Document:

Exhibit 4.6

 

SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT, dated as of June 30, 2016 (this “Agreement”), is among SG Blocks, Inc., a Delaware corporation
(the “Company”), SG Building Blocks, Inc., a Delaware corporation (the “Guarantor” and together
with the Company, the “Debtors”) and the holder of the Company's 12% Senior Secured Original Issue Discount
Convertible Debentures due on the Maturity Date (as defined in the Debentures), in the original aggregate principal amount of
$2,500,000.00 (collectively, the “Debentures”) issued pursuant to that certain securities purchase agreement
(the “Purchase Agreement”) dated on or about the date hereof among the Company and the Secured Party signatory
hereto, its endorsees, transferees and assigns (collectively, the “Secured Party”).

 

WITNESSETH:

 

WHEREAS,
concurrently with this Agreement the Debtors' Amended Plan of Reorganization (the "Plan"); in Case No. 15-12790 (JLG)
(the “Bankruptcy Case”), in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”) has become effective pursuant to the Order Confirming Debtors' Amended Plan of Reorganization under Chapter
11 of the Bankruptcy Code, entered by the Bankruptcy Court on June 3, 2016;

 

WHEREAS,
pursuant to the Purchase Agreement, the Secured Party has agreed to extend the loans to the Company evidenced by the Debentures;

 

WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantor has
jointly and severally agreed to guarantee and act as surety for payment of such Debentures; and

 

WHEREAS,
in order to induce the Secured Party to extend the loans evidenced by the Debentures, each Debtor has agreed to execute and deliver
to the Secured Parties this Agreement and to grant the Secured Parties, pari passu with each other Secured Party
and through the Agent (as defined in Section 18 hereof), a security interest in certain property of such Debtor to secure the
prompt payment, performance and discharge in full of all of the Company's obligations under the Debentures and the Guarantor's
obligations under the Guarantee.

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

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

 

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

 

(v)          All
commercial tort claims;

 

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

 

(vii)        All
investment property;

 

(viii)       All
supporting obligations; and

 

    	 	-2-	 

     

    

 

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

 

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

 

Without
limiting the generality of the foregoing, the “Collateral” shall include all investment property and general
intangibles respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of
capital stock and the other equity interests listed on Schedule H hereto (as the same may be modified from time to time pursuant
to the terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary
of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and,
in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable
or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged
Securities, including, but not limited to, all dividends, interest and cash.

 

Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the
extent that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable
law); provided, however, that to the extent permitted by applicable law, this Agreement shall create a valid security
interest in such asset and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in
the proceeds of such asset,

 

(b)          “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all
letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof,
and all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part
thereof, (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress,
service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing
or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether
in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade
secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to
obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes
of action for infringement of the foregoing.

 

    	 	-3-	 

     

    

 

(c)          “Majority
in interest” means, at any time of determination, 50.1% in interest (based on then-outstanding principal amounts of
Debentures at the time of such determination) of the Secured Parties.

 

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

 

(e)          “Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become
due, or that are now or may he hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties, including,
without limitation, all obligations under this Agreement, the Debentures, the Guarantee and any other instruments, agreements
or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all
or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may
he amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing,
the term "Obligations" shall include, without limitation: (i) principal of, and interest on the Debentures and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time
to time under or in connection with this Agreement, the Debentures, the Guarantee and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.

 

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

 

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

 

    	 	-4-	 

     

    

 

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

 

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

 

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

 

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

 

4.           Representations,
Warranties, Covenants and Agreements of the Debtors. Except as set forth under the corresponding section of the disclosure
schedules delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof; each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties
as follows:

 

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

 

    	 	-5-	 

     

    

 

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

 

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

 

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

 

(e)          Each
Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business
and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account
and records or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written
notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate
financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been
taken to perfect the Security Interests to create in favor of the Secured Parties a valid, perfected and continuing perfected
first priority lien in the Collateral.

