Document:

Exhibit
10.3

 

SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT, dated as of April 26, 2017 (this “Agreement”), is among Helix TCS, Inc., a Delaware
corporation (the “Company”), all of the Subsidiaries of the Company (such subsidiaries, the “Guarantors”
and, together with the Company, the “Debtors”) and RedDiamond Partners, LLC, its endorsees, transferees, and
assigns (collectively, the “Secured Parties”).

 

W
I T N E S S E T H:

 

WHEREAS,
the Company has executed and delivered a series of separate Convertible Promissory Notes in the principal amount of $104,000 (“Note”)
to the Secured Parties;

 

WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors have
jointly and severally agreed to guarantee and act as surety for payment of such Notes and the other obligations represented by
the Transaction Documents; and

 

WHEREAS,
in order to induce the Secured Parties to extend the loans evidenced by the Notes and to enter into all of the other agreements
to be entered into in connection with the transactions contemplated thereby, each Debtor has agreed to execute and deliver to
the Secured Parties this Agreement and to grant the Secured Parties, pari passu with each other Secured Party, a security
interest in certain property of such Debtor to secure the prompt payment, performance and discharge in full of all of the Company’s
obligations under the Notes and the other Transaction Documents and the Guarantors’ obligations under the Guarantee.

 

NOW,
THEREFORE, in consideration of the premises and for such other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto intending to be legally bound hereby agree as follows:

 

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

 

(a)          “Collateral”
means the collateral in which the Secured Party is granted a security interest by this Agreement and that shall include the following
personal property of the Debtor, whether presently owned or existing or hereafter acquired or coming into existence, wherever
situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products
and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith:

 

(i)      all
assets

 

(ii)     all
revenue

 

    	 	1	 

     

    

 

(iii)    all
chattel paper

 

(iv)    all
deposit accounts

 

(v)     all
equipment

 

(vi)    all
fixtures

 

(vii)    all
general intangibles

 

(viii)  all
goods

 

(ix)     all
intellectual property

 

(x)      all
inventory

 

(xi)     all
other tangible and intangible personal property whatsoever of the Debtors related to the Assets

 

(xii)    account
receivables, together with all instruments, all documents of title representing any of the foregoing, and all right, title, and
security with respect to each account;          

 

(xiii)  All supporting obligations;

 

(xiv)  the
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(xiii), above.

 

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

 

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

 

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

 

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

 

(e)         “Permitted
Liens” shall be those liens evidenced by the security interests listed on Exhibit A.

 

(f)         “Pledged
Interests” shall have the meaning ascribed to such term in Section 3(i).

 

(g)         “Pledged
Securities” shall have the meaning ascribed to such term in Section 1(a)(x).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)         The
Debtor will not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for
non-exclusive licenses granted by the Debtor in its ordinary course of business and sales of inventory by the Debtor in its ordinary
course of business) without the prior written consent of the Secured Party.

 

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

 

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(m)        The
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances
by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof. The Debtor shall cause each insurance policy issued in connection herewith to provide, and
the insurer issuing such policy to certify to the Secured Party, that (a) the Secured Party will be named as lender loss payee
and additional insured under each such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed
for any reason whatsoever, such insurer will promptly notify the Secured Party and such cancellation or change shall not be effective
as to the Secured Party for at least thirty (30) days after receipt by the Secured Party of such notice, unless the effect of
such change is to extend or increase coverage under the policy; and (c) the Secured Party will have the right (but no obligation)
at its election to remedy any default in the payment of premiums within thirty (30) days of notice from the insurer of such default.
If no Event of Default (as defined in the Notes) exists and if the proceeds arising out of any claim or series of related claims
do not exceed $104,000, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement
of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance
thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor; provided, however, that
payments received by the Debtor after an Event of Default occurs and is continuing or in excess of $104,000 for any occurrence
or series of related occurrences shall be paid to the Secured Party and, if received by the Debtor, shall be held in trust for
the Secured Party and immediately paid over to the Secured Party unless otherwise directed in writing by the Secured Party. Copies
of such policies or the related certificates, in each case, naming the Secured Party as lender loss payee and additional insured
shall be delivered to the Secured Party at least annually and at the time any new policy of insurance is issued.

