Document:

Exhibit 10.1B

 

SECURITY
AGREEMENT

 

THIS SECURITY AGREEMENT
(this agreement, together with all amendments and restatements and Joinders, this "Agreement"), dated as of October
3, 2016, is made by CARBON NATURAL GAS COMPANY, a Delaware corporation ("Borrower"), NYTIS EXPLORATION COMPANY
LLC, a Delaware limited liability company, NYTIS EXPLORATION (USA) INC., a Delaware corporation, each of the other signatories
party hereto and each other Person who becomes a party hereto pursuant to Section 6.15 (together with Borrower and
including any permitted successors and assigns, collectively, the "Debtors" and each a "Debtor"),
in favor of LEGACYTEXAS BANK, as administrative agent for the benefit of each of the Secured Parties (in such capacity, "Administrative
Agent").

 

BACKGROUND.

 

Borrower, the lenders from
time to time party thereto (the "Lenders"), and LegacyTexas Bank, as Administrative Agent and L/C Issuer, have
entered into the Credit Agreement dated as of the date hereof (such agreement, together with all amendments and restatements, the
"Credit Agreement").

 

Borrower and each other
Debtor are members of the same affiliated group of companies and are engaged in operations which require financing on a basis in
which credit can be made available from time to time to Borrower and the other Debtors, and Debtors will derive direct and indirect
economic benefit from the Loans, Letters of Credit and other financial accommodations under the Credit Agreement and other Loan
Documents and financial accommodations under Bank Product Agreements.

 

It is the intention of
the parties hereto that this Agreement create a first priority security interest in the Collateral in favor of Administrative Agent
for the benefit of the Secured Parties securing the payment and performance of the Obligations.

 

AGREEMENT.

 

NOW, THEREFORE, in consideration
of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Secured Parties to (a) make Loans and issue Letters of Credit under the Credit Agreement
and to extend other credit and financial accommodations under the Loan Documents, and (b) make financial accommodations under
Bank Product Agreements, each Debtor hereby agrees with Administrative Agent, for the benefit of Secured Parties, as follows:

 

ARTICLE
I

DEFINITIONS

 

1.01.       Definitions.
For purposes of this Agreement:

 

"Accession"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to an accession (as defined in the UCC), and (whether or not included in that definition), a good that is physically united
with another good in such a manner that the identity of the original good is not lost.

 

"Account"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to an account (as defined in the UCC), and (whether or not included in such definition), a right to payment of a monetary
obligation, whether or not earned by performance for property that has been or is to be sold, leased, licensed, assigned, or otherwise
disposed of, and for service rendered or to be rendered, and all right, title, and interest in any returned property, together
with all rights, titles, securities, and guarantees with respect thereto, including any rights to stoppage in transit, replevin,
reclamation, and resales, and all related Liens whether voluntary or involuntary.

 

    

     

    

 

"Account Debtor"
means any Person who is or who may become obligated to each Debtor under, with respect to or on account of an Account.

 

"Acquisition Rights"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to each warrant, option, instrument, subscription right, redemption right and other right (including any instrument or right
convertible into an Equity Interest) to acquire or sell any Equity Interest in any Person.

 

"As-Extracted Collateral"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to as-extracted collateral (as defined in the UCC), and (whether or not included in that definition), (a) oil, gas,
or other minerals that are subject to a security interest that (i) is created by such Debtor before extraction, and (ii) attaches
to the minerals as extracted, or (b) Accounts arising out of the sale at the wellhead or minehead of oil, gas, or other minerals
in which such Debtor had an interest before extraction.

 

"Chattel Paper"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to chattel paper (as defined in the UCC), and (whether or not included in such definition), a Record or Records that evidence
both a monetary obligation and a security interest in specific Goods, a security interest in specific Goods and Software used in
the Goods, or a lease of specific Goods. "Chattel Paper" includes Electronic Chattel Paper and Tangible Chattel Paper.

 

"Collateral"
has the meaning specified in Section 2.01.

 

"Collateral Records"
means books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer
software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or
contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization
thereupon.

 

"Commercial Tort
Claim" means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising,
or acquired) in and to a commercial tort claim (as defined in the UCC), and (whether or not included in such definition), all claims
arising in tort with respect to which the claimant (a) is an organization, or (b) an individual and the claim (i) arose
in the course of the claimant's business or profession, and (ii) does not include damages arising out of personal injury to
or the death of an individual.

 

"Commodity Account"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a commodity account (as defined in the UCC), and (whether or not included in such definition), an account maintained
by a Commodity Intermediary in which a Commodity Contract is carried for such Debtor.

 

"Commodity Contract"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a commodity futures contract, an option on a commodity futures contract, a commodity option, or any other contract if
the contract or option is (a) traded on or subject to the rules of a board of trade that has been designated as a contract
market for such a contract pursuant to the federal commodities Laws, or (b) traded on a foreign commodity board of trade,
exchange, or market, and is carried on the books of a Commodity Intermediary for such Debtor.

 

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"Commodity Intermediary"
means (a) a Person that is registered as a futures commission merchant under the federal commodities Laws or (b) a Person
that in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated
as a contract market pursuant to federal commodities Laws.

 

"Copyright License"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter
owned by such Debtor or which such Debtor otherwise has the right to license, or granting any right to such Debtor under any Copyright
now or hereafter owned by any third party, and all rights of such Debtor under any such agreement.

 

"Copyrights"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to (a) all copyright rights in any work subject to the copyright Laws of any Governmental Authority, whether as author,
assignee, transferee, or otherwise, (b) all registrations and applications for registration of any such copyright in any Governmental
Authority, including registrations, recordings, supplemental registrations, and pending applications for registration in any jurisdiction,
and (c) all rights to use and/or sell any of the foregoing.

 

"Deposit Account"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a deposit account (as defined in the UCC), and (whether or not included in such definition), a demand, time, savings,
passbook, or similar account maintained at a bank (as defined in the UCC).

 

"Document"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a document (as defined in the UCC), and (whether or not included in such definition), a document of title, bill of lading,
dock warrant, dock receipt, warehouse receipt, or order for the delivery of Goods.

 

"Electronic Chattel
Paper" means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising,
or acquired) in and to electronic chattel paper (as defined in the UCC), and (whether or not included in such definition), chattel
paper evidenced by a Record or Records consisting of information stored in electronic medium.

 

"Entitlement Holder"
means a Person identified in the records of a Securities Intermediary as the Person having a Security Entitlement against the Securities
Intermediary. If a Person acquires a Security Entitlement by virtue of § 8.501(b)(2) or (3) of the UCC, such Person is
the Entitlement Holder.

 

"Equipment"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to equipment (as defined in the UCC), and (whether or not included in such definition), all Goods other than Inventory or
consumer goods, and all improvements, accessions, or appurtenances thereto.

 

"Equity Interests"
means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests, other than a
net profits based bonus program solely for the benefit of employees, in) such Person, all of the warrants, options or other rights
for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests
in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests),
and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of
determination.

 

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"Event of Default"
has the meaning provided in Section 5.03.

 

"Farm Products"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to all farm products (as defined in the UCC), and (whether or not included in such definition), Goods (other than standing
timber) with respect to which a Person is engaged in raising, cultivating, propagating, fattening, grazing, or any other farming,
livestock, or aquiculture operation, and which are (a) crops grown, growing, or to be grown including (i) crops produced
on trees, vines, and bushes, and (ii) aquatic goods produced in aquacultural operations; (b) livestock born or unborn,
including aquatic goods produced in aquacultural operations; (c) supplies used or produced in a farming operation; or (d) products
of crops or livestock in their unmanufactured states.

 

"Financial Asset"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a financial asset (as defined in the UCC), and (whether or not included in such definition), (a) a Security, (b) an
obligation of a Person or a share, participation or other interest in a Person or in property or an enterprise of a Person, that
is, or is of a type, dealt in or traded on financial markets or that is recognized in any area in which it is issued or dealt in
as a medium for investment, or (c) any property that is held by a Securities Intermediary for another Person in a Securities
Account if the Securities Intermediary has expressly agreed with the other Person that the property is to be treated as a financial
asset under Chapter 8 of the UCC. As the context requires, "Financial Asset" means either the interest itself or
the means by which a Person's claim to it is evidenced, including a certificated or uncertificated Security, a certificate representing
a Security, or a Security Entitlement.

 

"Fixtures"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to fixtures (as defined in the UCC), and (whether or not included in such definition), all Goods that have become so related
to particular real property that an interest in them arises under the real property Law of the state in which the real property
is situated.

 

"Foreign Subsidiary"
means any Subsidiary of any Person that is organized under the Laws of a jurisdiction other than the United States or a political
subdivision of the United States.

 

"General Intangible"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a general intangible (as defined in the UCC), and (whether or not included in such definition), all personal property,
including things in action, other than Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Goods, Instruments,
Investment Property, Letter-of-Credit Rights, Letters of Credit, money, and oil, gas or other minerals before extraction.

