Document:

Exhibit 10.5

 

REGISTRATION RIGHTS AGREEMENT FOR
INVESTORS

 

THIS REGISTRATION
RIGHTS AGREEMENT (this “Agreement”) is made as of October 31, 2014 by and among Aqua Metals, Inc.,
a Delaware corporation (“Company”), and the persons listed on Schedule A hereto, referred to individually as
the “Holder” and collectively as the “Holders”.

 

A.           In
connection with the Securities Purchase Agreement by and among the parties hereto, dated as of October 31, 2014 (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue and sell to each Holder of the Notes (as defined in the Securities Purchase Agreement), which will be convertible
into Conversion Shares (as defined in the Notes) in accordance with the terms of the Notes.

 

B.           To
induce the Holders of the Notes to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has
agreed to provide certain registration rights under the Securities Act, and applicable state securities laws to the Holders, and
their assignees or successors in interest, certain rights to provide for the registration for resale of their Conversion Shares
by means of a Registration Statement under the Securities Act, pursuant to the terms of this Agreement.

 

C.           In
connection with the transactions contemplated by the Securities Purchase Agreement, the Company is also exchanging that senior
convertible note in the principal amount of $500,000 issued by the Company to Wirtz Manufacturing Co. Inc. on August 20, 2014 for
a new senior secured convertible note of like tenor with the Notes (the “Wirtz Note”).

 

D.           The
Conversion Shares (including any Conversion Shares issued upon conversion of the Wirtz Note) acquired by the Holders and their
assignees or successors in interest, are referred to collectively as the “Registrable Securities”.

 

E.           Unless
otherwise provided in this Agreement, capitalized terms used herein shall have the respective meanings set forth in Section 13
hereof.

 

NOW, THEREFORE,
in consideration of the above premises and the mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and Holder hereby agree as follows:

 

		1.	Registration.

 

(a)          Piggyback
Registrations Rights. If, at any time after the Company shall become subject to the periodic reporting obligations (a “Reporting
Company”) under the Securities and Exchange Act of 1934, as amended (the “1934 Act”) through the date
that is five years after the date the Company becomes a Reporting Company, there is not an effective Registration Statement covering
the Registrable Securities, and the Company shall determine to prepare and file with the Commission a Registration Statement relating
to an offering for its own account or the account of others under the Securities Act of any of its equity securities (other than
on Form S-4 or Form S-8, each as promulgated under the Securities Act, or their then equivalent relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
stock option or other employee benefit plans), then the Company shall send to the Holders a written notice of such determination
at least twenty (20) days prior to the filing of any such Registration Statement and shall, include in such Registration Statement
all Registrable Securities requested by any Holder hereunder to be included in the registration within ten (10) days after the
Company sends such notice to the Holders (the “Piggyback Shares”) for resale and offer on a continuous basis
pursuant to Rule 415; provided, that (i) if, at any time after giving written notice of its intention to register any securities
and prior to the effective date of the Registration Statement filed in connection with such registration, the Company determines
for any reason not to proceed with or terminate such registration, the Company will be relieved of its obligation to register any
Registrable Securities in connection with such registration, (ii) in case of a determination by the Company to delay registration
of its securities, the Company will be permitted to delay the registration of Registrable Securities for the same period as the
delay in registering such other securities, (iii) each Holder is subject to confidentiality obligations and shall not use or disclose
any information gained in this process or any other material non-public information he, she or it obtains, (iv) each Holder or
assignee or successor in interest shall comply with all applicable laws relating to insider trading or similar restrictions; and
(v) if all of the Registrable Securities of the Holders cannot be so included due to Commission Comments or Underwriter Cutbacks,
then the Company may reduce, in accordance with the provisions of Section 1(c) hereof, the number of securities covered by such
Registration Statement to the maximum number which would enable the Company to conduct such offering in accordance with the provisions
of Rule 415.

 

    	 

    	 

    

  

(b)          Initial
Registration Statement. At the election of each Holder, the Company shall be required to include up to all Piggyback Shares
held by such Holder for resale and offer on a continuous basis pursuant to Rule 415 in the first Registration Statement filed after
the date that it becomes a Reporting Company (the “Initial Registration Statement”); provided, however,
that if all of the Registrable Securities of the Holders cannot be so included due to Commission Comments or Underwriter Cutbacks,
then the Company may reduce, in accordance with the provisions of Section 1(c) hereof, the number of securities covered by the
Initial Registration Statement to the maximum number which would enable the Company to conduct such offering in accordance with
the provisions of Rule 415.

 

(c)          Cutback
Provisions. In the event all of the Registrable Securities cannot be or are not included in a Registration Statement due to
Commission Comments or Underwriter Cutbacks, the Company and the Holders agree that securities shall be removed from such Registration
Statement in the following order until no further removal is required by Commission Comments or Underwriter Cutbacks:

 

(i)          First,
any securities held by any former employee, consultant or affiliate of the Company shall be removed, pro rata based on the number
of securities being registered for such former employees, consultants or affiliates held by all of the former employees of the
Company and any of their affiliates and successors in interest, whether pursuant to agreement or otherwise and any other person
with any registration rights outstanding on the date hereof;

 

(ii)         Second,
the securities held by National Securities Corporation (“National Securities”) and its members and affiliates,
if any, obtained solely by reason of providing services to the Company, which are being registered pursuant to any registration
rights agreement or otherwise; and

 

(iii)        Third,
the Registrable Securities held by the Holders that are requested to be included in the Registration Statement shall be removed,
pro rata based on the number of Registrable Shares held by each Holder in comparison to the number of Registrable Securities held
by all Holders who have requested to include any Registrable Securities in the Registration Statement.

 

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(d)          Mandatory
Registrations. In the event all of the Piggyback Shares of the Holders are not included in a Registration Statement due to
Commission Comments or Underwriter Cutbacks, the Company shall prepare and file an additional Registration Statement (the “Follow-up
Registration Statement”) with the Commission within sixty (60) days following the effectiveness of the previously filed
Registration Statement; provided, however, that the time period for filing the Follow-up Registration shall be extended
to the extent that the Commission publishes written Commission Guidance or the Company receives written Commission Guidance which
provides for a longer period before a Follow-up Registration Statement may be filed. The Follow-up Registration Statement shall
cover the resale of all of the Registrable Securities that were excluded from any previously filed Registration Statement. In the
event that all of the Piggyback Shares have not been registered in a Registration Statement after the Follow-up Registration Statement
has been declared effective, the Company shall use commercially reasonable efforts thereafter to register any remaining unregistered
Registrable Securities, subject to the provisions of Section 1(e) hereof.

 

(e)          Filing;
Content. The Company will use its commercially reasonable efforts to cause each Registration Statement pursuant to which any
Registrable Securities are included, including the Initial or Follow-up Registration Statement, to contain the Plan of Distribution
substantially similar to that attached hereto as Schedule B. The Company shall use its commercially reasonable efforts to
cause any Registration Statement filed under this Section 1, including the Initial and Follow-up Registration Statement, to be
declared effective under the Securities Act as promptly as practicable after the filing thereof and shall keep such Registration
Statement continuously effective under the Securities Act until the earlier of (i) one year after its Effective Date (provided,
however, the one year period shall be extended for any Grace Period), (ii) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by the Holders, or (iii) such time as all of the Registrable Securities
covered by such Registration Statement may be sold by the Holders pursuant to Rule 144 without regard to both the volume limitations
for sales as provided in Rule 144 and the limitations for such sales provided in Rule 144(i), if applicable, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer
agent and the affected Holder (“Effectiveness Period”). By 5:00 p.m. (New York City time) on the business day
immediately following the Effective Date of a Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement
(whether or not such filing is technically required under such Rule). Notwithstanding the foregoing
portion of this Section 1(e), the Company shall have the right in its sole discretion to withdraw any Registration Statement filed
under this Section 1 prior to its effectiveness.

 

(f)          Termination
of Piggyback Registration Rights. The registration rights afforded to each Holder under this Section 1 shall terminate on the
earliest date when all Registrable Securities of the Holder either: (i) have been publicly sold by the Holder pursuant to a Registration
Statement, (ii) have been covered by an effective Registration Statement which has been effective for an aggregate period of sixteen
(16) months (whether or not consecutive), provided, however, the time period shall be calculated so as to exclude any Grace Period,
or (iii) may be sold by the Holder pursuant to Rule 144 without regard to both the volume limitations for sales as provided in
Rule 144 and the limitations for such sales provided in Rule 144(i), if applicable, as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected
Holder in its reasonable discretion.

 

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		2.	Demand Registration Rights.

 

(a)          Demand
Right. Commencing on the date that is one hundred eighty (180) days after the Company becomes a Reporting Company, the Holders
as a group representing at least 50% of the Registrable Securities (a “Requesting Group”) shall have a separate
one-time right, by written notice to the Company, signed by such Holders (the “Demand Notice”), to request the
Company to register for resale all Registrable Securities included by the Requesting Group in the Demand Notice (the “Demand
Shares”) under and in accordance with the provisions of the Securities Act by filing with the Commission a Registration
Statement covering the resale of such Demand Shares (the “Demand Registration Statement”). A copy of the Demand
Notice also shall be provided by the Company to each of the other Holders who will have fifteen (15) days to notify the Company
in writing to include their Registrable Securities as part of the Demand Shares, the failure of which, however, shall not in any
way affect the rights of the Requesting Group pursuant to this Section 2(a). The Demand Registration Statement required hereunder
shall be on any form of registration statement then available for the registration of the Registrable Securities, as selected by
the Company in accordance with applicable law and regulation. The Company will use its commercially reasonable efforts to file
the Demand Registration Statement within forty-five (45) days of the receipt of the Demand Notice, provided if the Demand Notice
is given within the forty-five (45) days after the prior fiscal year end, then the Company will use its reasonably commercial efforts
to file the Demand Registration Statement within ninety (90) days of the fiscal year end of the Company. The Company shall use
its commercially reasonable efforts to cause the Demand Registration Statement to be declared effective under the Securities Act
as promptly as practicable after the filing thereof and to keep the Demand Registration Statement continuously effective under
the Securities Act during the Effectiveness Period.

 

(b)          Inclusion
of Other Registrable Shares and Cutback Provisions. If as a result of Commission Comments, not all shares are included that
are desired to be included in a Registration Statement for the Demand Shares, the provisions of Section 1(c) shall apply, subject
to the Demand Priority (as defined below) of the Requesting Group. Pursuant to the piggyback registration rights granted under
this Agreement, the Company may include the Registrable Shares of the other Holders which will be subject to the provision of Section
1(c) hereof, except that under Section 1(c)(iii), there will be no cutback of the Registrable Securities of the Requesting Group
until the Holders of Piggyback Shares and the shares of any other person exercising piggyback rights under any other registration
rights agreement (except for National Securities and their current and former affiliates, which shall have the priority established
in Section 1(c)) have been removed, and thereafter if any further Registrable Securities have to be removed then those of the Requesting
Group will be removed pro rata (the “Demand Priority”). Notwithstanding the foregoing, if any other securities
of any person other than the Holders or the Requesting Group or National Securities and their current and former affiliates are
included on the Demand Registration Statement, such securities will be removed, if required pursuant to Commission Comments, after
removal of the securities indicated in Section 1(c)(i) and before the securities indicated in Section 1(c)(ii), as such persons
decide among themselves, and if there is no agreement at to such removal provided to the Company within a reasonable time, time
being of the essence, then all the such securities will be removed.

 

(c)          Termination
of Demand Registration Rights. The registration rights afforded to each Holder under this Section 2 shall terminate on the
earliest date when all Registrable Securities of the Holder either: (i) have been publicly sold by the Holder pursuant to a Registration
Statement, (ii) have been covered by an effective Registration Statement which has been effective for an aggregate period of sixteen
(16) months (whether or not consecutive), provided, however, the time period shall be calculated so as to exclude
any Grace Period, or (iii) may be sold by the Holder pursuant to Rule 144 without regard to both the volume limitations for sales
as provided in Rule 144 and the limitations for such sales provided in Rule 144(i), if applicable, as determined by the counsel
to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent
and the affected Holder in its reasonable discretion.

 

3.          Registration
Procedures. Whenever any Registrable Securities are to be registered pursuant to this Agreement, the Company shall use its
commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company shall have the following obligations:

 

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(a)          The
Company shall prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use
its commercially reasonable efforts to cause such Registration Statement to become effective.