 

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

 

(o)         The
Debtor shall promptly execute and deliver to the Secured Party such further deeds, mortgages, assignments, security agreements,
financing statements, or other instruments, documents, certificates, and assurances and take such further action as the Secured
Party may from time to time request and may in its sole discretion deem necessary to perfect, protect, or enforce the Secured
Party’s security interest in the Collateral including, without limitation in which the Secured Party has been granted a
security interest hereunder substantially in a form reasonably acceptable to the Secured Party.

 

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

 

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

 

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

 

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

 

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

 

(u)         The
Debtor will not change its name, type of organization, jurisdiction of organization, organizational identification number (if
it has one), legal or corporate structure, or identity, or add any new fictitious name unless it provides at least thirty (30)
days’ prior written notice to the Secured Party of such change and, at the time of such written notification, the Debtor
provides any financing statements or fixture filings necessary to perfect and continue the perfection of the Security Interests
granted and evidenced by this Agreement.

 

(v)         Except
in the ordinary course of business, the Debtor may not consign any of its inventory or sell any of its inventory on bill and hold,
sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Party, which shall not
be unreasonably withheld, delayed, denied, or conditioned.

 

(w)        The
Debtor may not relocate its chief executive office to a new location without providing 30 days prior written notification thereof
to the Secured Party and so long as, at the time of such written notification, the Debtor provides any financing statements or
fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(x)         The
Debtor was organized and remains organized solely under the laws of the state of Delaware.

 

(y)         The
Debtor does not have any trade names except, has not used any name other than that stated in the preamble hereto, and no entity
has merged into the Debtor or been acquired by the Debtor within the past five years.

 

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

 

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

 

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

 

(cc)        If
there is any investment property or deposit account included as Collateral that can be perfected by “control” through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each
case satisfactory to the Secured Party, to be entered into and delivered to the Secured Party.

 

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

 

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

 

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

 

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

 

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

 

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

 

(jj)         None
of the account debtors or other persons or entities obligated on any of the Collateral is a governmental authority covered by
the Federal Assignment of Claims Act or any similar federal, state or local statute or rule in respect of such Collateral.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.           Rights
and Remedies Upon Default.

 

(a)       Upon
the occurrence of any Event of Default and at any time thereafter, the Secured Party, shall have the right to exercise all of
the remedies conferred hereunder and under the Notes, and the Secured Party shall have all the rights and remedies of a secured
party under the UCC. Without limitation, the Secured Party shall have the following rights and powers:

 

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

 

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

 

    	 	11	 

     

    

 

(iii)     The
Secured Party shall have the right (but not the obligation) to notify any account Debtor and any obligors under instruments or
accounts to make payments directly to the Secured Party, and to enforce the Debtor’s rights against such account Debtor
and obligors.

 

(iv)     The
Secured Party, may (but is not obligated to) direct any financial intermediary or any other person or entity holding any investment
property to transfer the same to the Secured Party, or its designee.

 

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

 

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

 

8.           Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on
account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs
incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured
Party in enforcing its rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to
satisfaction of the Obligations pro rata among the Secured Party (based on then-outstanding principal amounts of Notes at the
time of any such determination), and to the payment of any other amounts required by applicable law, after which the Secured Party
shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the
proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Debtor will be liable
for the deficiency, together with interest thereon, at the rate of twenty-four percent (24%) per annum or the lesser amount permitted
by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by the Secured Party
to collect such deficiency. To the extent permitted by applicable law, the Debtor waives all claims, damages and demands against
the Secured Party arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross
negligence or willful misconduct of the Secured Party as determined by a final judgment (not subject to further appeal) of a court
of competent jurisdiction.

 

    	 	12	 

     

    

 

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

 

11.         Responsibility
for Collateral. The Debtor assume all liabilities and responsibility in connection with all Collateral, and the Obligations
shall in no way be affected or diminished by reason of the loss, destruction, damage, or theft of any of the Collateral or its
unavailability for any reason. Without limiting the generality of the foregoing, (a) the Secured Party does not have any (i) duty
(either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating
to the Collateral or (ii) obligation to clean-up or otherwise prepare the Collateral for sale and (b) the Debtor shall remain
obligated and liable under each contract or agreement included in the Collateral to be observed or performed by it. The Secured
Party shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement
or the receipt by the Secured Party of any payment relating to any of the Collateral, nor shall the Secured Party be obligated
in any manner to perform any of the obligations of the Debtor under or pursuant to any such contract or agreement, to make inquiry
as to the nature or sufficiency of any payment received by the Secured Party in respect of the Collateral or as to the sufficiency
of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts that may have been assigned to the Secured Party or to which the Secured
Party may be entitled at any time or times.