 

"Goods"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to goods (as defined in the UCC), and (whether or not included in such definition), all things that are movable when a security
interest attaches.

 

"Instrument"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to an instrument (as defined in the UCC), and (whether or not included in such definition), a negotiable instrument or any
other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and
is of a type that in ordinary course of business is transferred by delivery with any necessary endorsement or assignment.

 

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"Insurance"
means all insurance policies for which each Debtor is the owner, an insured, an additional insured, a beneficiary or loss payee,
including any policy covering any or all of the Collateral (regardless of whether Administrative Agent is the loss payee or an
additional insured thereof).

 

"Intellectual Property"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to all intellectual and similar property of every kind and nature, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, Trade Secrets, confidential or proprietary technical and business information, know-how, show-how or other data or
information, Software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises,
and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

 

"Inventory"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to inventory (as defined in the UCC), and (whether or not included in such definition), Goods that (a) are leased by
a Person as lessor, (b) are held by a Person for sale or lease or to be furnished under a contract of service, (c) are
furnished by a Person under a contract of service, or (d) consist of raw materials, work in process, or materials used or
consumed in a business, including packaging materials, scrap material, manufacturing supplies and spare parts, and all such Goods
that have been returned to or repossessed by or on behalf of such Person.

 

"Investment Property"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to investment property (as defined in the UCC), and (whether or not included in such definition), a Security (whether certificated
or uncertificated), a Commodity Contract, a Commodity Account, a Security Entitlement and Securities Account.

 

"Joinder"
means a Security Agreement Joinder in substantially the form of Exhibit A.

 

"Letter of Credit"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a letter of credit (as defined in the UCC).

 

"Letter-of-Credit
Right" means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising,
or acquired) in and to a letter-of-credit right (as defined in the UCC), and (whether or not included in such definition), (a) a
right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled
to demand payment or performance, and (b) the right of a beneficiary to demand payment or performance under a letter of credit.

 

"License"
means any Patent License, Trademark License, Copyright License, or other similar license or sublicense.

 

"Money"
means "money" as defined in the UCC.

 

"Patent License"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by such Debtor or which such Debtor otherwise has the right to license, is in existence,
or granting to such Debtor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third
party, is in existence, and all rights of such Debtor under any such agreement.

 

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"Patents"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to (a) all letters patent of any Governmental Authority, all registrations and recordings thereof, and all applications
for letters patent of any Governmental Authority, and (b) all reissues, continuations, divisions, continuations-in-part, renewals,
or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions
disclosed or claimed therein.

 

"Payment Intangible"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a payment intangible (as defined in the UCC), and (whether or not included in such definition), a General Intangible
under which the Account Debtor's principal obligation is a monetary obligation.

 

"Permit"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to any authorization, consent, approval, permit, license or exemption of, registration or filing with, or report or notice
to, any Governmental Authority.

 

"Pledged Debt"
means all indebtedness owed to each Debtor, the instruments evidencing such indebtedness, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any
or all of such indebtedness.

 

"Pledged Equity
Interests" means all Acquisition Rights, Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged
Trust Interests; provided, however, notwithstanding anything herein to the contrary, the amount of pledged Equity
Interests of any Foreign Subsidiary shall be limited to 65% of the issued and outstanding Equity Interests of such Foreign Subsidiary.

 

"Pledged LLC Interests"
means, with respect to each Debtor, all interests of such Debtor in any limited liability company and the certificates, if any,
representing such limited liability company interests and any limited liability company interest of such Debtor on the books and
records of such limited liability company or on the books and records of any securities intermediary pertaining to each such limited
liability company interest, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all
of such limited liability company interests; provided, however, notwithstanding anything herein to the contrary,
the amount of pledged limited liability company interests of any Foreign Subsidiary shall be limited to 65% of the issued and outstanding
limited liability company interests of such Foreign Subsidiary.

 

"Pledged Partnership
Interests" means, with respect to each Debtor, all interests of such Debtor in any general partnership, limited partnership,
limited liability partnership or other partnership and the certificates, if any, representing such partnership interests and any
partnership interest of such Debtor on the books and records of each such partnership or on the books and records of any securities
intermediary pertaining to such partnership interests and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such partnership interests; provided, however, notwithstanding anything herein to the contrary,
the amount of pledged general partnership, limited partnership, limited liability partnership or other partnership interests of
any Foreign Subsidiary shall be limited to 65% of the issued and outstanding general partnership, limited partnership, limited
liability partnership or other partnership interests of such Foreign Subsidiary.

 

"Pledged Stock"
means, with respect to each Debtor, all shares of capital stock of such Debtor in any corporation and the certificates, if any,
representing such shares and any equity interest of such Debtor on the books of the issuer of such shares or on the books of any
securities intermediary pertaining to such shares, and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares; provided, however, notwithstanding anything herein to the contrary, the amount of
pledged capital stock of any Foreign Subsidiary shall be limited to 65% of the issued and outstanding capital stock of such Foreign
Subsidiary.

 

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"Pledged Trust
Interests" means, with respect to each Debtor, all interests of such Debtor in a business trust or other trust and the
certificates, if any, representing such trust interests and any interest of such Debtor on the books and records of such trust
or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests.

 

"Proceeds"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to proceeds (as defined in the UCC), and (whether or not included in such definition), (a) whatever is acquired upon
the sale, lease, license, exchange, or other disposition of the Collateral, (b) whatever is collected on, or distributed on
account of, the Collateral, (c) rights arising out of the Collateral, (d) claims arising out of the loss, nonconformity,
or interference with the use of, defects or infringement of rights in, or damage to the Collateral, (e) proceeds of insurance,
including insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to the Collateral,
and (f) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

 

"Record"
means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable
in perceivable form.

 

"Release Date"
means the last to occur of the dates on which Liens securing the Obligations may be released pursuant to Section 11.9(a)(i)
of the Credit Agreement.

 

"Schedule Effective
Date" means, with respect to any Schedule to this Agreement, the effective date of such Schedule or any restatement of
such Schedule, which effective date shall be stated on such Schedule or restatement and agreed to by Administrative Agent as provided
in Section 4.16.

 

"Secured Parties"
means the collective reference to Administrative Agent, each Lender, L/C Issuer, each Bank Product Provider and any other Person
the Obligations owing to which are, or are purported to be, secured by the Collateral under the terms hereof.

 

"Securities Account"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to an account to which a Financial Asset is or may be credited in accordance with an agreement under which the Person maintaining
the account undertakes to treat the Person for whom the account is maintained as entitled to exercise rights that comprise the
Financial Asset.

 

"Securities Act"
has the meaning provided in Section 5.04(d).

 

"Securities Intermediary"
means (a) a clearing corporation, or (b) a Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.

 

"Security"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to any obligations of an issuer or any shares, participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security in bearer or registered form, or the transfer
of which may be registered upon books maintained for that purpose by or on behalf of the issuer, (b) are one of a class or
series or by its terms is divisible into a class or series of shares, participations, interests or obligations, and (c)(i) are,
or are of a type, dealt with or traded on securities exchanges or securities markets or (ii) are a medium for investment and
by their terms expressly provide that they are a security governed by Chapter 8 of the UCC.

 

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"Security Entitlements"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to the rights and property interests as and of an Entitlement Holder with respect to a Financial Asset.

 

"Software"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to software (as defined in the UCC), and (whether or not included in such definition), a computer program (including both
source and object code) and any supporting information provided in connection with a transaction relating to the program.

 

"Supporting Obligations"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to a supporting obligation (as defined in the UCC), and whether or not included in such definition, a Letter-of-Credit Right
or secondary obligation that supports the payment or performance of an Account, Chattel Paper, a Document, a General Intangible,
an Instrument, or Investment Property.

 

"Tangible Chattel
Paper" means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising,
or acquired) in and to tangible chattel paper (as defined in the UCC), and (whether or not included in such definition), chattel
paper evidenced by a Record or Records consisting of information that is inscribed on a tangible medium.

 

"Trade Secrets"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to trade secrets, all know-how, inventions, processes, methods, information, data, plans, blueprints, specifications, designs,
drawings, engineering reports, test reports, materials standards, processing standards and performance standards, and all Software
directly related thereto, and all Licenses or other agreements to which such Debtor is a party with respect to any of the foregoing.

 

"Trademark License"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or
hereafter owned by such Debtor or which such Debtor otherwise has the right to license, or granting to such Debtor any right to
use any Trademark now or hereafter owned by any third party, and all rights of such Debtor under any such agreement.

 

"Trademarks"
means all right, title, and interest of each Debtor (in each case whether now or hereafter existing, owned, arising, or acquired)
in and to (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature,
all registrations and recordings thereof, and all registration and recording applications filed with any Governmental Authority
in connection therewith, and all extensions or renewals thereof, (b) all goodwill associated therewith or symbolized thereby,
(c) all other assets, rights and interests that uniquely reflect or embody such goodwill, (d) all rights to use and/or
sell any of the foregoing, and (e) the portion of the business to which each trademark pertains.

