Document:

SECURITY AGREEMENT

 

This SECURITY
AGREEMENT (this “Agreement”), dated as of April 4, 2012, is made by and among the grantors listed on
the signature pages hereof (collectively, jointly and severally, the “Grantors” and each, individually, a
“Grantor”), and the secured parties listed on the signature pages hereof (collectively, the
“Secured Parties” and each, individually, a “Secured Party”).

 

RECITALS

 

WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated as of April 3, 2012 (as may be amended, restated, supplemented,
or otherwise modified from time to time, including all schedules thereto, collectively, the “Securities Purchase
Agreement”), by and among Morria Biopharmaceuticals PLC, a public limited company formed under the laws of England
and Wales (“Parent”), and each of the Secured Parties, Parent has agreed to sell, and each of the Secured
Parties have each agreed to purchase, severally and not jointly, the Securities (as defined in the Securities Purchase
Agreement); and

 

WHEREAS, each
Grantor other than Parent is a direct or indirect wholly-owned Subsidiary (as defined below) of Parent and will receive direct
and substantial benefits from the purchase by each of the Secured Parties of the Securities; and

 

WHEREAS, in
order to induce the Secured Parties to purchase, severally and not jointly, the Securities as provided for in the Securities Purchase
Agreement, Grantors have agreed to grant a continuing security interest in and to the Collateral in order to secure the prompt
and complete payment, observance and performance of the Secured Obligations.

 

AGREEMENTS

 

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

 

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

 

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

 

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

 

    	 

    	 

    
  

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

 

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

 

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

 

(f)       “Closing
Date” shall have the meaning ascribed to such term in the Securities Purchase Agreement.

 

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

 

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

 

(i)        “Commencement
Notice” means a written notice, given by any Secured Party to the other Secured Parties in accordance with the notice
provisions set forth in the Securities Purchase Agreement, pursuant to which such Secured Party notifies the other Secured Parties
of the existence of one or more Events of Default and of such Secured Party’s intent to commence the exercise of one or more
of the remedies provided for under this Agreement with respect to all or any portion of the Collateral as a consequence thereof,
which notice shall incorporate a reasonably detailed description of each Event of Default then existing and of the remedial action
proposed to be taken.

 

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

 

(k)       “Copyrights”
means all copyrights and copyright registrations, and also includes (i) the copyright registrations and recordings thereof and
all applications in connection therewith listed on Schedule 2 attached hereto and made a part hereof, (ii) all reissues,
continuations, extensions or renewals thereof, (iii) all income, royalties, damages and payments now and hereafter due or payable
under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (iv) the right to sue for past, present and future infringements and dilutions
thereof, (v) the goodwill of each Grantor’s business symbolized by the foregoing or connected therewith, and (vi) all of
each Grantor’s rights corresponding thereto throughout the world.

 

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(l)       “Copyright
Security Agreement” means each Copyright Security Agreement among Grantors, or any of them, and Secured Parties, in substantially
the form of Exhibit A attached hereto, pursuant to which Grantors have granted to each Secured Party a security interest
in all their respective Copyrights, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

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

 

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

 

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

 

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

 

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

 

(r)       “Guaranty”
means each Guaranty, in the form attached hereto as Exhibit D, executed by each Guarantor in favor of any or all
of the Secured Parties, together with any other guaranty or similar agreement now or hereafter executed by a Guarantor in favor
of any or all of the Secured Parties in connection with the Notes or any of the other Transaction Documents, as may be amended,
restated, supplemented, or otherwise modified from time to time, and all of the foregoing are collectively referred to herein as
the “Guaranties.”

 

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(s)       “Guarantor”
means each Grantor, other than Parent, and each other Person that now or hereafter executes a Guaranty.

 

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

 

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

 

(v)       “Intellectual
Property Licenses” means rights under or interests in any patent, trademark, copyright or other intellectual property,
including software license agreements with any other party, whether the applicable Grantor is a licensee or licensor under any
such license agreement, including the license agreements listed on Schedule 3 attached hereto and made a part hereof,
as may be amended, restated, supplemented, or otherwise modified from time to time. Notwithstanding anything to the contrary in
the Security Documents, and for the avoidance of doubt, the term Intellectual Property Licenses shall in no manner be deemed to
include any of the patents, trademarks, copyrights or other intellectual property that are the subject matter of any Intellectual
Property Licenses pursuant to which the Grantor is a licensee, except to the extent that the Grantor has rights to such patents,
trademarks, copyrights or other intellectual property without consideration to, and independent of, the rights provided under the
related Intellectual Property Licenses.

 

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

 

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

 

(y)       “Lien”
has the meaning specified therefor in the Notes.

 

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

 

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

 

(bb)     “Notes”
has the meaning specified therefor in the Securities Purchase Agreement.

 

(cc)      “Patents”
means all patents and patent applications, and also includes (i) the patents and patent applications listed on Schedule 4
attached hereto and made a part hereof, (ii) all renewals thereof, (iii) all income, royalties, damages and payments now and hereafter
due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages
and payments for past or future infringements or dilutions thereof, (iv) the right to sue for past, present and future infringements
and dilutions thereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.

 

(dd)    “Patent
Security Agreement” means each Patent Security Agreement among Grantors and Secured Parties in substantially the form
of Exhibit B attached hereto, pursuant to which Grantors have granted to each Secured Party a security interest in
all their respective Patents, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

(ee)    “Permitted
Liens” has the meaning specified therefor in the Notes.

 

(ff)     “Permitted
Secured Party” means, with respect to the exercise of any remedy provided for under this Agreement, any Secured Party
that has delivered a Commencement Notice with respect to the exercise of such remedy to the other Secured Parties and has not received
a Veto Notice with respect thereto within the Veto Period; provided, however, there shall only be a single Permitted Secured Party
that may exercise any specific remedy at any one time (it being agreed that if a Commencement Notice is delivered by more than
one Secured Party with respect to any remedy provided for under this Agreement, then the first Secured Party to deliver a Commencement
Notice and not receive a Veto Notice within the Veto Period shall be the only Secured Party that may exercise such remedy).

 

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

 

(hh)   “Pledged
Companies” means, each Person listed on Schedule 5 hereto as a “Pledged Company,” together
with each other Person all or a portion of whose Stock is acquired or otherwise owned by a Grantor after the date hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ss)   “Significant
Secured Party” means, on any date of determination, any Secured Party holding twenty percent (20%) or more of the aggregate
principal amount of Notes outstanding on such date.

 

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

 

(uu)    “Subsidiaries”
and “Subsidiary” each have the meanings specified therefor in the Notes.

 

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

 

(ww)  “Trademarks”
means all trademarks, trade names, trademark applications, service marks, service mark applications, and also includes (i) the
trade names, trademarks, trademark applications, service marks, and service mark applications listed on Schedule 6
attached hereto and made a part hereof, and (ii) all renewals thereof, (iii) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith
and damages and payments for past or future infringements or dilutions thereof, (iv) the right to sue for past, present and future
infringements and dilutions thereof, (v) the goodwill of each Grantor’s business symbolized by the foregoing or connected
therewith, and (vi) all of each Grantor’s rights corresponding thereto throughout the world.

 

(xx)     “Trademark
Security Agreement” means each Trademark Security Agreement among Grantors and Secured Parties in substantially the form
of Exhibit C attached hereto, pursuant to which Grantors have granted to each Secured Party a security interest in
all their respective Trademarks.

 

(yy)   “Transaction
Documents” has the meaning specified therefor in the Securities Purchase Agreement.

 

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

 

(aaa)  “Veto
Notice” means, with respect to any Commencement Notice, a written notice given by any Significant Secured Party to the
other Secured Parties in accordance with the notice provisions set forth in the Securities Purchase Agreement pursuant to which
such Significant Secured Party notifies the other Secured Parties of its objection to the commencement of the remedial action specified
in such Commencement Notice and certifies that, to the best of its knowledge, it is a Significant Secured Party.

 

(bbb)  “Veto
Period” means, with respect to any Commencement Notice (other than a Commencement Notice given by a Significant Secured
Party at a time when such Significant Secured Party is the only the Significant Secured Party), the period of ten (10) consecutive
calendar days following the delivery of such Commencement Notice to the Secured Parties (it being understood and agreed that there
shall be no Veto Period with respect to a Commencement Notice given by a Significant Secured Party at a time when such Significant
Secured Party is the only the Significant Secured Party).

 

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

 

(a)      all
of such Grantor’s Accounts;

 

(b)      all
of such Grantor’s Books;

 

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

 

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

 

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

 

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

 

(g)      all
of such Grantor’s Inventory;

 

(h)      all
of such Grantor’s Investment Related Property;

 

(i)       all
of such Grantor’s Negotiable Collateral;

 

(j)       all
of such Grantor’s rights in respect of Supporting Obligations;

 

(k)      all
of such Grantor’s Commercial Tort Claims;

 

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

 

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

 

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provided, however,
that for the avoidance of doubt (and notwithstanding anything to the contrary in the Security Documents), no Security Interest
shall be granted pursuant to the Security Documents in respect of any Patents, Trademarks, Copyrights or other Intellectual Property
that are the subject matter of any Intellectual Property Licenses pursuant to which the Grantor is a licensee, except to the extent
that the Grantor has rights to such Patents, Trademarks, Copyrights or other Intellectual Property without consideration to, and
independent of, the rights provided under the related Intellectual Property Licenses.

 

3.          Security for
Obligations. This Agreement and the Security Interests created hereby secure the payment and performance of the Secured Obligations,
whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Agreement secures the payment
of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to Secured Parties,
or any of them, but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding
involving any Grantor.

 

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

 

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

 

(a)      The
exact legal name of each of the Grantors is set forth on the signature pages of this Agreement.

