Document:

Exhibit 10.2

 

EXECUTION
COPY

 

SECURITY
AND PLEDGE AGREEMENT

 

SECURITY AND PLEDGE
AGREEMENT, dated as of May 13, 2016 (this “Agreement”), made by Eastside Distilling, Inc., a Nevada corporation
(the “Company”) (the “Company”), and each of the undersigned direct and indirect Domestic Subsidiaries
of the Company from time to time, if any (each a “Grantor” and together with the Company, collectively, the
“Grantors”), in favor of Magna Equities II LLC, a New York limited liability company, in its capacity as collateral
agent (in such capacity, the “Collateral Agent” as hereinafter further defined) for the Noteholders (as defined
below) party to the Exchange Agreement (as defined below).

 

WITNESSETH:

 

WHEREAS, on May 13, 2016,
MR Group I, LLC (“Investor”) purchased from the Company pursuant to that certain Exchange Agreement (the “Exchange
Agreement”) dated May 13, 2016 by and between the Company and MR Group I, LLC (i) that certain Secured Convertible Promissory
Note (as such note may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance
with the terms thereof, collectively, the “Note”), in the aggregate initial principal amount of $219,200.65
and (ii) that certain Secured Convertible Promissory Note (as such note may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time in accordance with the terms thereof, collectively, the “Note”), in the
aggregate initial principal amount of $302,646.58 (the “Second Note” and together with the Note, the “Notes”).

 

WHEREAS, certain Grantors
(other than the Company) from time to time (each a “Guarantor” and collectively, the “Guarantors”)
may execute and deliver one or more guarantees (each, a “Guaranty” and collectively, the “Guaranties”)
in form and substance acceptable to and in favor of the Collateral Agent, for the benefit of itself and the Noteholders (as defined
below), with respect to the Company’s obligations under the Exchange Agreement, the Notes and the other “Transaction
Documents” (as defined below);

 

WHEREAS, it is a condition
precedent to the Investor’s obligation to purchase the Notes issued pursuant to the Exchange Agreement that the Grantors
shall enter into this Agreement providing for the grant to the Collateral Agent, for the benefit of the Noteholders, of a valid,
enforceable, and perfected security interest in all personal property of each Grantor to secure all of the Company’s obligations
under the Transaction Documents and the Guarantors’ obligations under the Guaranties, as applicable; and

 

WHEREAS, each Grantor
has determined that the execution, delivery and performance of this Agreement directly benefits, and is in the best interest of,
such Grantor.

 

NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Investor to perform under the Exchange Agreement, each Grantor
agrees with the Collateral Agent, for the benefit of the Collateral Agent and the Noteholders, as follows:

 

     

     

    

 

 

Section
1.          Definitions.

 

(a)          Reference
is hereby made to the Exchange Agreement and the Notes for a statement of the terms thereof. All terms used in this Agreement and
the recitals hereto which are defined in the Exchange Agreement, the Notes or in the Code, and which are not otherwise defined
herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the
Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of the Code except
as the Collateral Agent may otherwise determine.

 

(b)          The
following terms shall have the respective meanings provided for in the Code: “Accounts”, “Account Debtor”,
“Cash Proceeds”, “Certificate of Title”, “Chattel Paper”, “Commercial Tort Claim”,
“Commodity Account”, “Commodity Contracts”, “Deposit Account”, “Documents”, “Electronic
Chattel Paper”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”,
“Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Payment
Intangibles”, “Proceeds”, “Promissory Notes”, “Security”, “Record”, “Security
Account”, “Software”, and “Supporting Obligations”.

 

(c)          As
used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:

 

“Affiliate”
of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control
with such Person and any officer or director of such Person. A Person shall be deemed to be “controlled by” any other
Person if such Person possesses, directly or indirectly, power to vote 25% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.

 

“Bankruptcy
Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable
bankruptcy, insolvency or similar laws).

 

“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in New York City are authorized
or required by law to remain closed.

 

“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights
or other securities exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any
Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.

 

“Closing Date”
means the date the Company initially issues the Notes pursuant to the terms of the Exchange Agreement.

 

“Code”
means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that,
if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

 

    	 	2	 

     

    

 

“Collateral”
shall have the meaning set forth in Section 2(a) of this Agreement.

 

“Collateral
Agent” shall have the meaning set forth in the preamble hereto.

 

“Company”
shall have the meaning set forth in the preamble hereto.

 

“Controlled
Account Agreement” means a deposit account control agreement or securities account control agreement with respect to
a Pledged Account, in form and substance satisfactory to the Collateral Agent, as the same may be amended, modified, supplemented,
extended, renewed, restated or replaced from time to time.

 

“Controlled
Accounts” means the Deposit Accounts, Commodity Accounts, Securities Accounts, and/or Foreign Currency Controlled Account
of the Grantors listed on Schedule IV attached hereto.

 

“Copyright
Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee
or licensor and providing for the grant of any right to use or sell any works covered by any Copyright (including, without limitation,
all Copyright Licenses set forth in Schedule II hereto).

 

“Copyrights”
means all domestic and foreign copyrights, whether registered or not, including, without limitation, 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 any Grantor (including, without limitation,
all copyrights described in Schedule II hereto), 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 or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations
in part and extensions or renewals thereof.

 

“Domestic
Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

 

“Event of
Default” shall have the meaning set forth in Article III of the Notes.

 

“Exchange
Agreement” shall have the meaning set forth in the recitals hereto.

 

“Excluded
Collateral” means such portion of the voting Capital Stock of any Foreign Subsidiary in excess of 65% of the issued and
outstanding voting Capital Stock of such Foreign Subsidiary at any time the pledging of more than 65% of the total outstanding
voting Capital Stock of such Foreign Subsidiary would result in a material adverse tax consequence to a Grantor.

 

“Foreign Currency
Controlled Accounts” means any Controlled Account of the Company or its Subsidiaries holding non-United States dollar
deposits.

 

    	 	3	 

     

    

 

“Foreign Subsidiary”
means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof,
Puerto Rico or the District of Columbia.

 

“GAAP”
means U.S. generally accepted accounting principles consistently applied.

 

“Governmental
Authority” means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other
political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guaranteed
Obligations” shall have the meaning set forth in Section 2 of each Guaranty.

 

“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.

 

“Guaranty”
or “Guaranties” shall have the meaning set forth in the recitals hereto.

 

“Insolvency
Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under
any other bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or
extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intellectual
Property” means, collectively, the Copyrights, Trademarks and Patents.

 

“Intellectual
Property Security Agreement” means the Intellectual Property Security Agreement required to be delivered pursuant to
Section 5(h)(i) of this Agreement, in the form attached hereto as Exhibit A.

 

“Investor”
shall have the meaning set forth in the recitals hereto.

 

“Licenses”
means, collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.

 

“Lien”
means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.

 

“Notes”
shall have the meaning set forth in the recitals hereto.

 

“Noteholders”
means, at any time, the holders of the Notes at such time.

 

“Obligations”
shall have the meaning set forth in Section 3 of this Agreement.

 

“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Obligations.

 

    	 	4	 

     

    

 

“Patent Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing
for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all
Patent Licenses set forth in Schedule II hereto).

 

“Patents”
means all 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 (including, without limitation, all domestic and foreign
letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described in Schedule II hereto), 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 any other country or any political subdivision
thereof), and all reissues, reexaminations, divisions, continuations, continuations in part and extensions or renewals thereof.

 

“Perfection
Requirement” or “Perfection Requirements” shall have the meaning set forth in Section 4(j) of this
Agreement.

 

“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental Authority.

 

“Pledged Accounts”
means all of each Grantor’s right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities Accounts
(in all cases, including, without limitation, all Controlled Accounts and Foreign Currency Control Accounts).

 

“Pledged Entity”
means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each
other Person, any right in or interest in or to all or a portion of whose Capital Stock is acquired or otherwise owned by a Grantor
after the date hereof.

 

“Pledged Equity”
means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter
owned by such Grantor, regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds
thereof and all rights relating thereto, also including any certificates representing the Securities and/or Capital Stock, the
right to receive any certificates representing any of the Securities and/or Capital Stock, all warrants, options, share appreciation
rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income,
profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments,
and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution
of, on account of, or in exchange for any or all of the foregoing.

 

“Pledged Operating
Agreements” means all of each Grantor’s rights, powers and remedies under the limited liability company operating
agreements of each of the Pledged Entities that are limited liability companies, as may be amended, modified, supplemented, extended,
renewed, restated or replaced from time to time.

 

    	 	5	 

     

    

 

“Pledged Partnership
Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of
the Pledged Entities that are partnerships, as may be amended, modified, supplemented, extended, renewed, restated or replaced
from time to time.

 

“Subsidiary”
means any Person in which a Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity
or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of
such Person, and all of the foregoing, collectively, “Subsidiaries”.

 

“Trademark
Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor
or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized
by any such licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory
now or hereafter owned by any Grantor and now or hereafter covered by such licenses, contracts or agreements (including, without
limitation, all Trademark Licenses described in Schedule II hereto).

 

“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
assumed names, Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles
of like nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and
foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, assumed names,
Internet domain names, trade styles, designs, logos and other source or business identifiers described in Schedule II hereto),
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, any state thereof or
any other country or any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill
of the business symbolized by such marks and all customer lists, formulae and other Records of any Grantor relating to the distribution
of products and services in connection with which any of such marks are used.

 

SECTION 2.          Grant
of Security Interest.

 

(a)          As
collateral security for the due and punctual payment and performance all of the Obligations, as and when due, each Grantor hereby
pledges and assigns to the Collateral Agent, for itself and for the benefit of the Noteholders, and grants to the Collateral Agent,
for itself and for the benefit of the Noteholders, a continuing security interest in, all personal property and assets of such
Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature
and description, whether tangible or intangible (collectively, the “Collateral”), including, without limitation,
the following:

 

    	 	6	 

     

    

 

(i)          all
Accounts;

 

(ii)         all
Chattel Paper (whether tangible or Electronic Chattel Paper);

 

(iii)        all
Commercial Tort Claims, including, without limitation, those specified on Schedule VI hereto;

 

(iv)        all
Documents;

 

(v)         all
Equipment;

 

(vi)        all
Fixtures;

 

(vii)       all
General Intangibles (including, without limitation, all Payment Intangibles);

 

(viii)      all
Goods;

 

(ix)         all
Instruments (including, without limitation, all Promissory Notes and each certificated Security);

 

(x)          all
Inventory;

 

(xi)         all
Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity, Pledged Operating
Agreements and Pledged Partnership Agreements);

 

(xii)        all
Intellectual Property and all Licenses;

 

(xiii)       all
Letter-of-Credit Rights;

 

(xiv)      all
Pledged Accounts, all cash and other property from time to time deposited therein, and all monies and property in the possession
or under the control of the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent of the
Collateral Agent or any such Noteholder;

 

(xv)       all
Supporting Obligations;

 

(xvi)      all
other tangible and intangible personal property of each Grantor (whether or not subject to the Code), including, without limitation,
all Deposit Accounts and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions,
rents, profits, income, benefits, substitutions and replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2(a) (including, without limitation, any proceeds of insurance thereon and all causes
of action, claims and warranties now or hereafter held by each Grantor in respect of any of the items listed above), and all books,
correspondence, files and other Records, including, without limitation, all tapes, desks, cards, Software, data and computer programs
in the possession or under the control of any Grantor or any other Person from time to time acting for any Grantor, in each case,
to the extent of such Grantor’s rights therein, that at any time evidence or contain information relating to any of the property
described in the preceding clauses of this Section 2(a) or are otherwise necessary or helpful in the collection or
realization thereof; and

 

    	 	7	 

     

    

 

(xvii)     all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;

 

in each case howsoever any Grantor’s
interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

 

(b)          Notwithstanding
anything herein to the contrary, the term “Collateral” shall not include any Excluded Collateral.

 

(c)          Each
Grantor agrees not to further encumber, or permit any other Lien to exist that encumbers, any of its Copyrights, Copyright applications,
Copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished,
any Licenses, Patents, Patent applications and like protections, including improvements, divisions, continuations, renewals, reissues,
extensions, and continuations-in-part of the same, Trademarks, service marks and, to the extent permitted under applicable law,
any applications therefor, whether registered or not, and the goodwill of the business of such Grantor connected with and symbolized
thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of
any past, present, or future infringement of any of the foregoing, in each case without the Collateral Agent’s prior written
consent (which consent may be withheld or given in the Collateral Agent’s sole discretion).

 

(d)          The
Grantors agree that the pledge of the shares of Capital Stock acquired by a Grantor of any and all Persons now or hereafter existing
who is a Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges or other
similar agreements or instruments, executed and delivered by the relevant Grantors in favor of the Collateral Agent, which pledge
agreements will provide for the pledge of such shares of Capital Stock in accordance with the laws of the applicable foreign jurisdiction.
With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its sole discretion,
take such actions in such foreign jurisdictions that will result in the perfection of the Lien created in such shares of Capital
Stock.

 

(e)          In
addition, to secure the prompt and complete payment, performance and observance of the Obligations and in order to induce the Investor
as aforesaid, each Grantor hereby grants to the Collateral Agent, for itself and for the ratable benefit of the Noteholders, a
right of set-off against the property of such Grantor held by the Collateral Agent, for itself and for the ratable benefit of the
Noteholders, consisting of property described above in Section 2(a) now or hereafter in the possession or custody of or
in transit to the Collateral Agent, for any purpose, including safekeeping, collection or pledge, for the account of such Grantor,
or as to which such Grantor may have any right or power; provided that such right shall only to be exercised after an Event of
Default has occurred and is continuing.

 

SECTION 3.          Security
for Obligations. The security interest created hereby in the Collateral constitutes
continuing collateral security for all of the following obligations, whether direct or indirect, absolute or contingent, and whether
now existing or hereafter incurred (collectively, the “Obligations”):

 

    	 	8	 

     

    

 

(a)          
(i) the payment by the Company and each other Grantor, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Exchange Agreement, this Agreement,
the Notes and the other Transaction Documents, and (ii) in the case of the Guarantors, the payment by such Guarantors, as and when
due and payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A) all principal
of, interest, make-whole and other amounts on the Notes (including, without limitation, all interest, make-whole and other amounts
that accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of such interest is
enforceable or is allowable in such Insolvency Proceeding), and (B) all fees, interest, premiums, penalties, contract causes of
action, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under this Agreement
or any of the Transaction Documents; and

 

(b)          the
due performance and observance by each Grantor of all of its other obligations from time to time existing in respect of any of
the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders
under the Notes.

 

SECTION 4.          Representations
and Warranties. Each Grantor represents and warrants as follows:

 

(a)          Schedule
I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization or formation
and the organizational identification number of each Grantor in such state. The information set forth in Schedule I hereto
with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name (or operated
under any other name), jurisdiction of organization or organizational identification number from those set forth in Schedule
I hereto except as disclosed in Schedule I hereto.

 

(b)          There
is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any Grantor before
any Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator,
in each case, that may adversely affect the grant by any Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.