 

(b)          The
Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to a Registration
Statement and the Prospectus used in connection with such Registration Statement, which Prospectus is to be filed pursuant to Rule
424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during
the Effectiveness Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by such Registration Statement. In the case of amendments and supplements
to a Registration Statement which are required to be filed pursuant to this Agreement by reason of the Company filing a report
on Forms 10-K, 10-Q or Current Report on Form 8-K, or any analogous report under the Securities Exchange Act, the Company shall
have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements
with the Commission on the same day on which the Securities Exchange Act report is filed which created the requirement for the
Company to amend or supplement such Registration Statement.

 

(c)          The
Company shall furnish to each Holder of Registrable Securities in any Registration Statement, without charge, (i) promptly after
the same is prepared and filed with the Commission at least one copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein by reference, if requested by such seller, all
exhibits and each preliminary Prospectus, (ii) unless such Holder is exempt from the prospectus delivery requirements pursuant
to Rule 172 of the Securities Act, upon the effectiveness of any Registration Statement, ten (10) copies of the Prospectus included
in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such seller may reasonably
request), and (iii) such other documents, including copies of any preliminary or final Prospectus, as such seller may reasonably
request from time to time in order to facilitate the disposition of the Registrable Securities owned by such seller.

 

(d)          The
Company shall use its commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by any seller of the Registrable Securities covered by a Registration Statement under such other securities
or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Effectiveness Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Effectiveness Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.

 

(e)          The
Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest practicable time and to notify
the Holder of any Registrable Securities included in the offering under such Registration Statement of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

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(f)          The
Company shall notify the Holder in writing of the happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement
of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain
any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and, unless such Holder is exempt from the prospectus delivery requirements
pursuant to Rule 172 of the Securities Act, deliver ten (10) copies of such supplement or amendment to the Holder (or such other
number of copies as the Holder may reasonably request).

 

(g)          The
Company shall promptly notify the Holder in writing (i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness
shall be delivered to the Holder by email or facsimile on the same day of such effectiveness or by overnight delivery), (ii) of
any request by the Commission for amendments or supplements to a Registration Statement or related Prospectus or related information,
and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be
appropriate.

 

(h)          If
the Holder is required under applicable Commission Guidance to be described in a Registration Statement as an underwriter, at the
reasonable request of such Holder, the Company shall use its best efforts to furnish to such Holder, on the date of the effectiveness
of such Registration Statement and thereafter from time to time on such dates as the Holder may reasonably request (i) a letter,
dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Holder, and (ii)
an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope
and substance as is customarily given in an underwritten public offering, addressed to the Holder.

 

(i)          If
the Holder is required under applicable Commission Guidance to be described in a Registration Statement as an underwriter, then
at the request of such Holder in connection with such Holder’s due diligence requirements, the Company shall make available
for inspection by (i) the Holder, (ii) the Holder’s legal counsel, and (iii) one firm of accountants or other agents retained
by the Holder (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary
by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall
not make any disclosure (except to the Holder) or use of any Record or other information which the Company determines in good faith
to be confidential, and of which determination the Inspectors are so notified, unless (a) the release of such Records is ordered
pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (b) the information
in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement
of which the Inspector has knowledge. Each Holder agrees that it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and the Holder) shall
be deemed to limit the Holder’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable
laws and regulations. Notwithstanding the foregoing, each Holder acknowledges that the Records may contain material non-public
information and agrees that it shall strictly comply with the insider trading rules prohibiting the purchasing, selling or the
Company’s securities while in the possession of any such material non-public information.

 

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(j)          The
Company shall hold in confidence and not make any disclosure of information concerning the Holder provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information
is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction,
(iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or
any other agreement, or (v) the Holder provides information to the Company intended for inclusion in a Registration Statement.
The Company agrees that it shall, upon learning that disclosure of such information concerning the Holder is sought in or by a
court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Holder if permitted
by applicable law or regulation and allow the Holder, at the Holder’s expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

 

(k)          The
Company shall (i) if applicable, use its best efforts to cause all of the Registrable Securities covered by a Registration Statement
to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed,
if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) otherwise, use
its commercially reasonable efforts to secure designation and quotation of all of the Registrable Securities covered by a Registration
Statement on any one of the different levels of The NASDAQ Stock Market, or (iii) if, despite the Company’s best efforts
or commercially reasonable efforts, as applicable, to satisfy, the preceding clauses (i) and (ii) the Company is unsuccessful in
satisfying the preceding clauses (i) and (ii), to instead secure the inclusion for quotation on the Over-the-Counter Bulletin Board
for such Registrable Securities and, without limiting the generality of the foregoing, to use its commercially reasonable efforts
to encourage at least two market makers to register with the Financial Industry Regulatory Authority, Inc. (“FINRA”)
as such with respect to such Registrable Securities. For the avoidance of doubt, subject to and in accordance with Section 5, the
Company shall pay all fees and expenses of the Company in connection with satisfying its obligation under this Section 3(k).

 

(l)          If
requested by the Holder, and permissible under Commission Guidance, the Company shall (i) as soon as practicable incorporate in
a Prospectus supplement such information as the Holder reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with respect to the Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in
such offering; (ii) as soon as practicable make all required filings of such Prospectus supplement after being notified of the
matters to be incorporated in such Prospectus supplement; and (iii) as soon as practicable, supplement any Registration Statement
if reasonably requested by the Holder holding any Registrable Securities.

 

(m)          The
Company shall cooperate with each Holder who holds Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Holder may reasonably request and registered in such names as the Holder may request.

 

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(n)          The
Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to
be registered with or approved by such other U.S. governmental agencies or authorities, but only in matters not contemplated Section
3(d) by or reasonably related to such matters (which matters are to be governed exclusively by Section 3(d)), as may be strictly
necessary to consummate the disposition of such Registrable Securities by the Holder strictly in accordance with the Plan of Distribution
included in the Registration Statement (as such Plan of Distribution may be modified from time to time in any filing with the Commission).

 

(o)          The
Company shall make generally available to its security holders as soon as practicable, but not later than ninety (90) days after
the close of the period covered thereby (or, if different, within the period permitted for the filing of reports on Forms 10-K
or 10-Q), an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities
Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following
the Effective Date of a Registration Statement.

 

(p)          The
Company shall otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission
in connection with any registration hereunder.

 

(q)          Within
two (2) business days after a Registration Statement which covers Registrable Securities is ordered effective by the Commission,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Holder whose Registrable Securities are included in such Registration Statement) confirmation that
such Registration Statement has been declared effective by the Commission in the form attached hereto as Exhibit A and the
Irrevocable Transfer Agent Instructions in the form attached hereto as Exhibit B.

 

(r)          Notwithstanding
anything to the contrary herein, at any time after the Effective Date of a Registration Statement, the Company may delay the disclosure
of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion
of the Board of Directors of the Company, in the best interest of the Company and not, after consultation with legal counsel, otherwise
required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Holder in writing of the
existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not
disclose the content of such material, non-public information to the Holder) and the date on which the Grace Period will begin,
and (ii) notify the Holder in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall
exceed sixty (60) consecutive days and during any three hundred sixty-five (365) day period such Grace Periods shall not exceed
an aggregate of one hundred twenty (120) days (each, an “Allowable Grace Period”). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on and include the date the Holder receives the notice referred
to in clause (i) and shall end on and include the later of the date the Holder receives the notice referred to in clause (ii) and
the date referred to in such notice. The provisions of Section 3(f) hereof shall not be applicable during the period of any Allowable
Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by Section 3(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of the Holder in connection
with any sale of Registrable Securities with respect to which the Holder has entered into a contract for sale, and delivered a
copy of the Prospectus included as part of the applicable Registration Statement (unless an exemption from such Prospectus delivery
requirements exists), prior to the Holder’s receipt of the notice of a Grace Period or, if earlier, Holders knowledge of
the material, non-public information concerning the Company that gave rise to the Grace Period, and for which the Holder has not
yet settled.

 

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(s)          In
the event the number of shares available under any Registration Statement filed pursuant to this Agreement is insufficient to cover
all of the Registrable Securities required to be covered by such Registration Statement in accordance with the requirements of
this Agreement or a Holder’s allocated portion of the Registrable Securities pursuant to Sections 1(c) or 2(b), the Company
may, as an alternative, to filing a Follow-up Registration Statement, amend the Registration Statement (if permissible) on or before
the date the filing of a Follow-up Registration Statement would be required, so as to cover at least the required number of Registrable
Securities (but taking account of any SEC Staff position with respect to the date on which the Staff will permit such amendment
to the Registration Statement and/or such new Registration Statement (as the case may be) to be filed with the SEC). The Company
shall use its commercially reasonable efforts to cause such any such amendment to such Registration Statement (as the case may
be) to become effective as soon as practicable following the filing thereof with the SEC.

 

		4.	Obligations of the Holders.

 

(a)          At
least five (5) business days prior to the first anticipated filing date of a Registration Statement, the Company shall notify the
Holders in writing of the information the Company requires from each Holder if the Holder’s Registrable Securities are to
be included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to any Registrable Securities of the Holder that the Holder shall furnish
to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition
of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

 

(b)          The
Holder, by the Holder’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested
by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless the Holder has notified
the Company in writing of the Holder's election to exclude all of the Holder’s Registrable Securities from such Registration
Statement.

 

(c)          The
Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Sections
3(e) or 3(f) or of a Grace Period under Section 3(r), the Holder will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities until the Holder’s receipt of the copies of
the supplemented or amended Prospectus contemplated by Sections 3(e) or 3(f) or receipt of notice that no supplement or amendment
is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares
of Common Stock to a transferee of the Holder in connection with any sale of Registrable Securities with respect to which the Holder
has entered into a contract for sale prior to the Holder’s receipt of a notice from the Company of the happening of any event
of the kind described in Sections 3(e) or 3(f) or of any Grace Period, or, if earlier, Holders knowledge of the material, non-public
information concerning the Company or the facts or circumstances that gave rise to the Grace Period or of the Section 3(e) or 3(f)
event, and for which the Holder has not yet settled.

 

(d)          The
Holder covenants and agrees that it will comply with the Prospectus delivery requirements of the Securities Act as applicable to
it or an exemption therefrom in connection with sales of Registrable Securities pursuant to a Registration Statement.

 

5.            Registration
Expenses. All expenses incident to the Company’s performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, fees and disbursements of custodians, and fees and disbursements of counsel for the Company and
all independent certified public accountants, underwriters retained by the Company (excluding discounts, commissions and placement
agent fees) and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”),
shall be borne by the Company. Further, the Company shall pay its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities
exchange on which similar securities issued by the Company are then listed.

 

    	-9-

    	 

    

  

		6.	Indemnification.

 

In the event any Registrable
Securities are included in a Registration Statement under this Agreement:

 

(a)          To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Holder, the directors,
officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls the Holder within the
meaning of the Securities Act or the Securities Exchange Act (each, an “Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement
or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the Commission, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar
as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky”
laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary Prospectus if used prior
to the effective date of such Registration Statement, or contained in the final Prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the Commission) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii) any violation or alleged violation by the Company of the Securities Act or the Securities Exchange
Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the
offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters
in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the Company
shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or
other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim
by an Indemnified Person arising out of or based upon a Violation which occurs based on a Holder’s material breach of its
covenants or agreements in Section 4(c) or (d) or in reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person or by a Related Information Provider expressly for use in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement thereto and (ii) shall not be available to the extent such
Claim is based on a failure of the Holder to deliver or to cause to be delivered the Prospectus made available by the Company,
including a corrected Prospectus, if such Prospectus or corrected Prospectus was timely made available by the Company pursuant
to Section 3(c); and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer
of the Registrable Securities by the Holder pursuant to Section 10. “Related Information Provider” means, in
respect of any Indemnified Person, the Holder to which such Indemnified Person is related or another Indemnified Person that is
related to the Holder to which such Indemnified Person is related.

 

    	-10-

    	 

    

  

(b)          To
the fullest extent permitted by law, in connection with any Registration Statement in which a Holder’s Registrable Securities
are included or in which a Holder is otherwise participating, such Holder will severally and not jointly indemnify and hold harmless
the Company, each of its directors, each of its officers who has signed the Registration Statement, each Person, if any, who controls
the Company within the meaning of the Securities Act, any underwriter, any other Holder or other Person selling securities in such
Registration Statement and any controlling person of any such underwriter or other Holder or other Person (each an “Other
Indemnified Person”), against any Claims or Indemnified Damages to which any of them may become subject, under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case to the extent, and only to the extent, that such Violation occurs based on a Holder’s material breach of its
covenants or agreements in Section 4(c) or (d) or in reliance upon and in conformity with written information furnished by such
Holder or by a Related Information Provider expressly for use in connection with such Registration Statement; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any Other Indemnified Person intended to be indemnified
pursuant to this Section 6(b), in connection with investigating or defending any such Claim; provided, however, that
the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any such Claim if such
settlement is effected without the prior written consent of the Holder, which consent shall not be unreasonably withheld; provided,
further, however, that the Holder shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to the Holder as a result of the sale of Registrable Securities pursuant to such Registration
Statement, except in the case of fraud by such Holder. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Other Indemnified Person and shall survive the transfer of the Registrable Securities by the Holder
pursuant to Section 10.