 

"UCC"
means Chapters 1, 8 and 9 of the Uniform Commercial Code as in effect from time to time in the State of Texas or, where applicable
as to specific items or types of Collateral, any other relevant state.

 

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1.02.       Other
Definitional Provisions. Capitalized terms not otherwise defined herein have the meaning specified in the Credit Agreement,
and, to the extent of any conflict, terms as defined herein shall control (provided, that a more expansive or explanatory
definition shall not be deemed a conflict).

 

1.03.       Construction.
Unless otherwise expressly provided in this Agreement or the context requires otherwise, (a) the singular shall include the
plural, and vice versa, (b) words of a gender include the other gender, (c) monetary references are to Dollars,
(d) time references are to central time, (e) references to the "Agreement" and to "Articles," "Sections,"
"Exhibits," and "Schedules" are to this Agreement and to the Articles, Sections, Exhibits, and Schedules of
and to this Agreement, together with all amendments and restatements thereto, (f) headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of any provision hereof, (g) references to any
Person include that Person's heirs, personal representatives, successors, trustees, receivers, and permitted assigns, that Person
as a debtor-in possession, and any receiver, trustee, liquidator, conservator, custodian, or similar party appointed for such Person
or all or substantially all of its assets, (h) references to any Law include every amendment or restatement to it, rule and
regulation adopted under it, and successor or replacement for it, (i) references to a particular Loan Document include each
amendment or restatement to it made in accordance with the Credit Agreement and such Loan Document, (j) references to a particular
Bank Product Agreement include each amendment or restatement to it made in accordance with such Bank Product Agreement, and (k) the
inclusion of Proceeds in the definition of "Collateral" shall not be deemed a consent by Administrative Agent or any
other Secured Party to any sale or other disposition of any Collateral not otherwise specifically permitted by the terms of the
Credit Agreement or this Agreement. This Agreement is a Loan Document.

 

ARTICLE
II

GRANT OF SECURITY INTEREST

 

2.01.       Assignment
and Grant of Security Interest. As security for the payment and performance, as the case may be, in full of the Obligations,
each Debtor hereby assigns, pledges and grants to Administrative Agent, for it and the benefit of Secured Parties, a security interest
in the entire right, title, and interest of such Debtor in and to all property of such Debtor, whether now or hereafter existing,
owned, arising or acquired, including all of the following property of such Debtor, whether now or hereafter existing, owned,
arising or acquired: (a) Accounts, (b) Accessions, (c) As-Extracted Collateral, (d) Chattel Paper, (e) Collateral
Records, (f) Commercial Tort Claims, including but not limited to the specific Commercial Tort Claims described on Schedule 6,
(g) Commodity Accounts, (h) Commodity Contracts, (i) Deposit Accounts, (j) Documents, (k) Equipment, (l) Financial
Assets, (m) Fixtures, (n) General Intangibles, (o) Goods, (p) Instruments, (q) Insurance, (r) Intellectual
Property, (s) Inventory, (t) Investment Property, (u) Letters of Credit, (v) Letter-of-Credit Rights, (w) Licenses,
(x) Money, (y) Payment Intangibles, (z) Permits, (aa) Pledged Debt, (bb) Pledged Equity Interests, (cc) Securities,
(dd) Securities Accounts, (ee) Security Entitlements, (ff) Software, (gg) Supporting Obligations, and (hh) Proceeds
of the foregoing (collectively, the "Collateral").

 

2.02.       Debtors
Remain Liable. Anything herein to the contrary notwithstanding, (a) each Debtor shall remain liable with respect to and
under all Collateral, (b) the exercise by Administrative Agent or any other Secured Party of any of the rights hereunder shall
not release any Debtor from any of its duties or obligations with respect to or under any Collateral or under this Agreement, and
(c) neither Administrative Agent nor any other Secured Party shall have any obligation or liability with respect to or under
any Collateral by reason of this Agreement, nor shall Administrative Agent or any other Secured Party be obligated to perform any
of the obligations or duties of any Debtor thereunder or to take any action to collect or enforce any claim for payment assigned
or in which a security interest is granted hereunder.

 

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2.03.       Rights
Retained by Debtor. So long as no Event of Default shall have occurred and be continuing and the Borrower has not received
notice from the Administrative Agent terminating such rights, the Debtors shall be entitled (a) to receive and retain all revenues
and other moneys pledged hereby as Collateral and the proceeds of any Disposition of any of its Properties constituting Collateral
provided that such Disposition is permitted under the Credit Agreement, and (b) protect, enforce and exercise its rights under
any contracts; provided that the Debtors shall not exercise nor shall any Debtor refrain from exercising any such right if such
action or inaction, as applicable, would have a materially adverse effect on the value of the applicable Collateral.

 

2.04.       Delivery
of Security and Instrument Collateral. All certificates, if any, or Instruments constituting or evidencing the Collateral shall
be delivered to and held by or on behalf of Administrative Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by undated and duly executed stock powers or instruments of transfer or assignment in blank,
all in form and substance reasonably satisfactory to Administrative Agent. If an Event of Default exists, Administrative Agent
has the right without notice to any Debtor to transfer to or to register in the name of Administrative Agent or any of its nominees
any or all of such Collateral. In addition, Administrative Agent has the right, if Administrative Agent reasonably determines that
the exercise of such right is necessary to protect its rights, at any time to exchange certificates or Instruments representing
or evidencing Collateral for certificates or Instruments of smaller or larger denominations.

 

2.05.       Agreement
With Respect to Collateral. Each Debtor and Administrative Agent agree that to the extent that any of the Collateral may be
deemed to be a Fixture as opposed to Equipment, Inventory, or any other form of Collateral that may be perfected by the filing
of a UCC financing statement, it is the intention of Debtors, Administrative Agent and Secured Parties that such Collateral be
deemed to be Equipment, Inventory, or any other form of Collateral that, to the extent not prohibited by Law, may be perfected
by the filing of a UCC financing statement and such Collateral not be deemed to be a Fixture.

 

2.06.       Future
Advances. Each Debtor acknowledges that the Loan Documents and each Bank Product Agreement provide for future advances and
financial accommodations, and this Agreement secures performance of such future advances and financial accommodations.

 

2.07.       Limited
Exclusions. Notwithstanding anything herein to the contrary, in no event shall the security interest granted in Section 2.01
attach to any lease, license, contract, property rights or agreement to which a Debtor is a party or any of its rights or interests
thereunder if and for so long as the grant of such security interest would constitute or result in the abandonment, termination
pursuant to the terms of, or a breach or default under, any such lease, license, contract, property rights or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to Sections 9.406, 9.407, 9.408 or 9.409 of the
UCC of any relevant jurisdiction or any other applicable Law (including any Debtor Relief Law) or principles of equity); provided,
however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation
or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license,
contract, property rights or agreement that does not result in any of the consequences specified above. So long as any property
of a Debtor is excluded from the security interest granted in Section 2.01 pursuant to the immediately preceding sentence,
such property shall be excluded from the term "Collateral" for all purposes hereunder. If the grant of a security interest
in any lease, license, contract, property right or agreement existing on the date of this Agreement to which a Debtor is a party,
or in any of its rights or interests thereunder, would constitute or result in the abandonment, termination pursuant to the terms
of, or a breach or default under, any such lease, license, contract, property right or agreement (other than to the extent that
any such term is rendered ineffective pursuant to Sections 9.406, 9.407, 9.408 or 9.409 of the UCC of any relevant jurisdiction
or any other applicable Law (including any Debtor Relief Law) or principles of equity), such Debtor shall use commercially reasonable
efforts to remove such term from such lease, license, contract, property right or agreement at the time of the next amendment to,
extension of or restatement of such lease, license, contract, property right or agreement. With respect to each lease, license,
contract, property right or agreement entered into by a Debtor after the date of this Agreement, each Debtor shall use commercially
reasonable efforts to assure that such Debtor can grant to Administrative Agent a security interest in such lease, license, contract,
property right or agreement and that such security interest can be perfected and that such grant and perfection will not result
in the abandonment, termination or breach of or default under, any such lease, license, contract, property right or agreement.