 

    	 	13	 

     

    

 

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

 

13.         Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Notes
have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that
all indemnities of the Debtor contained in this Agreement shall survive and remain operative and in full force and effect regardless
of the termination of this Agreement.

 

14.         Power
of Attorney; Further Assurances.

 

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

 

    	 	14	 

     

    

 

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

 

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

 

15.         Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Notes.

 

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

 

    	 	15	 

     

    

 

17.         Miscellaneous.

 

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

 

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

 

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

 

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

 

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

 

(f)         This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Debtor
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Secured Party. The
Secured Party may assign any or all of its rights under this Agreement to any entity or person to whom the Secured Party assigns
or transfers any Obligations, provided such transferee agrees in writing to be bound, with respect to the transferred Obligations,
by the provisions of this Agreement that apply to the Secured Party.

 

    	 	16	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature
Page to Follow.]

 

    	 	17	 

     

    

 

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

 

	HELIX TCS, INC. 	 
	 	 	 
	By:	 	 
	 	
        Name:

        Title:
	 
	 	 	 
	HELIX TCS, LLC  	 
	 	 	 
	By:	 	 
	 	
        

        Name:

        Title:
	 
	 	 	 
	SECURITY CONSULTANTS GROUP, LLC   	 
	 	 
	By:	 	 
	 	
        Name:

        Title:
	 
	 	 	 
	BOSS SECURITY SOLUTIONS, INC.   	 
	 	 
	By:	 	 
	 	
        Name:

        Title:
	 

 

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

    	 	18	 

     

    

 

 

[SIGNATURE
PAGE OF HOLDERS TO SECURITY AGREEMENT]

 

Name
of Investing Entity: RedDiamond Partners LLC

 

Signature
of Authorized Signatory of Investing entity: _________________________

 

Name
of Authorized Signatory: _________________________

 

Title
of Authorized Signatory: __________________________

 

    	 	19	 

     

    

 

DISCLOSURE
SCHEDULES

(Security
Agreement)

 

The
following are the Disclosure Schedules (the “Disclosure Schedules”) referred to in that certain Security Agreement,
dated as of April 26, 2017 (the “Security Agreement”), by and between Helix TCS, Inc., a Delaware corporation
(the “Company”), all of the Subsidiaries of the Company (such subsidiaries, the “Guarantors”;
and, together with the Company, the “Debtors”) and RedDiamond Partners LLC, its endorsees, transferees, and
assigns (collectively, the “Secured Parties”).

 

    	 	20	 

     

    

 

Schedule
A

Principal
Place of Business of Debtors:

Locations
Where Collateral is Located or Stored

  

	Debtor
    Name	Address
    of Business and Collateral Location
	 	 
	Helix
    TCS Inc	5300
    DTC Parkway, Greenwood Village, CO 80111
	Helix
    TCS LLC	5300
    DTC Parkway, Greenwood Village, CO 80111
	Security
    Consultants Group LLC	5300
    DTC Parkway, Greenwood Village, CO 80111
	BOSS
    Security Solutions Inc	5300
    DTC Parkway, Greenwood Village, CO 80111

 

    	 	21	 

     

    

 

Schedule
B

Ownership
Interest to Collateral

 

Helix
TCS Inc owns 100% of the membership interests of Helix TCS LLC.

Helix
TCS LLC owns 100% of the membership interests of Security Consultants Group LLC

Helix
TCS LLC owns 100% of the outstanding shares of BOSS Security Solutions Inc

 

    	 	22	 

     

    

 

Schedule
C

Filing
Jurisdictions

 

Delaware

 

    	 	23	 

     

    

 

Schedule
D

Legal
Names and Organizational Identification Numbers

 

	Entity
    Name	EIN
	 	 
	Helix
    TCS Inc	81-4046024
	Helix
    TCS LLC	47-3748821
	Security
    Consultants Group LLC	38-3972837
	BOSS
    Security Solutions Inc	46-3610250

 

    	 	24	 

     

    

 

Schedule
E

Names;
Mergers and Acquisitions

 

N/A

 

    	 	25	 

     

    

 

Schedule
F

Intellectual
Property

 

Patents/Patent
Applications

 

N/A

 

Domain
Names

 

www.helixtcs.com

  

Copyrights

 

N/A

 

Trademarks/Trademark
Applications

 

86617890
Cannabase

86617897
Cannalytics

 

    	 	26	 

     

    

 

Schedule
G

Account
Debtors

  

Helix
TCS Inc, U.S. Bank, Account #103683951075

Helix
TCS LLC, Citizens Bank, Account #6300700767

Security
Consultants Group LLC, Chase Bank, Account #831301788

BOSS
Security Solutions Inc, Wells Fargo Bank, Account #8413359566

 

    	 	27	 

     

    

Schedule
H

Pledged
Securities

 

The
Company is the sole owner of the membership interests/stock of its subsidiaries, as follows:

 

Helix
TCS Inc owns 100% of the membership interests of Helix TCS LLC.