 

    	 	-6-	 

     

    

 

(f)           This Agreement creates in favor of the Secured Parties a valid security interest in the Collateral, subject only to Permitted
Liens (as defined in the Debentures) securing the payment and performance of the Obligations. Upon making the filings
described in the immediately following paragraph, all security interests created hereunder in any Collateral which may be
perfected by filing Uniform Commercial Code financing statements shall have been duly perfected. Except for the filing of the
Uniform Commercial Code financing statements referred to in the immediately following paragraph, the recordation of the
Intellectual Property Security Agreement (as defined in Section 4(p) hereof) with respect to copyrights and copyright
applications in the United States Copyright Office referred to in Section 4(mm) hereof, the execution and delivery of deposit
account control agreements satisfying the requirements of Section 9-104(a)(2) of the UCC with respect to each deposit account
of the Debtors, and the delivery of the certificates and other instruments provided in Section 3, no action is necessary to
create, perfect or protect the security interests created hereunder. Without limiting the generality of the foregoing, except
for the filing of said financing statements, the recordation of said Intellectual Property Security Agreement, and the
execution and delivery of said deposit account control agreements, no consent of any third parties and no authorization,
approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for
(i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interests
created hereunder in the Collateral or (iii) the enforcement of the rights of the Agent and the Secured Parties
hereunder.

 

(g)          Each
Debtor hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.

 

(h)          The
execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational
Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable
law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
any Debtor's debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any
Debtor is bound or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any
Debtor) necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.

 

(i)          The
capital stock and other equity interests listed on Schedule Ii hereto (the “Pleated Securities”) represent
all of the capital stock and other equity interests of the Company's subsidiaries (other than of (1) Endaxi Infrastructure Group,
Inc., which will be dissolved in connection with, or promptly following, the consummation of the transactions contemplated by
the Purchase Agreement, and (2) the Company's non-United States subsidiaries, as to which no pledge shall be required), and represent
all capital stock and other equity interests owned, directly or indirectly, by the Company, All of the Pledged Securities are
validly issued, fully paid and nonassessable, and the Company is the legal and beneficial owner of the Pledged Securities, free
and clear of any lien, security interest or other encumbrance except for the security interests created by this Agreement and
other Permitted Liens (as defined in the Debentures).

 

    	 	-7-	 

     

    

 

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

 

(k)          Except
for Permitted Liens (as defined in the Debentures) and except as set forth on Schedule B attached hereto, each Debtor shall
at all times maintain the liens and Security Interests provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest hereunder
shall be terminated pursuant to Section 14 hereof. Each Debtor hereby agrees to defend the same against the claims of any and
all persons and entities. Each Debtor shall safeguard and protect all Collateral for the account of the Secured Parties. At the
request of the Agent, each Debtor will sign and deliver to the Agent on behalf of the Secured Parties at any time or from time
to time one or more financing statements pursuant to the UCC in form reasonably satisfactory to the Agent and will pay the cost
of filing the same in all public offices wherever filing is, or is deemed by the Agent to be, necessary or desirable to effect
the rights and obligations provided for herein. Without limiting the generality of the foregoing, each Debtor shall pay all fees,
taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder, and each Debtor shall obtain
and furnish to the Agent from time to time, upon demand, such releases and/or subordinations of claims and liens which may be
required to maintain the priority of the Security Interests hereunder.

 

(1)          Except
as set forth on Schedule I, no Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose
of any of the Collateral (except for non-exclusive licenses granted by a Debtor in its ordinary course of business and sales of
inventory by a Debtor in its ordinary course of business) without the prior written consent of a Majority in Interest.

 

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

 

    	 	-8-	 

     

    

 

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

 

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

 

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

 

(q)          Each
Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during normal business hours and upon
reasonable prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by the Agent
from time to time.

 

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

 

    	 	-9-	 

     

    

 

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

 

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

 

(u)          The
Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any
rights and franchises material to its business.

 

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

 

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

 

(x)          No
Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof
to the Secured Parties and so long as, at. the time of such written notification, such Debtor provides any financing statements
or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(y)          Each
Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor's name in Schedule
D) attached hereto, which Schedule D sets forth each Debtor's organizational identification number or, if any Debtor
does not have one, states that one does not exist.

 

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

 

    	 	-10-	 

     

    

 

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

 

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

 

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

 

(dd)         If there is any investment property or deposit account included as Collateral that can be perfected by "control" through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each
case satisfactory to the Agent, to be entered into and delivered to the Agent for the benefit of the Secured Parties.