 

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2.08.       Maximum
Liability. Anything in this Agreement to the contrary notwithstanding, the obligations of each Debtor (other than Borrower)
hereunder shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or
any applicable provisions of comparable Law (collectively, the "Fraudulent Transfer Laws"), in each case after
giving effect to all other liabilities of such Debtor, contingent or otherwise, that are relevant under the Fraudulent Transfer
Laws (specifically excluding, however, any liabilities of such Debtor in respect of intercompany indebtedness to other Obligated
Parties or Affiliates of other Obligated Parties to the extent that such indebtedness would be discharged in an amount equal to
the amount paid or property conveyed by such Debtor under the Loan Documents) and after giving effect as assets, subject to Section 6.01,
to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation or contribution
of such Debtor pursuant to (a) applicable Law or (b) any agreement providing for an equitable allocation among such Debtor
and other Obligated Parties of obligations arising under the Loan Documents and Bank Product Agreements.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

 

3.01.       Representations
and Warranties – All Debtors. Each Debtor represents and warrants to Administrative Agent and each Secured Party with
respect to itself and its Collateral that:

 

(a)       This
Agreement and the grant of the security interest in the Collateral pursuant to this Agreement create a valid security interest
in the Collateral in favor of Administrative Agent for the benefit of Secured Parties, securing the payment and performance of
the Obligations, and upon (i) the filing of UCC-1 financing statements for such Debtor, in the form delivered by such Debtor
to Administrative Agent on or prior to the date of this Agreement and in the appropriate filing offices listed on Schedule 1,
Section (h), (ii) the granting of control (as defined in the UCC) to Administrative Agent, (iii) the delivery
to and continuing possession by Administrative Agent of all certificates evidencing the Pledged Equity Interests, and (iv) the
filing of an appropriate notice with the United States Patent and Trademark office or the United States Copyright Office, as appropriate
for the item and type of Collateral in question, shall constitute a valid, first priority, perfected security interest in such
Collateral (subject (A) in the case of Collateral other than Pledged Equity Interests, to Permitted Liens, and (B) in
the case of Pledged Equity Interests, to Liens arising under the Loan Documents and Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained
on the books of such Debtor in accordance with GAAP) to the extent such security interests can be perfected by taking the actions
described in clauses (i)-(iv), and all filings and other actions necessary to perfect and protect such security
interest and such priority have been duly taken (or will be taken upon such Debtor obtaining rights in Collateral after the date
hereof).

 

(b)       No
authorization, approval, or consent of, and no filing or registration with, any Governmental Authority, issuer, manager, member,
stockholder, director or any other third party (other than filings required by the UCC or such authorization, approval, or consent
that has already been obtained) is or will be necessary (i) for the pledge by such Debtor of the Collateral, including without
limitation, the Pledged Equity Interests set forth on Schedule 7, pledged by it hereunder, for the grant by such Debtor
of the security interest granted hereby, or for the execution, delivery, or performance of this Agreement by such Debtor, (ii) for
the perfection or maintenance of the pledge, assignment, and security interest created hereby (including the first priority nature
of such pledge, assignment, and security interest, subject to Permitted Liens) or (iii) for the enforcement of remedies by
Administrative Agent or any other Secured Party.

 

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(c)       This
Agreement constitutes, and the other Loan Documents to which such Debtor is a party, when delivered, shall constitute, legal, valid
and binding obligations of such Debtor, enforceable against such Debtor in accordance with their respective terms, except as limited
by Debtor Relief Laws.

 

(d)       Such
Debtor has good and indefeasible title to, or valid leasehold interests in, all of the Collateral, and none of the Collateral is
subject to any Lien, except for Permitted Liens. Such Debtor has not granted a security interest or other Lien in or made an assignment
of any of the Collateral (except for the security interest and Lien granted by this Agreement and Permitted Liens). Such Debtor
has neither entered into nor is it or any of its Property subject to any agreement limiting the ability of such Debtor to grant
a Lien in any of the Collateral, or the ability of such Debtor to agree to grant or not grant a Lien in any of the Collateral.
None of the Collateral is consigned goods, subject to any agreement of repurchase, or subject to any dispute, defense, or counterclaim.
No effective financing statement or other similar effective document used to perfect and preserve a security interest or other
Lien under the Laws of any jurisdiction covering all or any part of the Collateral is on file in any recording office, except such
as may have been filed (i) pursuant to this Agreement or another Loan Document, or (ii) relating to Permitted Liens.
Such Debtor has not sold any interest in any of its Accounts, Chattel Paper, promissory notes, Payment Intangibles, or consigned
any of its Goods or been a party to any securitization of any of its property. No control agreement in favor of anyone other than
Administrative Agent exists with respect to any Collateral.

 

(e)       All
of the Pledged Equity Interests have been duly and validly issued, and the Pledged Equity Interests (other than any general partner
interest, if any), are fully paid and non-assessable. None of the Pledged Equity Interests were issued in violation of the preemptive
rights of any Person or any agreement to which such Debtor or the issuer thereof is a party or the Pledged Equity Interest is subject.
All capital contributions required to be made by the terms of the Constituent Documents of each issuer of Pledged Equity Interests
have been made. All Pledged Equity Interests that are certificated have been delivered and pledged to Administrative Agent duly
endorsed and accompanied by such duly executed instruments of transfer or assignment as are necessary for such pledge to be held
as pledged collateral. Except with respect to partnership or limited liability company interests of issuers the Constituent Documents
of which do not provide that any interest in such issuer is a security governed by Chapter 8 of the UCC, there are no Pledged
Equity Interests other than those represented by certificated securities in the possession of Administrative Agent. The Pledged
Equity Interests include (i) the percentage set forth on Schedule 7 of the issued and outstanding Equity Interests
of each Person in which such Debtor owns a direct interest and which Person is not a Foreign Subsidiary, and (ii) 65% of the
issued and outstanding Equity Interests of each first-tier Foreign Subsidiary, if any, of such Debtor. There are no restrictions
(which have not been effectively waived by all necessary Persons) in any Constituent Document governing any Pledged Equity Interest
or any other document related thereto which would limit or restrict (A) the grant of a Lien in the Pledged Equity Interests,
(B) the perfection of such Lien, (C) the exercise of remedies in respect of such perfected Lien in the Pledged Equity
Interests as contemplated by this Agreement or (D) the admission of any transferee of the Pledged Equity Interests as a shareholder,
member, partner or equity holder of the issuer of such Pledged Equity Interests. Such Debtor has delivered to Administrative Agent
complete and correct copies of all Constituent Documents for each issuer of Pledged Equity Interests. Except as set forth on Schedule 7,
the Constituent Documents of each issuer which is a partnership or limited liability company do not provide that any interest in
such issuer is a security governed by Chapter 8 of the UCC, and no Equity Interest of such issuer is evidenced by a certificate
or other instrument. Upon the exercise of remedies in respect of Pledged Equity Interests, a transferee or assignee of any Pledged
Equity Interests shall become a shareholder, partner or member, as the case may be, of the issuer thereof, entitled to participate
in the management thereof and, upon the transfer of the entire interest of such Debtor in such issuer, such Debtor shall cease
to be a shareholder, partner or member, as the case may be, of such issuer.

 

    	Security agreement–Page  12	 

     

    

 

(f)       As
of each Schedule Effective Date:

 

(i)       Schedule 1,
Section (a) states the exact name of such Debtor, as such name appears in its currently effective Constituent Documents
as filed with the appropriate authority of the jurisdiction of such Debtor's organization.

 

(ii)       Schedule 1,
Section (b) states the jurisdiction of organization of such Debtor, and such Debtor is not organized in more than one
jurisdiction.

 

(iii)       Schedule 1,
Section (c) sets forth the current type of entity of such Debtor.

 

(iv)       Schedule 1,
Section (d) states each other entity type, jurisdiction of organization and name such Debtor has had in the five-year
period preceding such Schedule Effective Date, together with the date of the relevant change. Except as set forth on Schedule 1,
Section (d), such Debtor has not changed its identity or type of entity, jurisdiction of organization or name in any
way within the five-year period preceding such Schedule Effective Date (changes in identity or type of entity include mergers,
consolidations, acquisitions (including both equity and asset acquisitions), and any change in the form, nature or jurisdiction
of organization).

 

(v)       Schedule 1,
Section (e) states all other names (including trade, assumed and similar names) used by such Debtor or any of its divisions
or other business units at any time during the five-year period preceding such Schedule Effective Date.

 

(vi)       Schedule 1,
Section (f) states the Federal Taxpayer Identification Number of such Debtor.

 

(vii)       Schedule 1,
Section (g) states the corporate or other organizational number of such Debtor issued by such Debtor's jurisdiction
of organization (or "N/A" if such jurisdiction does not issue an organizational number for such Debtor's entity type).

 

(g)       As
of each Schedule Effective Date, Schedule 2 is a complete and correct list of such Debtor's chief executive office and each
other location where such Debtor maintains any Collateral or any books and records relating to any Collateral or where such Debtor
conducts any business, including for each such location, a description of the Collateral maintained at such location, the name
of all Persons other than such Debtor who have possession of any of the Collateral or other property of such Debtor at such location,
and whether such location is owned or leased by such Debtor.

 

(h)       All
Accounts have been originated by such Debtor and all Inventory has been acquired by such Debtor in the ordinary course of business.

 

(i)       Such
Debtor has exclusive possession and control of the Equipment and Inventory (other than Inventory leased by such Debtor to third
parties in the ordinary course of business) pledged by it hereunder.