 

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

 

(c)      As of
the date hereof, no Grantor has any interest in, or title to, any Copyrights, Intellectual Property Licenses, Patents, or Trademarks
except as set forth on Schedules 2, 3, 4 and 6, respectively, attached hereto. This Agreement is effective
to create a valid and continuing Lien on such Copyrights, Intellectual Property Licenses, Patents and Trademarks and, upon filing
of the Copyright Security Agreement with the United States Copyright Office and filing of the Patent Security Agreement and the
Trademark Security Agreement with the United States Patent and Trademark Office, and the filing of appropriate financing statements
in the jurisdictions listed on Schedule 8 hereto, all action necessary or desirable to protect and perfect the Security
Interests in and to each Grantor’s Patents, Trademarks, or Copyrights has been taken and such perfected Security Interests
are enforceable as such as against any and all creditors of and purchasers from any Grantor; provided, however, that for the avoidance
of doubt, no Security Interest shall be granted pursuant to the Security Documents in respect of any Patents, Trademarks, Copyrights
or other Intellectual Property that are the subject matter of any Intellectual Property Licenses pursuant to which the Grantor
is a licensee, except to the extent that the Grantor has rights to such Patents, Trademarks, Copyrights or other Intellectual Property
without consideration to, and independent of, the rights provided under the related Intellectual Property Licenses. No Grantor
has any interest in any Copyright that is necessary in connection with the operation of such Grantor’s business, except for
those Copyrights identified on Schedule 2 attached hereto which have been registered with the United States Copyright
Office.

 

(d)      This
Agreement creates a valid security interest in all of the Collateral of each Grantor, to the extent a security interest therein
can be created under the Code, securing the payment of the Secured Obligations. Except to the extent a security interest in the
Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing
statements listing each applicable Grantor, as a debtor, and Secured Parties, as secured parties, in the jurisdictions listed next
to such Grantor’s name on Schedule 8 attached hereto. Upon the making of such filings, Secured Parties shall
each have a first priority perfected security interest in all of the Collateral of each Grantor to the extent such security interest
can be perfected by the filing of a financing statement. All action by any Grantor necessary to protect and perfect such security
interest on each item of Collateral has been duly taken.

 

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(e)      (i)
Except for the Security Interests created hereby, such Grantor is and will at all times be the sole holder of record and the legal
and beneficial owner, free and clear of all Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule
5 as being owned by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the date hereof;
(ii) all of the Pledged Interests are duly authorized, validly issued, fully paid and non-assessable and the Pledged Interests
constitute or will constitute the percentage of the issued and outstanding Stock of the Pledged Companies of such Grantor identified
on Schedule 5 hereto; (iii) such Grantor has the right and requisite authority to pledge all Investment Related Property
pledged by such Grantor to each Secured Party as provided herein; (iv) except as set forth on Schedule 5, all actions
necessary or desirable to perfect, establish the first priority of, or otherwise protect, Secured Parties’ respective Liens
in the Investment Related Property pledged hereunder, and the proceeds thereof, have been duly taken, (A) upon the execution and
delivery of this Agreement; (B) upon the taking of possession by any Secured Party of any certificates constituting the Pledged
Interests, to the extent such Pledged Interests are represented by certificates, together with undated powers endorsed in blank
by the applicable Grantor; and (C) upon the filing of financing statements in the applicable jurisdiction set forth on Schedule
8 attached hereto for such Grantor with respect to the Pledged Interests of such Grantor that are not represented by certificates;
and (v) except as set forth on Schedule 5, each Grantor has delivered to and deposited with any Secured Party (or,
with respect to any Pledged Interests created or obtained after the date hereof, will deliver and deposit in accordance with Sections
6(a) and 8 hereof) all certificates representing the Pledged Interests now or hereafter owned by such Grantor to the extent such
Pledged Interests are represented by certificates, and undated powers endorsed in blank with respect to such certificates. None
of the Pledged Interests owned or held by such Grantor has been issued or transferred in violation of any securities registration,
securities disclosure, or similar laws of any jurisdiction to which such issuance or transfer may be subject.

 

(f)       No consent,
approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority or any
other Person is required (i) for the grant of a Security Interest by such Grantor in and to the Collateral pursuant to this Agreement
or for the execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise by any Secured Party
of the voting or other rights provided in this Agreement with respect to Investment Related Property pledged hereunder or the remedies
in respect of the Collateral pursuant to this Agreement, except (A) as may be required in connection with such disposition of Investment
Related Property by laws affecting the offering and sale of securities generally and (B) for any consent that may be required for
the assignment of any Intellectual Property License that expressly provides that such Intellectual Property License is not assignable
(or is not assignable without the consent of the other party to such Intellectual Property License).

 

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

 

6.          Covenants.
Each Grantor, jointly and severally, covenants and agrees with each Secured Party that from and after the date of this Agreement
and until the date of termination of this Agreement in accordance with Section 24 hereof (but only to the extent the particular
assets described in this Section 6 constitute Collateral hereunder):

 

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

 

(b)            Chattel Paper.

 

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

 

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

 

(c)            [RESERVED]

 

(d)            Letter-of-Credit
Rights. Each Grantor that is or becomes the beneficiary of a letter of credit shall promptly (and in any event within 2 Business
Days after becoming a beneficiary) notify Secured Parties thereof and, upon the request by any Secured Party, enter into a multi-party
agreement with Secured Parties and the issuing or confirming bank with respect to letter-of-credit rights assigning such letter-of-credit
rights to Secured Parties and directing all payments thereunder to Secured Parties, all in form and substance satisfactory to Secured
Parties.

 

(e)            Commercial
Tort Claims. Each Grantor shall promptly (and in any event within 2 Business Days of receipt thereof) notify Secured Parties
in writing upon incurring or otherwise obtaining a Commercial Tort Claim after the date hereof and, upon request of any Secured
Party, promptly amend Schedule 1 to this Agreement to describe such after-acquired Commercial Tort Claim in a manner
that reasonably identifies such Commercial Tort Claim, and hereby authorizes the filing of additional financing statements or amendments
to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things deemed necessary
or desirable by any Secured Party to give Secured Parties a first priority, perfected security interest in any such Commercial
Tort Claim.

 

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(f)             Government
Contracts. If any Account or Chattel Paper arises out of a contract or contracts with the United States of America or any department,
agency, or instrumentality thereof, Grantors shall promptly (and in any event within 2 Business Days of the creation thereof) notify
Secured Parties thereof in writing and execute any instruments or take any steps reasonably required by any Secured Party in order
that all moneys due or to become due under such contract or contracts shall be assigned to Secured Parties, and shall provide written
notice thereof and take all other appropriate actions under the Assignment of Claims Act or other applicable law to provide each
Secured Party a first-priority perfected security interest in such contract.

 

(g)            Intellectual
Property.

 

(i)       Upon
request of any Secured Party, in order to facilitate filings with the United States Patent and Trademark Office and the United
States Copyright Office or any other applicable Governmental Authority, each Grantor shall execute and deliver to Secured Parties
one or more Copyright Security Agreements, Trademark Security Agreements, or Patent Security Agreements to further evidence Secured
Parties’ respective Liens on such Grantor’s Copyrights, Trademarks or Patents.

 

(ii)      Each
Grantor shall have the duty (A) to promptly sue for infringement, misappropriation, or dilution with respect to its material rights
in Intellectual Property and to recover any and all damages for such infringement, misappropriation, or dilution, (B) to prosecute
diligently any material trademark application or service mark application that is part of the Trademarks pending as of the date
hereof or hereafter until the termination of this Agreement, (C) to prosecute diligently any material patent application that is
part of the Patents pending as of the date hereof or hereafter until the termination of this Agreement, and (D) to take all reasonable
and necessary action to preserve and maintain all of each Grantor’s material Trademarks, Patents, Copyrights, Intellectual
Property Licenses, and its rights therein, including the filing of applications for renewal, affidavits of use, affidavits of noncontestability
and opposition and interference and cancellation proceedings. Each Grantor shall promptly file an application with the United States
Copyright Office for any Copyright that has not been registered with the United States Copyright Office. Each Grantor shall promptly
file an application with the United States Patent and Trademark Office for any material Patent or Trademark that has not been registered
with the United States Patent and Trademark Office. Any expenses incurred in connection with the foregoing shall be borne by Grantors.
Each Grantor further agrees not to abandon any material Trademark, Patent, Copyright, or Intellectual Property License.

 

(iii)      Grantors
acknowledge and agree that Secured Parties shall have no duties with respect to the Trademarks, Patents, Copyrights, or Intellectual
Property Licenses. Without limiting the generality of this Section 6(g), Grantors acknowledge and agree that no Secured Party shall
be under any obligation to take any steps necessary to preserve rights in the Trademarks, Patents, Copyrights, or Intellectual
Property Licenses against any other Person, but any Secured Party may do so at its option from and after the occurrence and during
the continuance of an Event of Default, and all expenses incurred in connection therewith (including fees and expenses of attorneys
and other professionals) shall be for the sole account of the Grantors and shall be deemed to be Secured Obligations.

 

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(h)             Investment
Related Property.

 

(i)         If
any Grantor shall receive or become entitled to receive any Pledged Interests after the date hereof, it shall promptly (and in
any event within 2 Business Days of receipt thereof) identify such Pledged Interests in a written notice to Secured Parties;

 

(ii)        All
sums of money and property paid or distributed in respect of the Investment Related Property pledged hereunder which are received
by any Grantor shall be held by the Grantors in trust for the benefit of Secured Parties segregated from such Grantor’s other
property, and such Grantor shall deliver it forthwith to the Secured Parties in the exact form received;

 

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

 

(iv)      No
Grantor shall make or consent to any material amendment or other modification or waiver with respect to any Pledged Interests,
Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with
respect to any Pledged Interests;

 

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

 

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

 

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(i)              Transfers
and Other Liens. Grantors shall not (i) sell, lease, license, assign (by operation of law or otherwise), transfer or otherwise
dispose of, or grant any option with respect to, any of the Collateral, except as expressly permitted by this Agreement and the
other Transaction Documents, or (ii) create or permit to exist any Lien upon or with respect to any of the Collateral of any of
Grantors, except for Permitted Liens. The inclusion of Proceeds in the Collateral shall not be deemed to constitute consent by
any Secured Party to any sale or other disposition of any of the Collateral except as expressly permitted in this Agreement or
the other Transaction Documents. Notwithstanding anything contained in this Agreement to the contrary, Permitted Liens shall not
be permitted with respect to any Pledged Interests.