 

(c)          Except
as set forth on Schedule 4(c), all Federal, state and local tax returns and other reports required by applicable law to be filed
by any Grantor have been filed, or extensions have been obtained, and all taxes, assessments and other governmental charges imposed
upon any Grantor or any property of any Grantor (including, without limitation, all federal income and social security taxes on
employees’ wages) and which have become due and payable on or prior to the date hereof have been paid, except to the extent
contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP.

    	 	9	 

     

    

 

(d)          All
Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory of
each Grantor hereafter existing will be, located and/or based at the addresses specified therefor in Schedule III hereto,
except that each Grantor will give the Collateral Agent written notice of any change in the location of any such Collateral within
20 days of such change, other than to locations set forth on Schedule III hereto (and with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected its Liens thereon.  Each Grantor’s principal place
of business and chief executive office, the place where each Grantor keeps its Records concerning the Collateral and all originals
of all Chattel Paper are located and will continue to be located at the addresses specified therefor in Schedule III
hereto. None of the Accounts is or will be evidenced by Promissory Notes or other Instruments.

 

(e)          Set
forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of (i) each Promissory Note,
Security and other Instrument owned by each Grantor, (ii) each Pledged Account of each Grantor, together with the name and
address of each institution at which each such Pledged Account is maintained, the account number for each such Pledged Account
and a description of the purpose of each such Pledged Account and (iii) the name of each Foreign Currency Controlled Account, together
with the name and address of each institution at which each such Foreign Currency Controlled Account is maintained and the amount
of cash or cash equivalents held in each such Foreign Currency Controlled Account. Set forth in Schedule II hereto is a
complete and correct list of each trade name used by each Grantor and the name of, and each trade name used by, each Person from
which each Grantor has acquired any substantial part of the Collateral.

 

(f)          Each
Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule II hereto,
including all schedules and exhibits thereto, which represent all of the Licenses of the Grantors existing on the date of this
Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter
thereof, and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby
or the rights of such Grantor or any of its Affiliates in respect thereof. Each material License now existing is, and any material
License entered into in the future will be, the legal, valid and binding obligation of the parties thereto, enforceable against
such parties in accordance with its terms. No default under any material License by any such party has occurred, nor does any defense,
offset, deduction or counterclaim exist thereunder in favor of any such party.

 

(g)          Each
Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, which is the only Intellectual
Property necessary to conduct its business in substantially the same manner as conducted as of the date hereof. Schedule II
hereto sets forth a true and complete list of all Intellectual Property and Licenses owned or used by each Grantor as of the date
hereof, and applications for grant or registration of Intellectual Property. To the knowledge of each Grantor, all such Intellectual
Property of such Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and
enforceable and has not been abandoned in whole or in part. Except as set forth in Schedule II, no such Intellectual
Property is the subject of any licensing or franchising agreement. Except as set forth in Schedule II, no Grantor has any
knowledge of any infringement upon or conflict with the Patent, Trademark, Copyright, trade secret rights of others and, each Grantor
is not now infringing or in conflict with any Patent, Trademark, Copyright, trade secret or similar rights of others, and to the
knowledge of each Grantor, no other Person is now infringing or in conflict in any material respect with any such properties, assets
and rights owned or used by each Grantor. No Grantor has received any notice that it is violating or has violated the Trademarks,
Patents, Copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights of publicity
or other intellectual property rights of any third party.

 

    	 	10	 

     

    

 

(h)          Each
Grantor is and will be at all times the sole and exclusive owner of the Collateral pledged by such Grantor hereunder free and clear
of any Liens, except for (i) Permitted Liens thereon and (ii) certain Intellectual Property rights of the Company which is jointly
owned by the Company with certain third parties as described in Schedule II hereto. No effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except
such as (i) may have been filed in favor of the Collateral Agent and/or the Noteholders relating to this Agreement or the other
Transaction Documents, and (ii) are securing Permitted Liens as of the date hereof and disclosed on Schedule VII hereto.

 

(i)          The
exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting each Grantor or any of its properties and will not result in or require the creation of any Lien,
upon or with respect to any of its properties.

 

(j)          No
authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required for (i) the
grant by each Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral, or (ii) the
exercise by the Collateral Agent of any of its rights and remedies hereunder, except for (A) the filing under the Code as
in effect in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of which financing
statements have been duly filed and are in full force and effect, (B) with respect to all Pledged Accounts, and all cash and other
property from time to time deposited therein, the execution of a Controlled Account Agreement with the depository or other institution
with which the applicable Pledged Accounts are maintained, as provided in Section 5(i), (C) with respect to Commodity
Contracts, the execution of a control agreement with the commodity intermediary with which such Commodity Contract is carried,
as provided in Section 5(i), (D) with respect to the perfection of the security interest created hereby in the
United States Intellectual Property and Licenses, the recording of the appropriate Intellectual Property Security Agreement in
the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (E) with respect to the
perfection of the security interest created hereby in foreign Intellectual Property and Licenses, registrations and filings in
jurisdictions located outside of the United States and covering rights in such jurisdictions relating to such foreign Intellectual
Property and Licenses, (F) with respect to the perfection of the security interest created hereby in any Letter-of-Credit Rights,
the consent of the issuer of the applicable letter of credit to the assignment of proceeds as provided in the Code as in effect
in the applicable jurisdiction, (G) with respect to Investment Property constituting uncertificated securities, the applicable
Grantor causing the issuer thereof either (i) to register the Collateral Agent as the registered owner of such securities or (ii)
to agree in an authenticated record with such Grantor and the Collateral Agent that such issuer will comply with instructions with
respect to such securities originated by the Collateral Agent without further consent of such Grantor, such authenticated record
to be in form and substance satisfactory to the Collateral Agent, (H) with respect to Investment Property constituting certificated
securities or instruments, such items to be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable
form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting
Commodity Contracts, Electronic Chattel Paper or Letter of Credit Rights, the taking of such actions, and (J) the Collateral Agent
having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses (A) through (J) each
a “Perfection Requirement” and collectively, the “Perfection Requirements”).

 

    	 	11	 

     

    

 

(k)          This
Agreement creates in favor of the Collateral Agent a legal, valid and enforceable security interest in the Collateral, as security
for the Obligations. The performance of the Perfection Requirements results in the perfection of such security interest in the
Collateral. Such security interest is (or in the case of Collateral in which each Grantor obtains rights after the date hereof,
will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid, enforceable and perfected security
interests in all personal property of each Grantor (other than Excluded Collateral). Such recordings and filings and all other
action necessary to perfect and protect such security interest have been duly taken (and, in the case of Collateral in which any
Grantor obtains rights after the date hereof, will be duly taken), except for the Collateral Agent’s having possession of
all Documents, Chattel Paper, Instruments and cash constituting Collateral after the date hereof and the other actions, filings
and recordations described above, including the Perfection Requirements.

 

(l)          As
of the date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims, except
for the Commercial Tort Claims described in Schedule VI.

 

(m)          All
of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV, and is presently represented
by the certificates listed on Schedule IV hereto (if applicable). As of the date hereof, there are no existing options,
warrants, calls or commitments of any character whatsoever relating to the Pledged Equity other than as contemplated and permitted
by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial owner of the Pledged Equity, as
applicable. None of the Pledged Equity has been issued or transferred in violation of the securities registration, securities disclosure
or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes 100% or such
other percentage as set forth on Schedule IV of the issued and outstanding shares of Capital Stock of the applicable
Pledged Entity.

 

(n)          Such
Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (ii) has all requisite
corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as
presently contemplated and to execute and deliver this Agreement and each other Transaction Document to which such Grantor is a
party, and to consummate the transactions contemplated hereby and thereby and (iii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, except where the failure to be so qualified would not result in a Material Adverse
Effect.

 

    	 	12	 

     

    

 

(o)          The
execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such Grantor
is a party (i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action,
(ii) do not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership
or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties,
(iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Transaction Document) upon
or with respect to any of its assets or properties, and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or
its operations or any of its assets or properties.

 

(p)          This
Agreement and each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, will be, a legal,
valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable
principles (regardless of whether enforcement is sought in equity or at law).

 

(q)          There
are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

 

SECTION 5.          Covenants
as to the Collateral. So long as any of the Obligations shall remain outstanding,
unless the Collateral Agent shall otherwise consent in writing:

 

(a)         Further
Assurances. Each Grantor will, at its expense, at any time and from time to time, promptly execute and deliver all further
instruments and documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect
and protect the security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation, the Controlled Accounts;
or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously all
Chattel Paper and each License and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral with
a legend, in form and substance satisfactory to the Collateral Agent, indicating that such Chattel Paper, License or Collateral
is subject to the security interest created hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note,
Security (subject to the limitations set forth in Section 2), Chattel Paper or other Instrument, now or hereafter owned
by any Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory
to the Collateral Agent, (C) executing and filing (to the extent, if any, that any Grantor’s signature is required thereon)
or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or that
the Collateral Agent may reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing
to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral in each case as the Collateral Agent may reasonably request, all in reasonable detail,
(E) if any Collateral shall be in the possession of a third party, notifying such Person of the Collateral Agent’s security
interest created hereby and obtaining a written acknowledgment from such Person, in form and substance reasonably satisfactory
to the Collateral Agent, that such Person holds possession of the Collateral for the benefit of the Collateral Agent (for the benefit
the Noteholders), (F) if at any time after the date hereof, any Grantor acquires or holds any Commercial Tort Claim, promptly
notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim
and granting to the Collateral Agent a security interest therein and in the proceeds thereof, which writing shall incorporate the
provisions hereof and shall be in form and substance satisfactory to the Collateral Agent, (G) upon the acquisition after
the date hereof by any Grantor of any motor vehicle or other Equipment subject to a certificate of title or ownership (other than
a motor vehicle or Equipment that is subject to a purchase money security interest), causing the Collateral Agent to be listed
as the lienholder on such certificate of title or ownership and delivering evidence of the same to the Collateral Agent in accordance
with Section 5(j) hereof; and (H) taking all actions required by the Code or by other law, as applicable, in any relevant
Code jurisdiction, or by other law as applicable in any foreign jurisdiction.

 

    	 	13	 

     

    

 

(b)          Location
of Collateral. Each Grantor will keep the Collateral (i) at the locations specified therefor on Schedule III hereto,
or (ii) at such other locations set forth on Schedule III and with respect to which the Collateral Agent has filed financing
statements and otherwise fully perfected its Liens thereon, or (iii) at such other locations in the United States, provided that
30 days prior to any change in the location of any Collateral to such other location, or upon the acquisition of any Collateral
to be kept at such other locations, the Grantors shall give the Collateral Agent written notice thereof and deliver to the Collateral
Agent a new Schedule III indicating such new locations and such other written statements and schedules as the Collateral
Agent may require.

 

(c)         Condition
of Equipment. Each Grantor will maintain or cause to be maintained and preserved in good condition,
repair and working order, ordinary wear and tear excepted, the Equipment (necessary or useful to its business) and will forthwith,
or in the case of any loss or damage to any Equipment of any Grantor within a commercially reasonable time after the occurrence
thereof, make or cause to be made all repairs, replacements and other improvements in connection therewith which are necessary
or desirable, consistent with past practice, or which the Collateral Agent may request to such end. Any Grantor will promptly
furnish to the Collateral Agent a statement describing in reasonable detail any such loss or damage in excess of $25,000 per
occurrence to any Equipment.

 

(d)         Taxes,
Etc. Each Grantor agrees to pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except for those taxes disclosed under the Exchange Agreement or to the extent the validity thereof
is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof.

 

(e)          Insurance.

 

(i)          Each
Grantor will, at its own expense, maintain insurance (including, without limitation, comprehensive general liability, hazard,
rent and business interruption insurance) with respect to its properties (including all real properties leased or owned by it)
and business, in such amounts and covering such risks, in such form and with responsible and reputable insurance companies or
associations as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated and in any event, in amount,
adequacy and scope reasonably satisfactory to the Collateral Agent.

 

    	 	14	 

     

    

 

(ii)         To
the extent requested by the Collateral Agent at any time and from time to time, each such policy for liability insurance shall
provide for all losses to be paid on behalf of the Collateral Agent and any Grantor as their respective interests may appear,
and each policy for property damage insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral
Agent. In addition to and without limiting the foregoing, to the extent requested by the Collateral Agent at any time and from
time to time, each such policy shall in addition (A) name the Collateral Agent as an additional insured party and/or loss payee,
as applicable, thereunder (without any representation or warranty by or obligation upon the Collateral Agent) as its interests
may appear, (B) contain an agreement by the insurer that any loss thereunder shall be payable to the Collateral Agent on its own
account notwithstanding any action, inaction or breach of representation or warranty by any Grantor, (C) provide that there shall
be no recourse against the Collateral Agent for payment of premiums or other amounts with respect thereto, and (D) provide that
at least 30 days’ prior written notice of cancellation, lapse, expiration or other adverse change shall be given to the
Collateral Agent by the insurer. Any Grantor will, if so requested by the Collateral Agent, deliver to the Collateral Agent original
or duplicate policies of such insurance (including certificates demonstrating compliance with this Section 5(e)) and, as often
as the Collateral Agent may reasonably request, a report of a reputable insurance broker with respect to such insurance. Any Grantor
will also, at the request of the Collateral Agent, execute and deliver instruments of assignment of such insurance policies and
cause the respective insurers to acknowledge notice of such assignment.

 

(iii)        Reimbursement
under any liability insurance maintained by any Grantor pursuant to this Section 5(e) may be paid directly to the Person
who shall have incurred liability covered by such insurance. In the case of any loss involving damage to Equipment or Inventory,
to the extent paragraph (iv) of this Section 5(e) is not applicable, any proceeds of insurance involving such damage
shall be paid to the Collateral Agent, and any Grantor will make or cause to be made the necessary repairs to or replacements of
such Equipment or Inventory, and any proceeds of insurance maintained by any Grantor pursuant to this Section 5(e) (except
as otherwise provided in paragraph (iv) in this Section 5(e)) shall be paid by the Collateral Agent to any Grantor as reimbursement
for the reasonable costs of such repairs or replacements.

 

(iv)        Notwithstanding
anything to the contrary in subsection 5(e)(iii) above, following and during the continuance of an Event of Default, all insurance
payments in respect of each Grantor’s properties and business shall be paid to the Collateral Agent and applied as specified
in Section 7(b) hereof.

 

(f)          Provisions
Concerning the Accounts and the Licenses.

 

(i)          Each
Grantor will (A) give the Collateral Agent at least 30 days’ prior written notice of any change in such Grantor’s name,
identity or organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth in
Schedule I hereto, (C) immediately notify the Collateral Agent upon obtaining an organizational identification number, if
on the date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Collateral
and permit representatives of the Collateral Agent during normal business hours on reasonable notice to such Grantor, to inspect
and make abstracts from such records.