Helix
TCS LLC owns 100% of the membership interests of Security Consultants Group LLC

Helix
TCS LLC owns 100% of the outstanding shares of BOSS Security Solutions Inc

  

    	 	28	 

     

    

 

ANNEX
A

to

SECURITY
AGREEMENT

FORM
OF ADDITIONAL DEBTOR JOINDER

 

Security
Agreement dated as of February [__], 2017 made by Helix TCS, Inc. and its subsidiaries party thereto from time to time, as Debtors
to and in favor of the Secured Parties identified therein (the “Security Agreement”).

 

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

 

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

 

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

 

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

 

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

 

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

 

Dated:

 

 

30Exhibit
10.4

 

SUBSIDIARY
GUARANTEE

 

This
SUBSIDIARY GUARANTEE, dated as of April 26, 2017 (this “Guarantee”), is made by each of the signatories
hereto (together with any other entity that may become a party hereto as provided herein, the “Guarantors”),
in favor of RedDiamond Partners, LLC (together with their permitted assigns, the “Secured Parties”).

 

W
I T N E S S E T H:

 

WHEREAS,
Helix TCS, Inc. (the “Company”) has agreed to sell and issue to the Secured Parties, and the Secured Parties
have agreed to purchase from the Company, certain debt securities (collectively, the “Notes”), subject to the
terms and conditions set forth therein;

 

WHEREAS,
each Guarantor will directly benefit from the extension of credit to the Company represented by the issuance of the Notes; and

 

WHEREAS,
as a material inducement to the Secured Parties to purchase the Notes and to enter into all of the other agreements to be entered
into in connection with the transactions contemplated thereby (collectively, the “Transaction Documents”),
the Secured Parties have requested the Guarantors and the Company enter into this Guarantee;

 

NOW,
THEREFORE, in consideration of the premises and for such other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Guarantor hereby agrees with the Secured Parties as follows:

 

1.           Definitions. The words “hereof,” “herein,” “hereto” and “hereunder” and
words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision
of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to
terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The following terms shall
have the following meanings:

 

“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented, or otherwise modified from time to time.

 

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

 

    	 	1	 

     

    

 

2. 
Guarantee. 

 

(a)           Guarantee. 

 

(i)           The Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Secured Parties and their respective
successors, endorsees, transferees and assigns, the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations. 

 

(ii)          Anything herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor
hereunder and under the other Transaction Documents shall in no event exceed the amount which can be guaranteed by such Guarantor
under applicable federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer
or laws affecting the rights of creditors generally (after giving effect to the right of contribution established in Section 2(b)).

 

(iii)         Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Secured Parties
hereunder.

 

(iv)         The guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations
of each Guarantor under the guarantee contained in this Section 2 shall have been satisfied by indefeasible payment in full. 

 

(v)          No payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the
Secured Parties from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are indefeasibly paid in full.

 

    	 	2	 

     

    

 

(vi)         Notwithstanding anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific
performance of which by the Guarantors is not reasonably possible (e.g. the issuance of the Company’s Common Stock), the
Guarantors shall only be liable for making the Secured Parties whole on a monetary basis for the Company’s failure to perform
such Obligations in accordance with the Transaction Documents.

 

(b)           Right of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that to the extent that a Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall
in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties and each Guarantor shall remain liable
to the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

 

(c)           No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Secured Parties, no Guarantor shall be entitled to be subrogated to any of the rights of the Secured Parties
against the Company or any other Guarantor or any collateral security or guarantee or right of offset held by the Secured Parties
for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from
the Company or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Secured
Parties by the Company on account of the Obligations are indefeasibly paid in full. If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall
be held by such Guarantor in trust for the Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Agent, if required), applied against the Obligations, whether matured or unmetered, in such order as the Secured
Parties may determine.