 

(c)          Promptly
after receipt by an Indemnified Person or Other Indemnified Person under this Section 6 of notice of the commencement of any action
or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Other Indemnified
Person shall, if a claim for indemnification in respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and reasonably satisfactory
to the Indemnified Person or the Other Indemnified Person, as the case may be; provided, however, that an Indemnified
Person or Other Indemnified Person shall have the right to retain its own counsel with the fees and expenses of not more than one
counsel for all such Indemnified Persons or all such Other Indemnified Persons to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person
or Other Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between
such Indemnified Person or Other Indemnified Person and any other party represented by such counsel in such proceeding. The Other
Indemnified Person or Indemnified Person, as applicable, shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to such Other Indemnified Person or such Indemnified Person which relates to such action or Claim. The indemnifying
party shall keep the Other Indemnified Person or Indemnified Person, as applicable, reasonably apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior written consent; provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent
of the Other Indemnified Person or Indemnified Person, as applicable, consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Other
Indemnified Person or such Indemnified Person of a release from all liability in respect to the Claim at issue, and such settlement
shall not include any admission as to fault on the part of such Other Indemnified Person or such Indemnified Person. Following
indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Other Indemnified Person
or Indemnified Person, as applicable, with respect to all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Other Indemnified
Person, as applicable, under this Section 6, except to the extent that the indemnifying party is materially prejudiced in its ability
to defend such action.

 

    	-11-

    	 

    

  

(d)          The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred, subject to an undertaking by the Indemnified Person
or the Other Indemnified Person, as applicable, to return such payments to the extent a court of competent jurisdiction or other
competent authority determines that such payments were unlawful or were not required under this Agreement.

 

(e)          Without
any duplication or multiplication of damages, the indemnity agreements contained herein shall be in addition to (i) any cause of
action or similar right of the Other Indemnified Person or Indemnified Person against the indemnifying party or others, and (ii)
any liabilities the indemnifying party may be subject to pursuant to the law.

 

(f)          Unless
suspended by the underwriting agreement applicable to any registration, the obligations of the Company and Holders under this Section
6 shall survive the completion of any offering of Registrable Securities in a Registration Statement under this Agreement, or otherwise.

 

7.          Contribution.
To the extent any indemnification by an indemnifying party is prohibited or limited by law, such indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) in connection with such sale
shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement

 

8.          No
Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any
registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement.

 

9.          Reports
under Securities Exchange Act. With a view to making available to the Holder the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the Commission that may at any time permit the Holder to sell securities
of the Company to the public without registration, once the Company becomes a Reporting Company, the Company agrees to use its
commercially reasonable efforts to continue to be a Reporting Company for five years and further during such time it is a Reporting
Company the Company agrees to use its best efforts to:

 

    	-12-

    	 

    

  

(a)          make
and keep public information available, as those terms are understood and defined in Rule 144;

 

(b)          file
with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the
Securities Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and

 

(c)          furnish
to the Holder so long as the Holder owns Registrable Securities, promptly upon request, (i) a written statement by the Company,
if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Securities Exchange Act,
(ii) unless available on the Commission’s EDGAR website, copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to
permit the Holder to sell such securities pursuant to Rule 144 without registration.

 

10.           Assignment
of Registration Rights. The rights under this Agreement shall be automatically assignable by the Holder to any transferee of
all or any portion of the Holder’s Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment;
(ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name
and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred
or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee
or assignee is or might be restricted under the Securities Act and applicable state securities laws; and (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in
writing with the Company to be bound by all of the provisions contained herein.

 

11.           Subsequent
Registration Rights. The Company agrees that after the date hereof and excluding any registration rights agreement with National
Securities or its members and affiliates, it will not grant to any person any registration right or proceed to register any securities
of any person unless it provides in such agreement or registration that any securities being registered under such agreement or
registration will be subject to the cutback provisions of this Agreement as provided in Section 1(c) and Section 2(b).

 

12.           Amendment
of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally
or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders
of at least a majority of the then outstanding Registrable Securities. Any amendment so effected will be binding upon all Holders,
whether or not such Holder consents thereto.

 

13.           Definitions.

 

(a)          “Commission”
means the Securities and Exchange Commission.

 

(b)          “Commission
Comments” means written comments pertaining solely to Rule 415 or other comments to the extent they relate to Rule 415
which are received by the Company from the Commission, and a copy of which shall have been provided by the Company to the Holder,
to a filed Registration Statement which limit the amount of shares which may be included therein to a number of shares which is
less than such amount sought to be included thereon as filed with the Commission.

 

    	-13-

    	 

    

  

(c)          “Commission
Guidance” means (i) any guidance, comments, requirements or requests of the Commission staff that is publicly available
in oral or written form and any comments or guidance provided by the Commission staff directly to the Company in written form,
(ii) the Securities Act and the rules and regulations promulgated thereunder or (iii) the Securities Exchange Act and the rules
and regulations promulgated thereunder.

 

(d)          “Common
Stock” means the common stock, $0.001 par value per share, of the Company.

 

(e)          “Effective
Date” means, as to a Registration Statement, the date on which such Registration Statement is first declared effective
by the Commission.

 

(f)          “Person”
means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(g)          “Prospectus”
means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus

 

(h)          “Registrable
Securities” means (i) the Conversion Shares issued or issuable to the Holder or its assignees or successor in interest
pursuant to conversion of the Notes and (ii) any other shares of Common Stock or any other securities issued or issuable with respect
to the securities referred to in clause (i) by way of a stock dividend or stock split or in connection with an exchange or combination
of shares, recapitalization, merger, consolidation or other reorganization.

 

(i)          “Registration
Statement” means any registration statement (including, without limitation, the Initial Registration Statement or the
Follow-up Registration Statement) required to be filed hereunder (which, at the Company’s option, may be an existing registration
statement of the Company previously filed with the Commission, but not declared effective), including (in each case) the Prospectus,
amendments and supplements to the Registration Statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in the Registration Statement.

 

(j)          “Reporting
Company” means a company that is obligated to file periodic reports under Sections 13 or 15(d) of the Securities Exchange
Act.

 

(k)          “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission that may at any time permit the Holder to sell securities
of the Company to the public without registration.

 

    	-14-

    	 

    

  

(l)          “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

(m)          “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

(n)          “Securities
Act” means the Securities Act of 1933, as amended from time to time together with the regulations promulgated thereunder.

 

(o)          “Securities
Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, together with the regulations
promulgated thereunder.

 

(p)          “Underwriter
Cutbacks” means any reduction in the number of shares suggested by any managing underwriter to be included in a registration
under a Registration Statement based upon the guidance in this Section 13(p). In connection with any offering involving an underwriting
of shares of the Company’s capital stock, the Company shall not be required under Section 1 to include any of the Holders’
securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters,
and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering
by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities to be sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that
number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling shareholders according
to the total amount of securities entitled to be included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders); provided, that any such cutback will be effected in accordance with
the priorities established by Section 1(c); provided further that in no event shall the amount of securities of the selling Holders
included in an offering pursuant to Section 1 be reduced below 30% of the total amount of securities included in such offering.

 

14.         Market
Stand-Off. In connection with the Initial Public Offering of the Company’s securities, if any, each Holder hereby agrees
not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the
Company however or whenever acquired (other than those included in the registration, if any) without the prior written consent
of the managing or lead underwriter of such offering, for a period of one hundred eighty (180) days from the effective date of
such registration (the “Restricted Period”), and to the extent requested by the underwriter, each Holder shall,
at the time of such offering, execute an agreement reflecting these requirements binding on such Holder that are substantially
consistent with this Section 14; provided, however, that if during the last seventeen (17) days of the Restricted
Period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to
the expiration of the Restricted Period the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required
by any FINRA rules, the restrictions imposed by this Section 14 shall continue to apply until the end of the third (3rd) trading
day following the expiration of the fifteen (15) day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event. In no event will the Restricted Period extend beyond two hundred sixteen (216) days after
the effective date of the registration statement. In order to enforce the restriction set forth above or any other restriction
agreed by Holder, including without limitation any restriction requested by the underwriters of any Initial Public Offering of
the securities of the Company agreed by such Holder, the Company may impose stop-transfer instructions with respect to any security
acquired under or subject to this Agreement until the end of the applicable stand-off period. The Company’s underwriters
shall be third-party beneficiaries of the agreement set forth in this Section 14. Each Holder agrees that prior to the Company’s
Initial Public Offering it will not transfer securities of the Company unless each transferee agrees in writing to be bound by
all of the provisions of this Section 14, provided that this Section 14 shall not apply to transfers pursuant to a Registration
Statement.         

 

    	-15-

    	 

    

  

Each Holder agrees that a legend reading
substantially as follows shall be placed on all certificates representing all Registrable Securities of each Holder issued before
the Company’s Initial Public Offering (and the shares or securities of every other person subject to the restriction contained
in this Section 14):

 

THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF UP TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION
STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES,
A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE
SHARES.

 

After the Company’s Initial Public
Offering and expiration of any lock-up period, upon request of any Holder who is a holder of record of the shares represented by
any stock certificate(s) bearing such legend and the surrender of such certificate(s) in connection with such request, the Company
shall cause its transfer agent to promptly issue replacement certificate(s) not bearing such legend representing the shares represented
by such surrendered stock certificate(s).

 

15.          Miscellaneous.

 

(a)          A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record
owner of such Registrable Securities.

 

(b)          Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

Aqua Metals, Inc.

501 23rd Avenue

Oakland, CA 94606

E-mail: Steve.Clarke@aqmetals.com

Attention: Dr. Stephen Clarke

 

    	-16-

    	 

    

  

With a copy (for informational
purposes only) to:

 

Greenberg Traurig, LLP

3161 Michelson Drive, Suite
1000

Irvine, CA 92612

Facsimile: (949) 732-6501

E-mail: DonahueD@gtlaw.com

Attention: Daniel K. Donahue,
Esq.

 

and

 

If to any Holder,
at the address for such Holder on the records of the Company, which may include the information on Schedule A hereto.

 

or to such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other
party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine
or email service containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt
from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(c)          Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 

(d)          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 other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the
State of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
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 this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction
or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(e)          This
Agreement and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the instruments referenced herein and therein supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter hereof and thereof.

 

    	-17-

    	 

    

  

(f)          Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

 

(g)          The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(h)          This
Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission
or other electronic transmission (such as but not limited to an email attachment in PDF format) of a copy of this Agreement bearing
the signature of the party so delivering this Agreement. This Agreement may also be executed by electronic signature of such Person.

 

(i)          Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(j)          All
consents and other determinations required to be made by the Holder pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Holder.

 

(k)          The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party.

 

(l)          This
Agreement is intended for the benefit of, and shall be binding upon, the parties hereto and their respective successors and permitted
assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(m)          The
obligations of each Holder hereunder are several and not joint with the obligations of any other Holder, and no provision of this
Agreement is intended to confer any obligations on a Holder vis-à-vis any other Holder. Nothing contained herein, and no
action taken by any Holder pursuant hereto, shall be deemed to constitute the Holder as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holder are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated herein.

 

(n)          Currency.
As used herein, “Dollar”, “US Dollar” and “$” each mean the lawful money of the United States.

 

[Signature pages follow immediately]

 

    	-18-

    	 

    

 

IN WITNESS WHEREOF,
the parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	COMPANY:
	 	 
	 	AQUA METALS, INC.
	 	 	 
	 	By:	/s/ Stephen R. Clarke
	 	 	Stephen R. Clarke
	 	 	Chief Executive Officer
	 	 
	 	HOLDERS:
	 	 
	 	PRINT NAME: ____________________________
	 	 
	 	SIGNATURE: ____________________________

  

    	-19-

    	 

    

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

[Transfer Agent]

[Address]

Attention:

 

Re: Aqua
Metals, Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel
to Aqua Metals, Inc., a [_________] corporation (the “Company”), and have represented the Company in connection with
that certain Registration Rights Agreement with _____________ (the “Holder”) (the “Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration
Rights Agreement), under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company's
obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company filed a registration statement on Form
S-[1] (File No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names the Holder as a selling stockholder thereunder.