 

(j)              Preservation
of Existence.  Each Grantor shall maintain and preserve its existence, rights and privileges, and become or remain
duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification necessary.

 

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

 

(l)              Maintenance
of Insurance. Each Grantor shall maintain insurance with responsible and reputable insurance companies or associations
(including, without limitation, comprehensive general liability, property, hazard, rent and business interruption insurance) with
respect to all of its assets and properties (including, without limitation, all real properties leased or owned by it and any and
all Inventory and Equipment) and business, in such amounts and covering such risks as is required by any governmental authority
having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in
similar businesses similarly situated, in each case, acceptable to the Secured Parties.

 

(m)             Additional
Grantors. Each Grantor shall cause each Subsidiary of such Grantor to immediately become a party hereto (an “Additional
Grantor”), by executing and delivering an Additional Grantor Joinder in substantially the form of Annex A attached
hereto (the “Additional Grantor Joinder”) and comply with the provisions hereof applicable to the Grantors.
Concurrent therewith, the Additional Grantor 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 Grantor 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 Additional Grantor Joinder to the Secured Parties, the Additional Grantor
shall be and become a party to this Agreement with the same rights and obligations as the Grantors, 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 Grantor Joinder, and all references
herein to the “Grantors” shall be deemed to include each Additional Grantor

 

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(n)             Other
Actions as to Any and All Collateral. Each Grantor shall promptly (and in any event within 5 Business Days of acquiring or
obtaining such Collateral) notify Secured Parties in writing upon (i) acquiring or otherwise obtaining any Collateral after the
date hereof consisting of Trademarks, Patents, registered Copyrights, Intellectual Property Licenses, Investment Related Property,
Chattel Paper (electronic, tangible or otherwise), documents (as defined in Article 9 of the Code), promissory notes (as defined
in the Code), or instruments (as defined in the Code) or (ii) any amount payable under or in connection with any of the Collateral
being or becoming evidenced after the date hereof by any Chattel Paper, documents, promissory notes, or instruments and, in each
such case upon the request of any Secured Party, promptly execute such other documents, or if applicable, deliver such Chattel
Paper, other documents or certificates evidencing any Investment Related Property and do such other acts or things deemed necessary
or desirable by any Secured Party to protect Secured Parties’ respective Security Interests therein.

 

7.           Relation to
Other Transaction Documents. The provisions of this Agreement shall be read and construed with the Transaction Documents referred
to below in the manner so indicated.

 

(a)             Securities
Purchase Agreement and Notes. In the event of any conflict between any provision in this Agreement and any provision in the
Securities Purchase Agreement or Notes, such provision of the Securities Purchase Agreement or Notes shall control, except to the
extent the applicable provision in this Agreement is more restrictive with respect to the rights of Grantors or imposes more burdensome
or additional obligations on Grantors, in which event the applicable provision in this Agreement shall control.

 

(b)             Patent,
Trademark, Copyright Security Agreements. The provisions of the Copyright Security Agreements, Trademark Security Agreements,
and Patent Security Agreements are supplemental to the provisions of this Agreement, and nothing contained in the Copyright Security
Agreements, Trademark Security Agreements or the Patent Security Agreements shall limit any of the rights or remedies of any Secured
Party hereunder.

 

(c)              UK
Security Agreement. The provisions of the UK Security Agreement are supplemental to the provisions of this Agreement, and nothing
contained in the UK Security Agreement shall limit any of the rights or remedies of any Secured Party hereunder.

 

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8.          Further Assurances.

 

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

 

(b)             Each
Grantor authorizes the filing by any Secured Party of financing or continuation statements, or amendments thereto, and such Grantor
will execute and deliver to such Secured Party such other instruments or notices, as may be necessary or as such Secured Party
may reasonably request, in order to perfect and preserve the Security Interests granted or purported to be granted hereby.

 

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

 

(d)             Each
Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect
to any financing statement filed in connection with this Agreement without the prior written consent of each Secured Party affected
thereby, subject to such Grantor’s rights under Section 9-509(d)(2) of the Code.

 

(e)             Each
Grantor shall permit each Secured Party or its employees, accountants, attorneys or agents, to examine and inspect any Collateral
or any other property of such Grantor at any time during ordinary business hours.

 

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

 

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10.        Secured Parties
Appointed Attorney-in-Fact. Until the discharge of all Secured Obligations hereunder, each Grantor, hereby irrevocably appoints
each Secured Party as the attorney-in-fact of such Grantor with full authority in the place and stead of such Grantor and in the
name of such Grantor, the Secured Party or otherwise, at such time as an Event of Default has occurred and is continuing, to take
any action and to execute any instrument which such Secured Party may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

 

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

 

(b)            to receive
and open all mail addressed to such Grantor or New Subsidiary and to notify postal authorities to change the address for the delivery
of mail to such Grantor or New Subsidiary to that of such Secured Party;

 

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

 

(d)            to file
any claims or take any action or institute any proceedings which such Secured Party may deem necessary or desirable for the collection
of any of the Collateral of such Grantor or New Subsidiary or otherwise to enforce the rights of any Secured Party with respect
to any of the Collateral;

 

(e)             to repair,
alter, or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to such Grantor
or New Subsidiary in respect of any Account of such Grantor or New Subsidiary;

 

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

 

(g)            such
Secured Party shall have the right, but shall not be obligated, to bring suit in its own name to enforce the Trademarks, Patents,
Copyrights and Intellectual Property Licenses and, if such Secured Party shall commence any such suit, the appropriate Grantor
or New Subsidiary shall, at the request of such Secured Party, do any and all lawful acts and execute any and all proper documents
reasonably required by such Secured Party in aid of such enforcement.

 

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

 

11.       Secured Parties
May Perform. If any Grantor fails to perform any agreement contained herein, any Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable expenses of such Secured Party incurred in connection therewith shall be payable,
jointly and severally, by Grantors.

 

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12.       Secured Parties’
Duties; Bailee for Perfection. The powers conferred on Secured Parties hereunder are solely to protect the Secured Parties’
respective interests in the Collateral and shall not impose any duty upon any Secured Party in favor of any Grantor or any other
Secured Party to exercise any such powers. Except for the safe custody of any Collateral in its actual possession and the accounting
for moneys actually received by it hereunder, no Secured Party shall have any duty to any Grantor or any other Secured Party as
to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining
to any Collateral. A Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral
in its actual possession if such Collateral is accorded treatment substantially equal to that which such Secured Party accords
its own property. Each Secured Party agrees that, with respect to any Collateral at any time or times in its possession and in
which any other Secured Party has a Lien, the Secured Party in possession of any such Collateral shall be the bailee of each other
Secured Party solely for purposes of perfecting (to the extent not otherwise perfected) each other Secured Party’s Lien in
such Collateral, provided that no Secured Party shall be obligated to obtain or retain possession of any such Collateral. Without
limiting the generality of the foregoing, Secured Parties and Grantors hereby agree that any Secured Party that is in possession
of any Collateral at such time as the Secured Obligations owing to such Secured Party have been paid in full may re-deliver such
Collateral to the applicable Grantor or, if requested by any Secured Party prior to such re-delivery, may deliver such Collateral
(unless otherwise restricted by applicable law or court order and subject in all events to the receipt of an indemnification of
all liabilities arising from such delivery) to the requesting Secured Party, without recourse to or representation or warranty
by the Secured Party in such possession.

 

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

 

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

 

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15.        Voting Rights.

 

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

 

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

 

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

 

(a)             Any
Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other
Transaction Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or
any other applicable law. Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such event,
any Secured Party without any demand, advertisement, or notice of any kind (except a notice specified below of time and place of
public or private sale) to or upon any Grantor or any other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code or by any other applicable law), may take immediate possession
of all or any portion of the Collateral and (i) require Grantors to, and each Grantor hereby agrees that it will at its own expense
and upon request of such Secured Party forthwith, assemble all or part of the Collateral as directed by such Secured Party and
make it available to such Secured Party at one or more locations where such Grantor regularly maintains Inventory, and (ii) without
notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at
any of such Secured Party’s offices or elsewhere, for cash, on credit, and upon such other terms as such Secured Party may
deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least 10 days
notice to any Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute
reasonable notification and specifically such notice shall constitute a reasonable “authenticated notification of disposition”
within the meaning of Section 9-611 of the Code. No Secured Party shall be obligated to make any sale of Collateral regardless
of notice of sale having been given. Any Secured Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was
so adjourned.

 

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

 

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

 

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

 

(e)             Notwithstanding
anything in this Agreement to the contrary, each Secured Party agrees that it will not exercise any remedy provided for under this
Agreement with respect to all or any portion of the Collateral unless such Secured Party is a Permitted Secured Party (provided
that the foregoing shall not prevent any Secured Party from commencing or participating in any Insolvency Proceeding or taking
any action (other than with respect to the Collateral) to enforce the payment or performance of any Grantors’ obligations
under any of the Notes, Guaranties or other Transaction Documents). This Section 16(e) is not intended to confer any rights or
benefits upon Grantors, or any of them, or any other Person except Secured Parties, and no Person (including any or all Grantors)
other than Secured Parties shall have any right to enforce any of the provisions of this Section 16(e). As between Grantors,
or any of them, and any Secured Party, any action that such Secured Party may take under this Agreement shall be conclusively presumed
to have been authorized and approved by the other Secured Parties.