 

(d)           Amendments, Etc. With Respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by the Secured Parties may be rescinded by the Secured Parties and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security
or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by the Secured Parties, and the Transaction Documents
and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Secured Parties may deem advisable from time to time, and any collateral security, guarantee or right
of offset at any time held by the Secured Parties for the payment of the Obligations may be sold, exchanged, waived, surrendered
or released. The Secured Parties shall have no obligation to protect, secure, perfect, or insure any Lien at any time held by
them as security for the Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 

 

    	 	3	 

     

    

 

(e)           Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the Secured Parties upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in
this Section 2; and all dealings between the Company and any of the Guarantors, on the one hand, and the Secured Parties, on the
other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in
this Section 2. Each Guarantor waives to the extent permitted by law diligence, presentment, protest, and demand for payment and
notice of default or nonpayment to or upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment and performance without regard to (a) the validity or enforceability of any Transaction Document, any of
the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Secured Parties, (b) any defense, set-off or counterclaim (other than a defense of payment or performance
or fraud by Secured Parties) which may at any time be available to or be asserted by the Company or any other Person against the
Secured Parties, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Company or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal discharge of the Company for the Obligations, or
of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Secured Parties may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as they may have against the Company,
any other Guarantor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset
with respect thereto, and any failure by the Secured Parties to make any such demand, to pursue such other rights or remedies
or to collect any payments from the Company, any other Guarantor or any other Person or to realize upon any such collateral security
or guarantee or to exercise any such right of offset, or any release of the Company, any other Guarantor or any other Person or
any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Secured
Parties against any Guarantor. For the purposes hereof, “demand” shall include the commencement and continuance of
any legal proceedings.

 

(f)            Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned
by the Secured Parties upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor,
or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the
Company or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

(g)           Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Secured Parties without set-off
or counterclaim in U.S. dollars at the address set forth or referred to in the Signature Pages to the Notes or other Transaction
Documents.

 

3.
Representations and Warranties. Each Guarantor hereby makes the following representations and warranties to Secured Parties
as of the date hereof:

 

(a)           Organization and Qualification. The Guarantor is a corporation, duly incorporated, validly existing and in good standing
under the laws of the applicable jurisdiction set forth on Schedule 1, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as currently conducted. The Guarantor has no subsidiaries
other than those that are signatories hereto. The Guarantor is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in
the aggregate, (x) adversely affect the legality, validity or enforceability of any of this Guaranty in any material respect,
(y) have a material adverse effect on the results of operations, assets, prospects, or financial condition of the Guarantor or
(z) adversely impair in any material respect the Guarantor’s ability to perform fully on a timely basis its obligations
under this Guaranty (a “Material Adverse Effect”).

 

(b)           Authorization; Enforcement. The Guarantor has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Guaranty, and otherwise to carry out its obligations hereunder. The execution and delivery
of this Guaranty by the Guarantor and the consummation by it of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of the Guarantor. This Guaranty has been duly executed and delivered by the Guarantor
and constitutes the valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable
principles of general application.

 

    	 	4	 

     

    

 

(c)           No Conflicts. The execution, delivery and performance of this Guaranty by the Guarantor and the consummation by the Guarantor
of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of its Certificate of
Incorporation or By-laws or (ii) conflict with, constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Guarantor is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Guarantor is subject (including
Federal and State securities laws and regulations), or by which any material property or asset of the Guarantor is bound or affected,
except in the case of each of clauses (ii) and (iii), such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as could not, individually or in the aggregate, have or result in a Material Adverse Effect. The business of the
Guarantor is not being conducted in violation of any law, ordinance, or regulation of any governmental authority, except for violations
which, individually or in the aggregate, do not have a Material Adverse Effect.

 

(d)           Consents and Approvals. The Guarantor is not required to obtain any consent, waiver, authorization, or order of, or make
any filing or registration with, any court or other federal, state, local, foreign, or other governmental authority or other person
in connection with the execution, delivery, and performance by the Guarantor of this Guaranty.

 

(e)           Universality of Representations and Warranties. The representations and warranties of the Company set forth in any of the
Transaction Documents, as they relate to such Guarantor, each of which is hereby incorporated herein by reference, are true and
correct as of each time such representations are deemed to be made pursuant to such Transaction Document, and the Secured Parties
shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation
and warranty to the Company’s knowledge shall, for the purposes of this Section 3, be deemed to be a reference to such Guarantor’s
knowledge. 