 

In connection with the
foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered
an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]
and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

 

If applicable, you may
receive notices from the Company pursuant to the Company’s rights or obligations under the Registration Rights Agreement
in connection with stop orders or other restrictions on transfer of the shares included in such Registration Statement, but [we][I]
[are][am] not obligated to update this letter or otherwise inform you of any such stop order or restriction.

 

[Other applicable disclosure
to be inserted here, if appropriate.]

 

	 	Very truly yours,

 

    	-20-

    	 

    

 

EXHIBIT B

 

IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

_______________, 2014

 

[Addressed to Transfer Agent]

_______________________

_______________________

 

		Attention:	[________________________]

 

Ladies and Gentlemen:

 

Reference is made to
that certain Registration Rights Agreement, dated as of _________________, 2014 (the “Agreement”), by and among
Aqua Metals, Inc., a [_____________] corporation (the “Company”), and _________________________ (the “Holder”),
pursuant to which the Company is obligated to register certain shares held by the Holder (the “Holder Shares”)
of Common Stock of the Company, par value [$_____] per share (the “Common Stock”).

 

This letter shall serve
as our irrevocable authorization and direction to you (provided that you are the transfer agent of the Company at such time) to
issue shares of Common Stock upon transfer or resale of the Holder Shares, unless we have otherwise informed you of the termination
of effectiveness of the registration statement in which the Holder Shares are included, a stop order or another transfer restriction.
We may also later inform you that after the termination of effectiveness of such registration statement that a registration statement
in which the Holder’s Shares are included, or that such stop order has been lifted or that such transfer restriction is not
applicable, in which case this authorization and direction shall be reinstated and be effective.

 

You acknowledge and agree
that so long as you have previously received (a) written confirmation from the Company's legal counsel that either (i) a registration
statement covering resales of the Holder Shares has been declared and remains effective by the Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), or (ii) sales
of the Holder Shares may be made in conformity with Rule 144 under the 1933 Act (“Rule 144”), (b) if applicable,
a copy of such registration statement, and (c) notice from legal counsel to the Company or any Holder that a transfer of Holder
Shares has been effected either pursuant to the registration statement (and a prospectus delivered to the transferee) or pursuant
to Rule 144, then as promptly as practicable, you shall issue the certificates representing the Holder Shares registered
in the names of such transferees, and such certificates shall not bear any legend restricting transfer of the Common Stock evidenced
thereby and should not be subject to any stop-transfer restriction; provided, however, that if such shares of Common Stock and
are not registered for resale under the 1933 Act or able to be sold under Rule 144, then the certificates for such Common Shares
shall bear the following legend:

 

THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

    	-21-

    	 

    

  

A form of written confirmation
from the Company’s outside legal counsel that a registration statement covering resales of the Holder Shares has been declared
effective by the SEC under the 1933 Act is attached hereto. We will inform you of any stop orders or other transfer restrictions.

 

Please execute this letter
in the space indicated to acknowledge your agreement to act in accordance with these instructions. Should you have any questions
concerning this matter, please contact me at ____________.

 

	Very truly yours,
	 
	Aqua Metals, Inc.
	 	 
	By:  	 
	 	Name:
	 	Title:

 

THE FOREGOING INSTRUCTIONS ARE

ACKNOWLEDGED AND AGREED TO

 

this ___ day of ________________, 2014

 

[TRANSFER AGENT]

 

	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 

Enclosures

 

Copy: Holder

 

    	-22-

    	 

    

SCHEDULE A

 

LIST OF HOLDERS

 

	Name	Address
	 	 

  

    	-23-

    	 

    

 

SCHEDULE B

 

SELLING STOCKHOLDERS

 

The shares of common
stock being offered by the selling stockholders are those issuable to the selling stockholders upon [conversion of the notes and
exercise of the warrants]. For additional information regarding the issuance of the [notes and the warrants], see “Private
Placement of Notes” above. We are registering the shares of common stock in order to permit the selling stockholders to offer
the shares for resale [from time to time]. Except for the ownership of [the notes issued pursuant to and in connection with the
Securities Purchase Agreement, and the warrants issued pursuant to and the agreements governing our engagement of National Securities
Corporation as a placement agent for the private placement of the notes and the engagement of National Securities Corporation as
an underwriter for a public offering of common stock by the Company, and our engagement of an affiliate of National Securities
Corporation as a consultant in respect of our patents and intellectual property] the selling stockholders have not had any material
relationship with us within the past three years.

 

The table below lists
the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based
on their respective ownership of shares of common stock [, notes and warrants,] as of ________, 20__, [assuming conversion of the
notes and exercise of the warrants held by each such selling stockholder on that date but taking account of any limitations on
conversion and exercise set forth therein].

 

The third column lists
the shares of common stock being offered by this prospectus by the selling stockholders [and does not take into account any limitations
on (i) conversion of the notes set forth therein or (ii) exercise of the warrants set forth therein].

 

In accordance with
the terms of a registration rights agreement with the holders of the notes and the warrants, this prospectus generally covers the
resale of [(i) the shares of common stock issued upon conversion of the notes and (ii) the maximum number of shares of common stock
issuable upon exercise of the warrants, in each case, determined as if the outstanding notes and warrants were converted or exercised
(as the case may be) in full (without regard to any limitations on conversion or exercise contained therein) as of the trading
day immediately preceding the date this registration statement was initially filed with the SEC]. Because the conversion price
of the notes and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more
or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered
by the selling stockholders pursuant to this prospectus.

 

See “Plan of
Distribution.”

 

    	-24-

    	 

    

	Name of Selling Stockholder	 	Number of Shares of

    Common Stock

    Owned Prior to the

    Offering	 	Maximum Number of 

    Shares of Common

    Stock to be Sold

    Pursuant to this

    Prospectus	 	Number of  Shares

    of Common Stock

    Owned After the

    Offering
	 	 	 	 	 	 	 

[Notes (1) . . .]

 

    	-25-

    	 

    

 

PLAN OF DISTRIBUTION

 

We are registering
the shares of common stock issued upon [conversion of the notes and issuable on exercise of the warrants] to permit the resale
of these shares of common stock by the holders of [the notes and warrants] [from time to time] after the date of this prospectus.
We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all
fees and expenses incident to our obligation to register the shares of common stock.

 

The selling stockholders
may sell all or a portion of the shares of common stock held by them and offered hereby [from time to time] [directly or] through
one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve
crosses or block transactions, pursuant to one or more of the following methods:

 

		·	on any national securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale;

		·	in the over-the-counter market;

		·	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

		·	through the writing or settlement of options, whether such options are listed on an options exchange
or otherwise;

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

		·	an exchange distribution in accordance with the rules of the applicable exchange;

		·	privately negotiated transactions;

		·	short sales made after the date the Registration Statement is declared effective by the SEC;

		·	broker-dealers may agree with a selling security holder to sell a specified number of such shares
at a stipulated price per share;

		·	a combination of any such methods of sale; and

		·	any other method permitted pursuant to applicable law.

 

The selling stockholders
may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather
than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described
in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions
or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of
common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders
may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.

    	-26-

    	 

    

  

The selling stockholders
may pledge or grant a security interest in some or all of the [notes, warrants or] shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate
the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.

 

To the extent required
by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in
the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered
and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed
or paid to broker-dealers.

 

Under the securities
laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.

 

There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.

 

The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and in each case together with the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases
and sales of any of the shares of common stock by the selling stockholders and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares
of common stock and the ability of any Person to engage in market-making activities with respect to the shares of common stock.

 

We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[     ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in
accordance with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written
information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related
registration rights agreements or we may be entitled to contribution.

 

Once sold under the
registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands
of persons other than our affiliates.

 

    	-27-Exhibit 10.6

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT
(this “Agreement”), dated as of October 31, 2014 is made by and among Aqua Metals, Inc., a Delaware corporation
(the “Grantor”), Ankur Desai, as the Collateral Agent, and the secured parties listed on the signature pages
hereof (collectively, the “Secured Parties” and each, individually, a “Secured Party”).

 

RECITALS

 

WHEREAS, pursuant to that certain
Securities Purchase Agreement, dated even date herewith (as may be amended, restated, supplemented, or otherwise modified from
time to time, including all schedules and exhibits thereto, collectively, the “Securities Purchase Agreement”),
by and among the Grantor and certain of the Secured Parties, Grantor has agreed to sell, and each of those Secured Parties have
each agreed to purchase, severally and not jointly, certain senior secured convertible notes in the aggregate original principal
amount of $4,500,000 (the “Offering Notes”); and

 

WHEREAS, in connection with the
transactions contemplated by the Securities Purchase Agreement, the Company is also exchanging that senior convertible note in
the principal amount of $500,000 (the “Old Wirtz Note”) issued by the Company to Wirtz Manufacturing Co. Inc.
(“Wirtz”) on August 20, 2014 for a new senior secured convertible note of like tenor with the Offering Notes
(the “New Wirtz Note”); and

 

WHEREAS, in order to induce those
Secured Parties to purchase, severally and not jointly, the Offering Notes as provided for in the Securities Purchase Agreement
and to induce Wirtz to exchange the Old Wirtz Note for the New Wirtz Note and agree to be parri passu with the other Secured Parties,
Grantor has agreed to grant a continuing security interest in and to the Collateral (as defined below) in order to secure the prompt
and complete payment, observance and performance of the Secured Obligations (as defined below).

 

AGREEMENTS

 

NOW, THEREFORE, for and in consideration
of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.          Defined
Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the
meanings ascribed thereto in the Notes. Any terms used in this Agreement that are defined in the Code shall be construed and defined
as set forth in the Code unless otherwise defined herein or in the Notes; provided, however, if the Code is used
to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such
term contained in Article 9 of the Code shall govern. In addition to those terms defined elsewhere in this Agreement, as used in
this Agreement, the following terms shall have the following meanings:

 

(a)          “Account”
means an account (as that term is defined in the Code).

 

(b)          “Account
Debtor” means an account debtor (as that term is defined in the Code).

 

    	-1-

    	 

    

  

(c)          “Bankruptcy
Code” means title 11 of the United States Code, as in effect from time to time.

 

(d)          “Books”
means books and records (including, without limitation, the Grantor’s Records) indicating, summarizing, or evidencing the
Grantor’s assets (including the Collateral) or liabilities, the Grantor’s Records relating to its business operations
(including, without limitation, stock ledgers) or financial condition, and the Grantor’s goods or General Intangibles related
to such information.

 

(e)          “Chattel
Paper” means chattel paper (as that term is defined in the Code) and includes tangible chattel paper and electronic chattel
paper.

 

(f)          “Code”
means the New York Uniform Commercial Code, as in effect from time to time; provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to any Secured
Party’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such
other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.

 

(g)          “Collateral”
has the meaning specified therefor in Section 2.

 

(h)          “Commercial
Tort Claims” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims
listed on Schedule 1 attached hereto.

 

(i)          “Control
Agreement” means a control agreement, in form and substance reasonably satisfactory to the Collateral Agent, executed
and delivered by Grantor, the Collateral Agent (on behalf of all Secured Parties), and the applicable securities intermediary (with
respect to a Securities Account) or bank (with respect to a Deposit Account), as may be amended, restated, supplemented, or otherwise
modified from time to time.

 

(j)          “Copyrights”
means all copyrights and copyright registrations, and also includes (i) all reissues, continuations, extensions or renewals thereof,
(ii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions
thereof, (iii) the right to sue for past, present and future infringements and dilutions thereof, (iv) the goodwill of Grantor’s
business symbolized by the foregoing or connected therewith, and (v) all of Grantor’s rights corresponding thereto throughout
the world.

 

(k)          “Deposit
Account” means a deposit account (as that term is defined in the Code).

 

    	-2-

    	 

    

  

(l)          “Equipment”
means all equipment (as that term is defined in the Code) in all of its forms of the Grantor, wherever located, and including,
without limitation, all machinery, apparatus, installation facilities and other tangible personal property, and all parts thereof
and all accessions, additions, attachments, improvements, substitutions, replacements and proceeds thereto and therefor.

 

(m)          “Event
of Default” has the meaning specified therefor in the Notes.

 

(n)          “GAAP”
means United States generally accepted accounting principles, consistently applied.

 

(o)          “General
Intangibles” means general intangibles (as that term is defined in the Code) and, in any event, includes payment intangibles,
contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill,
programming materials, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment
under any royalty or licensing agreements (including Intellectual Property Licenses), infringement claims, commercial computer
programs, information contained on computer disks or tapes, software, literature, reports, catalogs, pension plan refunds, pension
plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability
company which do not constitute a security under Article 8 of the Code, and any other personal property other than Commercial Tort
Claims, money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related Property, Negotiable Collateral, and oil, gas,
or other minerals before extraction.