 

    	 	15	 

     

    

 

(ii)         Each
Grantor will (except as otherwise provided in this subsection (f) or pursuant to its Factoring and Advance Agreement disclosed
under the Exchange Agreement), continue to collect, at its own expense, all amounts due or to become due under the Accounts. In
connection with such collections, any Grantor may (and, at the Collateral Agent’s direction, will) take such action as any
Grantor or the Collateral Agent may deem necessary or advisable to enforce collection or performance of the Accounts; provided,
however, that the Collateral Agent shall have the right at any time following the occurrence and during the continuance
of an Event of Default to notify the Account Debtors or obligors under any Accounts of the assignment of such Accounts to the
Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to any Grantor
thereunder directly to the Collateral Agent or its designated agent and, upon such notification and at the expense of any Grantor
and to the extent permitted by applicable law, to enforce collection of any such Accounts and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as any Grantor might have done. After receipt by any
Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify, or has enforced or intends
to enforce any Grantor’s rights against the Account Debtors or obligors under any Accounts as referred to in the proviso
to the immediately preceding sentence, (A) all amounts and proceeds (including Instruments) received by any Grantor in respect
of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder (for the benefit the Noteholders),
shall be segregated from other funds of any Grantor and shall be forthwith paid over to the Collateral Agent in the same form
as so received (with any necessary endorsement) to be applied as specified in Section 7(b) hereof, and (B) no Grantor
will adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or obligor
thereof or allow any credit or discount thereon. In addition, upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and financial institutions with
which any Grantor either maintains a Deposit Account or a lockbox (including, without limitation, any Controlled Account) or deposits
the proceeds of any Accounts to send immediately to the Collateral Agent by wire transfer (to such deposit account as the Collateral
Agent shall specify, or in such other manner as the Collateral Agent shall direct) all or a portion of such securities, cash,
investments and other items held by such institution. Any such securities, cash, investments and other items so received by the
Collateral Agent shall be applied as specified in accordance with Section 7(b) hereof.

 

(iii)        Upon
the occurrence and during the continuance of any breach or default under any material License referred to in Schedule II
hereto by any party thereto other than any Grantor, each Grantor party thereto will, promptly after obtaining knowledge thereof,
give the Collateral 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.

 

(iv)        Each
Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by
it by which any other party to any material License referred to in Schedule II hereto purports to exercise any of its rights
or affect any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.

 

    	 	16	 

     

    

 

(v)         Each
Grantor 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 material License and
will take all action reasonably necessary to maintain such Licenses in full force and effect. No Grantor will, without the prior
written consent of the Collateral Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any provision of,
any material License referred to in Schedule II hereto.

 

(g)          Transfers
and Other Liens.

 

(i)          Except
as otherwise expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, sell, lease, license,
assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single transaction or
a series of related transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and other dispositions
of such assets or rights by such Grantor for value in the ordinary course of business consistent with past practices; (B) sales
of Inventory and product in the ordinary course of business and (C) the transfer of any Accounts pursuant to the Factoring and
Advance Agreement described in the Exchange Agreement.

 

(ii)         Except
as permitted under Section 2.2 of the Notes, no Grantor shall, directly or indirectly, redeem, repurchase or declare or pay any
cash dividend or distribution on any of its Capital Stock.

 

(iii)        No
Grantor shall, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes (other than
as contemplated by the Exchange Agreement and the Notes) or (B) issue any other securities that would cause a breach or default
under the Notes.

 

(iv)        No
Grantor shall enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any
kind) with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice
and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to
it than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.

 

(v)         No
Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.

 

    	 	17	 

     

    

 

(h)          Intellectual
Property.

 

(i)          If
applicable, each Grantor shall duly execute and deliver the applicable Intellectual Property Security Agreement. Each Grantor (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, numbers and markings (relating
to patent, trademark and copyright rights) and using the Trademarks on each applicable trademark class of goods in order to so
maintain the Trademarks in full force and free from any claim of abandonment for non-use, and each Grantor will not (nor permit
any licensee thereof to) do any act or knowingly omit to do any act whereby any Intellectual Property may become abandoned, cancelled
or invalidated; provided, however, that so long as no Event of Default has occurred and is continuing, no Grantor
shall have an obligation to use or to maintain any Intellectual Property (A) that relates solely to any product or work, that
is no longer necessary or material and has been, or is in the process of being, discontinued, abandoned or terminated in the ordinary
course of business and consistent with the exercise of reasonable business judgment, (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 Lien created by this Agreement and does not have
a material adverse effect on the business of any Grantor or (C) that is substantially the same as another 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 Lien and security
interest created by this Agreement and does not have a material adverse effect on the business of any Grantor. Each Grantor 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 country or political subdivision thereof to maintain each registration
of the Intellectual Property and application for registration of 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 second
sentence of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or otherwise violated in any material respect
by a third party, each Grantor shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly
notify the Collateral Agent and (y) 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 such Grantor shall deem appropriate under the circumstances to protect such Intellectual Property.
Each Grantor shall furnish to the Collateral 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 the Collateral Agent may reasonably request, all in reasonable detail and promptly upon request of the Collateral Agent, following
receipt by the Collateral Agent of any such statements, schedules or reports, each Grantor shall modify this Agreement by amending
Schedule II hereto, as the case may be, to include any Intellectual Property and License, as the case may be, which is or
hereafter 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 reasonable judgment of the Collateral Agent, desirable to subject such Intellectual Property and
Licenses to the Lien and 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 Grantor may abandon, surrender or otherwise permit any Intellectual
Property to become abandoned, cancelled or invalid without the prior written consent of the Collateral Agent, and if any Intellectual
Property is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, each Grantor will
take such reasonable action as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual
Property.

 

    	 	18	 

     

    

 

(ii)         In
no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for the registration
of any Patent, Trademark or Copyright or the United States Copyright Office or the United States Patent and Trademark Office, as
applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof unless
it gives the Collateral Agent prior written notice thereof. Upon request of the Collateral Agent, any Grantor shall execute, authenticate
and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably request
to evidence the Collateral Agent’s security interest hereunder in such Intellectual Property and the General Intangibles
of any Grantor relating thereto or represented thereby, and each Grantor hereby appoints the Collateral Agent its attorney-in-fact
to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified
and confirmed, and such power (being coupled with an interest) shall be irrevocable until all Obligations are Paid in Full.

 

(i)         Pledged
Accounts.

 

(A) Upon the Collateral
Agent’s written request, each Grantor shall cause each bank and other financial institution which maintains a Controlled
Account (each a “Controlled Account Bank”) to execute and deliver to the Collateral Agent, in form and substance
satisfactory to the Collateral Agent, a Controlled Account Agreement with respect to such Controlled Account, duly executed by
each Grantor and such Controlled Account Bank, pursuant to which such Controlled Account Bank among other things shall irrevocably
agree, with respect to such Controlled Account, that (i) at any time after any Grantor, the Collateral Agent or any Investor shall
have notified such Controlled Account Bank that an Event of Default has occurred or is continuing, such Controlled Account Bank
will comply with any and all instructions originated by the Collateral Agent directing the disposition of the funds in such Controlled
Account without further consent by such Grantor, (ii) such Controlled Account Bank shall waive, subordinate or agree not to exercise
any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for payment of its service
fees and other charges directly related to the administration of such Controlled Account and for returned checks or other items
of payment, (iii at any time after any Grantor, the Collateral Agent or any Investor shall have notified such Controlled Account
Bank that an Event of Default has occurred or is continuing, with respect to each such Controlled Account, such Controlled Account
Bank shall not comply with any instructions, directions or orders of any form with respect to such Controlled Accounts other than
instructions, directions or orders originated by the Collateral Agent, (iv) all funds deposited by any Grantor with such Controlled
Account Bank shall be subject to a perfected, first priority security interest in favor of the Collateral Agent, and (v) upon receipt
of written notice from the Collateral Agent during the continuance of an Event of Default, such Controlled Account Bank shall immediately
send to the Collateral Agent by wire transfer (to such account as the Collateral Agent shall specify, or in such other manner as
the Collateral Agent shall direct) all such funds and other items held by it. No Grantor shall create or maintain any Pledged Account
without the prior written consent of the Collateral Agent and complying with the terms of this Agreement.

 

    	 	19	 

     

    

 

(j)          Motor
Vehicles.

 

(i)          Upon
the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for each motor vehicle with a value in excess of $10,000 owned by it, with the Collateral Agent listed as
lienholder, for the benefit of the Noteholders.

 

(ii)         Each
Grantor hereby appoints the Collateral Agent as its attorney-in-fact, during the occurrence and continuation of an Event of Default
and terminating upon the termination of this Agreement, for the purpose of (A) executing on behalf of such Grantor title or
ownership applications for filing with appropriate Governmental Authorities to enable motor vehicles now owned or hereafter acquired
by such Grantor to be retitled and the Collateral Agent listed as lienholder thereof, (B) filing such applications with such Governmental
Authorities, and (C) executing such other agreements, documents and instruments on behalf of, and taking such other action
in the name of, such Grantor as the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (including,
without limitation, for the purpose of creating in favor of the Collateral Agent a perfected Lien on the motor vehicles and exercising
the rights and remedies of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and
is irrevocable until all of the Obligations are Paid in Full.

 

(iii)        Any
certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by odometer statements for each
motor vehicle covered thereby.

 

(iv)        So
long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Collateral Agent shall
execute and deliver to any Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Collateral
Agent as lienholder on any certificate of title for any motor vehicle; provided, however, that any such instruments
shall be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from any Grantor stating
that such motor vehicle is to be sold or has suffered a casualty loss (with title thereto in such case passing to the casualty
insurance company therefor in settlement of the claim for such loss) and the amount that any Grantor will receive as sale proceeds
or insurance proceeds. Any proceeds of such sale or casualty loss shall be paid to the Collateral Agent hereunder immediately upon
receipt, to be applied to the Obligations then outstanding.

 

(k)          Control.
Each Grantor hereby agrees to take any or all action that may be necessary or that the Collateral Agent may reasonably request
in order for the Collateral Agent to obtain “control” in accordance with Sections 9-105 through 9-107 of the Code with
respect to the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.

 

    	 	20	 

     

    

 

(l)          Inspection
and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such professionals
or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and expense) (i) to examine and make
copies of and abstracts from any Grantor’s records and books of account, (ii) to visit and inspect its properties, (iii) to
verify materials, leases, Instruments, Accounts, Inventory and other assets of any Grantor from time to time, and (iv) to
conduct audits, physical counts, appraisals and/or valuations, examinations at the locations of any Grantor. Each Grantor shall
also permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountants or other professionals
or other Persons as the Collateral Agent may designate to discuss such Grantor’s affairs, finances and accounts with any
of its directors, officers, managerial employees, independent accountants or any of its other representatives. Without limiting
the foregoing, the Collateral Agent may, at any time following (and during the continuance of) an Event of Default, in the Collateral
Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail,
telephone, facsimile or otherwise) with the Account Debtors of such Grantor, parties to contracts with such Grantor and/or obligors
in respect of Instruments of such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence,
amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other receivables.

 

(m)          Future
Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary, simultaneously with the creation or acquisition
of such Subsidiary, such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary, cause such Subsidiary to become a party
to this Agreement as an additional “Grantor” hereunder, (ii) deliver to the Collateral Agent updated Schedules to this
Agreement, as appropriate (including, without limitation, an updated Schedule IV to reflect the grant by such Grantor of
a Lien on all Pledged Equity now or hereafter owned by such Grantor), (iii) if such Subsidiary is a Domestic Subsidiary, cause
such Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of the Collateral Agent in form and substance
acceptable to the Collateral Agent, (iv) deliver to the Collateral Agent the stock certificates representing all of the Capital
Stock of such Subsidiary, along with undated stock powers for each such certificates, executed in blank (or, if any such shares
of Capital Stock are uncertificated, confirmation and evidence reasonably satisfactory to the Collateral Agent that the security
interest in such uncertificated securities has been transferred to and perfected by the Collateral Agent, in accordance with Sections
8-313, 8-321 and 9-115 of the Code or any other similar or local or foreign law that may be applicable), and (v) duly execute and/or
cause to be delivered to the Collateral Agent, in form and substance acceptable to the Collateral Agent, such opinions of counsel
and other documents as the Collateral Agent shall request with respect thereto; provided, however, that no Grantor shall be required
to pledge any Excluded Collateral. Each Grantor hereby authorizes the Collateral Agent to attach such updated Schedules to this
Agreement and agrees that all Pledged Equity listed on any updated Schedule delivered to the Collateral Agent shall for all purposes
hereunder be considered Collateral. The Grantors agree that the pledge of the shares of Capital Stock acquired by a Grantor of
Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges, or other similar
agreements or instruments, executed and delivered by the relevant Grantor in favor of the Collateral Agent, which pledge agreements
will provide for the pledge of such shares of Capital Stock in accordance with the laws of the applicable foreign jurisdiction.
With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its sole discretion,
take actions in such foreign jurisdictions that will result in the perfection of the Lien created in such shares of Capital Stock.

 

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Section
6.          Additional Provisions Concerning the Collateral.

 

(a)          To
the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent to execute any
such agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments or other
documents in such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any time and
from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral
(including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all
personal property” (or words of similar effect) or that describe or identify the Collateral by type or in any other manner
as the Collateral Agent may determine regardless of whether any particular asset of such Grantor falls within the scope of Article
9 of the Code or whether any particular asset of such Grantor constitutes part of the Collateral, and (B) contain any other information
required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including, without limitation, whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor) and (iii) ratifies such authorization to the extent that the
Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof. A photocopy
or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law.

 

(b)          Following
the occurrence, and during the continuance of an Event of Default, each Grantor hereby appoints the Collateral Agent as its attorney-in-fact
and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to
time in the Collateral Agent’s discretion, to take any action and to execute any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (i) to obtain and adjust
insurance required to be paid to the Collateral Agent pursuant to Section 5(e) hereof, (ii) to ask, demand, collect,
sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any
Collateral, (iii) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper in connection with
clause (i) or (ii) above, (iv) to file any claims or take any action or institute any proceedings which the Collateral Agent may
deem necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of the Collateral Agent and
the Noteholders with respect to any Collateral, (v) to execute assignments, licenses and other documents to enforce the rights
of the Collateral Agent and the Noteholders with respect to any Collateral, and (vi) to verify any and all information with respect
to any and all Accounts. This power is coupled with an interest and is irrevocable until all of the Obligations are Paid in Full.

 

    	 	22	 

     

    

 

(c)          For
the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent shall
be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Collateral
Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation
to any Grantor) to use, assign, license or sublicense any Intellectual Property now owned or hereafter acquired by such Grantor,
wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may
be recorded or stored and to all computer programs used for the compilation or printout thereof. Notwithstanding anything contained
herein to the contrary, but subject to the provisions of the Exchange Agreement that limit the right of any Grantor to dispose
of its property, and Section 5(g) and Section 5(h) hereof, so long as no Event of Default shall have occurred
and be continuing, any Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions
with respect to the Intellectual Property in the ordinary course of its business and as otherwise expressly permitted by any of
the other Transaction Documents. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing,
the Collateral Agent shall from time to time, upon the request of any Grantor, execute and deliver any instruments, certificates
or other documents, in the form so requested, which such Grantor shall have certified are appropriate (in such Grantor’s
judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant to this clause
(c) as to any Intellectual Property). Further, upon the Payment in Full of all of the Obligations, the Collateral Agent (subject
to Section 10(e) hereof) shall release and reassign to any Grantor all of the Collateral Agent’s right, title
and interest in and to the Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever.
The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses
or sublicenses theretofore granted by each Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby
releases the Collateral Agent from any claims, causes of action and demands at any time arising out of or with respect to any actions
taken or omitted to be taken by the Collateral Agent under the powers of attorney granted herein other than actions taken or omitted
to be taken through the Collateral Agent’s gross negligence or willful misconduct, as determined by a final determination
of a court of competent jurisdiction.