 

(f)            Foreign Law. If applicable, each Guarantor has consulted with appropriate foreign legal counsel with respect to any of
the above representations for which non-U.S. law is applicable. Such foreign counsel have advised each applicable Guarantor that
such counsel knows of no reason why any of the above representations would not be true and accurate. Such foreign counsel were
provided with copies of this Subsidiary Guarantee and the Transaction Documents prior to rendering their advice. 

 

4.
Covenants.

 

(a)          Each Guarantor covenants and agrees with the Secured Parties that, from and after the date of this Guarantee until the Obligations
shall have been indefeasibly paid in full, such Guarantor shall take, and/or shall refrain from taking, as the case may be, each
commercially reasonable action that is necessary to be taken or not taken, as the case may be, so that no Event of Default (as
defined in the Notes) is caused by the failure to take such action or to refrain from taking such action by such Guarantor. 

 

    	 	5	 

     

    

 

(b)         So long as any of the Obligations are outstanding, unless Secured Parties holding at least 67% of the aggregate principal amount
of the then outstanding Notes shall otherwise consent in writing, each Guarantor will not directly or indirectly on or after the
date of this Guarantee:

 

i.            Enter into, create, incur, assume or suffer to exist any indebtedness for borrowed money of any kind, including but not limited
to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or
any income or profits therefrom;

 

ii.           Enter into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits therefrom except for permitted Liens;

 

iii.          Amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of any Secured
Party;

 

iv.          Repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its securities
or debt obligations; 

 

v.           Pay cash dividends on any equity securities of the Company;

 

vi.          Enter into any transaction with any Affiliate of the Guarantor which would be required to be disclosed in any public filing of
the Company with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority
of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

 

vii.         Enter into any agreement with respect to any of the foregoing.

 

5.
Miscellaneous.

 

(a)           Amendments in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented, or otherwise
modified except in writing by the Secured Parties.

 

(b)           Notices. All notices, requests, and demands to or upon the Secured Parties or any Guarantor hereunder shall be effected
in the manner provided for in any of the Transaction Documents, provided that any such notice, request, or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 5(b).

 

(c)           No Waiver By Course Of Conduct; Cumulative Remedies. The Secured Parties shall not by any act (except by a written instrument
pursuant to Section 5(a)), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default under the Transaction Documents or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Secured Parties, any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power, or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege. A waiver by the Secured Parties of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the Secured Parties would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive
of any other rights or remedies provided by law.

 

    	 	6	 

     

    

 

(d)         Enforcement Expenses; Indemnification.

 

(i)           Each Guarantor agrees to pay, or reimburse the Secured Parties for, all its reasonable costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee
and the other Transaction Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and
disbursements of counsel to the Secured Parties.

 

(ii)          Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in
connection with any of the transactions contemplated by this Guarantee.

 

(iii)         Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Guarantee to the extent the Company would be required to do so pursuant
to any of the Transaction Documents.

 

(iv)         The agreements in this Section shall survive repayment of the Obligations and all other amounts payable under any of the Transaction
Documents.

 

(e)               
Successor and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure
to the benefit of the Secured Parties and their respective successors and assigns; provided that no Guarantor may assign, transfer
or delegate any of its rights or obligations under this Guarantee without the prior written consent of the Secured Parties.

 

(f)               
Set-Off. Each Guarantor hereby irrevocably authorizes the Secured Parties at any time and from time to time while an Event
of Default under any of the Transaction Documents shall have occurred and be continuing, without notice to such Guarantor or any
other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits,
credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or
unmetered, at any time held or owing by the Secured Parties to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Secured Parties may elect, against and on account of the obligations and liabilities of such Guarantor
to the Secured Parties hereunder and claims of every nature and description of the Secured Parties against such Guarantor, in
any currency, whether arising hereunder, under any Transaction Document or otherwise, as the Secured Parties may elect, whether
or not the Secured Parties have made any demand for payment and although such obligations, liabilities and claims may be contingent
or unmetered. The Secured Parties shall notify such Guarantor promptly of any such set-off and the application made by the Secured
Parties of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Secured Parties under this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Secured Parties may have.

 

    	 	7	 

     

    

 

(g)           Counterparts. This Guarantee may be executed by two or more of the parties to this Guarantee on any number of separate
counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same
instrument. 

 

(h)           Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. 

 

(i)            Section Headings. The Section headings used in this Guarantee are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation hereof.