 

(p)          “Governmental
Authority” means any domestic or foreign federal, state, local, or other governmental or administrative body, instrumentality,
board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar
dispute-resolving panel or body.

 

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

 

(r)          “Intellectual
Property” means Patents, Copyrights, Trademarks, the goodwill associated with such Trademarks, trade secrets and customer
lists, and Intellectual Property Licenses.

 

(s)          “Intellectual
Property Licenses” means rights under or interests in any patent, trademark, copyright or other intellectual property,
including software license agreements with any other party, whether the Grantor is a licensee or licensor under any such license
agreement, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

(t)          “Inventory”
means all inventory (as that term is defined in the Code) in all of its forms of the Grantor, wherever located, including, without
limitation, (i) all goods in which the Grantor has an interest in mass or a joint or other interest or right of any kind (including
goods in which the Grantor has an interest or right as consignee), and (ii) all goods which are returned to or repossessed by the
Grantor, and all accessions thereto, products thereof and documents therefor.

 

    	-3-

    	 

    

  

(u)          “Investment
Related Property” means (i) investment property (as that term is defined in the Code), and (ii) all of the following
(regardless of whether classified as investment property under the Code): all Pledged Interests, Pledged Operating Agreements,
and Pledged Partnership Agreements.

 

(v)         “Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or
charge of any kind.

 

(w)          “Negotiable
Collateral” means letters of credit, letter-of-credit rights, instruments, promissory notes, drafts, and documents.

 

(x)          “New
Subsidiary” has the meaning specified therefor in the Notes.

 

(y)          “Notes”
mean collectively the Offering Notes and the New Writz Note.

 

(z)          “Patents”
means all patents and patent applications, and also includes (i) all renewals thereof, (ii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements or dilutions thereof, (iii) the right to sue for
past, present and future infringements and dilutions thereof, and (iv) all of Grantor’s rights corresponding thereto throughout
the world.

 

(aa)        
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent or that is
being contested in good faith for which adequate reserves have been established in accordance with GAAP, (iii) any Lien created
by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary
course of business with respect to a liability that is not yet due or delinquent or that is being contested in good faith by appropriate
proceedings, (iv) Liens on Equipment having a fair market value of not more than $250,000 in the aggregate, but only if the lien
constitutes a purchase money security interest incurred in connection with the purchase of such Equipment, (v) Liens securing the
Company’s obligations under the Transaction Documents, (vi) Liens granted to the Secured Parties pursuant to the terms of
this Agreement, and (vii) any Liens relating to a financing contemplated by Schedule 4(k) attached to the Disclosure Letter made
part of the Securities Purchase Agreement (the “Disclosure Letter”).

 

    	-4-

    	 

    

  

(bb)         “Permitted
Transfers” means (i) sales of Inventory in the ordinary course of business, (ii) licenses in the ordinary course of business
that terminate on or prior to the Maturity Date for the use of Intellectual Property (A) to manufacturers, distributors, OEMs,
strategic partners and value added re-sellers in connection with the manufacture and distribution of Grantor’s products,
(B) in connection with the embedding of Intellectual Property in the products of others, and (C) to end users; provided no such
license could result in a legal transfer of title of the licensed Intellectual Property, (iii) dispositions of worn-out, obsolete
or surplus Equipment at fair market value in the ordinary course of business, or (iv) any sales, licenses or transfers conducted
in connection with the development, operation or transfer of a recycling facility contemplated by Schedule 4(k) attached to the
Disclosure Letter. 

 

(cc)         
“Person” has the meaning specified therefor in the Securities Purchase Agreement.

 

(dd)         “Pledged
Companies” means each Person all or a portion of whose Stock is acquired or otherwise owned by the Grantor after the
date hereof.

 

(ee)         “Pledged
Interests” means all of Grantor’s right, title and interest in and to all of the Stock now or hereafter owned by
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 Stock, the right to receive any certificates
representing any of the 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.

 

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

 

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

 

(hh)        “Proceeds”
has the meaning specified therefor in Section 2.

 

(ii)         “Real
Property” means any estates or interests in real property now owned or hereafter acquired by Grantor and the improvements
thereto.

 

(jj)         “Records”
means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable
in perceivable form.

 

(kk)        “Registration
Rights Agreement” means that certain registration rights agreement, dated as of the date hereof, by and among the Company
and the initial holders of the Notes, as may be amended from time to time.

 

    	-5-

    	 

    

  

(ll)         “Secured
Obligations” mean all of the present and future payment and performance obligations of Grantor arising under this Agreement,
the Notes and the other Transaction Documents, including, without duplication, reasonable attorneys’ fees and expenses and
any interest, fees, or expenses that accrue after the filing of an Insolvency Proceeding, regardless of whether allowed or allowable
in whole or in part as a claim in any Insolvency Proceeding.

 

(mm)      “Securities
Account” means a securities account (as that term is defined in the Code).

 

(nn)        “Security
Documents” means, collectively, this Agreement, each Control Agreement and each other security agreement, pledge agreement,
assignment, mortgage, security deed, deed of trust, and other agreement or document executed and delivered by the Grantor as security
for any of the Secured Obligations, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

(oo)        “Security
Interest” and “Security Interests” have the meanings specified therefor in Section 2.

 

(pp)        “Stock”
means all shares, options, warrants, interests (including, without limitation, membership and partnership interests), participations,
or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred
stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the United States Securities and Exchange Commission and any successor thereto under the Securities Exchange Act
of 1934, as in effect from time to time).

 

(qq)        “Supporting
Obligations” means supporting obligations (as such term is defined in the Code).

 

(rr)         “Trademarks”
means all trademarks, trade names, trademark applications, service marks, service mark applications, and also includes (i) all
renewals thereof, (ii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iii) the right to sue for past, present and future infringements and dilutions thereof, (iv) the goodwill
of Grantor’s business symbolized by the foregoing or connected therewith, and (v) all of Grantor’s rights corresponding
thereto throughout the world.

 

(ss)         “Transaction
Documents” mean, collectively, the Securities Purchase Agreement, the Notes, the Security Documents, the Registration
Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined in the Registration Rights Agreement and each of the
other agreements and instruments entered into or delivered by any of the parties hereto in connection with the consummation of
the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(tt)         “URL”
means “uniform resource locator,” an internet web address.

 

    	-6-

    	 

    

  

2.          Grant
of Security. The Grantor hereby unconditionally grants, assigns, and pledges to each Secured Party a separate, continuing security
interest (each, a “Security Interest” and, collectively, the “Security Interests”) in all
assets of the Grantor whether now owned or hereafter acquired or arising and wherever located (collectively, the “Collateral”),
including, without limitation, the Grantor’s right, title, and interest in and to the following, whether now owned or hereafter
acquired or arising and wherever located:

 

(a)          all
of the Grantor’s Accounts;

 

(b)          all
of the Grantor’s Books;

 

(c)          all
of the Grantor’s Chattel Paper;

 

(d)          all
of the Grantor’s Deposit Accounts;

 

(e)          all
of the Grantor’s Equipment and fixtures;

 

(f)          all
of the Grantor’s General Intangibles;

 

(g)          all
of the Grantor’s Intellectual Property;

 

(h)          all
of the Grantor’s Inventory;

 

(i)          all
of the Grantor’s Investment Related Property;

 

(j)          all
of the Grantor’s Negotiable Collateral;

 

(k)          all
of the Grantor’s Real Property;

 

(l)          all
of the Grantor’s rights in respect of Supporting Obligations;

 

(m)        all
of the Grantor’s Commercial Tort Claims;

 

(n)         all
of the Grantor’s money, cash, cash equivalents, or other assets of the Grantor that now or hereafter come into the possession,
custody, or control of any Secured Party; and

 

(o)         all
of the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial
Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts,
Equipment, General Intangibles, Intellectual Property, Inventory, Investment Related Property, Negotiable Collateral, Real Estate,
Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection,
or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any
rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein,
and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured,
and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise
with respect to any of the foregoing (the “Proceeds”). Without limiting the generality of the foregoing, the
term “Proceeds” includes whatever is receivable or received when Investment Related Property or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of
any indemnity or guaranty payable to the Grantor or any Secured Party from time to time with respect to any of the Investment Related
Property.

 

    	-7-

    	 

    

  

3.           Security
for Obligations. This Agreement and the Security Interests created hereby secure the payment and performance of the Secured
Obligations, whether now existing or arising hereafter.

 

4.           Grantor
Remains Liable. Anything herein to the contrary notwithstanding, (a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform
all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by
Secured Parties, or any of them, of any of the rights hereunder shall not release the Grantor from any of its duties or obligations
under such contracts and agreements included in the Collateral, and (c) no Secured Party shall have any obligation or liability
under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any Secured Party be obligated
to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. Until an Event of Default shall occur and be continuing, except as otherwise provided in this Agreement
or any other Transaction Document, the Grantor shall have the right to possession and enjoyment of the Collateral for the purpose
of conducting the ordinary course of its businesses, subject to and upon the terms hereof and the other Transaction Documents.
Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership
of the Pledged Interests, including all voting, consensual, and dividend rights, shall remain in the Grantor until the occurrence
of an Event of Default and until the Collateral Agent (on behalf of all Secured Parties) shall notify the Grantor of its exercise
of voting, consensual, or dividend rights with respect to the Pledged Interests pursuant to Section 15 hereof.

 

5.           Representations
and Warranties. The Grantor hereby represents and warrants as follows:

 

(a)          The
exact legal name of the Grantor is set forth in the preamble this Agreement.

 

(b)          Schedule
2 attached hereto sets forth (i) all Real Property owned or leased by the Grantor, together with all other locations of
Collateral, as of the date hereof, and (ii) the chief executive office of the Grantor as of the date hereof.

 

(c)          This
Agreement creates a valid security interest in all of the Collateral of the Grantor, to the extent a security interest therein
can be created under the Code, securing the payment of the Secured Obligations. Except to the extent a security interest in the
Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or
reasonably desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing
of financing statements listing the Grantor, as a debtor, and Secured Parties, as secured parties, in the jurisdictions listed
on Schedule 3 attached hereto. Upon the making of such filings, the Secured Parties shall each have a first priority
perfected security interest in all of the Collateral of the Grantor to the extent such security interest can be perfected by the
filing of a financing statement (subject to Permitted Liens). Subject to Section 6(c), all action by the Grantor necessary to perfect
and reasonably necessary to protect such security interest on each item of Collateral has been duly taken.

 

    	-8-

    	 

    

  

(d)          Except
for the Security Interests created hereby, no Collateral is subject to any Lien as of the date hereof, except for Permitted Liens.

 

(e)          No
consent, approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority
or any other Person is required (i) for the grant of a Security Interest by the Grantor in and to the Collateral pursuant to this
Agreement or for the execution, delivery, or performance of this Agreement by the Grantor, or (ii) for the exercise by any Secured
Party of the voting or other rights provided in this Agreement with respect to Investment Related Property pledged hereunder or
the remedies in respect of the Collateral pursuant to this Agreement, except as may be required in connection with such disposition
of Investment Related Property by laws affecting the offering and sale of securities generally.

 

(f)          Schedule
4 contains a complete and accurate list of all of the Grantor’s Deposit Accounts and Securities Accounts, including,
without limitation, with respect to each bank or securities intermediary (a) the name and address of such Person and (b) the account
numbers of such accounts maintained with such Person.

 

6.           Covenants.
The Grantor covenants and agrees with each Secured Party that from and after the date of this Agreement and until the date of termination
of this Agreement in accordance with Section 24 hereof:

 

(a)          Possession
of Collateral. In the event that any Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral,
Investment Related Property, or Chattel Paper with a value in excess of $100,000 in the aggregate, and if and to the extent that
perfection or priority of Secured Parties’ respective Security Interests is dependent on or enhanced by possession, the Grantor,
immediately upon the request of the Collateral Agent (on behalf of all Secured Parties), shall execute such other documents and
instruments as shall be reasonably requested by the Collateral Agent or, if applicable, endorse and deliver physical possession
of such Negotiable Collateral, Investment Related Property, or Chattel Paper to the Collateral Agent (on behalf of all Secured
Parties), together with such undated powers endorsed in blank as shall be requested by the Collateral Agent.

 

    	-9-

    	 

    

  

(b)            Chattel
Paper.