 

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(j)       As
of each Schedule Effective Date, Schedule 3 is a complete and correct list of all Pledged Debt, promissory notes and
other instruments evidencing indebtedness held by such Debtor, including all intercompany notes and other instruments between such
Debtor and each Subsidiary, and each Subsidiary and each other Subsidiary.

 

(k)       As
of each Schedule Effective Date, Schedule 4 is a complete and correct list of each Trademark registration, Patent, Patent
application or Copyright in which such Debtor has any interest (whether as owner, licensee, or otherwise), including:

 

(i)       for
each Trademark registration or application in which such Debtor has any interest, the name of the registered owner or Person applying
to be the registered owner and the nature of such Debtor's interest if not owned by such Debtor, the registered or to be registered
Trademark, the Trademark application serial and/or registration number, the date of Trademark registration or application, and
the country or state registering the Trademark or with which the Trademark application was filed;

 

(ii)       for
each Patent or Patent application in which such Debtor has any interest (whether as owner, licensee, or otherwise), the name of
the registered owner or Person applying to be the registered owner and the nature of such Debtor's interest if not owned by such
Debtor, the Patent number or application, the date of Patent issuance or application filing, and the country issuing the Patent
or with which the Patent application was filed; and

 

(iii)       for
each Copyright (regardless of whether registered) in which such Debtor has any interest (whether as owner, licensee, or otherwise),
if applicable, the name of the registered owner (or owner, if not registered) or the Person applying to be the registered owner
and the nature of such Debtor's interest if such Debtor is not the owner, the title of the work which is the subject of the registered
or applied for Copyright (or, if not registered or applied for, a description of the work subject to such unregistered Copyright),
the date of Copyright issuance or application, the registration or application number (if applicable) and the country issuing the
Copyright or with which the Copyright application was filed.

 

(l)       As
of each Schedule Effective Date, Schedule 5 is a complete and correct list of each Deposit Account, Securities Account
or Commodity Account maintained by or in which such Debtor has any interest, including: (i) for each Deposit Account, the bank
in which such account is maintained and ABA number of such bank, the account number, and account type; (ii) for each Securities
Account, the complete name and identification number of the account, the jurisdiction the Law of which governs such account, and
the name and street address of the Securities Intermediary maintaining such account; and (iii) for each Commodity Account, the
complete name and identification number of the account, the jurisdiction the Law of which governs such account, and the name and
street address of the Commodity Intermediary maintaining such account.

 

(m)       As
of each Schedule Effective Date, Schedule 6 is a complete and correct list of all Commercial Tort Claims in which such
Debtor has any interest, including the complete case name or style, the case number, and the court or other Governmental Authority
in which the case is pending.

 

(n)       As
of each Schedule Effective Date, (i) Schedule 7 is a complete and correct list of all Equity Interests in which
such Debtor has a direct ownership interest, (ii) Schedule 7 contains a complete and correct description of each
certificate or other instrument included in or evidencing Pledged Equity Interests, (iii) Schedule 7 is a complete
and correct list of the exact name of each issuer of Pledged Equity Interests described on Schedule 7, its jurisdiction
of organization, and the authorized, issued and outstanding Equity Interests of such issuer, and (iv) such Debtor's interest
in each such issuer is as stated on Schedule 7.

 

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(o)       Such
Debtor has no interest in any Farm Products.

 

3.02.       Representations
and Warranties – Subsidiaries. Each Debtor (other than Borrower) represents and warrants to Administrative Agent and
each Secured Party with respect to itself and its Collateral that this Agreement may reasonably be expected to benefit, directly
or indirectly, such Debtor, and the board of directors of such Debtor, the requisite number of its partners, the requisite number
of its members or the requisite number of the appropriate governance body or equity holders, as appropriate, have determined that
this Agreement may reasonably be expected to benefit, directly or indirectly, such Debtor. Such Debtor is familiar with, and has
independently reviewed the books and records regarding, the financial condition of Borrower and is familiar with the value of any
and all collateral intended to be security for the payment of all or any part of the Obligations; provided, however,
such Debtor is not relying on such financial condition or collateral as an inducement to enter into this Agreement.

 

3.03.       Survival.
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or
thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof and any update of any
Schedule. Such representations and warranties have been or will be relied upon by Administrative Agent and each Secured Party,
regardless of any investigation made by Administrative Agent or any Secured Party or on their behalf and notwithstanding that Administrative
Agent or any Secured Party may have had notice or knowledge of any Default at the time of any credit extension, and shall continue
in full force and survive the Release Date.

 

ARTICLE
IV

COVENANTS

 

4.01.       Further
Assurances.

 

(a)       Each
Debtor will, from time to time and at such Debtor's expense, promptly execute and deliver all further instruments and documents
(including the delivery of certificated securities, if any, and supplements to all schedules), authenticate, execute and file such
financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be reasonably necessary,
or as Administrative Agent may reasonably request, in order to perfect and preserve the pledge, assignment, and security interest
granted or purported to be granted hereby, and take all further action that Administrative Agent may reasonably request in order
to perfect and protect any pledge, assignment, or security interest granted or purported to be granted hereby, and the priority
thereof, or to enable Administrative Agent to exercise and enforce Administrative Agent's and other Secured Parties' rights and
remedies hereunder with respect to any Collateral.

 

(b)       In
addition to such other information as shall be specifically provided for herein, each Debtor shall furnish to Administrative Agent
such other information (including copies of documents) with respect to such Debtor and the Collateral as Administrative Agent may
reasonably request.

 

(c)       Each
Debtor authorizes Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the authentication of any Debtor where permitted by Law and that (i) indicate
the Collateral (A) as all assets of such Debtor (or words of similar effect), regardless of whether any particular asset included
in the Collateral is within the scope of Article or Chapter 9 of the UCC of the applicable state or jurisdiction or whether such
assets are included in the Collateral, or (B) as being of an equal or lesser scope or with greater detail, and (ii) contain
any other information required by Article or Chapter 9 of the UCC of the applicable state or jurisdiction for the sufficiency
or filing office acceptance of any financing statement, continuation or amendment, including (A) whether such Debtor is an
organization, the type of organization, and any organization identification number issued to such Debtor and, (B) in the case
of a financing statement indicating Collateral to be Fixtures, As-Extracted Collateral or timber to be cut, a sufficient description
of real property to which such Collateral relates. Each Debtor agrees to furnish any such information to Administrative Agent promptly
upon request. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by Law. Each Debtor ratifies its authentication, execution
and delivery of, and the filing of, any financing statement or amendment thereto describing any of the Collateral which was filed
prior to the date of this Agreement.

 

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(d)       Each
Debtor shall cooperate to determine what may or shall be required to satisfy the Laws or regulations throughout the world with
respect to the recordation and validation of the license of and Lien in Intellectual Property as Administrative Agent may reasonably
require, or otherwise to render this Agreement and the security interest in such Debtor's Intellectual Property effective, and
shall execute all documents which may be necessary or desirable to implement this Section 4.01(e), including registered
user statements or other documents suitable for filing with the appropriate Governmental Authorities.

 

4.02.       Place
of Perfection; Records; Collection of Accounts, Chattel Paper and Instruments.

 

(a)       No
Debtor shall change the jurisdiction of its organization from the jurisdiction specified in Schedule 1, Section (b),
its type of entity from the type of entity specified in Schedule 1, Section (c), its name from the name
specified in Schedule 1, Section (a) or its organizational identification number from the organizational
identification number specified in Schedule 1, Section (g), unless such Debtor has delivered to Administrative
Agent 30 days' prior written notice (unless Administrative Agent has agreed in writing to a shorter period) and taken such actions
as Administrative Agent may reasonably require with respect to such change. With respect to each location on Schedule 2,
such Debtor shall keep its chief executive office at the address specified therein and the office where it keeps its Records concerning
the Accounts, and the originals of all Chattel Paper and Instruments, at the address specified in Schedule 2, unless
such Debtor has delivered to Administrative Agent 30 days' prior written notice (unless Administrative Agent has agreed in writing
to a shorter period) and taken such actions as Administrative Agent may reasonably require with respect to such change. Each Debtor
will hold and preserve such Records and Chattel Paper and Instruments in a commercially reasonable manner and will permit representatives
of Administrative Agent or any Lender to visit and inspect its Properties and make abstracts from and copies of such Records and
Chattel Paper and Instruments in accordance with Section 7.6 of the Credit Agreement.