 

(j)            Integration. This Guarantee and the other Transaction Documents represent the agreement of the Guarantors and the Secured
Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Secured Parties relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other
Transaction Documents.

 

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

  

    	 	8	 

     

    

 

(l)            Acknowledgements. Each Guarantor hereby acknowledges that:

 

(i)           It has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents
to which it is a party; 

 

(ii)          The Secured Parties have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee
or any of the other Transaction Documents, and the relationship between the Guarantors, on the one hand, and the Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and 

 

(iii)         No joint venture is created hereby or by the other Transaction Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Guarantors and the Secured Parties. 

 

(m)          Additional
Guarantors. The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date hereof to
become a Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of
Annex 1 hereto.

 

(n)           Release of Guarantors. Each Guarantor will be released from all liability hereunder concurrently with the indefeasible
repayment in full of all amounts owed under the Notes and the Transaction Documents. 

 

(o)           Seniority. The Obligations of each of the Guarantors hereunder rank senior in priority to any other Indebtedness (as defined
in the Notes) of such Guarantor. 

 

(p)           WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

 

[SIGNATURE
PAGES FOLLOW]

 

    	 	9	 

     

    

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first
above written.

 

	HELIX
    TCS, LLC	 
	 	 	 
	By:	 	 
	 	Name:

        Title:
	 
	 	 	 
	SECURITY
    CONSULTANTS GROUP	 
	 	 	 
	By:	 	 
	 	Name:

        Title:
	 
	 	 	 
	BOSS
    SECURITY SOLUTIONS, INC.	 
	 	 
	By:	 	 
	 	Name:

        Title:
	 
	 	 	 
	Consented
    and agreed to:	 
	 	 	 
	REDDIAMOND
    PARTNERS, LLC	 
	 	 
	By:	 	 
	 	Name:

        Title:
	 

  

    	 	10	 

     

    

 

SCHEDULE
1

 

GUARANTORS

 

The
following are the names, notice addresses, and jurisdiction of organization of each Guarantor.

 

	NAME/ADDRESS	 	JURISDICTION OF 

INCORPORATION	 	COMPANY PERCENTAGE

 OWNERSHIP
	Helix TCS, LLC 
	 	Delaware	 	100%
	Security Consultants Group 
	 	Colorado	 	100%
	BOSS Security Solutions, Inc. 
	 	Colorado	 	100%
	 	 	 	 	 

    	 	11	 

     

    

 

DISCLOSURE
SCHEDULES

(Subsidiary
Guarantee)

 

 

    	 	12	 

     

    

 

ANNEX
1 TO

 

SUBSIDIARY
GUARANTEE

 

ASSUMPTION
AGREEMENT, dated as of ___________ __, 201__ made by ______________________________, a ______________ corporation (the “Additional
Guarantor”), in favor of the Secured Parties pursuant to the Notes referred to below. All capitalized terms not defined
herein shall have the meaning ascribed to them in such Notes.

 

W
I T N E S S E T H:

 

WHEREAS,
Helix TCS, Inc., a Nevada corporation (the “Company”) and the Secured Parties have entered into a series of
transactions, dated as of February __, 2017, including the purchase by the Secured Parties of certain debt securities of the Company
(as amended, supplemented, or otherwise modified from time to time, the “Transaction Documents”);

 

WHEREAS,
in connection with the Transaction Documents, the Subsidiaries of the Company (other than the Additional Guarantor) have entered
into the Subsidiary Guarantee, dated as of February __, 2017 (as amended, supplemented or otherwise modified from time to time,
the “Guarantee”) in favor of the Secured Parties;

 

WHEREAS,
one or more of the Transaction Documents requires the Additional Guarantor to become a party to the Guarantee; and

 

WHEREAS,
the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the
Guarantee;

 

NOW,
THEREFORE, IT IS AGREED:

 

1.           Guarantee. By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 5(m)
of the Guarantee, hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally
named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1 hereto is hereby added to the information set forth
in Schedule 1 to the Guarantee. The Additional Guarantor hereby represents and warrants that each of the representations
and warranties contained in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor
(after giving effect to this Assumption Agreement) as if made on and as of such date.

 

2.           Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.

 

    	 	13	 

     

    

 

IN
WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first
above written.

 

	[ADDITIONAL GUARANTOR]	 
	 	 	 
	By:	 	 
	 	
        Name:

        Title:
	 

  

 

14

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