 

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

 

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

 

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

 

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

 

    	 	-11-	 

     

    

 

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

 

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

 

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

 

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

 

    	 	-12-	 

     

    

 

(mm)        Without limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be
registered at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated
hereby with respect to all Intellectual Property registered at the United Stales Copyright Office or United States Patent and
Trademark Office to be duly recorded at the applicable office, and (iii) give the Agent notice whenever it acquires (whether absolutely
or by license) or creates any additional material Intellectual Property, subject to Agent's agreement to confidentially treat
such information if such information has not been publicly disclosed.

 

(nn)         Each Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further
instruments and documents, and take all such further action as may be necessary or desirable, or as the Agent may reasonably request,
in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties
to exercise and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes
of this Agreement.

 

(oo)          Schedule
F attached hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights,
and domain names owned by any of the Debtors as of the date hereof. Schedule F lists all material licenses in favor of
any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and
trademarks of the Debtors have been duly recorded at the United States Patent and Trademark Office and all material copyrights
of the Debtors have been duly recorded at the United States Copyright Office.

 

(pp)        Except as set forth on Schedule G attached hereto, none of the account debtors or other persons or entities obligated on
any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state
or local statute or rule in respect of such Collateral.

 

(qq)        Until the Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct
or indirect subsidiary of the Company formed or acquired after the date hereof to enter into a Subsidiary Guarantee in favor of
the Secured Party, in the form of Exhibit E to the Purchase Agreement.

 

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

 

    	 	-13-	 

     

    

 

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

 

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

 

(b)          Any
representation or warranty of any Debtor in this Agreement of the Purchase Agreement shall prove to have been incorrect in any
material respect when made;

 

(c)          The
failure by any Debtor to observe or perform in any material respects, any of its obligations hereunder for five (5) Business Days
after delivery to such Debtor of notice of such failure by or on behalf of a Secured Party unless such default is capable •
of cure but cannot be cured within such time frame and such Debtor is using reasonable best efforts to cure same in a timely fashion;
or

 

(d)          If
any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having
jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any
Debtor has any liability or obligation purported to be created under this Agreement.

 

7.          Duty
To Hold In Trust.

 

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

 

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

 

    	 	-14-	 

     

    

 

8.          Rights
and Remedies Upon Default.

 

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

 

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

 

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

 

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

 

    	 	-15-	 

     

    

 

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

 

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

 

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

 

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

 

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

 

    	 	-16-	 

     

    

 

9.          Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on
account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Agent in enforcing the Secured Parties' rights hereunder and in connection with collecting,
storing and disposing of the Collateral, and then to satisfaction of the Obligations pro rata among the Secured Parties (based
on then-outstanding principal amounts of Debentures at the time of any such determination), and to the payment of any other amounts
required by applicable law, after which the Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon
the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the
Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest thereon, at the rate
of 18% per annum or the lesser amount permitted by applicable law (the "Default Rate"), and the reasonable fees of any
attorneys employed by the Secured Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives
all claims, damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the
Collateral, unless due solely to the gross negligence or willful misconduct of the Secured Parties as determined by a final judgment
(not subject to further appeal) of a court of competent jurisdiction.

 

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

 

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

 

    	 	-17-	 

     

    

 

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

 

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

 

    	 	-18-	 

     

    

 

14.        Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Debentures
have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all indemnities
of the Debtors contained in this Agreement (including, without limitation, Annex B hereto) shall survive and remain operative
and in full force and effect regardless of the termination of this Agreement.

 

15.         Power
of Attorney; Further Assurances.

 

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

 

    	 	-19-	 

     

    

 

(b)          On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C attached
hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested
by the Agent, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to the Agent the grant or perfection of a perfected security interest in all the Collateral under
the UCC.

 

(c)          Each
Debtor hereby irrevocably appoints the Agent as such Debtor's attorney-in-fact, with full authority in the place and instead of
such Debtor and in the name of such Debtor, from time to time in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing,
in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral
without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral
as "all assets" or "all personal property" or words of like import, and ratifies all such actions taken by
the Agent. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter
as long as any of the Obligations shall be outstanding.

 

16.          Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase
Agreement.

 

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

 

18.          Appointment
of Agent. The Secured Party hereby appoints Hillair Capital Management LLC to act as their agent ("Hillair”
or “Agent”) for purposes of exercising any and all rights and remedies of the Secured Parties hereunder, Such
appointment shall continue until revoked in writing by a Majority in Interest, at which time a Majority in Interest shall appoint
a new Agent, provided that Hillair may not be removed as Agent unless funds managed by Hillair shall then hold less than $25,000
in principal amount of Debentures; provided, further, that such removal may occur only if each of the other Secured
Parties shall then hold not less than an aggregate of $25,000 in principal amount of Debentures, The Agent shall have the rights,
responsibilities and immunities set forth in Annex B hereto.