 

(b)       Except
as otherwise provided in this Section 4.02(b), each Debtor shall continue to collect, in accordance with commercially
reasonable procedures and at its own expense, all amounts due or to become due such Debtor under its Accounts, Chattel Paper, and
Instruments. In connection with such collections, each Debtor may take (and, at Administrative Agent's direction, shall take) such
action as such Debtor or Administrative Agent may deem necessary or advisable to enforce collection of such Debtor's Accounts,
Chattel Paper, and Instruments; provided, however, that Administrative Agent shall have the right, if an Event of
Default exists, to notify the Account Debtors or obligors under any Accounts, Chattel Paper, and Instruments of the assignment
to Administrative Agent of such Accounts, Chattel Paper, and Instruments and to direct such Account Debtors or obligors to make
payment of all amounts due or to become due to such Debtor thereunder directly to Administrative Agent and, at the expense of such
Debtor, to enforce collection of any such Accounts, Chattel Paper, and Instruments, and to adjust, settle or compromise the amount
or payment thereof, in the same manner and to the same extent as such Debtor might have done or as Administrative Agent reasonably
deems appropriate. If any Event of Default exists, all amounts and proceeds (including Instruments) received by any Debtor in respect
of the Accounts, Chattel Paper, and Instruments constituting Collateral shall be received in trust for the benefit of Administrative
Agent hereunder, shall be segregated from other funds and property of such Debtor and shall be forthwith paid or delivered over
to Administrative Agent in the same form as so received (with any necessary endorsement) to be held as Cash Collateral, thereafter
to be applied as provided in the Credit Agreement and the other Loan Documents. No Debtor shall adjust, settle, or compromise the
amount or payment of any Account, Chattel Paper, or Instrument, release wholly or partly any Account Debtor or obligor thereof,
or allow any credit or discount thereon, except in the ordinary course of business. Notwithstanding the foregoing, any failure
of Administrative Agent to notify Debtor of any actions taken hereunder shall not affect the validity of such actions or any other
rights and remedies of Administrative Agent or each Lender hereunder.

 

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4.03.       Equipment,
Fixtures, and Inventory.

 

(a)       Each
Debtor shall keep its Equipment, Fixtures, and Inventory (other than Inventory sold in the ordinary course of business) at the
addresses specified in Schedule 2 or, upon 30 days' prior written notice to Administrative Agent, at such other places
in such jurisdiction where all action required by Section 4.01 shall have been taken with respect to the Equipment,
Fixtures, and Inventory.

 

(b)       Each
Debtor shall cause its Equipment and Fixtures to be maintained, kept and preserved in good working order and condition and shall
forthwith or, in the case of any loss or damage to any of the Equipment and Fixtures, as quickly as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements, and other improvements in connection therewith which are necessary
or desirable to such end. Each Debtor shall promptly furnish to Administrative Agent a statement respecting any loss or damage
to any of the Equipment and Fixtures which singly or in the aggregate equals or exceeds $100,000. Each Debtor shall promptly furnish
to Administrative Agent a statement respecting any loss or damage to any Inventory which singly or in the aggregate equals or exceeds
$100,000.

 

(c)       Each
Debtor shall comply with, and shall cause its licensees and subcontractors to comply with, all requirements of the Fair Labor Standards
Act.

 

4.04.       Chattel
Paper and Instruments. a) Each Debtor will: (i) mark conspicuously each item of Tangible Chattel Paper and Instruments
in the original amount of $100,000 or greater and all Tangible Chattel Paper if the aggregate original amount of all Tangible Chattel
Paper and Instruments is $100,000 or greater and each of its Records pertaining to the Collateral with the following legend:

 

THIS *[INSTRUMENT]*[OTHER RECORD]*
IS SUBJECT TO THE SECURITY INTEREST AND LIEN PURSUANT TO THE SECURITY AGREEMENT DATED OCTOBER 3, 2016 (AS THE SAME MAY BE
AMENDED OR RESTATED) MADE BY *[DEBTOR NAME]*, IN FAVOR OF LEGACYTEXAS BANK, AS ADMINISTRATIVE AGENT.

 

or such other legend, in form and substance
reasonably satisfactory to and as specified by Administrative Agent, indicating that such Tangible Chattel Paper or Collateral
is subject to the pledge, assignment, and security interest granted hereby; and (ii) if any Collateral shall be or be evidenced
by a promissory note or other Instrument or be Tangible Chattel Paper, and is, in each case, in the original amount of $100,000
or greater or the aggregate original amount of all promissory notes, other Instruments and Tangible Chattel Paper is $100,000 or
greater, pledge to Administrative Agent hereunder and deliver to Administrative Agent such note, Instrument, or Chattel Paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Administrative
Agent; provided, however, during the existence of an Event of Default, such Debtor shall deliver to Administrative
Agent all Tangible Chattel Paper and all Collateral evidenced by a promissory note or other Instrument accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to Administrative Agent.

 

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(b)       No
Debtor shall have any rights in any Electronic Chattel Paper unless such Debtor has taken all actions reasonably necessary to establish
in Administrative Agent control (as that term is defined in the UCC) of such Electronic Chattel Paper and Administrative Agent
(and no other Person) has control of each item of Electronic Chattel Paper in the original amount of $100,000 or greater and all
Electronic Chattel Paper if the aggregate original amount of all Electronic Chattel Paper is $100,000 or greater; provided,
however, during the existence of an Event of Default, such Debtor shall take all actions reasonably necessary to establish
in Administrative Agent control (as that term is defined in the UCC) of all Electronic Chattel Paper.

 

(c)       Each
Debtor shall pledge to Administrative Agent all Tangible Chattel Paper, promissory notes or other Instruments constituting or securing
intercompany loans or intercompany leases and shall deliver to Administrative Agent such notes, Instruments, or Tangible Chattel
Paper duly indorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory
to Administrative Agent.

 

4.05.       Deposit
Accounts, Securities Accounts, Commodity Accounts and Letter-of-Credit Rights. Each Debtor shall use Administrative Agent as
its principal depository bank in accordance with Section 7.12 of the Credit Agreement. No Debtor shall establish or maintain any
Deposit Account, Securities Account or Commodity Account not listed on Schedule 5 (other than de minimis accounts,
so long as the balance in all such accounts, collectively, does not exceed $100,000 at any time), unless prior to the establishment
of such new Deposit Account, Securities Account, or Commodity Account such Debtor (i) delivers to Administrative Agent an updated
Schedule as required by the first sentence of Section 4.16 and executes and delivers to Administrative Agent assignments
of, and control agreements with respect to, such new Deposit Account, Securities Account, or Commodity Account, as applicable,
in such form as Administrative Agent may reasonably request, (ii) causes the bank, Securities Intermediary or Commodity Intermediary,
as appropriate, in which such account is or will be maintained, to deliver to Administrative Agent acknowledgments of the assignment
of, and control agreements with respect to, such account, in form and substance satisfactory to Administrative Agent, and (iii)
takes all actions necessary to establish in Administrative Agent control (as that term is defined in the UCC) with respect to such
Deposit Account, Securities Account, or Commodity Account. Contemporaneously with the acquisition by any Debtor of any rights in
a Letter of Credit (other than rights as an account party), such Debtor shall (x) execute and deliver to Administrative Agent assignments
of, and control agreements with respect to, such Letter of Credit and Letter-of-Credit Right in such form as Administrative Agent
may reasonably request, (y) cause the bank or other Person that is the issuer of such Letter of Credit to deliver to Administrative
Agent acknowledgments of the assignment of, and control agreements with respect to, such Letter of Credit and Letter-of-Credit
Right in form and substance satisfactory to Administrative Agent, and (z) take all actions necessary to establish control (as that
term is defined in the UCC) by Administrative Agent with respect to such Letter of Credit and Letter-of-Credit Right. No Debtor
shall obtain or maintain any interest in any Securities Entitlement other than Securities Entitlements held in and subject to a
Securities Account described in Schedule 5 with respect to which such Debtor has complied with this Section 4.05.
No Debtor shall obtain or maintain any interest in any Commodity Contract other than Commodity Contracts held in and subject to
a Commodity Account described in Schedule 5 with respect to which such Debtor has complied with this Section 4.05.

 

4.06.       Transferable
Record. Each Debtor shall, upon acquisition by such Debtor of any transferable record, as that term is defined in the federal
Electronic Signatures in Global and National Commerce Act or in the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, promptly notify Administrative Agent thereof and take such action as Administrative Agent may reasonably request
to vest in Administrative Agent control (as that term is defined in the UCC) of such transferable record or control under the federal
Electronic Signatures in Global and National Commerce Act or, as the case may be, the Uniform Electronic Transactions Act, as so
in effect in such jurisdiction, of such transferable record.

 

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4.07.       Patents,
Trademarks, and Copyrights.

 

(a)       Each
Debtor shall ensure that an acknowledgment (approved in form and substance by Administrative Agent) containing a description of
all Collateral consisting of Intellectual Property has been received by and recorded with (i) the United States Patent and Trademark
Office, with respect to United States Patents and Trademarks, and (ii) the United States Copyright Office, with respect to United
States registered Copyrights pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205,
and each Debtor shall take such other actions as may be required pursuant to the Laws of any other applicable jurisdiction to protect
the validity of and to establish a legal, valid, and perfected security interest in favor of Administrative Agent in respect of
all Collateral consisting of Patents, Trademarks, and Copyrights in which a security interest may be perfected by filing, recording,
or registration in the United States and its territories and possessions, or in such other jurisdictions as may be required by
Administrative Agent, such that no further or subsequent filing, refiling, recording, rerecording, registration, or reregistration
is necessary (other than such actions as are necessary to perfect the security interest with respect to any Collateral consisting
of Patents, Trademarks, and Copyrights (or registration or application for registration thereof) acquired or developed after the
date hereof).