 

(d)          If
any Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor pursuant to Section 8 hereof and shall be secured
by the Collateral.

 

(e)          The
powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

(f)          Anything
herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with respect
to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights hereunder shall not release
any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral
Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other
Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or
to take any action to collect or enforce any claim for payment assigned hereunder.

 

    	 	23	 

     

    

 

(g)          As
long as no Event of Default shall have occurred and be continuing and until written notice shall be given to the applicable Grantor:

 

(i)          Each
Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any part thereof
for all purposes not inconsistent with the provisions of this Agreement, the Exchange Agreement or any other Transaction Document;
provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of impairing
the position or interest of the Collateral Agent in respect of the Pledged Equity or which would authorize, effect or consent to
(unless and to the extent expressly permitted by the Exchange Agreement):

 

(A)         the
dissolution or liquidation, in whole or in part, of a Pledged Entity;

 

(B)         the
consolidation or merger of a Pledged Entity with any other Person;

 

(C)         the
sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the
Collateral Agent;

 

(D)         any
change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance
of any additional shares of its Capital Stock; or

 

(E)         the
alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.

 

(h)          (i)          Each
Grantor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and interest paid in respect
of the Pledged Equity to the extent not in violation of the Exchange Agreement other than any and all: (A) dividends and interest
paid or payable other than in cash in respect of any Pledged Equity, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends and other distributions paid or payable
in cash in respect of any Pledged Equity in connection with a partial or total liquidation or dissolution or in connection with
a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed,
in respect of principal of, or in redemption of, or in exchange for, any Pledged Equity; provided, however, that until actually
paid all rights to such distributions shall remain subject to the Lien created by this Agreement; and

 

(ii)         all
dividends and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with
clause (i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered
to the Collateral Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of
the Collateral Agent (for the benefit the Noteholders), be segregated from the other property or funds of such Grantor, and be
forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement).

 

    	 	24	 

     

    

 

SECTION 7.          Remedies
Upon Event of Default; Application of Proceeds. If any Event of Default shall have occurred and be continuing:

 

(a)          The
Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein, in
any other Transaction Document or otherwise available to it, all of the rights and remedies of a secured party upon default under
the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral,
including, without limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to
the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the benefit of the Noteholders, all payments
made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though
it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense
and upon request of the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral
Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably
convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by any Grantor where
the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s
rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, and (iii) without
notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral
or any part thereof in one or more parcels at public or private sale (including, without limitation, by credit bid), at any of
the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and
upon such other terms as the Collateral Agent may deem commercially reasonable and/or (B) lease, license or dispose of the
Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. Each Grantor agrees that,
to the extent notice of sale or any other disposition of its respective Collateral shall be required by law, at least ten (10)
days’ notice to any Grantor of the time and place of any public sale or the time after which any private sale or other disposition
of its respective Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated
to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Collateral Agent may
adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the Collateral
Agent and the Noteholders arising by reason of the fact that the price at which its respective Collateral may have been sold at
a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of
the Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than
one offeree, and waives all rights that any Grantor may have to require that all or any part of such Collateral be marshaled upon
any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of its respective Collateral
by the Collateral Agent shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties
of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall
not adversely affect the commercial reasonableness of any such sale of Collateral. In addition to the foregoing, (1) upon
written notice to any Grantor from the Collateral Agent after and during the continuance of an Event of Default, such Grantor shall
cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose described in such
notice; (2) the Collateral Agent may, at any time and from time to time after and during the continuance of an Event of Default,
upon 10 days’ prior notice to such Grantor, license, whether general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any of the Intellectual Property, throughout the universe for such term or terms, on such conditions, and
in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral Agent may, at any time,
pursuant to the authority granted in Section 6 hereof or otherwise (such authority being effective upon the occurrence
and during the continuance of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments of assignment
of the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration
in any country.

 

    	 	25	 

     

    

 

(b)          Any
cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale
or disposition of or collection from, or other realization upon, all or any part of the Collateral shall be applied as follows
(subject to the provisions of the Exchange Agreement): first, to pay any fees, indemnities or expense reimbursements then
due to the Collateral Agent (including those described in Section 8 hereof); second, to pay any fees, indemnities
or expense reimbursements then due to the Noteholders, on a pro rata basis; third to pay interest due under the Notes owing
to the Noteholders, on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes, whether or not then
due, owing to the Noteholders, on a pro rata basis; fifth, to pay or prepay any other Obligations, whether or not then
due, in such order and manner as the Collateral Agent shall elect, consistent with the provisions of the Exchange Agreement. Any
surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the Payment in Full of all of the Obligations
shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall
direct.

 

(c)          In
the event that the proceeds of any such sale, disposition, collection or realization are insufficient to pay all amounts to which
the Collateral Agent and the Noteholders are legally entitled, each Grantor shall be, jointly and severally, liable for the deficiency,
together with interest thereon at the highest rate specified in the Notes for interest on overdue principal thereof or such other
rate as shall be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other
charges of any attorneys employed by the Collateral Agent to collect such deficiency.

 

(d)          To
the extent that applicable law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses
deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work
in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access
to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to
exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same
business as any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature,
(viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition
of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii)
to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment bankers, consultants, attorneys
and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor
acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by the Collateral
Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated
in this section. Without limitation upon the foregoing, nothing contained in this section shall be construed to grant any rights
to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this section.

 

    	 	26	 

     

    

 

(e)          The
Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this
Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of the Collateral Agent’s rights hereunder and
in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights,
however existing or arising. To the extent that any Grantor lawfully may, each Grantor hereby agrees that it will not invoke any
law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s
rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

 

Section
8.          Indemnity and Expenses.

 

(a)          Each
Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the Noteholders
harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s counsel) to the extent that
they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except
to the extent resulting from such Person’s gross negligence or willful misconduct, as determined by a final judgment of a
court of competent jurisdiction no longer subject to appeal.

 

(b)          Each
Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all costs and expenses,
including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents
(including, without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral Agent
may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment,
waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.

 

    	 	27	 

     

    

 

SECTION 9.          Notices,
Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail,
first-class postage prepaid and return receipt requested), telecopied, e-mailed or delivered, if to any Grantor, to the Company’s
address, or if to the Collateral Agent or any Noteholder, to it at its respective address, each as set forth in Section 9(f) of
the Exchange Agreement; or as to any such Person, at such other address as shall be designated by such Person in a written notice
to all other parties hereto complying as to delivery with the terms of this Section 9. All such notices and other communications
shall be effective (a) if sent by certified mail, return receipt requested, when received or three Business Days after deposited
in the mails, whichever occurs first, (b) if telecopied or e-mailed, when transmitted (during normal business hours) and confirmation
is received, and otherwise, the day after the notice or communication was transmitted and confirmation is received, or (c) if
delivered in person, upon delivery. For the avoidance of doubt, all Foreign Subsidiaries, as Grantors, hereby appoint the Company
as its agent for receipt of service of process and all notices and other communications in the United States at the address specified
below.

 

Section
10.         Miscellaneous.

 

(a)          No
amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Collateral
Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure
by each Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent (and
approved by the Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No amendment, modification or waiver of this Agreement shall be effective to the extent that
it (1) applies to fewer than all of the holders of Notes or (2) imposes any obligation or liability on any holder of Notes without
such holder’s prior written consent (which may be granted or withheld in such holder’s sole discretion).

 

(b)          No
failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right reasonably hereunder or under any
of the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right
reasonably preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Collateral
Agent or any Noteholder provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law. The rights of the Collateral Agent or any Noteholder under any of the other Transaction
Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights
under any of the other Transaction Documents against such party or against any other Person, including but not limited to, any
Grantor.

 

    	 	28	 

     

    

 

(c)          Any
provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting
the validity or enforceability of such provision in any other jurisdiction.

 

(d)          This
Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until Payment
in Full of the Obligations, and (ii) be binding on each Grantor and all other Persons who become bound as debtor to this Agreement
in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the Collateral Agent
and the Noteholders hereunder, to the benefit of the Collateral Agent and the Noteholders and their respective permitted successors,
transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, without notice to
any Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations under this
Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested with
all of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon any such assignment
or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral
Agent or such Noteholder. None of the rights or obligations of any Grantor hereunder may be assigned or otherwise transferred without
the prior written consent of the Collateral Agent, and any such assignment or transfer without such consent of the Collateral Agent
shall be null and void.

 

(e)          Upon
the Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby shall terminate and all rights
to the Collateral shall revert to the respective Grantor that granted such security interests hereunder, and (ii) the Collateral
Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such of the Collateral
as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any representation, warranty
or recourse whatsoever.

 

(f)          Governing
Law; Jurisdiction; Jury Trial.

 

(i)          All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of New York.

 

(ii)         Each
Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction
Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Exchange
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. Nothing contained herein
shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action
against any Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce a judgment or other court
ruling in favor of the Collateral Agent or a Noteholder.

 

    	 	29	 

     

    

 

(iii)        WAIVER
OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(iv)        Each
Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.

 

(g)          Section
headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other
purpose.

 

(h)          This
Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of any executed
counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as delivery
of a manually executed counterpart of this Agreement.

 

(i)          This
Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations
is rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence
of any Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not
been made).

 

    	 	30	 

     

    

 

SECTION 11.         Material
Non-Public Information. Upon receipt or delivery by the Company of any notice in
accordance with the terms of this Agreement, unless the Company has in good faith determined that the matters relating to such
notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall
within two (2) Business Days after any such receipt or delivery publicly disclose such material, non-public information on a Current
Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Collateral Agent and any applicable Noteholder
contemporaneously with delivery of such notice, and in the absence of any such indication, the Collateral Agent and each Noteholder
shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating
to the Company or its Subsidiaries. Nothing contained in this Section 11 shall limit any obligations of the Company, or
any rights of the Collateral Agent or any Noteholder, under the Exchange Agreement.

 

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

    	 	31	 

     

    

 

IN WITNESS WHEREOF, each
Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above
written.

 

	 	GRANTORS:
	 	 	 
	 	EASTSIDE DISTILLING, INC.
	 	 	 
	 	By:	/s/ Steven Earles
	 	 	Name: Steven Earles
	 	 	Title: CEO
	 	 	 
	ACCEPTED BY:	 	 
	 	 	 
	MAGNA EQUITIES II LLC,	 	 
	as Collateral Agent	 	 
	 	 	 
	By: /s/ Joshua Sason	 	 
	 	Name: Joshua Sason	 	 
	 	Title: CEO	 	 

 

     

     

    

 

EXHIBIT A

 

FORM OF
INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This INTELLECTUAL PROPERTY
SECURITY AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this “IP Security
Agreement”), dated May 13, 2016, is made by the Persons listed on the signature pages hereof (collectively, the “Grantors”)
in favor of Magna Equities II LLC, a New York limited liability company, in its capacity as collateral agent (the “Collateral
Agent”) for the Noteholders. All capitalized terms not otherwise defined herein shall have the meanings respectively
ascribed thereto in the Security Agreement (as defined below).

 

WHEREAS, on May 13, 2016,
MR Group I, LLC purchased from the Company pursuant to that certain Exchange Agreement (the “Exchange Agreement”)
dated May 13, 2016 by and between the Company and MR Group I, LLC (i) that certain Secured Convertible Promissory Note (as such
note may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms
thereof, collectively, the “Note”), in the aggregate initial principal amount of $219,200.65 and (ii) that certain
Secured Convertible Promissory Note (as such note may be amended, modified, supplemented, extended, renewed, restated or replaced
from time to time in accordance with the terms thereof, collectively, the “Note”), in the aggregate initial
principal amount of $302,646.58 (the “Second Note” and together with the Note, the “Notes”).

 

WHEREAS, it is a condition
precedent to the purchase of the Notes under the Exchange Agreement that each Grantor has executed and delivered that certain Security
and Pledge Agreement, dated May 13, 2016, made by the Grantors to the Collateral Agent (as amended, modified, supplemented, renewed,
restated or replaced from time to time, the “Security Agreement”); and

 

WHEREAS, under the terms
of the Security Agreement, the Grantors have granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and
the Noteholders, a security interest in, among other property, certain intellectual property of the Grantors, and have agreed as
a condition thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United States
Copyright Office and other governmental authorities.

 

WHEREAS, the Grantors
have determined that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best
interest of, the Grantors.

 

NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Investors to perform under the Exchange Agreement, each Grantor
agrees with the Collateral Agent, for the benefit of the Noteholders, as follows

 

     

     

    

 

SECTION 1. Grant of
Security. Each Grantor hereby grants to the Collateral Agent for the ratable benefit of the Collateral Agent and the Noteholders
a security interest in all of such Grantor’s right, title and interest in and to the following (the “Collateral”):

 

(i)          the
Patents and Patent applications set forth in Schedule A hereto;

 

(ii)         the
Trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security interest
shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which,
the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications
under applicable federal law), together with the goodwill symbolized thereby;

 

(iii)        all
Copyrights, whether registered or unregistered, now owned or hereafter acquired by such Grantor, including, without limitation,
the copyright registrations and applications and exclusive copyright licenses set forth in Schedule C hereto;

 

(iv)        all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all
rights in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;

 

(v)         any
and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise
recover, such damages; and

 

(vi)        any
and all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral of or arising from any of the foregoing.

 

SECTION 2. Security
for Obligations. The grant of a security interest in, the Collateral by each Grantor under this IP Security Agreement secures
the payment of all Obligations of such Grantor now or hereafter existing under or in respect of the Notes and the Transaction Documents,
whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties,
fees, indemnifications, contract causes of action, costs, expenses or otherwise.

 

SECTION 3. Recordation.
Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.

 

SECTION 4. Execution
in Counterparts. This IP Security 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.

 

     

     

    

 

SECTION 5. Grants,
Rights and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement.
Each Grantor does hereby acknowledge and confirm that the grant of the security interest hereunder to, and the rights and remedies
of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions
of which are incorporated herein by reference as if fully set forth herein.

 

SECTION 6. Governing
Law; Jurisdiction; Jury Trial.

 

(i)          All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of New York.

 

(ii)         Each
Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction
Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Exchange
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. Nothing contained herein
shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action
against any Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce a judgment or other court
ruling in favor of the Collateral Agent or a Noteholder.

 

(iii)        WAIVER
OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT,
ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(iv)        Each
Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.

 

[The remainder of the
page is intentionally left blank]

 

     

     

    

 

IN WITNESS WHEREOF, each
Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first
above written.