 

19.          Miscellaneous.

 

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

 

    	 	-20-	 

     

    

 

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

 

(c)          This
Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtors
and the Secured Parties holding 50.1% or more of the principal amount of Debentures then outstanding, or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought.

 

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

 

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

 

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

 

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

 

    	 	-21-	 

     

    

 

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

 

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

 

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

 

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

 

    	 	-22-	 

     

    

 

(l)          Nothing
in this Agreement shall be construed to subject Agent or any Secured Party to liability as a partner in any Debtor or any if its
direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries
that is a limited liability company, nor shall Agent or any Secured Party be deemed to have assumed any obligations under any
partnership agreement or limited liability company agreement, as applicable, of any such Debtor or any of its direct or indirect
subsidiaries or otherwise, unless and until any such Secured Party exercises its right to be substituted for such Debtor as a
partner or member, as applicable, pursuant hereto.

 

(m)          To
the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or
compliance with any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and
waive any such noncompliance with the terms of said documents.

 

[SIGNATURE
PAGES FOLLOW]

 

    	 	-23-	 

     

    

  

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

 

	SG
    Blocks, Inc.	 
	 	 	 
	By:	/s/
    Paul M. Galvin	 
	Name:	Paul
    M. Galvin	 
	Title:	Chief
    Executive Officer	 
	 	 	 
	SG
    Building Blocks, Inc.	 
	 	 	 
	By:	/s/
    Paul M. Galvin	 
	Name:	Paul
    M. Galvin	 
	Title:	Chief
    Executive Officer	 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

    	 	-24-	 

     

    

 

[SIGNATURE
PAGE OF HOLDERS TO SGBX SA]

 

Name
of Investing Entity: Hillair Capital Investments L.P.

 

Signature
of Authorized Signatory of Investing entity: /s/ Sean M. McAvoy

 

Name
of Authorized Signatory: Sean M. McAvoy

 

Title
of Authorized Signatory: Managing Member, Hillair Capital Advisors LLC

 

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

     

     

    

 

ANNEX
A

to 

SECURITY 

AGREEMENT

 

FORM
OF ADDITIONAL DEBTOR JOINDER

 

Security
Agreement dated as of June 30, 2016 made by

SG
Blocks, Inc.

and
its subsidiaries party thereto from time to time, as Debtors

to
and in favor of

the
Secured Parties identified therein (the “Security Agreement”)

 

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

 

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

 

Attached
hereto are supplemental and/or replacement Schedules to the Security Agreement, as applicable.

 

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

 

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

 

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

 

     

     

    

 

ANNEX
B 

to 

SECURITY 

AGREEMENT

 

THE
AGENT

 

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

 

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

 

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

 

     

     

    

 

4.          Certain
Rights of the Agent. The Agent shall have the right to take any action with respect to the Collateral, on behalf of all of
the Secured Parties. To the extent practical, the Agent shall request instructions from the Secured Parties with respect to any
material act or action (including failure to act) in connection with the Agreement or any other Transaction Document, and shall
be entitled to act or refrain from acting in accordance with the instructions of a Majority in Interest; if such instructions
are not provided despite the Agent's request therefor, the Agent shall be entitled to refrain from such act or taking such action,
and if such action is taken, shall be entitled to appropriate indemnification from the Secured Parties in respect of actions to
be taken by the Agent; and the Agent shall not incur liability to any person or entity by reason of so refraining. Without limiting
the foregoing, (a) no Secured Party shall have any right of action whatsoever against the Agent as a result of the Agent acting
or refraining from acting hereunder in accordance with the terms of the Agreement or any other Transaction Document, and the Debtors
shall have no right to question or challenge the authority of, or the instructions given to, the Agent pursuant to the foregoing
and (b) the Agent shall not be required to take any action which the Agent believes (i) could reasonably be expected to expose
it to personal liability or (ii) is contrary to this Agreement, the Transaction Documents or applicable law.