 

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

 

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

 

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

 

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

 

    	22

    	 

    

  

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

 

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

 

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

 

(f)             sixth,
to Grantors or such other Person entitled thereto under applicable law.

 

18.        Remedies
Cumulative. Each right, power, and remedy of any Secured Party as provided for in this Agreement or in any other Transaction
Document or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power, or remedy provided for in this Agreement or in the other Transaction Documents or now
or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by any Secured
Party, of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by such Secured
Party of any or all such other rights, powers, or remedies. Each Grantor acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to each Secured Party and that the remedy at law for any such breach may be inadequate. Each Grantor
therefore agrees that, in the event of any breach or any threatened breach, each Secured Party shall be entitled, in addition to
all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required.

 

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

 

    	23

    	 

    

  

20.        Acknowledgment.

 

(a)             Each
Secured Party hereby agrees and acknowledges that no other Secured Party has agreed to act for it as an administrative or collateral
agent, and each Secured Party is and shall remain solely responsible for the attachment, perfection and priority of all Liens created
by this Agreement or any other Security Document in favor of such Secured Party. No Secured Party shall have by reason of this Agreement
or any other Transaction Document an agency or fiduciary relationship with any other Secured Party. No Secured Party (which term,
as used in this sentence, shall include reference to each Secured Party’s officers, directors, employees, attorneys, agents
and affiliates and to the officers, directors, employees, attorneys and agents of such Secured Party’s affiliates) shall:
(i) have any duties or responsibilities except those expressly set forth in this Agreement and the other Security Documents
or (ii) be required to take, initiate or conduct any enforcement action (including any litigation, foreclosure or collection
proceedings hereunder or under any of the other Security Documents). Without limiting the foregoing, no Secured Party shall have
any right of action whatsoever against any other Secured Party as a result of such Secured Party acting or refraining from acting
hereunder or under any of the Security Documents except as a result and to the extent of losses caused by such Secured Party’s
actual gross negligence or willful misconduct (it being understood and agreed by each Secured Party that the delivery by any
Significant Secured Party of one or more Veto Notices shall not be deemed to be or construed as gross negligence or willful misconduct
on the part of the Secured Party delivering any such Veto Notice). No Secured Party assumes any responsibility for any failure
or delay in performance or breach by any Grantor or any Secured Party of its obligations under this Agreement or any other
Transaction Document. No Secured Party makes to any other Secured Party any express or implied warranty, representation or
guarantee with respect to any Secured Obligations, Collateral, Transaction Document or Grantor. No Secured Party nor any of its
officers, directors, employees, attorneys or agents shall be responsible to any other Secured Party or any of its officers, directors,
employees, attorneys or agents for: (i) any recitals, statements, information, representations or warranties contained in
any of the Transaction Documents or in any certificate or other document furnished pursuant to the terms hereof; (ii) the
execution, validity, genuineness, effectiveness or enforceability of any of the Transaction Documents; (iii) the validity,
genuineness, enforceability, collectability, value, sufficiency or existence of any Collateral, or the attachment, perfection or
priority of any Lien therein; or (iv) the assets, liabilities, financial condition, results of operations, business, creditworthiness
or legal status of any Grantor or any Account Debtor. No Secured Party nor any of its officers, directors, employees, attorneys
or agents shall have any obligation to any other Secured Party to ascertain or inquire into the existence of any default or Event
of Default, the observance or performance by any Grantor of any of the duties or agreements of such Grantor under any of the
Transaction Documents or the satisfaction of any conditions precedent contained in any of the Transaction Documents.

 

    	24

    	 

    

 

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

 

21.        Indemnity
and Expenses.

 

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

 

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

 

22.       Merger, Amendments;
Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES SOLELY
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No provision of this Agreement may be amended
other than by an instrument in writing signed by each Grantor and each Significant Secured Party, and any amendment to any provision
of this Agreement made in conformity with the provisions of this Section 22 shall be binding on all Secured Parties, provided that
no such amendment shall be effective to the extent that it (1) applies to less than all of the Secured Parties or (2) imposes any
obligation or liability on any Secured Party without such Secured Party’s prior written consent (which may be granted or
withheld in such Secured Party’s sole discretion). No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party, provided that all of the Significant Secured Parties (in a writing signed by all
of the Significant Secured Parties) may waive any provision of this Agreement, and any waiver of any provision of this Agreement
made in conformity with the provisions of this Section 22 shall be binding on all Secured Parties, provided that no such waiver
shall be effective to the extent that it (1) applies to less than all the Secured Parties (unless a party gives a waiver as to
itself only) or (2) imposes any obligation or liability on any Secured Party without such Secured Party’s prior written consent
(which may be granted or withheld in such Secured Party’s sole discretion).

 

    	25

    	 

    

  

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

 

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

 

    	26

    	 

    

  

25.         Governing
Law; Jurisdiction; Service of Process; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper; provided, however, any suit seeking enforcement against any Collateral or other property may be brought, at any Secured
Party’s option, in the courts of any jurisdiction where such Secured Party elects to bring such action or where such Collateral
or other property may be found. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Without
limitation of the foregoing, each Grantor other than Parent hereby irrevocably appoints Parent as such Grantor’s agent for
purposes of receiving and accepting any service of process hereunder or under any of the other Security Documents. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

 

26.         Miscellaneous.

 

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

 

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

 

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

 

    	27

    	 

    

  

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

 

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

 

(f)             Unless
the context of this Agreement or any other Transaction Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes” and “including” are not limiting,
and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement or any other Transaction Document refer to this Agreement or such other Transaction Document, as the case may be, as
a whole and not to any particular provision of this Agreement or such other Transaction Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in
this Agreement or in any other Transaction Document to any agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). “Satisfaction in Full of the Secured Obligations” shall mean the
indefeasible payment in full in cash and discharge, or other satisfaction in accordance with the terms of the Transaction Documents
and discharge, of all Secured Obligations in full. For the avoidance of doubt, the “Satisfaction in Full of the Secured Obligations”
shall be deemed to have occurred upon the indefeasible payment in full and discharge, or other satisfaction, of (i) the Notes in
accordance with their terms and (ii) all other Secured Obligations as of such date. Any reference herein to any Person shall be
construed to include such Person’s permitted successors and permitted assigns. Any requirement of a writing contained herein
or in any other Transaction Document shall be satisfied by the transmission of a Record and any Record so transmitted shall constitute
a representation and warranty as to the accuracy and completeness of the information contained therein.

 

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

 

[signature pages
follow]

 

    	28

    	 

    

 

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

 

	GRANTORS:	MORRIA BIOPHARMACEUTICALS PLC
	 	 
	 	By:	/s/
    YUVAL COHEN
	 	Name: Yuval Cohen
	 	Title: President
	 	 
	 	MORRIA BIOPHARMACEUTICALS INC.
	 	 
	 	By:	/s/ YUVAL
    COHEN
	 	Name: Yuval Cohen
	 	Title: President

 

[SECURITY AGREEMENT]

 

    	 

    	 

    

 

	SECURED PARTIES:	IROQUOIS MASTER FUND LTD.
	 	 
	 	/s/
    JOSHUA SILVERMAN
	 	By: Joshua Silverman, Authorized Signatory
	 	 
	 	ALPHA CAPITAL ANSTALT
	 	 
	 	/s/ KONRAD
    ACKERMAN
	 	By: Konrad Ackerman, Director

 

[SECURITY AGREEMENT]

 

    	 

    	 

    

 

SCHEDULE 1 

 

COMMERCIAL TORT CLAIMS

 

None

 

 

 

 

    	 

    	 

    

SCHEDULE 2

 

COPYRIGHTS

  

None

 

 

 

 

 

 

    	 

    	 

    

SCHEDULE 3

 

INTELLECTUAL PROPERTY LICENSES

 

		1.	Exclusive License Agreement, dated November 27, 2002, between Yissum, The Research & Development
Company of the Hebrew University of Jerusalem ("Yissum") and Morria Biopharmaceuticals, Inc.

 

		2.	Sublicense Agreement, dated February 1, 2005: Transfer of License from Morria Biopharmaceuticals, Inc. to Morria Biopharmaceuticals
PLC.

 

		3.	Yissum Service Agreements

 

		3.1.	Agreement for Rendering Services, dated June 20, 2005, between Yissum and Morria Biopharmaceuticals, Inc. ("Service Agreement").

 

		3.2.	Extension of the Service Agreement, dated June 4, 2006.

 

		3.3.	Second Extension of the Service Agreement, dated December 28, 2006.

 

		3.4.	Third Extension of the Service Agreement, dated June 17, 2007.

 

		3.5.	Forth Extension of the Service Agreement, dated June 2, 2008.

 

		3.6.	Fifth Extension of the Service Agreement, dated February 22, 2011.

 

 

 

    	 

    	 

    

SCHEDULE 4

 

PATENTS

 

	PCZL Docket No.	Serial No.	Inventor(s)	Assignee	Filing Date	Status
	P-8967-US 

United States	11/984,224	YEDGAR, Saul;

 COHEN, Yuval	Yissum Research Development Company of the Hebrew University (“Yissum”); Morria Biopharmaceuticals PLC (“Morria”)	14-Nov-2007	Pending
	P-8967-US1 

United States	11/984,223	YEDGAR, Saul;

 COHEN, Yuval	Yissum; Morria	14-Nov-2007	Pending
	P-71126-US 

United States	12/997,014	YEDGAR, Saul;

 COHEN, Yuval;

 BONDI, Joseph V.	Yissum; Morria	09-Dec-2010	Pending

    	 

    	 

    

SCHEDULE 5

 

PLEDGED COMPANIES

 

	Name of Pledgor	    Name of Pledged Company	Percentage of Class Owned
	Morria Biopharmaceuticals PLC	Morria Biopharmaceuticals, Inc.	100,000 shares of

common stock (100% of

common stock)

 

 

* The security
interest in the Pledged Interests listed on this Schedule 5 will be perfected as soon as practicable following the Closing Date
(but in no event later than 14 days following the Closing Date) by the delivery to Iroquois Master Fund Ltd. of all certificates
representing the Pledged Interests of such Pledged Companies now owned by such Grantor to the extent such Pledged Interests are
represented by certificates, and undated powers endorsed in blank with respect to such certificates.

