause may not itself be waived except by writing.

 

		12.8	Variation

 

A variation of any term of this deed must be in
writing and signed by the parties.

 

		12.9	Cumulative rights

 

The Powers are cumulative and do not exclude any
other right, power, authority, discretion or remedy of the Secured Party, Receiver or Attorney.

 

		12.10	Assignment

 

		(a)	Subject to any Finance Document, the Secured Party may assign its rights under this deed and each Collateral Security without
the consent of the Grantor.

 

		(b)	The Grantor may not assign any of its rights under this deed or any Collateral Security without the prior written consent of
the Secured Party.

 

		12.11	Counterparts

 

This deed may be executed in any number of counterparts.
All counterparts taken together constitute one instrument. A party may execute this deed by signing any counterpart.

 

		12.12	Attorneys

 

Each of the attorneys executing this deed states
that the attorney has no notice of the revocation of the power of attorney appointing that attorney.

 

    	 	Specific Security Agreement (Shares)    page 28

     

    

 

 

Schedules

 

Table of contents

 

	 	 
	Notice details	30
	 	 
	Notice of lodgment of Deposit Documents	31
	 	 
	Irrevocable direction from Grantor	32

 

    	 	Specific Security Agreement (Shares)    page 29

     

    

 

 

Schedule 1

 

Notice details

	 	 
	 	Discovery Energy Corp.
	 	 
	Address	One Riverway Drive, Suite 1700, Houston, Texas 77056 
	 	 
	Attention	Keith Spickelmier
	 	 
	Phone	(713) 248-5981
	 	 
	Fax	(713) 622-1937
	 	 
	Email	kspickelmier1@comcast.net and kjm@discoveryenergy.com
	 	 
	 	 
	 	DEC Funding LLC
	 	 
	Address	c/o Avista Capital Partners, 1000 Louisiana Street, Suite 3700, Houston, Texas 77002
	 	 
	Attention	Steven Webster
	 	 
	Phone	(713) 328-1051
	 	 
	Fax	(713) 328-1097
	 	 
	Email	webster@avistacap.com
	 	 

 

    	 	Specific Security Agreement (Shares)    page 30

     

    

 

 

Schedule 2

 

Notice of lodgment
of Deposit Documents

 

 

Clause 2.1(b)(2)

 

To: DEC Funding LLC

 

We refer to the Specific Security Agreement (Shares)
dated 27 May 2016 between you and us (Mortgage).

 

Attached to this notice is the Share Certificate
for Discovery Energy SA Pty Ltd which we now lodge with you for the purposes of the Mortgage as required by clause 2.1(b) of the
Mortgage.

 

We represent and warrant to you that the equity
capital of Discovery Energy SA Limited is fully represented by 1,000,000 Ordinary Fully Paid Shares and that we are registered
as the holder of 1,000,000 Ordinary Fully Paid Shares.

 

	date ►	May 27, 2016	 

 

Executed for Discovery Energy Corp. by its authorised
signatory:

 

	sign here ►	/s/ Michael D. Dahlke	 

 

    	 	Specific Security Agreement (Shares)    page 31

     

    

 

 

Schedule 3

 

Irrevocable direction
from Grantor

 

 

Clause 5.12 (Irrevocable direction)

 

DISCOVERY ENERGY CORP.

 

May 27, 2016

 

The Share Registrar

 

Discovery Energy SA Pty Ltd (Company)

 

Dear Sir

 

We refer to the 1,000,000 Ordinary Fully Paid Shares
(Shares) that we acquired in the Company on 15 May 2012.

 

Under section 1071H of the Corporations Act you
are irrevocably directed to deliver to DEC Funding LLC (at [insert address of Secured Party], Attention: [insert
details of to whose attention the share scrip should be delivered]) all certificates and other documents of title in relation
to the Shares, and any shares, debentures or interests issued or made available in relation to the Shares.

 

Yours faithfully

 

for and on behalf of

 

Discovery Energy Corp.

 

	 	/s/ Michael D. Dahlke	 
	 	Attorney/Director	 
	 	 	 
	print name	 	 

 

    	 	Specific Security Agreement (Shares)    page 32

     

    

 

 

Signing page

 

Executed as a deed

 

 

	 	Grantor	 
	 	 	 
	 	
        Signed by

        Discovery Energy Corp.

        by
	

	sign here ►	/s/ Keith D. Spickelmier	 
	 	Authorised Signatory 	 
	 	 	 
	print name	 	 
	 	 	 
	 	in the presence of:	 
	 	 	 
	sign here ►	 	 
	 	witness	 
	 	 	 
	print name	 	 
	 
	 

 

    	 	Specific Security Agreement (Shares)    page 33

     

    

 

 

	 	Secured Party	 
	 	 	 
	 	
        Signed sealed and delivered for

        DEC Funding LLC

         
	

	sign here ►	/s/ Steven Webster	 
	 	Authorised Signatory	 
	 	 	 
	print name	 	 
	 	 	 
	 	in the presence of	 
	 	 	 
	sign here ►	 	 
	 	Witness	 
	 	 	 
	print name	 	 
	 	 	 
	print address	 	 
	 	 	 
	 

 

    	 	Specific Security Agreement (Shares)    page 34

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