 

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

 

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

 

    	 	-2-	 

     

    

 

7.          Resignation
by the Agent.

 

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

 

(b)          Upon
any such notice of resignation, the Secured Parties, acting by a Majority in Interest, shall appoint a successor Agent hereunder.

 

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

 

8.          Rights
with respect to Collateral. Each Secured Party agrees with all other Secured Parties and the Agent (i) that it shall not,
and shall not attempt to, exercise any rights with respect to its security interest in the Collateral, whether pursuant to any
other agreement or otherwise (other than pursuant to this Agreement), or take or institute any action against the Agent or any
of the other Secured Parties in respect of the Collateral or its rights hereunder (other than any such action arising from the
breach of this Agreement) and (ii) that such Secured Party has no other rights with respect to the Collateral other than as set
forth in this Agreement and the other Transaction Documents. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of
the retiring Agent and the retiring Agent shall be discharged from its duties and obligations under the Agreement. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of the Agreement including this Annex B shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was Agent.

 

    	 	-3-	 

     

    

 

SCHEDULE
A

 

Location
of Collateral

 

2701
Magnet Street Houston, TX 77054

 

     

     

    

 

SCHEDULE
B

 

 Title to Property

 

	1.	Under
                                         the terms of the Security Agreement entered into in connection with the 2016 Transaction
                                         (defined below), the Secured Parties (as defined therein) have a security interest in
                                         the Collateral (as defined therein). As used herein, "2016 Transaction" shall
                                         mean the transactions consummated (including the issuance of debentures and warrants
                                         of the Company) pursuant to that certain Securities Purchase Agreement dated June 30,
                                         2016, between the Company and the purchasers identified on the signature pages thereto
                                         and the transaction documents (including the debentures and warrants) referenced therein.
	 	 
	2.	IPFS
                                         Corporation has a super-priority security interest in certain insurance policies of the
                                         Company.

 

     

     

    

 

SCHEDULE
C

 

Financing
Statements

 

None.

 

     

     

    

 

SCHEDULE
D

 

Legal
Names and Organizational Identification Numbers

 

	Name	 	State
    of Organization	 	Organizational
    

Identification Number
	 	 	 	 	 
	SG
    Blocks, Inc.	 	Delaware	 	2365700
	 	 	 	 	 
	SG
    Building Blocks, Inc.	 	Delaware	 	4843510

 

     

     

    

 

SCHEDULE
E

 

Names;
Mergers and Acquisitions 

 

Prior
names of the Debtors used in the last five years are set forth in the narrative below.

 

The
Company was previously known as CDSI Holdings, Inc. (a Delaware corporation incorporated on December 29, 1993). On July 27, 2011,
the Company entered into a Merger Agreement and Plan of Reorganization (the "Merger Agreement") by and among the Company,
CDSI Merger Sub, Inc., a Delaware corporation wholly-owned subsidiary of the Company ("Merger Sub"), the Guarantor (f/k/a
SG Blocks, Inc.), and certain stockholders of the Guarantor. The merger contemplated by the Merger Agreement was completed on
November 4, 2011 (the "Merger"). Upon the consummation of the transactions contemplated by the Merger Agreement, Merger
Sub was merged with and into the Guarantor, with the Guarantor surviving the Merger and becoming a wholly-owned subsidiary, and
the only operating business of the Company. Upon consummation of the Merger, the Company changed its name from CDSI Holdings,
Inc. to SG Blocks, Inc. The Merger was a reverse merger that was accounted for as a recapitalization of the Guarantor, as the
Guarantor was the accounting acquirer.

 

On
October 25, 2010, SG Blocks, LLC (a Missouri Limited Liability Company formed on January 23, 2007) completed a common control
merger with the Guarantor, with the Guarantor being the surviving entity. In connection with the merger, all of the outstanding
membership units were retroactively restated to shares of common stock.

 

     

     

    

 

SCHEDULE
F

 

Intellectual
Property 

 

Patents

 

The
Company has abandoned the patent application previously disclosed in its filings with the SEC. The Company has no other patents
or patent applications.

 

Trademarks

 

	Mark	Country
	SG
    Blocks	United
    States

 

Domain
Names 

 

www.sgblocks.eum

 

     

     

    

 

SCHEDULE
G

 

Account
Debtors

 

No account debtors or other persons
or entities obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or
any similar federal, state or local statute or rule in respect of such Collateral.