 

    	 

    	 

    

SCHEDULE 6

 

TRADEMARKS

 

	Grantor	Description of Trademark	Registration Number	Issue Date	Application No.	Application Date
	USA	CONTEGO	N/A	N/A	N/A	N/A
	USA	MORRIA	N/A	N/A	78679127	26-Jul-05
	USA	MORRIA	N/A	N/A	77953759	08-Mar-10

    	 

    	 

    

SCHEDULE 7

 

REAL PROPERTY

 

Owned Real Property:

 

None

 

Leased Real Property: 

 

None

 

Other Collateral Location: 

 

None

 

Chief Executive Office of Each Grantor:

 

Agreement For Virtual Office Services dated
January 20, 2010, at Argyll Business Centers Limited, 33 St James’s Square, London SW1Y 4JS

 

    	 

    	 

    

SCHEDULE 8

 

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

 

 

	
        Grantor

         
	Jurisdictions
	Morria Biopharmaceuticals, Inc.	
        Delaware 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

SCHEDULE 9

 

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

 

Deposit Accounts

 

	Grantor	Name of Depositary Bank	Account Number	
        Account

        

        Name

         
	Notes
	Morria 

Biopharmaceuticals, 

Inc	 	 	 	 
	Morria

 Biopharmaceuticals 

Plc	 	 	 	 

 

 

 

 

Securities Accounts 

 

None

 

 

 

 

 

    	 

    	 

    

 

EXHIBIT A

 

COPYRIGHT SECURITY
AGREEMENT

 

This COPYRIGHT SECURITY
AGREEMENT (this “Copyright Security Agreement”) is made this __ day of April 2012, by the Grantors listed on
the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”),
in favor of the Secured Parties under and as defined in the below-described Security Agreement.

 

RECITALS

 

WHEREAS, pursuant
to that certain Securities Purchase Agreement, dated as of April 3, 2012 (as may be amended, restated, supplemented, or
otherwise modified from time to time, including all schedules thereto, collectively, the “Securities Purchase
Agreement”), by and among Morria Biopharmaceuticals PLC, a public limited company formed under the laws of England
and Wales (“Parent”), and each of the Secured Parties, Parent has agreed to sell, and each of the Secured
Parties have each agreed to purchase, severally and not jointly, the Securities (as defined in the Securities Purchase
Agreement); and

 

WHEREAS, in order to
induce each of the Secured Parties to purchase, severally and not jointly, the Securities as provided for in the Securities Purchase
Agreement, Grantors have executed and delivered to each of the Secured Parties that certain Security Agreement of even date herewith
(including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified,
the “Security Agreement”); and

 

WHEREAS, pursuant to
the Security Agreement, Grantors are required to execute and deliver to each of the Secured Parties this Copyright Security Agreement.

 

AGREEMENTS

 

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

 

1.         DEFINED TERMS. All capitalized
terms used but not otherwise defined herein have the meanings given to them in the Security Agreement.

 

2.         GRANT OF SECURITY
INTEREST IN COPYRIGHT COLLATERAL. Each Grantor hereby grants to each Secured Party a continuing first priority security interest
in all of such Grantor’s right, title and interest in, to and under the following, whether presently existing or hereafter
created or acquired (collectively, the “Copyright Collateral”):

 

(a)           all of each Grantor’s
Copyrights and Copyright Intellectual Property Licenses to which it is a party including those referred to on Schedule I
hereto;

 

(b)           all reissues,
continuations or extensions of the foregoing; and

 

    	 

    	 

    

  

(c)           all products and
proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future infringement or
dilution of any Copyright or any Copyright licensed under any Intellectual Property License;

 

provided, however,
that for the avoidance of doubt (and notwithstanding anything to the contrary in the Security Documents), no Security Interest
shall be granted pursuant to the Security Documents in respect of any Copyrights or other Intellectual Property that are the subject
matter of any Intellectual Property Licenses pursuant to which the Grantor is a licensee, except to the extent that the Grantor
has rights to such Copyrights or other Intellectual Property without consideration to, and independent of, the rights provided
under the related Intellectual Property Licenses.

 

3.         SECURITY FOR
OBLIGATIONS. This Copyright Security Agreement and the Security Interests created hereby secures the payment and performance
of all the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this
Copyright Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed
by Grantors, or any of them, to Secured Parties, or any of them, whether or not they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Grantor.

 

4.         SECURITY AGREEMENT.
The security interests granted pursuant to this Copyright Security Agreement are granted in conjunction with the security interests
granted to Secured Parties pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and
remedies of Secured Parties with respect to their respective security interests in the Copyright Collateral made and granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

 

5.         AUTHORIZATION
TO SUPPLEMENT. To the extent required under the Security Agreement, Grantors shall give Secured Parties prompt notice in writing
of any additional copyright registrations or applications therefor after the date hereof. Grantors hereby authorize Secured Parties
unilaterally to modify this Agreement by amending Schedule I to include any future registered copyrights or applications
therefor of Grantors. Notwithstanding the foregoing, no failure to so modify this Copyright Security Agreement or amend Schedule
I shall in any way affect, invalidate or detract from any Secured Party’s continuing security interest in all Collateral,
whether or not listed on Schedule I.

 

6.         COUNTERPARTS.
This Copyright Security Agreement may be executed in two or more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
In proving this Copyright Security Agreement or any other Transaction Document in any judicial proceedings, it shall not be necessary
to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought.

 

    	 

    	 

    

  

7.         CONSTRUCTION.
Unless the context of this Copyright Security Agreement or any other Transaction Document clearly requires otherwise, references
to the plural include the singular, references to the singular include the plural, the terms “includes” and “including”
are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Copyright Security Agreement or any other Transaction Document refer to this Copyright Security Agreement
or such other Transaction Document, as the case may be, as a whole and not to any particular provision of this Copyright Security
Agreement or such other Transaction Document, as the case may be. Section, subsection, clause, schedule, and exhibit references
herein are to this Copyright Security Agreement unless otherwise specified. Any reference in this Copyright Security Agreement
or in any other Transaction Document to any agreement, instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s
permitted successors and permitted assigns. Any requirement of a writing contained herein or in any other Transaction Document
shall be satisfied by the transmission of a Record and any Record so transmitted shall constitute a representation and warranty
as to the accuracy and completeness of the information contained therein. The language used in this Copyright Security Agreement
will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will
be applied against any party. For clarification purposes, the Recitals are part of this Copyright Security Agreement.

 

8.         Governing
Law; Jurisdiction; Service of Process; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Copyright Security Agreement shall be governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper; provided, however, any suit seeking enforcement against any Copyright Collateral
or other property may be brought, at any Secured Party’s option, in the courts of any jurisdiction where such Secured Party
elects to bring such action or where such Copyright Collateral or other property may be found. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Copyright Security Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Without limitation of the foregoing, each Grantor other than
Parent hereby irrevocably appoints Parent as such Grantor’s agent for purposes of receiving and accepting any service of
process hereunder or under any of the other Security Documents. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

[signature pages follow]

 

    	 

    	 

    

  

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

 

	GRANTORS:	MORRIA BIOPHARMACEUTICALS PLC
	 	 
	 	By:	 
	 	Name: Yuval Cohen
	 	Title: President
	 	 
	 	MORRIA BIOPHARMACEUTICALS INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

COPYRIGHT SECURITY AGREEMENT 

 

    	 

    	 

    

  

SCHEDULE
I

to

COPYRIGHT SECURITY AGREEMENT

 

Copyright
Registrations 

 

	Grantor	 	Country	 	Copyright	 	Registration No.	 	
        Registration

Date

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	  
	 	 	 	 	 	 	 	 	 

  

Copyright Licenses

 

    	 

    	 

    

 

EXHIBIT B

 

PATENT SECURITY
AGREEMENT

 

This PATENT SECURITY
AGREEMENT (this “Patent Security Agreement”) is made this ___ day of April 2012, by the Grantors listed on the
signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”),
in favor of the Secured Parties under and as defined in the below-described Security Agreement.

 

RECITALS

 

WHEREAS, pursuant
to that certain Securities Purchase Agreement, dated as of April 3, 2012 (as may be amended, restated, supplemented, or
otherwise modified from time to time, including all schedules thereto, collectively, the “Securities Purchase
Agreement”), by and among Morria Biopharmaceuticals PLC, a public limited company formed under the laws of England
and Wales (“Parent”), and each of the Secured Parties, Parent has agreed to sell, and each of the Secured
Parties have each agreed to purchase, severally and not jointly, the Securities (as defined in the Securities Purchase
Agreement); and

 

WHEREAS, in order to
induce each of the Secured Parties to purchase, severally and not jointly, the Securities as provided for in the Securities Purchase
Agreement, Grantors have executed and delivered to each of the Secured Parties that certain Security Agreement of even date herewith
(including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified,
the “Security Agreement”); and

 

WHEREAS, pursuant to
the Security Agreement, Grantors are required to execute and deliver to each of the Secured Parties this Patent Security Agreement.