 

	 	EASTSIDE DISTILLING, INC.
	 	 	 
	 	By	/s/ Steven Earles
	 	 	Name: Steven Earles
	 	 	Title: CEO
	 	 	 
	 	Address for Notices:
	 	 	 
	 	[ADDRESS]

 

     

     

    

 

IN WITNESS WHEREOF, each
Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first
above written.

 

	 	[NAME OF GRANTOR]
	 	 	 
	 	By	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Address for Notices:Exhibit 10.1

 

 

 

Sales,
Marketing, Distribution, and Supply Agreement {***}

 

WHEREAS HEMISPHERX is a biopharmaceutical company with headquarters
at One Penn Center, 1617 JFK Boulevard, Suite 500, Philadelphia, PA 19103, U.S. ("HEMISPHERX") and Scientific
Products Pharmaceutical Co. LTD is a pharmaceutical company with its primary offices located at Tahlia Street, P.O Box 10485,
Riyadh 11433 Saudi Arabia (" SCIEN”), each a “Party” together, “Parties”, and

 

WHEREAS HEMISPHERX owns intellectual proprietary rights relating
to Interferon alfa-n3 (human leukocyte derived), and

 

WHEREAS HEMISPHERX desires to have Interferon alfa-n3 (human
leukocyte derived) provided to physicians to treat genital warts and other infections and diseases, including MERS, in the GCC
(Gulf Cooperation Council) states , as appropriate, prior to regulatory approval in such countries and to have Interferon alfa-n3
(human leukocyte derived) approved by the regulatory authorities in each GCC country (Kingdom of Saudi Arabia, Bahrain, Qatar,
Kuwait, United Arab emirates (UAE) and Sultanate of Oman)), and

 

WHEREAS SCIEN has sales, marketing, distribution capabilities
in the GCC states, and

 

WHEREAS, AFTER A SUCCESSFUL CLINICAL TRIAL IN MERS, SCIEN affirms
it has the ability to supply Interferon alfa-n3 (human leukocyte derived) in the GCC States prior to regulatory approval and simultaneously
seek to gain regulatory approval in each of the GCC States. After the clinical trial in MERS has been conducted, in the event
it is successful and the Hemispherx manufacturing site requires approved by the GCC / SFDA, the cost of any post-clinical trial
inspection of the facility to be the responsibility of Scien or the regulatory authority, and subsequently to market, sell and
distribute Interferon alfa-n3 (human leukocyte derived) in the GCC, and

 

WHEREAS, SCIEN desires to supply Interferon alfa-n3 (human
leukocyte derived) under special approval from the Saudi Ministry of Health and for other GCC states where applicable, and

 

WHEREAS, HEMISPHERX desires to supply and sell Interferon alfa-n3
(human leukocyte derived)) to SCIEN, and SCIEN is willing to purchase Interferon alfa-n3 (human leukocyte derived) from HEMISPHERX
for the purposes described in this agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and
agreements made herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties
agree as follows:

 

I.           DEFINITIONS

 

"Affiliate" means any corporation or other business
entity, which controls, is controlled by, or is under the common control of a Party.

 

"End User" means a physician, medical facility or
institution, or government agency that purchases Product with the intent of administering it to a patient.

 

"Field" means refractory/recurrent genital warts,
recombinant interferon refractory patients and patients with other infectious diseases, e.g., MERS, influenza, West Nile Virus,
and cancer, etc.

 

"HEMISPHERX Intellectual Property" means all HEMISPHERX
patents, patent applications, know-how, and trademarks owned or controlled by HEMISPHERX up to the termination or expiration of
this Agreement.

 

“List Price” means ${***}/Product Unit.

 

“Product” means an injectable formulation of clinical
grade Interferon alfa-n3 (human leukocyte derived).

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 1 of 28	 

     

    

 

"Product Data" means all data possessed by HEMISPHERX
relating to the use of Interferon alfa-n3 (human leukocyte derived) to treat patients in the Field and which is needed to obtain
regulatory approval in the Territory.

 

"Product Unit" means 1 x1ml vial containing 5 million
international units (I.U.) of Interferon alfa-n3 (human leukocyte derived)

 

"Sales Price" means the price SCIEN and/or its Affiliates
charge an End User for a Product Unit.

 

"Territory" means the GCC States

 

“Transfer Price” means
a discounted price of ${***}/ Product Unit. 

 

II.          LICENSE

 

CONDITION PRECEDENT: THE GRANTING OF ANY AND ALL LICENSES
OR PRIVILEGES HEREIN IS SUBJECT TO THE SUCCESSFUL COMPLETION OF A FIVE PERSON MINIMUM CLINICAL TRIAL IN THE KINGDOM OF SAUDI
ARABIA TREATING EARLY ONSET PATIENTS INFECTED WITH MERS.

 

A.           Subject
to the condition above, HEMISPHERX hereby grants SCIEN the exclusive license to sell, market, and distribute Product for use
in the Field in the Territory for Direct Access/EAP and Regulatory Agency-Approved (RAA) purposes.

 

B.           SCIEN
shall not use HEMISPHERX Intellectual Property nor sell nor permit the sale of any products that use the HEMISPHERX Intellectual
Property outside the Territory or knowingly sell or have sold any products that use the HEMISPHERX Intellectual Property to any
party in or outside the Territory for export or sale outside the Territory, without HEMISPHERX's prior written consent.

 

C.           SCIEN
will have six 6) months after the date of this Agreement to Purchase at least 50 vials to be used by the MOH in treating patients
with MERS. Scien will thereafter, based on the outcome of the initial treatment for MERS by the MOH trial, aggressively promote
to all stakeholders in Saudi Arabia and the other GCC states (“First Performance Milestone”).

 

III.         COMMERCIAL
DEVELOPMENT

 

A.          HEMISPHERX has or will provide SCIEN:

 

1.          As
an Integral Part of this Agreement and in order for HEMISPHERX to ship Product to SCIEN, the letter with attachments (Exhibit
1) must be signed by an officer of SCIEN. A protocol is also provided (Exhibit 2).

 

2.          All
the appropriate information about Products that will assist with the education of physicians about the Product in the Territory.

 

3.          Ongoing
scientific and medical support.

 

4.          Product
Units in quantities sufficient for SCIEN's Direct Access/EAP and RAA commercial needs in the Territory, subject to availability
from HEMISPHERX.

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 2 of 28	 

     

    

 

B.           SCIEN
will:

 

1.
         Within 60 days after this Agreement becomes effective, prepare and
provide a Business Plan, to be attached to this Agreement as Exhibit 3, to make aware and educate physicians and patients about
Product both prior to and following approval of Product.

 

2.          Assist
in determining reimbursable End User pricing of Product and gain reimbursement for Product under Direct Access/EAP program and
RAA sales of the Product in the Territory.

 

3.          Assist
physicians who desire to administer Product with the required paperwork under any Direct Access/EAP program.

 

4.          Manage
the logistics within the Territory from arrival to End User supply.

 

6.          Assist
HEMISPHERX to gain regulatory approval of Product in the Field in the Territory

 

7.          Prepare
and provide a 3-year post regulatory approval Sales, Marketing, and Distribution Plan including a 3-year minimum sale forecast
and a committed-dollar field sales force, product manager and marketing budget to be agreed by both Parties and a non-binding
12 month Product forecast no later than six (6) months prior to the anticipated registration and subsequent launch date for each
Product, also to be agreed by both parties,

 

8.          Pay
for all the above Sales Marketing and Distribution activities and related expenses.

 

9.          Hold
3 months inventory of the forecasted sales once the product is registered.

 

10.         If
needed, assist in recruiting clinical trial sites and principal investigators in the Field in the Territory.

 

11.         Provide
HEMISPHERX a monthly written report of SCIEN's efforts and status thereof under this Agreement.

 

IV.          SUPPLY

 

A.           Subject
to the terms and conditions of this Agreement, HEMISPHERX agrees to exclusively supply Product to SCIEN in the Territory with
a minimum expiry of 6 months from the date of shipment.

 

B.           The
price that SCIEN will pay for Product under this Agreement is the Transfer Price, CIF. Taxes, duties, and other expenses to be
paid by SCIEN.

 

C.           SCIEN
shall pay HEMISPHERX for each order of Product within 75 days after receipt of the goods except for the for first purchase order
which will be for 50 vials of Interferon alfa-n3 (human leukocyte derived) (“First Order”) and paid once the MOH approves
the use for Interferon alfa-n3 (human leukocyte derived) on 5 MERS patients. All purchase orders are final.

 

D.           SCIEN
will ensure all necessary QA testing / approval for use occurs in the Territory and that each Product is stored under the conditions
stipulated in a Quality Agreement (QA) to be executed and appended to this Agreement as Exhibit 4.

 

E.           Forecasts,
Orders, Payment, and Delivery.

 

Direct Access/EAP Distribution

 

Following the signing of this Agreement, SCIEN will start a
full and comprehensive market analysis of the potential of each Product for Direct Access/ EAP distribution. This will be from
a market potential and willingness to pay point of view and will be completed within 3 months of the signature of this Agreement.
A forecast will then be provided for Product for Direct Access/ EAP distribution and this will be added as a supplement to the
Business Plan (Exhibit 3).

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 3 of 28	 

     

    

 

RAA Distribution 

 

Six (6) months prior to the estimated regulatory approval for
commercial sale of Product in each country in the Territory:

 

1.
         SCIEN will provide HEMISPHERX a rolling 12-month forecast of
the estimated sales of Product Units, the first 3 months of which will be firm and the second three (3) months of which cannot
vary by more than 25% when these become the first three (3) months. This forecast will be updated at 3-month intervals thereafter.

 

2.
         In accordance with this forecast, SCIEN agrees to order Product
from HEMISPHERX under this Agreement by submitting to HEMISPHERX written purchase orders specifying the quantity, packaging, delivery
dates, and delivery location.

 

3.
         HEMISPHERX shall manufacture Product as described in the purchase
order from SCIEN and HEMISPHERX shall make all shipments to the location specified on SCIEN's purchase order as follows:

 

4.
         Hemispherx shall pack, mark and ship Products in accordance with
temperature thermometer specifications for the drug product. Hemispherx shall package Products so as to prevent damage or deterioration
and shall comply with all applicable temperature and packaging laws. Unless otherwise stipulated, Products shall be packaged,
marked, crated and otherwise prepared in accordance with HEMISPHERX's current packaging and crating practices, and good commercial
practices.

 

5.
         SCIEN will prominently display on all Product that the Product
is a product of HEMISPHERX and be so noted and on a visible surface thereof and/or on tags, labels, manuals, and other materials
with which Product is sold, the fact that the Product is manufactured and supplied to SCIEN by HEMISPHERX for use and/or sale
in the Territory shall be clearly displayed.

 

F.           If,
for any reason, at any time, HEMISPHERX shall be unable, or should reasonably anticipate being unable to deliver any part or all
of the ordered Product in accordance with the terms hereof or the accompanying purchase order, HEMISPHERX shall notify SCIEN of
such inability at the earliest possible time (but no later than five (5) workings after HEMISPHERX becomes aware of this their
inability to supply Product, whereupon HEMISPHERX and SCIEN will devise a plan to manage the situation.

 

		G.	HEMISPHERX warrants that the Product (i) shall conform to
                                         the specifications set out in the SCIEN purchase order for Product and (ii) shall meet
                                         all, if any, reasonably applicable regulatory requirements in the Territory once Product
                                         is approved. In the Direct Access/ EAP setting, the Product that HEMISPHERX supplies
                                         must confirm with all manufacturing and regulatory requirements (including labelling)
                                         for the country in which said Product is intended to be sold. SCIEN's acceptance of the
                                         Product shall relieve HEMISPHERX from the obligations arising from this warranty

 

		H.	SCIEN shall have the right to return and demand replacement
                                         of any Product which violates this warranty.

 

		I.	HEMISPHERX and/or SCIEN shall have the right to cancel, without
                                         further obligation to the other party, one or more orders for Product(s) if HEMISPHERX's
                                         or SCIEN's business is interrupted because of an event of force majeure beyond the control
                                         of HEMISPHERX or SCIEN.

 

		J.	HEMISPHERX shall permit SCIEN or its agent, at SCIENs' expense,
                                         to conduct periodic audits of HEMISPHERX's Quality System and Manufacturing records relating
                                         to HEMISPHERX's performance under this Agreement. The audits shall be conducted upon
                                         reasonable advance notice during regular business hours at HEMISPHERX's principal office
                                         and in such a manner as not to unduly interfere with HEMISPHERX's operations.

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 4 of 28	 

     

    

 

		K.	SCIEN will provide HEMISPHERX with copies of Product specification
                                         sheets, Product inserts, user manuals, user bulletins, and user Product updates and any
                                         other customer materials such as brochures, educational materials, web pages or other
                                         electronic information relating to SCIEN's efforts to sell, market and distribute Product
                                         under this Agreement at least 10 (ten) days prior to the public release or use of such
                                         information.

 

		V.	REPORTS
                                         AND PAYMENTS

 

		A.	Within 30 days following the end of each calendar quarter
                                         after execution of the Agreement, SCIEN will provide HEMISPHERX with quarterly reports
                                         on the number of Product Units sold and the Sales Price during the preceding three months,
                                         key market place issues and successes, regulatory and reimbursement subjects and revisions
                                         to the sales and marketing plans.

 

		B.	Product (s) will be considered sold by SCIEN on the date
                                         it is shipped or invoiced to an End User, whichever is earlier. All shipping, taxes,
                                         duties and other expenses in the Territory is the responsibility of SCIEN.

 

		C.	Price Increase: Beginning on the second year anniversary
of the signing of this Agreement (“Effective Date”) and on each succeeding anniversary of the Effective Date during
the term of this agreement and in consideration of a varies of economic factors such as for example, costs of labour, costs of
material and costs the price paid by SCIEN for Product(s) shall be renegotiated. Any price increase will need to be justified
by HEMISPHERX. Both parties shall, in good faith, attempt to agree upon a reasonable price increase. In the event agreement cannot
be reached the Agreement shall terminate.

 

		D.	All payments hereunder will be made by SCIEN in United States
                                         Dollars by wire transfer of immediately available funds to an account designated by HEMISPHERX.
                                         The following is wire transfer information:

 

Domestic (U.S.):

{***}

International:

{***}

 

		VI.	TERM/TERMINATION

 

		A.	The Term will be 3 years from Effective Date with an automatic
                                         2 year term extensions unless otherwise advised by one of the Parties.

 

		B.	Termination for breach will include:

 

		1.	Failure to purchase Product and distribute to End Users
as called for in II D.

 

		2.	Failure of SCIEN achieving less than 50% achievement
                                         of the minimum Purchases as in III B.7. for two (2) consecutive years,

 

3.          
Insolvency, or the filing for protection under either Party’s bankruptcy laws. Upon the filing of a petition in bankruptcy,
insolvency or reorganization against or by either Party, or either Party becoming subject to a composition for creditors , whether
by law or agreement, or either party going into receivership or otherwise becoming insolvent (such party hereinafter referred
to as the "insolvent party"), this Agreement may be terminated by the other Party by giving written notice of termination
to the insolvent Party, such termination immediately effective upon the giving of such notice of termination.