 

(i)          The
Grantor shall take all steps reasonably necessary to grant the Collateral Agent (on behalf of all Secured Parties) control of all
Chattel Paper in accordance with the Code and all “transferable records” as that term is defined in Section 16 of the
Uniform Electronic Purchase Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in
effect in any relevant jurisdiction; and

 

(ii)         If
the Grantor retains possession of any Chattel Paper or instruments (which retention of possession shall be subject to the extent
permitted hereby), promptly upon the request of the Collateral Agent (on behalf of all Secured Parties), such Chattel Paper and
instruments shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are
subject to the Security Interests of [names of Secured Parties].”

 

(c)          Control
Agreements. The Grantor shall not establish or maintain any Deposit Account or Securities Account (or any other similar account)
other than a payroll account unless (i) the Grantor shall have provided each Secured Party with ten (10) days’ advance written
notice of each such account and (ii) if an Event of Default has occurred and is then continuing, the Secured Parties shall have
received a Control Agreement in respect of such account concurrently with the opening thereof. From and after the occurrence and
during the continuance of any Event of Default, the Grantor shall ensure that all of its Account Debtors forward payment of the
amounts owed by them directly to a Deposit Account that is subject to a Control Agreement and deposit or cause to be deposited
promptly, and in any event no later than the first (1st) Business Day after the date of receipt thereof, all of their
collections (including those sent directly by their Account Debtors to the Grantor) into a Deposit Account subject to a Control
Agreement. Upon the request of the Collateral Agent (on behalf of all Secured Parties) from and after the occurrence and during
the continuance of any Event of Default, the Grantor shall promptly (but in no event later than ten (10) Business Days after such
request therefor) cause each of its Deposit Accounts and Securities Accounts to be subject to a Control Agreement in favor of the
Secured Parties.

 

(d)            Letter-of-Credit
Rights. In the event that the Grantor is or becomes the beneficiary of one or more letters of credit with a face amount of
greater than $25,000 individually or $100,000 in the aggregate, the Grantor shall promptly (and in any event within five (5) Business
Days after becoming a beneficiary) notify the Secured Parties thereof and, upon the request by the Collateral Agent (on behalf
of all Secured Parties), use commercially reasonable efforts to enter into an agreement with the Collateral Agent (on behalf of
all Secured Parties) and the issuing or confirming bank with respect to letter-of-credit rights assigning such letter-of-credit
rights to the Collateral Agent (on behalf of all Secured Parties) and directing all payments thereunder to the Collateral Agent
(on behalf of all Secured Parties) during the continuance of an Event of Default following notice from the Collateral Agent, all
in form and substance satisfactory to the Collateral Agent (on behalf of all Secured Parties).

 

    	-10-

    	 

    

  

(e)            Commercial
Tort Claims. The Grantor shall promptly (and in any event within five (5) Business Days of receipt thereof) notify the Secured
Parties in writing upon incurring or otherwise obtaining a Commercial Tort Claim after the date hereof and, upon request of the
Collateral Agent (on behalf of all Secured Parties), promptly amend Schedule 1 to this Agreement to describe such
after-acquired Commercial Tort Claim in a manner that reasonably identifies such Commercial Tort Claim, and hereby authorizes the
filing of additional financing statements or amendments to existing financing statements describing such Commercial Tort Claims,
and agrees to do such other acts or things deemed reasonably necessary or desirable by the Collateral Agent (on behalf of all Secured
Parties) to give the Secured Parties a first priority, perfected security interest (subject to Permitted Liens) in any such Commercial
Tort Claim.

 

(f)            Government
Contracts. If any Account or Chattel Paper arises out of a contract or contracts with the United States of America or any department,
agency, or instrumentality thereof, the Grantor shall promptly (and in any event within five (5) Business Days of the creation
thereof) notify the Secured Parties thereof in writing and use commercially reasonable efforts to execute any instruments or take
any steps reasonably required by the Collateral Agent (on behalf of all Secured Parties) in order that all moneys due or to become
due under such contract or contracts shall be assigned to the Collateral Agent (on behalf of all Secured Parties) during the continuance
of an Event of Default following notice from the Collateral Agent, and shall provide written notice thereof and use commercially
reasonable efforts to take all other appropriate actions under the Assignment of Claims Act or other applicable law to provide
each Secured Party a first-priority perfected security interest (subject to Permitted Liens) in such contract.

 

(g)            Investment
Related Property.

 

(i)          If
the Grantor shall receive or become entitled to receive any Pledged Interests after the date hereof, it shall promptly (and in
any event within five (5) Business Days of receipt thereof) identify such Pledged Interests in a written notice to the Secured
Parties;

 

(ii)         Upon
the request of the Collateral Agent during the continuance of an Event of Default, all sums of money and property paid or distributed
in respect of the Investment Related Property pledged hereunder which are received by the Grantor shall be held by the Grantor
in trust for the benefit of the Secured Parties segregated from the Grantor’s other property, and the Grantor shall deliver
it promptly to the Collateral Agent (on behalf of all Secured Parties) in the exact form received;

 

(iii)        The
Grantor shall promptly deliver to the Secured Parties a copy of each material notice or other written communication received by
it in respect of any Pledged Interests;

 

(iv)        The
Grantor shall not make or consent to any material amendment or other modification or waiver with respect to any Pledged Interests,
Pledged Operating Agreement, or Pledged Partnership Agreement or enter into any agreement or permit to exist any restriction with
respect to any Pledged Interests;

 

    	-11-

    	 

    

  

(v)         The
Grantor agrees that it will cooperate with the Secured Parties in obtaining all necessary approvals and making all necessary filings
under federal, state, local, or foreign law in connection with the Security Interests on the Investment Related Property pledged
hereunder or any sale or transfer thereof; and

 

(vi)        As
to all limited liability company or partnership interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
the Grantor hereby represents, warrants and covenants that the Pledged Interests issued pursuant to such agreement (A) shall not
be dealt in or traded on securities exchanges or in securities markets, (B) will not constitute investment company securities,
and (C) will not be held by the Grantor in a securities account. In addition, none of the Pledged Operating Agreements, the
Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating
Agreement or Pledged Partnership Agreement, shall provide that such Pledged Interests are securities governed by Article 8 of the
Uniform Commercial Code as in effect in any relevant jurisdiction.

 

(h)            Transfers
and Other Liens. The Grantor shall not (i) sell, lease, license, assign (by operation of law or otherwise), transfer or otherwise
dispose of, or grant any option with respect to, any of the Collateral, except for Permitted Transfers or as expressly permitted
by this Agreement and the other Transaction Documents, or (ii) except for Permitted Liens, create or permit to exist any Lien upon
or with respect to any of the Collateral without the consent of the Collateral Agent. The inclusion of Proceeds in the Collateral
shall not be deemed to constitute consent by any Secured Party to any sale or other disposition of any of the Collateral except
as expressly permitted in this Agreement or the other Transaction Documents. Notwithstanding anything contained in this Agreement
to the contrary, Permitted Liens shall not be permitted with respect to any Pledged Interests.

 

(i)            Preservation
of Existence.  The Grantor shall maintain and preserve its existence, rights and privileges, and become or remain
duly qualified and 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 failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect (as defined in the Securities Purchase Agreement).

 

(j)            Maintenance
of Properties. The Grantor shall maintain and preserve all of its properties which are reasonably necessary in the proper
conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply at all times with the
provisions of all material leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss
or forfeiture thereof or thereunder.

 

    	-12-

    	 

    

  

(k)          Maintenance
of Insurance. The Grantor shall maintain insurance with responsible and reputable insurance companies or associations
(including, without limitation, comprehensive general liability, property, hazard, rent and business interruption insurance) with
respect to all of its assets and properties (including, without limitation, all real properties leased or owned by it and any and
all Inventory and Equipment) and business, in such amounts and covering such risks 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, in each case, reasonably acceptable to the Collateral Agent (on behalf of all Secured Parties).

 

(l)          Other
Actions as to Any and All Collateral. The Grantor shall promptly (and in any event within five (5) Business Days of acquiring
or obtaining such Collateral) notify the Secured Parties in writing upon (i) acquiring or otherwise obtaining any Collateral after
the date hereof consisting of Investment Related Property, Chattel Paper (electronic, tangible or otherwise), documents (as defined
in Article 9 of the Code), promissory notes (as defined in the Code) or instruments (as defined in the Code) collectively having
an aggregate value in excess of $100,000 or (ii) any amount payable under or in connection with any of the Collateral being or
becoming evidenced after the date hereof by any Chattel Paper, documents, promissory notes, or instruments and, in each such case
upon the request of the Collateral Agent (on behalf of all Secured Parties), promptly execute such other documents, or if applicable,
deliver such Chattel Paper, other documents or certificates evidencing any Investment Related Property and do such other acts or
things deemed reasonably necessary or desirable by the Collateral Agent (on behalf of all Secured Parties) to protect the Secured
Parties’ respective Security Interests therein.

 

7.          Relation
to Other Transaction Documents. In the event of any conflict between any provision in this Agreement and any provision in the
Securities Purchase Agreement or Notes, such provision of the Securities Purchase Agreement or Notes shall control, except to the
extent the applicable provision in this Agreement is more restrictive with respect to the rights of the Grantor or imposes more
burdensome or additional obligations on the Grantor, in which event the applicable provision in this Agreement shall control.

 

8.            Further
Assurances.

 

(a)          The
Grantor agrees that from time to time, at its own expense, it will promptly execute and deliver all further instruments and documents,
and take all further action, that may be reasonably necessary or that the Collateral Agent (on behalf of all Secured Parties) may
reasonably request, in order to perfect and protect the Security Interests granted or purported to be granted hereby or to enable
the Secured Parties to exercise and enforce their rights and remedies hereunder with respect to any of the Collateral.

 

    	-13-

    	 

    

  

(b)          The
Grantor authorizes the filing by the Collateral Agent (on behalf of all Secured Parties) of financing or continuation statements,
or amendments thereto, including, but limited to, the recordation of the security interests granted hereunder in Patents, Trademarks
and Copyrights in the United States Patent and Trademark Office and the United States Copyright Office, and Grantor will execute
and deliver to the Collateral Agent such other instruments or notices, as may be reasonably necessary or as the Collateral Agent
may reasonably request, in order to perfect and preserve the Security Interests granted or purported to be granted hereby. Upon
the Satisfaction in Full of the Secured Obligations, the Collateral Agent shall (at Grantor’ expense) file a termination
statement and/or other necessary documents terminating and releasing any and all financing statements or Liens on the Collateral
pursuant to Section 24 within five (5) Business Days following a written request therefor from Grantor.

 

(c)          The
Grantor authorizes the Collateral Agent (on behalf of all Secured Parties) at any time and from time to time to file, transmit,
or communicate, as applicable, financing statements and amendments (i) describing the Collateral as “all real and personal
property of debtor” or “all assets of debtor” or words of similar effect, (ii) describing the Collateral as being
of equal or lesser scope or with greater detail, or (iii) that contain any information required by part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance. The Grantor also hereby ratifies any and all financing statements or amendments
previously filed by the Collateral Agent in any jurisdiction.

 

(d)          Subject
to Section 8(b), the Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination
statement with respect to any financing statement filed in connection with this Agreement without the prior written consent of
the Collateral Agent (on behalf of all Secured Parties), subject to the Grantor’s rights under Section 9-509(d)(2) of the
Code.

 

(e)          Upon
five (5) Business Day’s advance notice, the Grantor shall permit each Secured Party (at such Secured Party’s expense)
or its employees, accountants, attorneys or agents, access to examine and inspect any Collateral or any other property of the Grantor
at any time during ordinary business hours.

 

9.          Collateral
Agent’s Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence and during the continuance of an Event
of Default, the Collateral Agent (on behalf of all Secured Parties) (a) may proceed to perform any and all of the obligations of
the Grantor contained in any contract, lease, or other agreement and exercise any and all rights of the Grantor therein contained
as fully as the Grantor itself could, (b) shall have the right to use the Grantor’s rights under Intellectual Property Licenses
in connection with the enforcement of the Secured Parties’ rights hereunder, including the right to prepare for sale and
sell any and all Inventory and Equipment now or hereafter owned by the Grantor and now or hereafter covered by such licenses, and
(c) shall have the right to request that any Stock that is pledged hereunder be registered in the name of the Secured Parties or
any of their nominees.