 

     

     

    

 

SCHEDULE
H 

 

Pledged
Securities 

 

SG
Building Blocks, Inc.*               100 Shares

 

*Under
the terms of the Security Agreement entered into in connection with the 2016 Transaction, the Secured Parties (as defined therein)
have a security interest in the Collateral, including the capital stock of SG Building Blocks, Inc.

 

     

     

    

 

SCHEDULE
I

 

Dissolution
of Endaxi Infrastructure Group, Inc.

 

Endaxi
Infrastructure Group, Inc., a Delaware corporation ("Endaxi"), is a subsidiary of the Company. Endaxi is not an operating
entity. In connection with, or promptly following, the consummation of the transactions contemplated by the Purchase Agreement,
Endaxi will be dissolved.Exhibit

EHEALTH, INC.
2016 CHIEF EXECUTIVE OFFICER BONUS PLAN
(Effective July 1, 2016)
1.Plan Objectives.
•Reward the Chief Executive Officer (the “CEO”) of eHealth, Inc. (the “Company”) for achieving stated business objectives for the remainder of fiscal 2016
•Build long-term stockholder value
•Provide competitive compensation for the CEO
2.
    Administration.  The Compensation Committee of the Company will administer the 2016 Chief Executive Officer Bonus Plan (the “Plan”). The Compensation Committee reserves the right at any time during the fiscal year to modify the Plan in total or in part.  The Plan may be amended, suspended or terminated at any time at the sole and absolute discretion of the Compensation Committee.
3.
    Eligibility.  The CEO is the sole participant in the Plan.  The CEO must be employed at the time of payment to earn any payment under the Plan.  
4.
    Term.  Commencing on July 1, 2016 and ending on December 31, 2016.
5.
    Target Incentive Payout.  Attached, as Exhibit A, is a schedule of the Annual Salary, Target and Maximum Incentive Percentage and aggregate incentive for the CEO under the Plan.  The aggregate “Target Incentive Award” for the CEO is equal to the CEO’s Annual Salary (pro-rated for the portion of the year he was employed as the CEO) multiplied by the Target Incentive Percentage.
6.
    Incentive Determination.  One hundred percent (100%) of the CEO’s potential Target Incentive Award is based upon achievement of goals (each, a “Goal”), as set forth in the resolutions of and as approved by the Compensation Committee and subject to adjustment as set forth elsewhere in the Plan.  The Compensation Committee, in its sole discretion, will determine the extent to which the Goals have been achieved.  The Compensation Committee may (a) increase, eliminate or reduce the actual award that otherwise would be payable based on the achievement of Goals, and (b) determine whether or not the CEO will receive an actual award in the event the CEO incurs a termination of employment prior to the date the actual award is to be paid pursuant Section 7.
7.
    Payment.  Payment under the Plan will be made following the end of the 2016 fiscal year and after the Compensation Committee has determined to what extent a bonus has been earned.  Any earned bonus will be paid no later than March 15, 2017.  All payments under the Plan are intended to fall within the “short-term deferral” exemption from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and under Section 1.409A-1(b)(4) of the Treasury Regulations or comply with any requirements necessary to avoid the imposition of additional tax under Code Section 409A(a)(1)(B), and the Plan will be interpreted consistent with that intent.  All Plan payments will be made net of applicable tax withholding.
8.
    Employment at Will.  The employment of the CEO at the Company is terminable at any time by either party, with or without cause being shown or advance notice by either party.  The Plan will not be construed to create a contract of employment for a specified period of time between the Company and any employee.
9.
    Entire Agreement.  The Plan is the entire agreement between the Company and the CEO regarding the subject matter of the Plan and supersedes all prior bonus compensation or bonus incentive plans or any written or verbal representations regarding the subject matter of the Plan.  
******

EXHIBIT A

	
																						
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Salary, Incentive and Incentive Percentage for the CEO
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	INCENTIVE %
	INCENTIVE $
	 

	 
	OFFICERS
	SALARY*
	TITLE
	TARGET
	MAX
	TARGET
	MAX
	 

	 
	Scott Flanders
	$
	600,000
	 
	CEO
	100
	%
	150
	%
	$
	600,000
	 
	

	$900,000
	

	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

* Base salary to be prorated for portion of year the CEO was employed by the Company (i.e., as of May 31, 2016)

-1-

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