 

AGREEMENTS

 

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

 

1.         DEFINED TERMS.
All capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement.

 

2.         GRANT OF SECURITY
INTEREST IN PATENT COLLATERAL. Each Grantor hereby grants to each Secured Party a continuing first priority security interest
in all of such Grantor’s right, title and interest in, to and under the following, whether presently existing or hereafter
created or acquired (collectively, the “Patent Collateral”):

 

(a)         all
of its Patents and Patent Intellectual Property Licenses to which it is a party including those referred to on Schedule I
hereto;

 

(b)         all
reissues, continuations or extensions of the foregoing; and

 

    	 

    	 

    

 

(c)         all
products and proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future infringement
or dilution of any Patent or any Patent licensed under any Intellectual Property License;

 

provided, however, that
for the avoidance of doubt (and notwithstanding anything to the contrary in the Security Documents), no Security Interest shall
be granted pursuant to the Security Documents in respect of any Patents or other Intellectual Property that are the subject matter
of any Intellectual Property Licenses pursuant to which the Grantor is a licensee, except to the extent that the Grantor has rights
to such Patents or other Intellectual Property without consideration to, and independent of, the rights provided under the related
Intellectual Property Licenses.

 

3.        SECURITY FOR
OBLIGATIONS. This Patent Security Agreement and the Security Interests created hereby secures the payment and performance of
all the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this
Patent Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed
by Grantors, or any of them, to Secured Parties, or any of them, whether or not they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Grantor.

 

4.        SECURITY AGREEMENT.
The security interests granted pursuant to this Patent Security Agreement are granted in conjunction with the security interests
granted to Secured Parties pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and
remedies of Secured Parties with respect to their respective security interests in the Patent Collateral made and granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

 

5.        AUTHORIZATION
TO SUPPLEMENT. If any Grantor shall obtain rights to any new patentable inventions or become entitled to the benefit of any
patent application or patent for any reissue, division, or continuation, of any patent, the provisions of this Patent Security
Agreement shall automatically apply thereto. To the extent required under the Security Agreement, Grantors shall give prompt notice
in writing to Secured Parties with respect to any such new patent rights. Without limiting each Grantor’s obligations under
this Section 5, Grantors hereby authorize Secured Parties unilaterally to modify this Agreement by amending Schedule I
to include any such new patent rights of Grantors. Notwithstanding the foregoing, no failure to so modify this Patent Security
Agreement or amend Schedule I shall in any way affect, invalidate or detract from any Secured Party’s continuing
security interest in all Collateral, whether or not listed on Schedule I.

 

6.        COUNTERPARTS.
This Patent Security Agreement may be executed in two or more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
In proving this Patent Security Agreement or any other Transaction Document in any judicial proceedings, it shall not be necessary
to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought.

 

    	 

    	 

    

  

7.         CONSTRUCTION.
Unless the context of this Patent Security Agreement or any other Transaction Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural, the terms “includes” and “including”
are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Patent Security Agreement or any other Transaction Document refer to this Patent Security Agreement or
such other Transaction Document, as the case may be, as a whole and not to any particular provision of this Patent Security Agreement
or such other Transaction Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are
to this Patent Security Agreement unless otherwise specified. Any reference in this Patent Security Agreement or in any other Transaction
Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions
on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to include such Person’s permitted successors and
permitted assigns. Any requirement of a writing contained herein or in any other Transaction Document shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a representation and warranty as to the accuracy and completeness
of the information contained therein. The language used in this Patent Security Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. For clarification
purposes, the Recitals are part of this Patent Security Agreement.

 

8.         Governing
Law; Jurisdiction; Service of Process; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Patent Security Agreement shall be governed by the internal laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper; provided, however, any suit seeking enforcement against any Patent Collateral or
other property may be brought, at any Secured Party’s option, in the courts of any jurisdiction where such Secured Party
elects to bring such action or where such Patent Collateral or other property may be found. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Patent Security Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Without limitation of the foregoing, each Grantor other than Parent
hereby irrevocably appoints Parent as such Grantor’s agent for purposes of receiving and accepting any service of process
hereunder or under any of the other Security Documents. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

 

[signature pages follow]

 

    	 

    	 

    

 

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

 

	GRANTORS:	MORRIA BIOPHARMACEUTICALS PLC
	 	 
	 	By:	 
	 	Name: Yuval Cohen
	 	Title: President
	 	 
	 	MORRIA BIOPHARMACEUTICALS INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

  

SCHEDULE
I

to

PATENT SECURITY AGREEMENT

 

Patents

 

Patent Licenses

 

    	 

    	 

    

 

EXHIBIT C

 

TRADEMARK SECURITY
AGREEMENT

 

This TRADEMARK SECURITY
AGREEMENT (this “Trademark Security Agreement”) is made this ___ day of April 2012, by the Grantors listed on
the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”),
in favor of the Secured Parties under and as defined in the below-described Security Agreement.

 

RECITALS

 

WHEREAS, pursuant
to that certain Securities Purchase Agreement, dated as of April 3, 2012 (as may be amended, restated, supplemented, or
otherwise modified from time to time, including all schedules thereto, collectively, the “Securities Purchase
Agreement”), by and among Morria Biopharmaceuticals PLC, a public limited company formed under the laws of England
and Wales (“Parent”), and each of the Secured Parties, Parent has agreed to sell, and each of the Secured
Parties have each agreed to purchase, severally and not jointly, the Securities (as defined in the Securities Purchase
Agreement); and

 

WHEREAS, in order to
induce each of the Secured Parties to purchase, severally and not jointly, the Securities as provided for in the Securities Purchase
Agreement, Grantors have executed and delivered to each of the Secured Parties that certain Security Agreement of even date herewith
(including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified,
the “Security Agreement”); and

 

WHEREAS, pursuant to
the Security Agreement, Grantors are required to execute and deliver to each of the Secured Parties this Trademark Security Agreement.

 

AGREEMENTS

 

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

 

1.         DEFINED TERMS.
All capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement.

 

2.         GRANT OF SECURITY
INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby grants to each Secured Party a continuing first priority security interest
in all of such Grantor’s right, title and interest in, to and under the following, whether presently existing or hereafter
created or acquired (collectively, the “Trademark Collateral”):

 

(a)         all
of its Trademarks and Trademark Intellectual Property Licenses to which it is a party including those referred to on Schedule
I hereto;

 

(b)          all
goodwill, trade secrets, proprietary or confidential information, technical information, procedures, formulae, quality control
standards, designs, operating and training manuals, customer lists, and other General Intangibles with respect to the foregoing;

 

    	 

    	 

    

 

 

(c)         all
reissues, continuations or extensions of the foregoing;

 

(d)         all
goodwill of the business connected with the use of, and symbolized by, each Trademark and each Trademark Intellectual Property
License; and

 

(e)         all
products and proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future (i)
infringement or dilution of any Trademark or any Trademark licensed under any Intellectual Property License or (ii) injury to the
goodwill associated with any Trademark or any Trademark licensed under any Intellectual Property License;

 

provided, however, that
for the avoidance of doubt (and notwithstanding anything to the contrary in the Security Documents), no Security Interest shall
be granted pursuant to the Security Documents in respect of any Trademarks or other Intellectual Property that are the subject
matter of any Intellectual Property Licenses pursuant to which the Grantor is a licensee, except to the extent that the Grantor
has rights to such Trademarks or other Intellectual Property without consideration to, and independent of, the rights provided
under the related Intellectual Property Licenses.

 

3.         SECURITY FOR
OBLIGATIONS. This Trademark Security Agreement and the Security Interests created hereby secures the payment and performance
of all the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this
Trademark Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed
by Grantors, or any of them, to Secured Parties, or any of them, whether or not they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Grantor.

 

4.         SECURITY AGREEMENT.
The security interests granted pursuant to this Trademark Security Agreement are granted in conjunction with the security interests
granted to Secured Parties pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and
remedies of Secured Parties with respect to their respective security interests in the Trademark Collateral made and granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

 

5.         AUTHORIZATION
TO SUPPLEMENT. If any Grantor shall obtain rights to any new trademarks, the provisions of this Trademark Security Agreement
shall automatically apply thereto. To the extent required under the Security Agreement, Grantors shall give prompt notice in writing
to Secured Parties with respect to any such new trademarks or renewal or extension of any trademark registration. Without limiting
each Grantor’s obligations under this Section 5, Grantors hereby authorize Secured Parties unilaterally to modify this Agreement
by amending Schedule I to include any such new trademark rights of Grantors. Notwithstanding the foregoing, no failure
to so modify this Trademark Security Agreement or amend Schedule I shall in any way affect, invalidate or detract
from any Secured Party’s continuing security interest in all Collateral, whether or not listed on Schedule I.

 

    	 

    	 

    

  

6.         COUNTERPARTS.
This Trademark Security Agreement may be executed in two or more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
In proving this Trademark Security Agreement or any other Transaction Document in any judicial proceedings, it shall not be necessary
to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought.

 

7.         CONSTRUCTION.
Unless the context of this Trademark Security Agreement or any other Transaction Document clearly requires otherwise, references
to the plural include the singular, references to the singular include the plural, the terms “includes” and “including”
are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Trademark Security Agreement or any other Transaction Document refer to this Trademark Security Agreement
or such other Transaction Document, as the case may be, as a whole and not to any particular provision of this Trademark Security
Agreement or such other Transaction Document, as the case may be. Section, subsection, clause, schedule, and exhibit references
herein are to this Agreement unless otherwise specified. Any reference in this Trademark Security Agreement or in any other Transaction
Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions
on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to include such Person’s permitted successors and
permitted assigns. Any requirement of a writing contained herein or in any other Transaction Document shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a representation and warranty as to the accuracy and completeness
of the information contained therein. The language used in this Trademark Security Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. For
clarification purposes, the Recitals are part of this Trademark Security Agreement.