 

    	-14-

    	 

    

  

10.         Collateral
Agent Appointed Attorney-in-Fact. The Grantor, on behalf of itself and each New Subsidiary of the Grantor, hereby irrevocably
appoints the Collateral Agent (on behalf of all Secured Parties) as the attorney-in-fact of the Grantor and each such New Subsidiary
upon the occurrence and during the continuance of an Event of Default. In the event the Grantor or any New Subsidiary fails to
execute or deliver in a timely manner any Transaction Document or other agreement, document, certificate or instrument which the
Grantor or New Subsidiary now or at any time hereafter is required to execute or deliver pursuant to the terms of the Securities
Purchase Agreement or any other Transaction Document, upon the occurrence and during the continuance of an Event of Default, the
Collateral Agent (on behalf of all Secured Parties) shall have full authority in the place and stead of the Grantor or New Subsidiary,
and in the name of the Grantor, such New Subsidiary or otherwise, to execute and deliver each of the foregoing. Without limitation
of the foregoing, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent (on behalf of all
Secured Parties) shall have full authority in the place and stead of the Grantor and each New Subsidiary, and in the name of any
the Grantor, any such New Subsidiary or otherwise, to take any action and to execute any instrument which the Collateral Agent
(on behalf of all Secured Parties) may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:

 

(a)          to
ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due
under or in connection with any Collateral of the Grantor or New Subsidiary;

 

(b)          to
receive and open all mail addressed to the Grantor or New Subsidiary and to notify postal authorities to change the address for
the delivery of mail to the Grantor or New Subsidiary to that of an address approved by the Collateral Agent (on behalf of all
Secured Parties);

 

(c)          to
receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;

 

(d)          to
file any claims or take any action or institute any proceedings which the Collateral Agent (on behalf of all Secured Parties) may
deem reasonably necessary or desirable for the collection of any of the Collateral of the Grantor or New Subsidiary or otherwise
to enforce the rights of the Secured Parties with respect to any of the Collateral; and

 

(e)          to
use any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, customer lists, advertising
matter or other industrial or intellectual property rights, in advertising for the exclusive purpose of sale and selling Inventory
and other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of the Grantor or New Subsidiary.

 

To the extent permitted by law, the Grantor
hereby ratifies, for itself and each New Subsidiary, all that such attorney-in-fact shall lawfully do or cause to be done by virtue
hereof. Such power-of-attorney granted pursuant to this Section 10 is coupled with an interest and shall be irrevocable until this
Agreement is terminated.

 

11.         Collateral
Agent May Perform. If the Grantor fails to perform any agreement contained herein, upon the occurrence and during the continuance
of an Event of Default, the Collateral Agent (on behalf of all Secured Parties) may perform, or cause performance of, such agreement,
and the reasonable expenses of the Collateral Agent incurred in connection therewith shall be payable by the Grantor.

 

    	-15-

    	 

    

   

12.         Collateral
Agent’s Duties; Bailee for Perfection. The powers conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties’ respective interests in the Collateral and shall not impose any duty upon the Collateral Agent in favor
of the Grantor or any other Secured Party to exercise any such powers. Except for the safe custody of any Collateral in its actual
possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall not have any duty to the
Grantor or any other Secured Party 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. The Collateral Agent shall be deemed to have exercised reasonable care
in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment substantially
equal to that which is accorded to its own property. The Collateral Agent agrees that, with respect to any Collateral at any time
or times in its possession and in which any other Secured Party has a Lien, the Collateral Agent shall be the bailee of each other
Secured Party solely for purposes of perfecting (to the extent not otherwise perfected) each other Secured Party’s Lien in
such Collateral, provided that the Collateral Agent shall not be obligated to obtain or retain possession of any such Collateral.

 

13.         Collection
of Accounts, General Intangibles and Negotiable Collateral. At any time upon the occurrence and during the continuation of
an Event of Default, the Collateral Agent (on behalf of all Secured Parties) may (a) notify Account Debtors of the Grantor that
the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral have been assigned to the Collateral Agent (on behalf
of all Secured Parties) or that the Collateral Agent (on behalf of all Secured Parties) has a security interest therein, and (b)
collect the Accounts, General Intangibles and Negotiable Collateral directly, and any collection costs and expenses shall constitute
part of the Secured Obligations.

 

14.         Disposition
of Pledged Interests by Secured Parties. None of the Pledged Interests hereafter acquired on the date of acquisition thereof
will be registered or qualified under the various federal, state or other securities laws of the United States or any other jurisdiction,
and disposition thereof after an Event of Default may be restricted to one or more private (instead of public) sales in view of
the lack of such registration. The Grantor understands that in connection with such disposition, the Collateral Agent (on behalf
of all Secured Parties) may approach only a restricted number of potential purchasers and further understands that a sale under
such circumstances may yield a lower price for the Pledged Interests than if the Pledged Interests were registered and qualified
pursuant to federal, state and other securities laws and sold on the open market. The Grantor, therefore, agrees that: (a) if the
Collateral Agent (on behalf of all Secured Parties) shall, pursuant to the terms of this Agreement, sell or cause the Pledged Interests
or any portion thereof to be sold at a private sale, the Collateral Agent (on behalf of all Secured Parties) shall have the right
to rely upon the advice and opinion of any nationally recognized brokerage or investment firm (but shall not be obligated to seek
such advice and the failure to do so shall not be considered in determining the commercial reasonableness of such action) as to
the best manner in which to offer the Pledged Interest or any portion thereof for sale and as to the best price reasonably obtainable
at the private sale thereof; and (b) such reliance shall be conclusive evidence that the Collateral Agent has handled the disposition
in a commercially reasonable manner.

 

    	-16-

    	 

    

  

15.         Voting
Rights.

 

(a)          Upon
the occurrence and during the continuation of an Event of Default, (i) the Collateral Agent (on behalf of all Secured Parties)
may, at its option, and with two (2) Business Days prior notice to the Grantor, and in addition to all rights and remedies available
to the Secured Parties under any other agreement, at law, in equity, or otherwise, exercise all voting rights, and all other ownership
or consensual rights in respect of the Pledged Interests, but under no circumstances is the Collateral Agent obligated by the terms
of this Agreement to exercise such rights, and (ii) if the Collateral Agent (on behalf of all Secured Parties) duly exercises its
right to vote any of such Pledged Interests, the Grantor hereby appoints the Collateral Agent (on behalf of all Secured Parties)
as the Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner that
the Collateral Agent (on behalf of all Secured Parties) deem advisable for or against all matters submitted or which may be submitted
to a vote of shareholders, partners or members, as the case may be. Such power-of-attorney granted pursuant to this Section 15
is coupled with an interest and shall be irrevocable until this Agreement is terminated.

 

(b)          For
so long as the Grantor shall have the right to vote the Pledged Interests, it covenants and agrees that it will not, without the
prior written consent of the Collateral Agent (on behalf of all Secured Parties), vote or take any consensual action with respect
to such Pledged Interests which would materially or adversely affect the rights of the Secured Parties exercising the voting rights
owned by the Grantor or the value of the Pledged Interests.

 

16.         Remedies.
Upon the occurrence and during the continuance of an Event of Default:

 

(a)          The
Collateral Agent (on behalf of all Secured Parties) may exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein, in the other Transaction Documents, or otherwise available to it, all the rights and remedies of
a secured party on default under the Code or any other applicable law. Without limiting the generality of the foregoing, the Grantor
expressly agrees that, in any such event, the Collateral Agent (on behalf of all Secured Parties) without any demand, advertisement,
or notice of any kind (except a notice specified below of time and place of public or private sale) to or upon the Grantor or any
other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted
by the Code or by any other applicable law), may take immediate possession of all or any portion of the Collateral and (i) require
the Grantor to, and the Grantor hereby agrees that it will at its own expense and upon request of the Collateral Agent (on behalf
of all Secured Parties) promptly, assemble all or part of the Collateral as directed by the Collateral Agent (on behalf of all
Secured Parties) and make it available to the Collateral Agent (on behalf of all Secured Parties) at one or more locations where
the Grantor regularly maintains Inventory, and (ii) without notice except as specified below, sell the Collateral or any part thereof
in one or more parcels at public or private sale, at the Collateral Agent’s offices or elsewhere, for cash, on credit, and
upon such other terms as the Collateral Agent (on behalf of all Secured Parties) may deem commercially reasonable. The Grantor
agrees that, to the extent notice of sale shall be required by law, at least 10 days’ notice of the time and place of any
public sale or the time after which any private sale is to be made shall constitute reasonable notification and specifically such
notice shall constitute a reasonable “authenticated notification of disposition” within the meaning of Section 9-611
of the Code. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been
given. The Collateral Agent (on behalf of all Secured Parties) 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.

 

    	-17-

    	 

    

  

(b)          The
Collateral Agent (on behalf of all Secured Parties) is hereby granted a non-exclusive license or other right to use, without liability
for royalties or any other charge, the Grantor’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade
names, Trademarks, service marks and advertising matter, URLs, domain names, industrial designs, other industrial or intellectual
property or any property of a similar nature, whether owned by the Grantor or with respect to which the Grantor has rights under
license, sublicense, or other agreements (but only to the extent (i) such license, sublicense or agreement does not prohibit such
use by the Collateral Agent (on behalf of all Secured Parties), and (ii) the Grantor will not be in default under such license,
sublicense, or other agreement as a result of such use by the Collateral Agent (on behalf of all Secured Parties)), as it pertains
to the Collateral, for the exclusive purpose of preparing for sale, advertising for sale and effectuating the sale of any Collateral,
and the Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit of the Collateral Agent
(on behalf of all Secured Parties).

 

(c)          Any
cash held by the Collateral Agent as Collateral and all proceeds received by the Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall be applied against the Secured Obligations in the order
set forth in Section 17 hereof. In the event the proceeds of Collateral are insufficient for the Satisfaction in Full of the Secured
Obligations (as defined below), the Grantor shall remain liable for any such deficiency.

 

(d)          The
Grantor hereby acknowledges that the Secured Obligations arose out of a commercial transaction, and agrees that if an Event of
Default shall occur and be continuing the Collateral Agent (on behalf of all Secured Parties) shall have the right to an immediate
writ of possession without notice of a hearing. The Collateral Agent (on behalf of all Secured Parties) shall have the right to
the appointment of a receiver for the properties and assets of the Grantor, and the Grantor hereby consents to such rights and
such appointment and hereby waives any objection it may have thereto or the right to have a bond or other security posted by the
Collateral Agent (on behalf of all Secured Parties).

 

    	-18-

    	 

    

  

(e)          The
Collateral Agent (on behalf of all Secured Parties) may, in addition to other rights and remedies provided for herein, in the other
Transaction Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon the Grantor
or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable
law), (i) with respect to the Grantor’s Deposit Accounts in which any Secured Party’s Liens are perfected by control
under Section 9-104 of the Code, instruct the bank maintaining such Deposit Account for the Grantor to pay the balance of such
Deposit Account to or for the benefit of the Collateral Agent (on behalf of all Secured Parties), and (ii) with respect to
the Grantor’s Securities Accounts in which any Secured Party’s Liens are perfected by control under Section 9-106 of
the Code, instruct the securities intermediary maintaining such Securities Account for the Grantor to (A) transfer any cash in
such Securities Account to or for the benefit of the Collateral Agent (on behalf of all Secured Parties), or (B) liquidate any
financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof
to or for the benefit of the Collateral Agent (on behalf of all Secured Parties).

 

17.         Priority
of Liens; Application of Proceeds of Collateral. Each Secured Party hereby acknowledges and agrees that, notwithstanding the
time or order of the filing of any financing statement or other registration or document with respect to the Collateral and the
Security Interests, or any provision of this Agreement, any other Security Document, the Code or other applicable law, solely as
amongst the Secured Parties, the separate Security Interests of the Secured Parties shall have the same rank and priority; provided,
that, the foregoing shall not apply to any Security Interest of a Secured Party that is void or voidable as a matter of law. In
furtherance thereof, all proceeds of Collateral received by the Collateral Agent shall be applied as follows:

 

(a)          first,
ratably to pay any expenses due to the Collateral Agent (including, without limitation, the reasonable costs and expenses paid
or incurred to correct any default under or enforce any provision of the Transaction Documents, or after the occurrence and during
the continuance of any Event of Default in gaining possession of, maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated);

 

(b)          second,
to pay any indemnities then due to any of the Secured Parties under the Transaction Documents, until paid in full;

 

(c)          third,
ratably to pay any fees or premiums then due to any of the Secured Parties under the Transaction Documents, until paid in full;

 

(d)          fourth,
ratably to pay interest due in respect of the Secured Obligations then due to any of the Secured Parties, until paid in full;

 

(e)          fifth,
ratably to pay the principal amount of all Secured Obligations then due to any of the Secured Parties, until paid in full;

 

(f)          sixth,
ratably to pay any other Secured Obligations then due to any of the Secured Parties; and

 

(g)         seventh,
to Grantor or such other Person entitled thereto under applicable law.

 

    	-19-

    	 

    

  

18.         Remedies
Cumulative. Each right, power, and remedy of any Secured Party as provided for in this Agreement or in any other Transaction
Document or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power, or remedy provided for in this Agreement or in the other Transaction Documents or now
or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by any Secured
Party, of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by such Secured
Party of any or all such other rights, powers, or remedies.