 

(b)       Except
as permitted pursuant to the Loan Documents and where an act or failure to act could not reasonably be expected to result in a
Material Adverse Event, no Debtor (either itself or through licensees or sublicensees) will do any act, or omit to do any act,
whereby any Patent may become invalidated or dedicated to the public, and shall continue to mark any products covered by a Patent
with the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable Laws.

 

(c)       Except
where the failure to do so could not reasonably be expected to result in a Material Adverse Event, each Debtor (either itself or
through licensees or sublicensees) will, for each Trademark, (i) maintain such Trademark in full force free from any claim
of abandonment or invalidity for non-use, except as permitted pursuant to the Loan Documents, (ii) maintain the quality of
products and services offered under such Trademark, except products and services offered under Trademarks disposed of as permitted
pursuant to the Loan Documents, (iii) display such Trademark with notice of United States federal or foreign registration
to the extent necessary and sufficient to establish and preserve its maximum rights under applicable Law, except as to Trademarks
disposed of as permitted pursuant to the Loan Documents, and (iv) not use or permit the use of such Trademark in violation
of any third party rights.

 

(d)       Except
where the failure to do so could not reasonably be expected to result in a Material Adverse Event, each Debtor (either itself or
through licensees or sublicensees) will, for each work covered by a Copyright, continue to publish, reproduce, display, adopt,
and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum rights
under applicable Laws.

 

(e)       Each
Debtor shall notify Administrative Agent immediately if it knows or has reason to know that any Intellectual Property may become
abandoned, lost, or dedicated to the public, or of any adverse determination or development (including the institution of, or any
such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright
Office, or any Governmental Authority in any jurisdiction) regarding such Debtor's ownership of any Intellectual Property, its
right to register the same, or its rights with respect to a License, or to keep and maintain the same, except to the extent that
the abandonment, loss, or dedication to the public, or any adverse determination or development regarding such Debtor's ownership
of any Intellectual Property, its right to register the same, or to keep and maintain the same, is permitted pursuant to the Loan
Documents and could not reasonably be expected to result in a Material Adverse Event.

 

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(f)       In
no event shall any Debtor, either itself or through any agent, employee, licensee, or designee, file an application for any Patent,
Trademark, or Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office,
the United States Copyright Office, or any Governmental Authority in any jurisdiction unless it complies with Section 4.16
within the time period specified therein, and, upon request of Administrative Agent, executes and delivers any and all agreements,
instruments, documents, and papers as Administrative Agent may reasonably request to evidence Administrative Agent's and Secured
Parties' security interest in such Patent, Trademark, or Copyright, and each Debtor hereby appoints Administrative Agent as its
attorney-in-fact to execute and file such writings for the foregoing purposes.

 

(g)       Except
where the failure to do so could not reasonably be expected to result in a Material Adverse Event, each Debtor will take all necessary
steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States
Copyright Office, or any Governmental Authority in any other jurisdiction as may be reasonably required by Administrative Agent,
to maintain and pursue each application relating to the Patents, Trademarks, and/or Copyrights (and to obtain the relevant grant
or registration), and to maintain each issued Patent and each registration of the Trademarks and Copyrights, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent
with good business judgment, to initiate opposition, interference, and cancellation proceedings against third parties.

 

(h)       If
any Debtor has reason to believe that any Collateral consisting of a Patent, Trademark, or Copyright has been or is about to be
infringed, misappropriated, or diluted by a third party, such Debtor promptly shall notify Administrative Agent and shall, if consistent
with good business judgment, unless such Debtor shall reasonably determine that such Patent, Trademark or Copyright is not material
to the conduct of its business or operations, promptly sue for infringement, misappropriation, or dilution and to recover any and
all damages for such infringement, misappropriation, or dilution, and take such other actions as are appropriate under the circumstances
to protect such Collateral.

 

(i)       Upon
the request of Administrative Agent, each Debtor shall use commercially reasonable efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License, or Trademark License to effect the assignment of all of such
Debtor's right, title, and interest thereunder to Administrative Agent or its designee.

 

(j)       In
no event shall any Debtor acquire or purchase any Patent, Trademark, or Copyright unless it complies with Section 4.16
within the time period specified therein, and, upon request of Administrative Agent, executes and delivers any and all agreements,
instruments, documents, and papers as Administrative Agent may request to evidence Administrative Agent's and Secured Parties'
security interest in such purchased or acquired Patent, Trademark, or Copyright. Each Debtor hereby appoints Administrative Agent
as its attorney-in-fact to execute and file any application for any Patent, Trademark, or Copyright (or for the registration of
any Trademark or Copyright) with the United States Patent and Trademark Office, United States Copyright Office, or any Governmental
Authority in any other jurisdiction as may be required by Administrative Agent in connection with such purchase or acquisition
of any Patent, Trademark, or Copyright.

 

(k)       The
parties acknowledge and agree that the Intellectual Property is the sole and exclusive property of each Debtor, subject to the
terms and conditions stated in this Agreement. Other than in connection with any security interest in the Intellectual Property
that a Debtor has granted to Administrative Agent, or any rights and remedies of Administrative Agent and Secured Parties under
Laws, Administrative Agent shall not challenge such Debtor's ownership of the Intellectual Property. Each Debtor expressly retains
all rights, at such times when no Event of Default exists, to license third parties to use the Intellectual Property for any purpose
whatsoever not in violation of the Loan Documents and which are not exclusive as to prevent Administrative Agent from using any
of the Intellectual Property.

 

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(l)       The
license granted to Administrative Agent hereunder shall include the right of Administrative Agent to grant sublicenses to others
to use the Intellectual Property, and to enable such sublicensees to exercise any rights and remedies of Administrative Agent with
respect to the Collateral, as Administrative Agent reasonably deems necessary or appropriate in the exercise of the rights and
remedies of Administrative Agent. In any country where sublicenses are incapable of registration or where registration of a sublicense
will not satisfactorily protect the rights of each Debtor and Administrative Agent, Administrative Agent shall also have the right
to designate other parties as direct licensees of such Debtor to use the Intellectual Property if an Event of Default exists and
to enable such direct licensees to exercise any rights and remedies of Administrative Agent as such licensees reasonably deem necessary
or appropriate and each Debtor agrees to enter into direct written licenses with the parties as designated on the same terms as
would be applicable to a sublicense, and any such direct license may, depending on the relevant local requirements, be either (i) in
lieu of a sublicense or (ii) supplemental to a sublicense. In either case, the parties hereto shall cooperate to determine
what shall be necessary or appropriate in the circumstances. For each sublicense to a sublicensee and direct license to a licensee,
each Debtor appoints Administrative Agent its agent for the purpose of exercising quality control over the sublicensee. Each Debtor
shall execute this Agreement and each other agreement necessary to effect the purposes of this Agreement in any form, content and
language suitable for recordation, notice and/or registration in all available and appropriate agencies of foreign countries as
Administrative Agent may reasonably require.

 

(m)       In
connection with the assignment or other transfer (in whole or in part) of its obligations to any other Person, Administrative Agent
may assign the license granted herein without any Debtor's consent (other than any consent required by the Credit Agreement) and
upon such assignment or transfer such other Person shall thereupon become vested with all rights and benefits in respect thereof
granted to Administrative Agent under this Agreement (to the extent of such assignment or transfer).

 

(n)       The
parties hereto shall take reasonable action to preserve the confidentiality of the Intellectual Property; provided, that
Administrative Agent shall not have any liability to any Person for any disclosure of the Intellectual Property in connection with
Administrative Agent's enforcement of its rights under this Agreement or Laws.

 

4.08.       Equity
Interests; Dilution of Ownership. No Debtor will, or permit any Person to, revise, modify, amend or restate the Constituent
Documents of any issuer of Pledged Equity Interests in a manner that adversely affects the security interest of Administrative
Agent therein (except as permitted by the Loan Documents), or terminate, cancel, or dissolve any such Person (except as permitted
by the Loan Documents). As to any Pledged Equity Interests, no Debtor will consent to or approve of the issuance of (a) any
additional shares or units of any class of Equity Interests of such issuer (unless, promptly upon issuance, additional Equity Interests
are pledged and delivered to Administrative Agent pursuant to the terms hereof to the extent necessary to give Administrative Agent
a security interest after such issuance in at least the same percentage of such issuer's outstanding Equity Interests as Administrative
Agent had before such issuance), (b) any instrument convertible voluntarily by the holder thereof or automatically upon the
occurrence or non-occurrence of any event or condition into, or exchangeable for, any Equity Interests, or (c) any warrants,
options, contracts or other commitments entitling any third party to purchase or otherwise acquire any Equity Interests.