 

    	 

    	 

    

  

8.         Governing
Law; Jurisdiction; Service of Process; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Trademark Security Agreement shall be governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper; provided, however, any suit seeking enforcement against any Trademark Collateral
or other property may be brought, at any Secured Party’s option, in the courts of any jurisdiction where such Secured Party
elects to bring such action or where such Trademark Collateral or other property may be found. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Trademark Security Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Without limitation of the foregoing, each Grantor other than
Parent hereby irrevocably appoints Parent as such Grantor’s agent for purposes of receiving and accepting any service of
process hereunder or under any of the other Security Documents. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

[signature pages follow]

 

    	 

    	 

    

 

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

 

	GRANTORS:	MORRIA BIOPHARMACEUTICALS PLC
	 	 
	 	By:	 
	 	Name: Yuval Cohen
	 	Title: President
	 	 
	 	MORRIA BIOPHARMACEUTICALS INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT 

Trademark Registrations/Applications

 

	Grantor	 	Description of Trademark	 	Registration Number	 	Issue Date
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

  

Trade Names

 

Common Law Trademarks

 

Trademarks Not Currently
In Use

 

Trademark Licenses

 

    	 

    	 

    

 

EXHIBIT D

 

FORM OF GUARANTY

 

See attached.

 

    	 

    	 

    

 

ANNEX A

to

SECURITY

AGREEMENT

 

FORM OF ADDITIONAL
GRANTOR JOINDER

 

Security Agreement dated
as of April 4, 2012 made by

Morria Biopharmaceuticals
PLC

and its Subsidiaries party
thereto from time to time, as Grantors

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 Grantor Joinder to the Secured Parties referred to above, the undersigned shall
(a) be an Additional Grantor under the Security Agreement, (b) have all the rights and obligations of the Grantors 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 Grantor 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 WHEREOF, the undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.

 

	 	[Name of Additional Grantor]
	 	 
	 	By:
	 	Name:
	 	Title:
	 	 
	 	Address:

 

Dated:CONVERTIBLE BRIDGE NOTE

 

THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF,
BY PURCHASING SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (C) IF REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION, A SECURITIES PURCHASE AGREEMENT, DATED AS OF THE DATE HEREOF,
A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG
THE PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH (A) LIMIT THE CONVERSION RIGHTS OF THE HOLDER, (B) SPECIFY VOLUNTARY
AND MANDATORY REPAYMENT, PREPAYMENT AND REDEMPTION RIGHTS AND OBLIGATIONS AND (C) SPECIFY EVENTS OF DEFAULT FOLLOWING WHICH THE
REMAINING BALANCE DUE AND OWING HEREUNDER MAY BE ACCELERATED.

 

	Series A, No. __	$_______

 

CONVERTIBLE BRIDGE NOTE

 

3DICON Corporation, an Oklahoma corporation
(together with its successors, the “Company”), for value received hereby promises to pay to:

 

______________________

 

(The “Holder”) and registered assigns, the principal
sum of _______________ ($_______) or, if less, the principal amount of this Note then outstanding, on the Maturity Date by wire
transfer of immediately available funds to the Holder in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts. The Maturity Date is November 26, 2012.

 

    	1

    	 

    

 

Past due amounts will accrue interest at
15% per annum or, if less, the maximum rate permitted by applicable law, and will be payable on demand (“Default Interest”).
All payments of principal hereunder shall be made for the benefit of the Holder pursuant to the terms of the Agreement (hereafter
defined). At the option of the Purchaser, principal may be paid in cash or in shares of Common Stock.

 

This Convertible Bridge Note (this “Convertible
Bridge Note”) is a duly authorized issuance of up to $_______principal amount referred to in that certain Securities Purchase
Agreement dated as of the date hereof between the Company and the Purchaser named therein (the “Agreement”). The Agreement
contains certain additional agreements among the parties with respect to the terms of this Convertible Bridge Note, including,
without limitation, provisions which (A) limit the conversion rights of the Holder, (B) specify voluntary and mandatory repayment,
prepayment and redemption rights and obligations and (C) specify Events of Default following which the remaining balance due and
owing hereunder may be accelerated. All such provisions are an integral part of this Convertible Bridge Note and are incorporated
herein by reference. This Convertible Bridge Note is transferable and assignable to one or more Persons, in accordance with the
limitations set forth in the Agreement.

 

1.           Certain
Terms Defined. All terms defined in the Agreement and not otherwise defined herein shall have for purposes hereof the meanings
provided for in the Agreement.

 

2.           Covenants.
The Company covenants and agrees to observe and perform each of its covenants, obligations and undertakings contained in the Agreement,
which obligations and undertakings are expressly assumed herein by the Company and made for the benefit of the holder hereof.

 

3.           Payment
of Principal. The Company shall repay all remaining unpaid balance of this Convertible Bridge Note on the Maturity Date. The
Company may, and shall be obligated to, prepay all or a portion of this Convertible Bridge Note on the terms specified in the Agreement.

 

4.          Conversion.

 

4.1      Conversion of Convertible Bridge Note.
 Subject to Section 5 hereof, the Holder shall have the right, at its option, at Maturity, to convert the principal amount
or any portion of such principal amount, of this Convertible Bridge Note into (a) Common Stock of the Company, at the price determined
pursuant to this Section 4.1 or (b) securities issuable in a contemplated subsequent transaction at the offering price of such
transaction. The number of shares of Common Stock to be issued upon each conversion of this Convertible Bridge Note shall be determined
by dividing the Conversion Amount (as defined below) by the Conversion Price in effect on the date (the “Conversion Date”)
a Notice of Conversion is delivered to the Company, as applicable, by the Holder by facsimile or other reasonable means of communication
dispatched prior to 5:00 p.m., E.S.T. The term “Conversion Amount” means, with respect to any conversion of this Convertible
Bridge Note, the sum of (1) the principal amount of this Convertible Bridge Note to be converted in such conversion plus (2) Default
Interest, if any, at the Holder’s option, any amounts owed to the Holder pursuant to Section 4.3 hereof, Section 10.1 of
the Agreement or Section 10.4 of the Agreement.

 

    	2

    	 

    

 

4.2     Conversion Price. Upon Maturity and
at the option of the Holder, any portion or the entire outstanding principal amount of this Convertible Bridge Note may be converted
into a number of shares of Common Stock at the conversion price equal to the lesser of 100% of the Volume Weighted Average Price
(the “VWAP), as reported for the 5 trading days prior to (a) the Closing Date hereof, (b) the Maturity Date, or (c) the Closing
Date of the subsequent transaction (the “Conversion Price”).

 

4.3      Authorized Shares.

 

(a)          
          
Consistent with Section 7.11 of the Agreement, the Company (i) shall promptly irrevocably instruct the Company's transfer agent
to issue certificates for the Common Stock issuable upon conversion of this Convertible Bridge Note and (ii) agrees that its issuance
of this Convertible Bridge Note shall constitute full authority to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and
conditions of this Convertible Bridge Note.

 

(b)          
          
If at any time a Holder of this Convertible Bridge Note submits a Notice of Conversion and the Company does not have sufficient
authorized but unissued shares of Common Stock available to effect such conversion in full in accordance with the provisions of
this Article 4 to effect such conversion in full as provided in subsection (d) below, without stockholder approval (each, a “Conversion
Default”), the Company shall issue to the Holder all of the shares of Common Stock which are then available to effect such
conversion. The portion of this Convertible Bridge Note which the Holder included in its Conversion Notice and which exceeds the
amount which is then convertible into available shares of Common Stock (the “Excess Amount”) shall, notwithstanding
anything to the contrary contained herein, not be convertible into Common Stock in accordance with the terms hereof until (and
at the Holder’s option at any time after) the date additional shares of Common Stock are authorized by the Company, or its
stockholders, as applicable, at which time the Excess Amount shall be convertible at the Conversion Price. The Company shall use
its best efforts to authorize, or cause its stockholders to authorize within 40 days of the occurrence of a Conversion Default,
as applicable, a sufficient number of shares of Common Stock as soon as practicable following the earlier of (i) such time that
the Holder notifies the Company or that the Company otherwise becomes aware that there are or likely will be insufficient shares
to allow full conversion thereof and (ii) a Conversion Default. The Company shall send notice to the Holder of the authorization
of additional shares of Common Stock. Nothing herein shall limit the Holders right to pursue actual damages (to the extent in excess
of the Conversion Default Payments) due to the Company’s failure to maintain a sufficient number of authorized shares of
Common Stock.

    	3

    	 

    

 

(c)          
          
In no event shall the Company issue more than the Maximum Number of Shares upon conversion of this Convertible Bridge Note,
unless the Company shall have obtained approval by the stockholders of the Company ("Stockholder Approval"). Once the
Maximum Number of Shares has been issued (the date of which is hereinafter referred to as the “Maximum Conversion Date”),
unless the Company shall have obtained Stockholder Approval within 40 days of the Maximum Conversion Date, the Company shall pay
to the Holder within five (5) Business Days of the Maximum Conversion Date (or, if the Company is, in good faith, using its best
efforts to obtain Stockholder Approval, then the earlier of (x) 40 days following the Maximum Conversion Date, and (y) such date
that it becomes reasonably apparent that Stockholder Approval will not be obtained within such 40 days period), the Redemption
Price plus accrued and unpaid Default Interest, if any. The Maximum Number of Shares shall be subject to adjustment from time to
time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring
after the date hereof as contemplated by Article XI of the Agreement. With respect to each Holder of Convertible Bridge Notes,
the Maximum Number of Shares shall refer to such Holder’s pro rata share thereof based upon the aggregate principal balance
of the Convertible Bridge Notes then outstanding. In the event that the Company obtains Stockholder Approval, or otherwise is able
to increase the number of shares to be issued above the Maximum Number of Shares (such increased number being the “New Maximum
Number of Shares”), the references to Maximum Number of Shares above shall be deemed to be, instead, references to the New
Maximum Number of Shares.