 

19.         Marshaling.
No Secured Party shall be required to marshal any present or future collateral security (including but not limited to the Collateral)
for, or other assurances of payment of, the Secured Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security
and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.
To the extent that it lawfully may, the 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 any Secured Party’s rights and remedies under this Agreement or under
any other instrument creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully
may, the Grantor hereby irrevocably waives the benefits of all such laws.

 

20.         Appointment
of Collateral Agent; Acknowledgment.

 

(a)          The
Secured Parties hereby appoint Ankur Desai to act as the initial collateral agent on behalf of all Secured Parties (the “Collateral
Agent”). Notwithstanding anything in this Agreement to the contrary, one or more Secured Parties (other than the then
Collateral Agent) holding a majority of the then aggregate outstanding principal balance of the Notes (excluding any Notes held
by the then acting Collateral Agent) may remove the then-acting Collateral Agent and appoint any other Secured Party to act as
the Collateral Agent under this Agreement. Upon such appointment such Secured Party shall act as Collateral Agent pursuant to the
terms of this Agreement.

 

    	-20-

    	 

    

  

(b)          No
Secured Party (which term, as used in this sentence, shall include reference to each Secured Party’s officers, directors,
employees, attorneys, agents and affiliates and to the officers, directors, employees, attorneys and agents of such Secured Party’s
affiliates) shall: (i) have any duties or responsibilities except those expressly set forth in this Agreement and the other
Security Documents or (ii) be required to take, initiate or conduct any enforcement action (including any litigation, foreclosure
or collection proceedings hereunder or under any of the other Security Documents). Without limiting the foregoing, no Secured Party
shall have any right of action whatsoever against any other Secured Party as a result of such Secured Party acting or refraining
from acting hereunder or under any of the Security Documents except as a result and to the extent of losses caused by such Secured
Party’s actual gross negligence or willful misconduct. No Secured Party assumes any responsibility for any failure or
delay in performance or breach by the Grantor or any other Secured Party of its obligations under this Agreement or any other Transaction
Document. No Secured Party makes to any other Secured Party any express or implied warranty, representation or guarantee with
respect to any Secured Obligations, Collateral, Transaction Document or the Grantor. No Secured Party nor any of its officers,
directors, employees, attorneys or agents shall be responsible to any other Secured Party or any of its officers, directors, employees,
attorneys or agents for: (i) any recitals, statements, information, representations or warranties contained in any of the
Transaction Documents or in any certificate or other document furnished pursuant to the terms hereof; (ii) the execution,
validity, genuineness, effectiveness or enforceability of any of the Transaction Documents; (iii) the validity, genuineness,
enforceability, collectability, value, sufficiency or existence of any Collateral, or the attachment, perfection or priority of
any Lien therein; or (iv) the assets, liabilities, financial condition, results of operations, business, creditworthiness
or legal status of the Grantor or any Account Debtor. No Secured Party nor any of its officers, directors, employees, attorneys
or agents shall have any obligation to any other Secured Party to ascertain or inquire into the existence of any default or Event
of Default, the observance or performance by the Grantor of any of its duties or agreements under any of the Transaction Documents
or the satisfaction of any conditions precedent contained in any of the Transaction Documents.

 

(d)          Each
Secured Party hereby acknowledges and represents that it has, independently and without reliance upon any other Secured Party,
and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of the Grantor
and its own decision to enter into the Transaction Documents and to purchase the Notes, and each Secured Party has made such
inquiries concerning the Transaction Documents, the Collateral and the Grantor as such Secured Party feels necessary and appropriate,
and has taken such care on its own behalf as would have been the case had it entered into the Transaction Documents without any
other Secured Party. Each Secured Party hereby further acknowledges and represents that the other Secured Parties have not made
any representations or warranties to it concerning the Grantor, any of the Collateral or the legality, validity, sufficiency or
enforceability of any of the Transaction Documents. Each Secured Party also hereby acknowledges that it will, independently and
without reliance upon the other Secured Parties, and based upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions in taking or refraining to take any other
action under this Agreement or the Transaction Documents. No Secured Party shall have any duty or responsibility to provide any
other Secured Party with any notices, reports or certificates furnished to such Secured Party by the Grantor or any credit or other
information concerning the affairs, financial condition, business or assets of the Grantor (or any of its affiliates) which may
come into possession of such Secured Party.

 

    	-21-

    	 

    

  

21.         Indemnity
and Expenses.

 

(a)          Without
limiting any obligations of the Grantor under the Securities Purchase Agreement, the Grantor agrees to indemnify all Secured Parties
from and against all claims, lawsuits and liabilities (including reasonable attorneys’ fees) arising out of or resulting
from this Agreement (including enforcement of this Agreement), except claims, losses or liabilities resulting from the gross negligence
or willful misconduct of the Secured Party seeking indemnification as determined by a final non-appealable order of a court of
competent jurisdiction. This provision shall survive the termination of this Agreement and the Transaction Documents and the Satisfaction
in Full of the Secured Obligations.

 

(b)          The
Grantor shall, upon demand, pay to the Collateral Agent all of the reasonable costs and expenses which the Collateral Agent may
incur in connection with the custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection
from, or other realization upon, any of the Collateral in accordance with this Agreement and the other Transaction Documents. The
Grantor shall, upon demand, pay to each Secured Party all of the reasonable costs and expenses which such Secured Party may incur
in connection with (i) the exercise or enforcement of any of the rights of such Secured Party hereunder or (ii) the failure by
the Grantor to perform or observe any of the provisions hereof.

 

22.         Merger,
Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES SOLELY WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No provision of this Agreement
may be amended other than by an instrument in writing signed by the Grantor and the Collateral Agent, and any amendment to any
provision of this Agreement made in conformity with the provisions of this Section 22 shall be binding on all Secured Parties,
provided that no such amendment shall be effective to the extent that it (a) applies to less than all of the Secured Parties or
(b) imposes any obligation or liability on any Secured Party without such Secured Party’s prior written consent (which may
be granted or withheld in such Secured Party’s sole discretion). No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party, provided that the Collateral Agent may waive any provision of this
Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 22 shall be
binding on all Secured Parties, provided that no such waiver shall be effective to the extent that it (i) applies to less than
all the Secured Parties (unless a party gives a waiver as to itself only) or (ii) imposes any obligation or liability on any Secured
Party without such Secured Party’s prior written consent (which may be granted or withheld in such Secured Party’s
sole discretion).

 

23.         Addresses
for Notices. All notices and other communications provided for hereunder (a) shall be given in the form and manner set forth
in the Securities Purchase Agreement and (b) shall be delivered, (i) in the case of notice to the Grantor, by delivery of such
notice to the Grantor’s address specified in the Securities Purchase Agreement or at such other address as shall be designated
by the Grantor in a written notice to each of the Secured Parties in accordance with the provisions thereof, and (ii) in the case
of notice to any Secured Party, by delivery of such notice to such Secured Party at its address specified in the Securities Purchase
Agreement or at such other address as shall be designated by such Secured Party in a written notice to the Grantor and each other
Secured Party in accordance with the provisions thereof.

 

    	-22-

    	 

    

  

24.         Separate,
Continuing Security Interests; Assignments under Transaction Documents. This Agreement shall create a separate, continuing
security interest in the Collateral in favor of each Secured Party and shall (a) remain in full force and effect until Satisfaction
in Full of the Secured Obligations, (b) be binding upon the Grantor, and its permitted successors and permitted assigns, and (c)
inure to the benefit of, and be enforceable by, the Secured Parties and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Secured Party may, in accordance with the provisions of the Transaction
Documents, assign or otherwise transfer all or any portion of its rights and obligations under the Transaction Documents to any
other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Secured
Party herein or otherwise. Upon Satisfaction in Full of the Secured Obligations, the Security Interests granted hereby shall terminate
and all rights to the Collateral shall revert to the Grantor or any other Person entitled thereto. At such time, each Secured Party
will authorize the filing of appropriate termination statements to terminate such Security Interests. No transfer or renewal, extension,
assignment, or termination of this Agreement or any other Transaction Document, or any other instrument or document executed and
delivered by the Grantor to any Secured Party nor any additional loans made by any Secured Party to the Grantor, nor the taking
of further security, nor the retaking or re-delivery of the Collateral to the Grantor, or any of them, by any Secured Party, nor
any other act of the Secured Parties, or any of them, shall release the Grantor from any obligation, except a release or discharge
executed in writing by all Secured Parties. No Secured Party shall by any act, delay, omission or otherwise, be deemed to have
waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by such Secured Party and then only
to the extent therein set forth. A waiver by any Secured Party of any right or remedy on any occasion shall not be construed as
a bar to the exercise of any such right or remedy which such Secured Party would otherwise have had on any other occasion.

 

25.         Governing
Law; Jurisdiction; Service of Process; Jury Trial. 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. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim 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; provided, however, any suit seeking enforcement against any Collateral or other property may be brought,
at any Secured Party’s option, in the courts of any jurisdiction where such Secured Party elects to bring such action or
where such Collateral or other property may be found. 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 this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

 

    	-23-

    	 

    

  

26.         Subordination.
Each Secured Party hereby agrees to subordinate the Security Interests to any security interest or lien that the Grantor or a New
Subsidiary may grant to a lender (“Facility Lender”) in any real or personal property (“Facility Property”)
of Grantor or a New Subsidiary acquired or developed through a financing contemplated by Schedule 4(k) attached to the Disclosure
Letter made part of the Securities Purchase Agreement. Notwithstanding the respective dates of attachment or perfection of the
Security Interests of the Secured Parties, all hereafter arising security interests of a Facility Lender in any Facility Property
of Grantor or a New Subsidiary and all proceeds thereof (the “Facility Collateral”) shall at all times be senior
to the Security Interests of the Secured Parties. Each Secured Party hereby (a) acknowledges and consents to (i) Grantor or a New
Subsidiary granting to a Facility Lender a security interest in the Facility Collateral, and (ii) Grantor or a New Subsidiary filing
any and all financing statements and other documents as deemed necessary by Facility Lender in order to perfect Facility Lender’s
security interest in the Facility Collateral. The Secured Parties agree that, at the reasonable request of the Facility Lender,
the Collateral Agent (on behalf of all Secured Parties) shall be permitted to execute such other documents, and do such other acts
or things deemed reasonably necessary or desirable by the Collateral Agent (on behalf of all Secured Parties), to carry out the
agreement to subordinate set forth herein.

 

27.         Miscellaneous.

 

(a)          This
Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof. Any party delivering an executed
counterpart of this Agreement by facsimile or other electronic method of transmission also shall deliver an original executed counterpart
of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Security Document mutatis mutandis.

 

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

 

(c)          Headings
used in this Agreement are for convenience only and shall not be used in connection with the interpretation of any provision hereof.

 

    	-24-

    	 

    

  

(d)          The
pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction
of sentences shall conform thereto.

 

(e)          The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. For clarification purposes, the Recitals are part of this Agreement.

 

(f)          Unless
the context of this Agreement or any other Transaction Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes” and “including” are not limiting,
and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement or any other Transaction Document refer to this Agreement or such other Transaction Document, as the case may be, as
a whole and not to any particular provision of this Agreement or such other Transaction Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in
this Agreement or in any other Transaction Document to any agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). “Satisfaction in Full of the Secured Obligations” shall mean the
indefeasible payment in full in cash and discharge, or other satisfaction in accordance with the terms of the Transaction Documents
(including, without limitation, conversion of the Notes into equity of the Company) and discharge, of all Secured Obligations in
full. Any reference herein to any Person shall be construed to include such Person’s permitted successors and permitted assigns.
Any requirement of a writing contained herein or in any other Transaction Document shall be satisfied by the transmission of a
Record and any Record so transmitted shall constitute a representation and warranty as to the accuracy and completeness of the
information contained therein.

 

(g)          All
dollar amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated
in other currencies shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date
of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S.
Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in The Wall Street Journal on the relevant date
of calculation.

 

[signature pages follow]

 

    	-25-

    	 

    

 

IN WITNESS WHEREOF, the undersigned parties
hereto have executed this Agreement by and through their duly authorized officers, as of the day and year first above written. 

 

	GRANTOR:	AQUA METALS, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Stephen R. Clarke
	 	 	Dr. Stephen R. Clarke,
	 	 	President and Chief Executive Officer
	 	 
	COLLATERAL AGENT:	/s/ Ankur Desai
	 	Ankur Desai

 

    	-26-

    	 

    

 

	SECURED PARTIES:	________________________
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	-27-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}]]