 

		C.	Upon the occurrence of a breach or default as to any obligation
                                         hereunder by either Party and the failure of the breaching Party to cure (within thirty
                                         (30) days after receiving written notice thereof from the non-breaching Party) such breach
                                         or default, this Agreement may be terminated by the non- breaching Party by giving written
                                         notice of termination to the breaching Party, such termination being immediately effective
                                         upon the giving of such notice of termination.

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 5 of 28	 

     

    

 

		D.	In the event this Agreement is terminated by either Party
                                         for any reason whatsoever, HEMISPHERX agrees to reasonable efforts to make Product available
                                         to SCIEN for a period of three (3) months after the termination date at the same Transfer
                                         Price and under the same terms of payment.

 

		E.	In the event of termination of this Agreement, SCIEN will
                                         have the right to complete all contracts for the sale or disposition of Product) under
                                         which SCIEN is obligated on the date of termination, provided SCIEN pays the associated
                                         Transfer Price and provided all such sales or dispositions are completed within three
                                         (3) months after the date of termination. Thereafter, HEMISPHERX shall purchase from
                                         the SCIEN all remaining stock of Product that is of merchantable quality at the same
                                         price as was paid by SCIEN.

 

		VII.	ASSIGNMENT

 

Neither this Agreement nor any rights or obligations or licenses
hereunder may be assigned, pledged, transferred or encumbered by either party without the express prior written approval of the
other party, except that either HEMISPHERX or SCIEN may assign this Agreement to any successor by merger or sale of substantially
all of its business or assets to which this Agreement pertains, without any such consent. Any assignment in violation hereof is
void.

 

		VIII.	AUTHORITY

 

SCIEN and HEMISPHERX each warrant and represent that it has
the full right and power to make the promises set forth in this Agreement and that there are no outstanding agreements, assignments,
or encumbrances inconsistent with the provisions of this Agreement.

 

IX.          EXCEPT
AS EXPRESSLY SET FORTH IN THIS SECTION IX, HEMISPHERX MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESSED OR
IMPLIED, REGARDING THE DEVELOPMENT, VIABILITY, COMMERCIAL OR OTHER USEFULNESS OR SUCCESS OF PRODUCT) AND THAT NO WARRANTY OR REPRESENTATION
THAT ANYTHING MADE, USED, SOLD OR OTHERWISE PRACTICED OR ANY SERVICE PROVIDED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT,
COPYRIGHT, TRADE SECRET, OR OTHER PROPRIETARY RIGHT, FOREIGN OR DOMESTIC, OF ANY THIRD PARTY AND MAKES NO WARRANTIES OR REPRESENTATIONS
AS TO THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY HEMISPHERX INTELLECTUAL PROPERTY.

 

		X.	INDEMNIFICATION AND WARRANTIES

 

		A.	INDEMNIFICATION

 

SCIEN and HEMISPHERX (each an "Indemnifying
Party") shall indemnify, defend and hold harmless and the other Party's subsidiaries or affiliates, their agents, directors,
officers, employees and assigns (the "Indemnified Parties") from and against all losses, liabilities, damages, demands
and expenses (including reasonable attorneys' fees and expenses) arising out of, as a result of, or in connection with (i) the
negligent actions of the Indemnifying Party, its employees or any third party acting on behalf of or under authority of the Indemnifying
Party in the performance of this Agreement and/or (ii) the violation of any representation or warranty of Indemnifying Party in
this Agreement. Each Party's obligations under this provision shall be subject to the other Party providing reasonable notice
of any such claim. Each Party shall defend with competent counsel and pay all costs of defence, including attorneys' fees, and
any and all damages and court costs awarded in respect to such claim, action or proceeding regarding the claim of infringement.
The Indemnified Parties agree to permit the Indemnifying Party to defend, compromise, or settle any such claim, action or proceeding
and further agree to provide all available information, and reasonable assistance to enable the other Indemnifying Party to do
so. However, neither party will be liable under this indemnity for any losses, liabilities, damages, demands or expenses arising
out of the gross negligence or wilful misconduct of the other party or any of its affiliates, agents, directors, officers, employees
or assigns. Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES
RESULTING FROM THE LICENSE GRANTED PURSUANT TO THIS AGREEMENT OR THE USE OR COMMERCIAL DEVELOPMENT OF PRODUCT.

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 6 of 28	 

     

    

 

		B.	WARRANTIES

Subject as herein provided
HEMISPHERX warrants to SCIEN that:

 

		·	All
                                         Product(s) supplied hereunder will comply with the Dossier and with any specification
                                         agreed for them in the Quality Agreement;

		·	It
                                         is not aware of any rights of any third party in the Territory which would or might render
                                         the sale of the Product, or the use of any of the Trademarks on or in relation to the
                                         Products, unlawful;

		·	It
                                         is the owner or the permitted licensee of all Intellectual Property Rights and it is
                                         not aware of any claims of any third party in the Territory or worldwide related to the
                                         fact that the Products infringes any intellectual property of such third party.

		·	Nothing
                                         in this Agreement shall exclude either party’s liability for death or personal
                                         injury.

 

Subject to the above WARRANTIES, HEMISPHERX shall
indemnify and hold harmless SCIEN and its respective employees from any loss, damage or claim made by a third party in respect
of (i) the death or personal injury arising from the manufacture or use of the Products in the Territory or (ii) infringement
of third party intellectual property, if and to the extent such loss, damage or claim is caused by any act or omission of HEMISPHERX
and is not attributable directly or indirectly to the breach of any of the material terms of this Agreement by SCIEN or by any
wilful default or negligent act or omission of SCIEN, its employees or its agents.

 

		1.	The indemnity given by HEMISPHERX shall be subject to the
following conditions:

 

		·	No
                                         indemnity shall be claimed unless notice is given by SCIEN claiming the indemnity to
                                         HEMISPHERX together with details of the claim promptly on notice of such claim being
                                         received by the SCIEN;

		·	No
                                         admissions of liability or compromise or offer of settlement of any claim shall be made
                                         by SCIEN without the prior written consent of HEMISPHERX; and

		·	HEMISPHERX
                                         shall have full control over any claim, proceedings or settlement negotiations in respect
                                         of which it is providing the indemnity.

 

Subject to clause X.B 1.), SCIEN shall defend and
indemnify HEMISPHERX and its Affiliates and hold each of them harmless against all claims, demands, actions, losses, expenses,
damages, liabilities, costs (including interest, penalties and reasonable attorneys' fees) and judgements suffered by each of
them, which arise out of SCIEN’s negligent or wilful acts or omissions or which otherwise arise out of SCIEN’s breach
of the Agreement.

 

Survivability. The obligations set forth in this
Section X. shall survive the termination of this Agreement for the legal periods of limitation provided by US law.

 

{***}
Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a
confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 7 of 28	 

     

    

 

		XI.	CONFIDENTIALITY

 

		A.	SCIEN and HEMISPHERX agree to keep secret and confidential
                                         all confidential, proprietary or non-public information ("Confidential Information")
                                         of the other Party .This provision shall survive termination or expiration of this Agreement.

 

		B.	Such Confidential Information will be kept confidential until
                                         5 years after the expiration of termination of this Agreement. Notwithstanding the foregoing
                                         , Confidential Information of a Party shall not include information which the other Party
                                         can establish by written documentation was (a) to have been publicly known prior to disclosure
                                         of such information by the disclosing Party to the other Party, (b) to have become publicly
                                         known, without fault on the part of the other Party, subsequent to disclosure of such
                                         information by the disclosing Party to the other Party, (c) to have been received by
                                         the other Party at any time from a source , other than the disclosing Party, rightfully
                                         having possession of and the right to disclose such information, (d) to have been otherwise
                                         known by the other Party prior to disclosure of such information by the disclosing Party
                                         to the other Party, or (e) to have been independently developed by employees or agents
                                         of the other Party without access to or use of such information disclosed by the disclosing
                                         Party to the other Party.

 

		C.	The confidentiality obligations contained in this section
                                         XI shall not apply to the extent that the receiving Party (the "Recipient")
                                         is required (a) to disclose information by law, order or regulation of a governmental
                                         agency or a court of competent jurisdiction , or (b) to disclose information to any governmental
                                         agency for purposes of obtaining approval to test or market a Product , provided in either
                                         case that the Recipient shall provide written notice thereof to the other Party and sufficient
                                         opportunity to object to any such disclosure or to request confidential treatment thereof.

 

		XII.	PROSECUTION, INFRINGEMENT, AND DEFENSE OF HEMISPHERX
INTELLECTUAL PROPERTY

 

		A.	HEMISPHERX will be responsible for and shall control, at
its expense, the preparation, filing, prosecution and maintenance of HEMISPHERX Intellectual Property.

 

		B.	SCIEN will cooperate in all reasonable ways to establish
and protect HEMISPHERX Intellectual Property in the Territory.

 

		C.	HEMISPHERX, at its expense, will have the right to determine
the appropriate course of action to enforce its HEMISPHERX Intellectual Property against infringement or otherwise abate the infringement
thereof , to take (or refrain from taking) appropriate action to enforce its HEMISPHERX Intellectual Property, to control any
litigation or other enforcement action and to enter into, or permit, the settlement of any such litigation or other enforcement
action with respect to its Intellectual Property .

 

		D.	Each Party shall promptly notify the other Party in writing
if any claim, action, demand or other proceeding (a "Claim") is brought against or is threatened to be brought against
such Party alleging that the sale of Product violates another party's intellectual property.

 

		E.	SCIEN will promptly notify HEMISPHERX of any Third party
SCIEN knows or believes may be infringing HEMISPHERX Intellectual Property and will, to the greatest extent reasonably possible,
provide to HEMISPHERX any information SCIEN has in support of such belief. HEMISPHERX will have the right, but not the obligation,
to use such information in an infringement action against such third Party. SCIEN agrees to cooperate with HEMISPHERX in any action
for infringement of HEMISPHERX, and HEMISPHERX will reimburse SCIEN for all reasonable costs incurred by it in providing cooperation
requested by HEMISPHERX.

 

		F.	HEMISPHERX is and shall remain the sole legal and registered
owner for any trademark or trade name of “Interferon alfa-n3 (human leukocyte derived)". The parties shall work together,
upon commercial approval in the Territory to secure a trade name in the Territory.

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 8 of 28	 

     

    

 

		G.	HEMISPHERX hereby grants to SCIEN and SCIEN hereby accepts
the right, privilege and exclusive license to use of “Interferon alfa-n3 (human leukocyte derived)” solely in connection
with the terms of the Sales, Marketing, Distribution and Supply Agreement of Product in the Territory for the Term of this Agreement.
Should the Agreement expire or terminate, the right to use the trademark shall also terminate. SCIEN shall use “Interferon
alfa-n3 (human leukocyte derived)” at all times for the sole purpose of marketing of Product for no other purpose.

 

		H.	The terms of the intellectual property license hereby granted
shall be effective upon the Effective Date of this Agreement and during the term of this Agreement, unless sooner terminated in
accordance with the provisions of the Sales, Marketing, Distribution and Supply Agreement between the parties.

 

1.          Good
Will. SCIEN recognizes that there exists great value and good will associated with the Intellectual Property of Interferon alfa-n3
(human leukocyte derived)”

 

2.
          SCIEN agrees that it will not during the term of this Agreement,
or thereafter, attack the title or any rights of HEMISPHERX in and to Interferon alfa-n3 (human leukocyte derived) or attack the
validity of the license granted herein by HEMISPHERX and solely owned by HEMISPHERX.

 

		I.	SCIEN agrees to assist HEMISPHERX to the extent necessary
                                         in the procurement of any protection or to protect any of HEMISPHERX's right to Interferon
                                         alfa-n3 (human leukocyte derived) and HEMISPHERX, if it so desires, may commence or prosecute
                                         any claims or suits in its own name or in the name of SCIEN or join SCIEN as a party
                                         thereto. SCIEN shall notify HEMISPHERX in writing of any infringements or imitations
                                         by others of “Interferon alfa-n3 (human leukocyte derived) which may come to SCIEN
                                         's attention, and HEMISPHERX shall have the sole right to determine whether or not any
                                         action shall be taken on account of any such infringements or imitations. SCIEN shall
                                         not institute any suit or take any action on account of any such infringements or imitation
                                         without first obtaining the written consent of the HEMISPHERX so to do.

 

		J.	SCIEN agrees to cooperate fully and in good faith with
HEMISPHERX for the purpose of securing and preserving HEMISPHERX's rights.

 

K.          It
is agreed that nothing contained in this Sales, Marketing, Distribution, and Supply Agreement shall be construed as an assignment
or grant to the SCIEN of any rights, title or interest in or to “Interferon alfa-n3 (human leukocyte derived)".

 

		L.	It is further understood that all rights relating thereto
                                         are reserved by HEMISPHERX, except for the license hereunder to SCIEN of the right to
                                         use and utilize the name Interferon alfa-n3 (human leukocyte derived) only as specifically
                                         and expressly provided in this Agreement.

 

		M.	In the event of termination of this license for any reason,
                                         SCIEN shall within 6months (as described in the Termination clause), cease all use of
                                         the “Interferon alfa-n3 (human leukocyte derived)”. SCIEN shall not thereafter
                                         use any names, mark or trade name similar thereto belonging to HEMISPHERX. Termination
                                         of the license under the provisions of this Agreement shall be without prejudice to any
                                         rights which HEMISPHERX may otherwise have against SCIEN.

 

		N.	SCIEN shall, and shall cause its shareholders, officers,
                                         directors, and managing personnel to, comply with all laws, rules and government regulations
                                         pertaining to its business and shall not violate any laws which would create an adverse
                                         effect on “Interferon alfa-n3 (human leukocyte derived)” in the U.S. and/or
                                         the Territory.

 

		O.	Relationship of Parties. SCIEN shall not in any manner
or respect be the legal representative or agent of HEMISPHERX and shall not enter into or create any contracts, Agreements, or
obligations on the part of HEMISPHERX, either expressed or implied, nor bind HEMISPHERX in any manner or respect whatsoever regarding
its intellectual property; it being understood that this Agreement is only a contract for the licensed use of the product names
in connection with the terms in this Agreement.

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 9 of 28	 

     

    

 

		XIII.	BUYOUT

 

HEMISPHERX will have the option at any time to buy out this
Agreement. If exercised within the first two (2) years HEMISPHERX will pay SCIEN three (3) times the Product sales for the preceding
12 months. If exercised after year 3, HEMISPHERX will pay SCIEN two (2) times the Product sales for the preceding 12 months.

 

XIV.         MISCELLANEOUS.

 

		A.	Notices. Notices sent pursuant to this Agreement are valid
if in writing and addressed to the parties at the respective addresses given below or at such other addresses as either party
shall notify the other in writing and sent by registered or certified mail, postage prepaid and return receipt requested, or by
Federal Express or other comparable courier providing proof of delivery, and shall be deemed duly given and received (i) if mailed,
on the third business day following the mailing thereof, or (ii) if sent by courier, the date of its receipt (or if not on a business
day, the next succeeding business day).