 

    	4

    	 

    

 

4.4           Method
of Conversion.

 

(a)          
          
Notwithstanding anything to the contrary set forth herein, upon conversion of this Convertible Bridge Note in accordance with
the terms hereof, the Holder shall not be required to physically surrender this Convertible Bridge Note to the Company unless the
entire unpaid principal amount of this Convertible Bridge Note is so converted. Rather, records showing the principal amount converted
(or otherwise repaid) and the date of such conversion or repayment shall be maintained on a ledger substantially in the form of
Annex A attached hereto (a copy of which shall be delivered to the Company or transfer agent with each Notice of Conversion).
It is specifically contemplated that the Holder hereof shall act as the calculation agent for conversions and repayments. In the
event of any dispute or discrepancies, such records maintained by the Holder shall be controlling and determinative in the absence
of manifest error or failure of Holder to record the principal amount converted (or otherwise repaid) from time to time, in which
events the record of the Company shall be controlling and determinative. The Holder and any assignee, by acceptance of this Convertible
Bridge Note, acknowledge and agree that, by reason of the provisions of this paragraph, following a conversion of a portion of
this Convertible Bridge Note, the principal amount represented by this Convertible Bridge Note will be the amount indicated on
Annex A attached hereto (which may be less than the amount stated on the face hereof).

 

(b)          
          
The Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock or other securities or property on conversion of this Convertible Bridge Note in a name other
than that of the Holder (or in street name), and the Company shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such
shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Company the amount
of any such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

    	5

    	 

    

 

(c)          
          
Subject to Section 5 hereof, upon receipt by the Company of a Notice of Conversion, the Holder shall be deemed to be the holder
of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid
interest on this Convertible Bridge Note shall be deemed reduced to reflect such conversion, and, unless the Company defaults on
its obligations under this Article 4, all rights with respect to the portion of this Convertible Bridge Note being so converted
shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. Subject to Section 5 hereof, if the Holder shall have given a Notice of Conversion as provided herein, the
Company’s obligation to issue and deliver the certificates for shares of Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provisions
thereof, the recovery of any judgment against any person or any action by the Holder to enforce the same, any failure or delay
in the enforcement of any other obligation of the Company to the Holder of record, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder of any obligation to the Company, and subject to Section 4.4(a) irrespective
of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with such conversion.
The date of receipt (including receipt via telecopy) of such Notice of Conversion shall be the Conversion Date so long as it is
received before 5:00 p.m., E.S.T., on such date.

 

(d)          
          
Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the expiration
of the Deadline with respect to a conversion of any portion of this Convertible Bridge Note for any reason, then (unless the Holder
otherwise elects to retain its status as a holder of Common Stock by so notifying the Company), the Holder shall regain the rights
of a Holder of this Convertible Bridge Note with respect to such unconverted portions of this Convertible Bridge Note and the Company
shall, as soon as practicable, return such unconverted Convertible Bridge Note to the holder or, if the Convertible Bridge Note
has not been surrendered, adjust its records to reflect that such portion of this Convertible Bridge Note not been converted. In
all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the
right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 4.3 for the Company’s
failure to convert this Convertible Bridge Note.

 

(e)          
          
In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program,
upon request of the Holder and its compliance with the provisions contained in Section 4.1 and in this Section 4.4, the Company
shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to
the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission System.

 

    	6

    	 

    

 

5.          
Redemption by Company.

 

5.1      Company’s Right to Redeem. In
accordance with the provisions of the Purchase Agreement, the Company may elect, or be required, upon receipt of a Notice of Conversion,
to redeem in whole or in part, the remaining unpaid principal amount of this Convertible Bridge Note, for cash at a redemption
price (the “Redemption Price”) equal to one hundred percent (100%) of the principal amount outstanding at the date
of redemption, plus accrued and unpaid interest, if any.

 

5.2      Mechanics of Redemption. The Company
shall effect each such redemption within 5 business days of giving notice of its election to redeem by facsimile with a copy by
either overnight or 2-day courier to the Holder of this Convertible Bridge Note to be redeemed at the address and facsimile number
of such Holder appearing in the Company’s register for the Convertible Bridge Notes. Such redemption notice shall indicate
whether the Company will redeem all or part of such portion of the Convertible Bridge Note to be redeemed and the applicable Redemption
Price. The Company shall not be entitled to send any notice of redemption and begin the redemption procedure unless it has (i)
the full amount of the Redemption Price, in cash, available in a demand or other immediately available account in a bank or similar
financial institution or (ii) immediately available credit facilities, in the full amount of the Redemption Price, with a bank
or similar financial institution on the date the redemption notice is sent to the Holders of this Convertible Bridge Note. Provided,
however, the Company will process any Notice of Conversion received prior to the issuance of a notice of redemption; and further
provided that, after a notice of redemption has been issued, the Holder may issue a Notice of Conversion which will not be honored
unless the Company fails to make the redemption payment when due. In the event of such failure, the Notice of Conversion will be
honored as of the date of the Notice of Conversion. Additionally, if the Company fails to make full payments of the Redemption
Price of this Convertible Bridge Note being redeemed by the tenth day following the notice or redemption, then the Company waives
its right to redeem any of the remaining then outstanding Notes, unless approved by the Holder.

 

5.3      Payment of Redemption Price. The Redemption
Price shall be paid to the Holder of this Convertible Bridge Note within 5 business days of the delivery of the notice of such
redemption to such Holder.

 

6.          Holder’s
Right to Advance Notice of Election Redeem.

 

6.1      Holder’s Right to Elect to Receive
Notice of Cash Redemption by Company.  The Holder of this Convertible Bridge Note shall have the right to require Company to
provide advance notice stating whether the Company will elect to redeem all or part of the redeemable portion in cash, pursuant
to the Company’s redemption rights discussed in Section 5.1 above.

 

    	7

    	 

    

 

6.2      Mechanics of Holder’s Election Notice.
Holder shall give notice to the Company by facsimile (the “Election Notice”), requiring that the Company disclose whether
the Company would elect to redeem the redeemable portion of this Convertible Bridge Note (in whole or in part) if the Holder were
to provide a Notice of Conversion and sought to convert the Convertible Bridge Note in such principal amount as is specified in
the Notice of Election.

 

6.3      Company’s Response. Company must
respond, disclosing its election, within two (2) business days of receipt of Holder’s Election Notice via facsimile. If Company
does not respond to Holder within two (2) business days (by 12:00 noon, if required above) via facsimile, Company shall be deemed
to have forfeited its right to exercise redemption pursuant to Section 5(a) upon its receipt of (but only with respect to) that
Notice of Conversion.

 

		7.	No Waiver of Payee's Rights. All payments of principal shall be made without setoff, deduction
or counterclaim. No delay or failure on the part of the Payee in exercising any of its options, powers or rights, nor any partial
or single exercise of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and
no waiver on the part of the Payee of any of its options, powers or rights shall constitute a waiver of any other option, power
or right. Acceptance by the Payee of less than the full amount due and payable hereunder shall in no way limit the right of the
Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

  

8.          
Miscellaneous. This Convertible Bridge Note shall be deemed to be a contract made under the laws of the State of Georgia, and
for all purposes shall be governed by and construed in accordance with the laws of said State. The parties hereto, including all
guarantors or endorsers, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with
the delivery, acceptance, performance and enforcement of this Convertible Bridge Note, except as specifically provided herein,
and asset to extensions of the time of payment, or forbearance or other indulgence without notice. The Company hereby submits to
the exclusive jurisdiction of the United States District Court for the Northern District of Georgia and of any Georgia state court
sitting in Atlanta, Georgia for purposes of all legal proceedings arising out of or relating to this Convertible Bridge Note. The
Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. The Company hereby irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Convertible Bridge Note.

 

    	8

    	 

    

 

The Holder of this Convertible Bridge Note
by acceptance of this Convertible Bridge Note agrees to be bound by the provisions of this Convertible Bridge Note which are expressly
binding on such Holder.

 

IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.

 

	               Dated: August __, 2012	 
	 	 
	 	3DICON Corporation.
	 	 
	 	By:	 
	 	Name:  Mark Willner
	 	Title:  CEO

 

    	9

    	 

    

 

FULL NAME AND ADDRESS OF SUBSCRIBER FOR REGISTRATION PURPOSES:

 

NAME:

 

ADDRESS:

 

TEL NO:

 

FAX NO:

 

CONTACT

NAME:

 

DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):

 

NAME:

 

ADDRESS:

 

TEL NO:

 

FAX NO:

 

CONTACT

NAME:

 

	SPECIAL INSTRUCTIONS:	 	 

 

    	10

    	 

    

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder

 

in order to Convert the Convertible Bridge
Note)

 

The undersigned hereby irrevocably elects
to convert $________ of the principal balance of the Convertible Bridge Note into shares of Common Stock, no par value per share
(the “Common Stock”), of 3DICON Corporation (the “Company”) according to the conditions hereof, as of the
date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any. The undersigned,
as contemplated by Section 5.1 of the Securities Purchase Agreement pursuant to which the Convertible Bridge Note was issued, hereby
states that the representations and warranties of the undersigned set forth therein are true and correct in all material respects
as of the date hereof (provided, the undersigned makes no representations concerning its investment intent with respect to the
Common Stock received upon this conversion).

 

Conversion calculations:

 

	 	 
	 	Date of Conversion
	 	 
	 	 
	 	Applicable Conversion Price
	 	 
	 	 
	 	Number of Shares
	 	 
	 	 
	 	Name/Signature
	 	 
	 	Address:
	 	 
	 	 
	 	 

 

    	11

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