 

If to HEMISPHERX:

 

Thomas K. Equels, President and CEO

One Penn Center

1617 JFK Boulevard

Suite 500

Philadelphia, PA 19103 United States

 

If to SCIEN:

Abdelrhman Mofeed Zhreldin

Business Development Manager

Scientific Products Pharmaceutical Co. Ltd

Tahlia Street, P.O Box 10485,

Riyadh 11433 Saudi Arabia

 

		B.	This Agreement and the transactions contemplated herein
shall be governed by, and construed in accordance with, the laws of the State of Delaware, USA and disputes, if not resolved by
the Parties, will be settled by binding arbitration in and under the rules of arbitration in London, England.

 

		C.	This Agreement constitutes the entire understanding of
the parties with respect to the purchase and sale of Products and supersedes all prior discussions, agreements, and understandings
between HEMISPHERX and SCIEN.

 

		D.	Each party an independent contractor to the other and the
relationship between the parties shall not be construed to be that of an employer and employee, or to constitute a partnership,
joint venture, or agency of any kind.

 

		E.	This Agreement may only be amended in a writing signed
by both parties hereto.

 

		F.	If any provision of this Agreement is declared invalid
or unenforceable by a court having competent jurisdiction, it is mutually agreed that this Agreement shall endure except for the
part declared invalid or unenforceable by order of such court.

 

		G.	This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 10 of 28	 

     

    

 

		H.	Prior to their release, the parties must agree on press
releases or market communication that utilises the other Party’s name.

 

Counterparts; Integration; Effectiveness; Electronic Execution

 

This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement constitutes the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

 

This Agreement shall become effective when it shall have been
executed by all parties and upon receipt of all counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by e-mail and/or telecopy
shall be effective as delivery of a manually executed counterpart of this Agreement.

 

The words "execution," "signed," "signature,"
and words of like shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which
shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping
system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, and any other similar State laws based on the Uniform Electronic Transactions Act.

 

IN WITNESS WHEREOF, the parties have executed this Agreement
as of the last date below and in so doing acknowledge that they have a corporate authority to bind their respective organizations
to this Agreement.

 

	SCIENTIFIC PRODUCTS PHARMACEUTICAL
    CO. LTD:	 	HEMISPHERX BIOPHARMA, INC:
	 	 	 
	S/	 	S/
	Saleh Al-Abdullah Al-Rasheed	 	Thomas K. Equels
	CEO & Owner	 	President and CEO
	 	 	 
	Date:	 	Date:
	 	 	 
	 	 	 

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 11 of 28	 

     

    

 

 

 

Exhibit 1

 

The drug, Interferon Alfa-n3, is intended for investigational
use in the countries in which it is distributed prior to receipt of RAA;

 

The drug, Interferon Alfa-n3, meets your specifications as
reflected on the attached Certificate of Analysis;

 

The drug, Interferon Alfa-n3, is not in conflict with the laws
of the countries in which it is distributed;

 

The investigation will be conducted in accordance with good
clinical practices, including review and approval of the study by an independent ethics panel and informed consent of the study
subjects;

 

The drug, Interferon Alfa-n3, does not present an imminent
hazard to public health, either in the United States, if the drug were to be reimported, or in the countries in which it is distributed;

 

The drug, Interferon Alfa-n3, is labelled in accordance with
the laws of the countries in which it is distributed.

 

I have reviewed the attached labels and the current Certificate
of Analysis against the specifications and agree with the above statements that these meet the laws of the countries in which
the product will be distributed.

 

	Signature: 	 	Date: 	 	 

 

Printed Name: Saleh Al- Rashid

 

Title: Chairman and CEO

 

Company: Scientific Products Pharmaceutical Co. LTD

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 12 of 28	 

     

    

 

Certificate of Analysis

 

{***}

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 13 of 28	 

     

    

 

Label information enlarged for ease of read.

 

{***}

 

Enlarged Label:

 

{***}

 

Caution: Limited by Federal (US)

 

Law to Investigational Use.

 

Manufactured For:

 

Hemispherx Biopharma, Inc.

 

Philadelphia, PA 19103

 

(U.S.A.)

 

Actual Label:

 

{***}

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 14 of 28	 

     

    

 

Exhibit 2 Study Protocol Synopsis

 

A Compassionate Use Protocol Using Natural
Leukocyte Interferon (Alfa-n3) for Individual Treatment of Symptomatic Patients with Middle East Respiratory Syndrome (MERS)

 

{***}

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 15 of 28	 

     

    

 

Exhibit 3 Business Plan

 

{***} Confidential portions of this
exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 16 of 28	 

     

    

 

Exhibit 4

 

TECHNICAL / QUALITY AGREEMENT 

 

1.          Parties

 

This Quality Agreement is entered by and between Scientific
Products Pharmaceutical Co. LTD., a pharmaceutical company with its primary offices located at Tahlia Street, P.O Box 10485, Riyadh
11433 Saudi Arabia (“SCIEN”) and Hemispherx Biopharma, Inc. 783 Jersey Avenue, New Brunswick, New Jersey 08901(HEMISPHERX).

 

2.          Purpose

 

The purpose of this Quality Agreement is to clearly define
the quality operating procedures, duties and responsibilities to be employed by SCIEN and HEMISPHERX in the conduct of
activities by SCIEN for Hemispherx Biopharma, Inc. The objective of these procedures and this Quality Agreement is assurance
that services are conducted in a timely, consistent and uniform manner and in accordance with current laws, directives, regulations
and guidelines, as may be applicable to the specific project(s). These requirements may include those defined by the U.S. FDA’s
regulations At 21CFR314.80 (Post-marketing reporting of adverse drug experiences for drugs), 21CFR312.32 (IND safety reporting)
21CFR600.80 (Post marketing reporting of adverse experiences for biologics) 21CFR Parts 210 and 211 (“current Good Manufacturing
Practices” or “cGMPs”) with particular interest in 21CFR211.1.42 (Warehousing), 21CFR211.150 (Distribution),
21CFR211.204 (Returned drug) and 21CFR211.208 (Drug product salvaging), ICH Guidance for Industry: E6 Good Clinical Practice Consolidated
Guidance and/or others that may be appropriate for the particular project.

 

3.          Scope

 

This Quality Agreement is to be applied to the activities performed
by SCIEN, for HEMISPHERX as specifically defined by the Sales, Marketing, Distribution, and Supply Agreement January ___, 2016
(“Agreement”) to which this Quality Agreement is an integral Exhibit. In the event of a conflict between the terms
of the Agreement and this Quality Agreement, the terms of the Agreement shall control. Unless
otherwise stated in these documents, SCIEN shall follow its Standard Operating Procedures (“SOPs”) with respect to
the activities it shall carry out in accordance with the Agreement. Copies of all relevant SOPs shall be provided to HEMISPHERX
for review during audits.

 

4.          Confidentiality

 

The information and procedures contained in this Quality Agreement
are confidential and subject to the terms and conditions of the confidentiality provisions as set forth in the Confidential Disclosure
Agreement September 22, 2014 (“CDA”) executed by HEMISPHERX and SCIEN.

 

5.          Terms

 

This Agreement between HEMISPHERX and SCIEN shall be in effect
beginning the last date of execution set forth on the signature page to the Agreement (the “Effective Date”) to which
this Quality Agreement is Exhibit 2 and remain in effect until HEMISPHERX and SCIEN terminate the Agreement or it is superseded
by a revised Quality Agreement executed by both parties. This Quality Agreement should be reviewed periodically by both
parties for any needed updating, revisions, amendments, and the like. Regular periodic review of this Quality Agreement should
be conducted to ensure it is up-to-date.

 

{***} Confidential portions of this exhibit have
been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2
of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 17 of 28	 

     

    

 

HEMISPHERX may perform audits for initial qualification of
SCIEN as well as periodic audits and “for cause” audits. At mutually agreed upon times, HEMISPHERX may review
standard operating and other quality control procedures and records and the records of SCIEN relating to the Agreement.
Such routine and general oversight review is to be requested at least twenty (20) business days in advance, limited to two (2)
persons, completed within one (1) to two (2) business days and shall be offered to HEMISPHERX one (1) time each calendar year.
SCIEN will make every reasonable effort to accommodate the special circumstances that may arise pursuant to “for
cause” audits. The following applies to all audits:

 

		·	Prior to an audit
                                         HEMISPHERX will communicate to SCIEN the scope of the audit.

		·	HEMISPHERX will
                                         prepare a written report of the results of the audit and forward a copy to SCIEN.

 

SCIEN will provide a written response to HEMISPHERX’s
written audit report within twenty (20) business days of receipt of such report setting forth the corrective actions to be taken
by SCIEN, if any, and a timeline for such implementation.

 

In the event of an inspection by any governmental
or regulatory authority concerning the activities carried out under the Agreement, SCIEN shall notify HEMISPHERX promptly
upon learning of such an inspection, shall supply HEMISPHERX with copies of any correspondence or portions of correspondence relating
to HEMISPHERX’s materials and shall inform HEMISPHERX of the general findings and outcomes of such inspections.

 

SCIEN and HEMISPHERX shall cooperate with each other during
any such inspection, investigation or other inquiry, including applying reasonable effort, as might be practical, at allowing,
upon reasonable request, a representative of HEMISPHERX to be on site during such inspection, investigation or other inquiry,
and providing copies of all documents related to the inspection. Each party acknowledges that it may not direct the manner in
which the other party fulfills its obligations to permit inspection by governmental entities

 

6.          Dispute
Resolution

 

If a dispute arises between the parties under this Agreement,
the parties agree that, prior to either pursuing other available remedies, decision-making individuals from each party will promptly
meet, either in person or by telephone, to attempt in good faith to negotiate a resolution of the dispute. If, within sixty days
after such meeting, the parties are unable to resolve the dispute (or such longer time as the parties may agree) either party
is free to pursue its legal remedies.

 

7.          Definitions

 

Adverse experience: Any adverse event associated
with the use of a biological or drug product in humans, whether or not considered product related, including the following: an
adverse event occurring in the course of the use of a biological or drug product in professional practice; an adverse event occurring
from overdose of the product whether accidental or intentional; an adverse event occurring from abuse of the product; an adverse
event occurring from withdrawal of the product; and any failure of expected pharmacological action.

 

Disability: A substantial disruption of a person’s
ability to conduct normal life functions.

 

Life-threatening adverse experience: Any adverse
experience that places the patient, in the view of the initial reporter, at immediate risk of death from the adverse experience
as it occurred, i.e., it does not include an adverse experience that, had it occurred in a more severe form, might have caused
death.

 

Labeled event: An adverse experience that is listed
on the product insert as having been observed in patients who are receiving the drug product.

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 18 of 28	 

     

    

 

Drug Product: A finished dosage form, for example, tablet,
capsule, or solution that contains an active ingredient generally, but not necessarily, in association with inactive ingredients

 

Serious adverse experience: Any adverse experience
occurring at any dose that results in any of the following outcomes: Death, a life-threatening adverse experience, inpatient hospitalization
or prolongation of existing hospitalization, a persistent or significant disability/incapacity, or a congenital anomaly/birth
defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered
a serious adverse experience when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may
require medical or surgical intervention to prevent one of the outcomes listed in this definition.

 

Unexpected adverse experience: Any adverse experience
that is not listed in the current labelling for the biological or drug product. This includes events that may be symptomatically
and pathophysiologically related to an event listed in the labelling, but differ from the event because of greater severity or
specificity.

 

For example, under this definition, hepatic necrosis would
be unexpected (by virtue of greater severity) if the labeling only referred to elevated hepatic enzymes or hepatitis. Similarly,
cerebral thromboembolism and cerebral vasculitis would be unexpected (by virtue of greater specificity) if the labeling only listed
cerebral vascular accidents. “Unexpected,” as used in this definition, refers to an adverse experience that has not
been previously observed (i.e., included in the labeling) rather than from the perspective of such experience not being anticipated
from the pharmacological properties of the pharmaceutical product.

 

Call report: A list of all questions, requests for circulars,
and physician/patient complaints received by SCIEN's Clinical Support Department is prepared monthly by SCIEN staff
and is forwarded to HEMISPHERX RA/QA Department.

 

Audit: A systematic examination of processes, controls
and systems, operating procedures, reports, records and/or data to assess SCIEN’s compliance with standards, regulatory
submissions, SOPs; applicable laws, regulations, directives, standards and guidelines; the terms of this Agreement and other contracts
in place defining the services being provided and to verify data integrity.

 

Good Clinical Practices (“GCPs”): Good clinical
practice (GCP) is an international ethical and scientific quality standard for designing, conducting, recording, and reporting
trials that involve the participation of human subjects. Compliance with this standard provides public assurance that the rights,
safety, and wellbeing of trial subjects are protected, consistent with the principles that have their origin in the Declaration
of Helsinki, and that the clinical trial data are credible. ICH Guidance for Industry: E6 Good Clinical Practice Consolidated
Guidance.

 

Good Manufacturing Practices (“GMPs”): The
recognized pharmaceutical regulations and requirements of regulatory authorities such as those defined by the U.S. FDA’s
regulations at 21CFR Parts 210 and 211.

 

Key Contacts:  Persons at SCIEN and HEMISPHERX
assigned to assure proper communication and follow-up in a timely manner within both parties’ organizations. Names, titles
and full contact information for Key Contacts shall be appended to this Agreement as Attachment 1 and should be maintained up-to-date
during the course of the project.

 

Observation: A statement of fact made during an audit
that is substantiated by objective evidence. HEMISPHERX categorizes observations as follows:

 

		o	Critical: May pose risk to patient or consumer or otherwise
                                         compromise the integrity or quality of the material, product, process, or service being
                                         provided. Other instances that could be defined as a critical observation include: A
                                         practice that poses an immediate safety risk to personnel; Quality System(s) missing
                                         or not in compliance with regulations, guidelines, or corporate policies.

		o	Major:  Does not fully comply with regulations, guidelines
                                         or corporate policies and may pose unnecessary risks to the integrity or quality of material,
                                         product, process or service being provided. Other instances that could be defined as
                                         a major observation include: Likely or probable safety risk to personnel; Quality System(s)
                                         weak or needing improvement; repeated Minor deficiencies of a similar nature that indicate
                                         a systemic problem and therefore may be classified as Major.

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 19 of 28	 

     

    

 

		o	Minor:  Does not comply with regulations, guidelines,
                                         or corporate policies but does not directly impact the integrity or quality of the material,
                                         product, process, or service being provided.

		o	Comment:  Compliant with regulations, guidelines and/or
                                         corporate policies; however, the auditor comment serves as a recommendation relative
                                         to maintaining or improving a specific condition noted.

 

Out-of-Specification / Out-of-Trend (“OOS / “OOT”):
 A result that is not within the established specifications or trend, whether these are qualitative or quantitative.

 

Standard Operating Procedures (“SOPs”):
Procedures in effect at SCIEN that define the processes and controls by and under which activities are to be conducted
to assure compliance with the appropriate Code of Federal Regulations.

 

7.          Communications

 

To assure proper communication, notification
and follow-up in a timely manner by both parties, “Key” contacts are listed in Attachment 1 of this Agreement. Key
contacts shall have access to project managers and technical staff and, upon reasonable notice and as required, facilitate resolution
of any issues. Every effort will be made by SCIEN to accommodate timely communications, including face-to-face meetings,
with HEMISPHERX.

 

8.          Change
of Control 

 

SCIEN will maintain and follow change control SOP(s)
to ensure that changes to equipment, procedures, processes, etc. occur in a controlled manner and in compliance with requirements
e defined by the U.S. FDA’s regulations (see Section 2). The implementation of any change that may directly impact the integrity
of the activities conducted or data being supplied for HEMISPHERX will require prior written approval of HEMISPHERX. SCIEN
and HEMISPHERX will advise the appropriate organization’s staff member (See Attachment 1) before implementation of a
change, by either party, to equipment, procedures, specifications, processes, clinical protocols, product claims or facilities
directly related to HEMISPHERX’s specific products and processes. Each party agrees to review the proposed change in a timely
manner and, at its discretion, may audit and/or request an alternative or additional change prior to the implementation of the
proposed change. The respective party will review the proposed change, determine if it is reasonably practicable to implement
the change and can suggest alternative or additional changes prior to the implementation of the proposed change. Change control
requirements should be articulated within the specific operation’s documentation practices.

 

HEMISPHERX is responsible for assuring changes are in accordance
with and/or reported to the investigational, marketing and/or any other filing with regulatory agencies (IND, IMPD, CTA, NDA,
MA, etc.) and for informing SCIEN of any changes requested by regulatory agencies. SCIEN agrees to keep HEMISPHERX
fully informed of any and all communications with regulatory agencies that may affect the services being provided to HEMISPHERX
by SCIEN.

 

This Agreement is not meant to supersede or replace controlled
documents typically used to define and record the work to be conducted by SCIEN for HEMISPHERX. Specific requirements of this
Agreement and/or any service contracts shall be articulated within SCIEN’s current operating procedures and documentation
systems.

 

9.          Responsibilities

 

SCIEN is responsible for:

		1)	case management support services
                                         to patients and maintain a 24-hour/365-day a year telephone service for assistance of
                                         prescription drug-related medical emergencies to patients

		2)	the distribution of product, including
                                         the shipping, handling and storage and all rules and regulations of every governmental
                                         authority having jurisdiction over the shipping, handling, storage, distribution, and
                                         dispensing of Product

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 20 of 28	 

     

    

 

		3)	confirming the product labelling
                                         requirements in the territory

		4)	conforming to all labeled specifications
                                         concerning the shipping, handling and storage of Product

		5)	notifying HEMISPHERX of any unacceptable
                                         storage or handling deviation within one (1) business day

		6)	inspecting all product shipments
                                         received by SCIEN from HEMISPHERX and reporting any damage, defect, loss in transit,
                                         or other shipping errors to HEMISPHERX within one (1) business days of receipt by SCIEN

		7)	administering recalls, field alerts,
                                         warning letters, quarantines or withdrawals in accordance with HEMISPHERX instructions
                                         (See Attachment 2)

		8)	administering HEMISPHERX’s
                                         Returned Goods Policy (See Attachment 3)

		9)	immediately (within 24 hours of
                                         becoming aware of event) notifying HEMISPHERX of any serious and unexpected side effects
                                         (Adverse Experiences reported to SCIEN, as defined by 21CFR 314.80 and 21CFR 312.32))

		10)	providing HEMISPHERX with written
                                         Adverse Experience Reports (at the latest day 4 after becoming aware of event)

		11)	notifying the Regulatory Authorities
                                         within the Territory of any reportable adverse experiences

		12)	notifying the Regulatory Authorities
                                         within the Territory of any suspected counterfeiting or tampering except as required
                                         different by law

		13)	obtaining program approval from
                                         appropriate regulatory agencies in the Territory

		14)	keeping HEMISPHERX fully informed
                                         of any and all communications with regulatory agencies that may affect the services being
                                         provided to HEMISPHERX by SCIEN

		15)	receiving and processing complaints

		16)	notifying HEMISPHERX of complaints
                                         and actions taken or to be taken to address the complaints

		17)	the performance of all services
                                         provided by SCIEN’s subcontractors

		18)	communicating to HEMISPHERX any
                                         events of non-conformance that impact the quality of HEMISPHERX’s product. Examples
                                         of non-conformances may include, but are not limited to: equipment failure, shipping
                                         error or documentation error, labeling error, improper storage, facilities system error,
                                         and unplanned study protocol deviations. When a non-conformance event occurs that is
                                         specific to HEMISPHERX’s product, SCIEN will conduct an investigation and provide
                                         copies of all investigation documentation to HEMISPHERX for review and input

		19)	for initiating, monitoring and
                                         completing CAPA tasks related to discrepancies, errors and incidents involving services
                                         that are under SCIEN’s control

 

HEMISPHERX is responsible for:

		1)	release of product following review
                                         of all manufacturing and quality control testing requirements to confirm the batch has
                                         been manufactured according to approved processes and specifications

		2)	supply all necessary quality documentation
                                         with shipments to allow product importation and release

		3)	ensuring product intended for
                                         supply in territory is labelled accordingly

		4)	assuring changes to the established
                                         operations are in accordance with and/or reported to the investigational, marketing and/or
                                         any other filing with regulatory agencies (IND, IMPD, CTA, NDA, MA, etc.).

		5)	informing SCIEN of any changes
                                         requested by regulatory agencies

		6)	assist with/address any Agencies
                                         requests relating to manufacture of product

		7)	providing SCIEN any information
                                         that could result in a field alert or recall of a product under a HEMISPHERX NDA or ANDA
                                         immediately, but no more than one (1) business day after discovery. HEMISPHERX interprets
                                         FDA 21 CFR 314.81, “Other Post-Marketing Reports,” to require a Field Alert
                                         Report to be made within three (3) days of an occurrence of an OOS result, whether that
                                         result is confirmed or not. The only exception to this would be where the original result
                                         was invalidated within the three (3) days. In that case, no field alert would be required

		8)	making the proper reports to the
                                         FDA regarding a field alert or recall

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 21 of 28	 

     

    

 

		9)	making the proper reports to the
                                         FDA regarding any serious and unexpected side effects

		10)	communicating to SCIEN any events
                                         of non-conformance that impact the quality of HEMISPHERX’s product. Examples of
                                         non-conformances may include, but are not limited to: contamination, calculation or documentation
                                         error, labeling error. When a non-conformance event occurs HEMISPHERX will conduct an
                                         investigation and inform SCIEN of any appropriate action to be taken

		11)	for initiating, monitoring and
                                         completing CAPA tasks related to discrepancies, errors and incidents involving services
                                         that are under HEMISPHERX’s control

		12)	contribute to customer complaint
                                         investigations where possible issues due to manufacturing process may have contributed
                                         to complaint

 

HEMISPHERX and SCIEN are separately responsible for securing
and maintaining all required licenses, permits and certificates applicable to their respective operations and each shall comply
with any and all applicable federal, state and local laws, including but not limited to (i) the Federal Food Drug and Cosmetic
Act; (ii) the Social Security Act; (iii) HIPAA; (iv) all federal and state health care anti-fraud and abuse laws, and (v) all
state privacy, and consumer protection laws, including those relating to the use of medical and prescription information for commercial
purposes.

 

10.         Subcontractors

 

SCIEN may enter into agreements between SCIEN
and a subcontractor. SCIEN will identify the services performed by each such subcontractor. SCIEN is responsible
for the performance of all services provided on behalf HEMISPHERX and the compliance of each subcontractor to the terms of this
Agreement. HEMISPHERX will be permitted to conduct periodic audits of the subcontractors to assure compliance to applicable GMP’s,
GLP’s and federal regulations (CFR’s).

 

11.         Standard
Operating Procedures (SOP’s)

 

The following HEMISPHERX SOP’s are relevant to this Quality
Agreement and interactions between HEMISPHERX and SCIEN and affiliates.

		A.	CLN-009 Handling Adverse Event Reports and Records

		B.	RA-001 Post Marketing Adverse Experience Reporting

		C.	QC-006 Investigation of Out of Specification Results

 

12.         Laboratory
Controls-N/A

 

13.         Documentation
and Record Maintenance

 

SCIEN shall preserve all records in accordance with any applicable
federal, state or local requirements. Raw data, documentation, batch records, source documents, product disposition records and
reports (collectively, “Documentation”) shall be retained by SCIEN for a minimum period of two (2) years after termination
or expiration of the Specialty Distributor Purchase and Service Agreement between HEMISPHERX and SCIEN. SCIEN shall, upon written
receipt of a written request from HEMISPHERX, finish such Documentation in a format reasonably acceptable to HEMISPHERX with thirty
(30) days of receipt of such request. In this case, the Documentation will be shipped to the Quality Assurance Manager named in
this Agreement (see Key Contact List, Attachment 1). It is the responsibility of HEMISPHERX to notify SCIEN of any changes in
this contact. During the retention period, documentation shall be available for inspection by HEMISPHERX, its authorized agents
and authorized government agencies.

 

14.         Complaints

 

In the event SCIEN is notified of a complaint, SCIEN will receive,
investigate and respond to the complaint following its internal procedures. A copy of all complaint investigation documentation
will be provided to HEMISPHERX.

 

{***} Confidential portions of this exhibit have
been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2
of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 22 of 28	 

     

    

 

15.         Contact
List of Key Personnel. See Attachment 1

 

IN WITNESS WHEREOF, the parties hereto have executed this Quality
Agreement as of the Effective Date.

 

Hemispherx Biopharma Inc.         

 

	Quality Assurance Signature: 	 	 

 

Printed Name: Victoria Scott

 

Title: Associate Director Quality and Regulatory

 

	Date: 	 	 

 

	Management Signature: 	 	 

 

Printed Name: Wayne Springate

 

Title: Senior Vice President Operations

 

	Date: 	 	 

 

SCIEN.

 

	Quality Assurance Signature: 	 	 

 

	Printed Name: 	 	 

 

	Title: 	 	 

 

	Date: 	 	 

 

	Management Signature: 	 	 

 

Printed Name: Abdelrhman Mofeed Zhreldin

 

Title: Business Development Manager

 

	Date: 	 	 

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 23 of 28	 

     

    

 

 

 

Attachment 1

List of Key Contacts

 

	SUBJECT	 	HEMISPHERX
    CONTACT	 	SCIEN
    CONTACT
	Regulatory Compliance Requirements

         

        Notification of Regulatory Agencies and Regulatory
        Submissions
	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Regulatory@Hemispherx.net
	 	 
	Recall of Marketed Product	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Regulatory@Hemispherx.net
	 	 
	Adverse Drug Events	 	David Strayer, MD

        Medical Director

        Phone:215-988-0880

        Fax: 215-988-1739

        Email: SAE@Hemispherx.net
	 	 
	Product Complaint	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Field Alert Reports/Biological Product Deviation
    Reports	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Change Control	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Clinical Study Protocol Changes	 	David Strayer, MD

        Medical Director

        Phone:215-988-0880

        Fax: 215-988-1739

        Email: David.Strayer@Hemispherx.net
	 	 
	New or Revised Product Claims	 	David Strayer, MD

        Medical Director

        Phone:215-988-0880

        Fax: 215-988-1739

        Email: David.Strayer@Hemispherx.net
	 	 
	Documentation

        Quality Records

        Record Retention
	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 24 of 28	 

     

    

 

	SUBJECT	 	HEMISPHERX
    CONTACT	 	 
	Product Testing and Release	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Control of Components, Labelling and Packaging Materials

         
	 	Chris Cavalli

        VP Quality and Process Development

        Phone: 732-249-3250

        Email:Chris.Cavalli@Hemispherx.net

        Fax:732-249-6895
	 	 
	Product Storage and Shipping	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Returned Goods	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.
	 	 
	Deviations/Investigations

         

        Nonconforming or Rejected Material
	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Supplier Qualification	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 
	Quality Audits & Regulatory Inspections	 	Victoria Scott

        Associate Director/Quality and Regulatory

        Phone: 732-249-3250

        Fax:732-249-6895

        Email:Victoria.Scott@Hemispherx.net
	 	 

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 25 of 28	 

     

    

 

Attachment 2

QA-007-Product Recall

 

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 26 of 28	 

     

    

 

Attachment 3

HEMISPHERX Return Goods Policy

 

This Return Goods Policy us for all HEMISPHERX product, Interferon
alfa-n3 (human leukocyte derived) distributed by SCIEN.

 

The following products are eligible for return and reimbursement:

 

		·	Outdated
                                         Product: Product within two (2) months prior or six (6) months past expiration date and
                                         noted on product;

 

AND

 

		·	Product
                                         in its original container and bearing its original label.

 

OR

 

		·	Product
                                         which HEMISPHERX has specified be returned

 

The following products are not eligible for return and reimbursement:

 

		·	Product
                                         that is not outdated.

 

		·	Product
                                         in which the lot number and/or expiration date is missing, illegible, covered, and/or
                                         unreadable on original container.

 

		·	Product
                                         that has been damaged due to improper storage handling, fire, flood, or catastrophe.

 

		·	Product
                                         that has been sold expressly on a non-returnable basis.

 

		·	Product
                                         that is not in its original container and/or not bearing its original label.

 

		·	Product
                                         that is in its original container with a prescription label attached.

 

		·	Product
                                         that has been repackaged

 

		·	Partial
                                         Vials

 

		·	Product
                                         obtained illegally or via diverted means

 

		·	Product
                                         purchased on the “secondary source” market or from a distributor other than
                                         SCIEN.

 

		·	Product
                                         that HEMISPHERX determines, in its sole discretion, is otherwise adulterated, misbranded,
                                         or counterfeit.

 

HEMISPHERX will only accept returns shipped to SCIEN.
All eligible products shall be shipped in a safe, secure, and reliable manner, and in compliance with all applicable federal,
state and local laws, regulations and statutes. It is the shipper’s responsibility to securely package all return goods
to prevent to prevent breakage during transit and otherwise comply with the laws and regulations applicable to the packaging,
shipping, and transport of return goods shipments.

 

HEMISPHERX is not responsible for shipments lost and/or damaged
in transit. HEMISPHERX recommends that all customers insure return goods shipments.

 

HEMISPHERX will audit the quantities of return goods and final
reimbursement will be based on HEMISPHERX count. All products will be reimbursed based on the price paid direct purchasing customers
reimbursement will be issued in the form of credit or product replacement to the appropriate party.

  

{***} Confidential portions
of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance
with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

    	 	Page 27 of 28	 

     

    

 

To assist in accurate credit memo processing, please include
the following information:

 

1.          Purchasers
Name and Mailing Address

 

2.          Date
and Quantity

 

Return goods shipments which are deemed to be outside of this
policy will not be returned to the customer or the third party processor and no reimbursement will be issued by HEMISPHERX. HEMISPHERX
return goods policy is subject to change at any time and without prior notices to other parties.

 

{***} Confidential portions of this exhibit have been redacted
and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

 

    	 	Page 28 of 28

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