 

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4.09.       Waiver.
To the extent not prohibited by applicable Laws or Permits, each Debtor agrees that any provision of any Constituent Document of
any issuer of Collateral, any applicable Law, any certificate or instrument evidencing Collateral, or any other governance document
that in any manner restricts, prohibits or provides conditions to (a) the grant of a Lien on any Equity Interest of such issuer
or any other Collateral, (b) any transfer of any Equity Interest of such issuer or any other Collateral, (c) any change
in management or control of such issuer or any other Collateral, (d) the admission of any transferee of any Collateral as
a shareholder, member, partner or other equity holder of the issuer of such Collateral, or (e) any other exercise by Administrative
Agent or any other Secured Party of any rights pursuant to this Agreement, any other Loan Document or Law, in each case shall not
apply to (i) the grant of any Lien hereunder, (ii) the execution, delivery and performance of this Agreement by such
Debtor, (iii) the foreclosure or other realization upon any interest in any Collateral, or (iv) the exercise of rights
with respect to such Collateral, including the right to participate in the management of such issuer. Furthermore, to the extent
not prohibited by applicable Laws or Permits, no Debtor will permit any amendment to or restatement of any Constituent Document
or any other governance document or enter into or permit to exist any agreement that in any manner adversely affects Administrative
Agent's ability to foreclose on any Collateral or which conflicts with the provisions of this Section 4.09.

 

4.10.       Restrictions
on Securities. No issuer of any Pledged Equity Interests which is either a partnership or limited liability company shall amend
or restate its Constituent Documents (if its Constituent Documents do not provide that any Equity Interest in such issuer is a
security governed by Chapter 8 of the UCC or that any Equity Interest in such issuer is evidenced by a certificate or other instrument)
to provide that any Equity Interest in such issuer is a security governed by Chapter 8 of the UCC or permit any Equity Interest
in such issuer to be evidenced by a certificate or other instrument. No certificate or other instrument evidencing or constituting
any Pledged Equity Interest shall contain any restriction on transfer or other legend not reasonably acceptable to Administrative
Agent. With respect to each certificate that contains any such legend that is not reasonably acceptable to Administrative Agent,
each Debtor shall cause the issuer of each such certificate to issue one or more certificates in a form reasonably acceptable to
Administrative Agent.

 

4.11.       Rights
to Dividends and Distributions. With respect to any certificates, bonds, or other Instruments or Securities constituting a
part of the Collateral, Administrative Agent shall have authority, if an Event of Default exists, either to have the same registered
in Administrative Agent's name or in the name of a nominee, and, with or without such registration, to demand of the issuer thereof,
and to receive and receipt for, any and all dividends and distributions (including any stock or similar dividend or distribution)
payable in respect thereof, whether they be ordinary or extraordinary. If any Debtor shall become entitled to receive or shall
receive any interest in or certificate (including, without limitation, any interest in or certificate representing a dividend or
a distribution in connection with any reclassification, increase, or reduction of capital, or issued in connection with any reorganization),
or any option or rights arising from or relating to any of the Collateral, whether as an addition to, in substitution of, as a
conversion of, or in exchange for any of the Collateral, or otherwise, such Debtor agrees to accept the same as Administrative
Agent's agent and to hold the same in trust on behalf of and for the benefit of Administrative Agent, and to deliver the same immediately
to Administrative Agent in the exact form received, with appropriate undated stock or similar powers, duly executed in blank, to
be held by Administrative Agent, subject to the terms hereof, as Collateral. Unless an Event of Default exists or will result therefrom
and subject to the other Loan Documents, such Debtor shall be entitled to receive all cash dividends and distributions not representing
a return of capital or liquidating dividend paid or distributed with respect to the Securities, other than dividends or distributions
or interests payable in Securities of the issuer of such Securities (which, if evidenced by certificated securities, shall be delivered
to Administrative Agent as set forth in the immediately preceding sentence, whether or not an Event of Default exists). Administrative
Agent shall be entitled to all dividends and distributions, and to any sums paid upon or in respect of any Collateral, upon the
liquidation, dissolution, or reorganization of the issuer thereof, which shall be paid to Administrative Agent to be held by it
as additional collateral security for and application to the Obligations as provided in the Loan Documents. All dividends, distributions
and Proceeds paid or distributed in respect of the Collateral which are received by any Debtor in violation of this Agreement shall,
until paid or delivered to Administrative Agent, be held by such Debtor in trust as additional Collateral for the Obligations.
Notwithstanding the foregoing, any failure of Administrative Agent to notify Debtor of any actions taken hereunder shall not affect
the validity of such actions or any other rights and remedies of Administrative Agent or each Lender hereunder.

 

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4.12.       Right
of Administrative Agent to Notify Issuers. If an Event of Default exists and at such other times as Administrative Agent is
entitled to receive dividends, distributions and other property in respect of or consisting of any Collateral which is or represents
a Security or an Equity Interest, Administrative Agent may notify issuers of such Security or Equity Interest to make payments
of all dividends and distributions directly to Administrative Agent and Administrative Agent may take control of all Proceeds of
any Securities and Equity Interests. Until Administrative Agent elects to exercise such rights, each Debtor, as agent of Administrative
Agent, shall collect, segregate and hold in trust all dividends and other amounts paid or distributed with respect to Securities
and Equity Interests.

 

4.13.       Insurance.
Each Debtor shall, at its own expense, maintain insurance in accordance with the Credit Agreement.

 

4.14.       Transfers
and Other Liens. Except as permitted by the Loan Documents, no Debtor shall (a) sell, assign (by operation of Law or otherwise)
or otherwise Dispose of, or grant any option with respect to, any of the Collateral, or (b) create or permit to exist any
Lien, option, or other charge or encumbrance upon or with respect to any of the Collateral.

 

4.15.       Administrative
Agent Appointed Attorney-in-Fact. Each Debtor hereby irrevocably appoints Administrative Agent such Debtor's attorney-in-fact,
with full authority in the place and stead of such Debtor and in the name of such Debtor or otherwise to take any action and to
execute any instrument which Administrative Agent may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation (provided, Administrative Agent shall not have any duty to take any such action or execute
any instrument):

 

(a)       to
obtain and adjust insurance required to be paid to Administrative Agent pursuant to Section 4.13;

 

(b)       to
ask, demand, collect, sue for, recover, compromise, receive, and give acquittance and receipts for moneys due and to become due
under or in connection with the Collateral;

 

(c)       to
receive, indorse, and collect any drafts or other Instruments, Documents, and Chattel Paper in connection therewith; and

 

(d)       to
file any claims or take any action or institute any proceedings which Administrative Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce compliance with the terms and conditions of any Collateral or the
rights of Administrative Agent with respect to any of the Collateral.

 

EACH DEBTOR HEREBY IRREVOCABLY
GRANTS TO ADMINISTRATIVE AGENT SUCH DEBTOR'S PROXY (EXERCISABLE IF AN EVENT OF DEFAULT EXISTS) TO VOTE ANY SECURITIES INCLUDED
IN COLLATERAL AND APPOINTS ADMINISTRATIVE AGENT SUCH DEBTOR'S ATTORNEY-IN-FACT (EXERCISABLE IF AN EVENT OF DEFAULT EXISTS) TO PERFORM
ALL OBLIGATIONS OF SUCH DEBTOR UNDER THIS AGREEMENT AND TO EXERCISE ALL OF ADMINISTRATIVE AGENT'S AND EACH OTHER SECURED PARTY'S
RIGHTS HEREUNDER. THE PROXY AND EACH POWER OF ATTORNEY HEREIN GRANTED, AND EACH STOCK POWER AND SIMILAR POWER NOW OR HEREAFTER
GRANTED (INCLUDING ANY EVIDENCED BY A SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE IRREVOCABLE BEFORE THE RELEASE DATE.

 

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4.16.       Changes
to Representations, Schedules. Not later than 30 days after the last day of each fiscal quarter of each Debtor during which
any information disclosed on any Schedule to this Agreement changed and at such other times as required by this Agreement, each
such Debtor shall deliver to Administrative Agent an updated Schedule (which updates shall restate (and not supplement) such Schedule
in its entirety); provided, the delivery of any updated Schedule shall not be (a) deemed a waiver of any (i) obligation
of any Debtor under any Loan Document, or (ii) representation or warranty of any Debtor with respect to a Schedule during
the period such Schedule was effective, and (b) effective until Administrative Agent agrees in writing to (i) the substitution
of such updated Schedule, and (ii) the Schedule Effective Date of such updated Schedule. Each Debtor shall promptly notify
Administrative Agent of any change in any representation herein and any information on any Schedule hereto if such change could
reasonably be expected to result in a Material Adverse Event. Each representation and warranty made as of a particular Schedule
Effective Date shall be deemed made as of such Schedule Effective Date and at all times thereafter until the Schedule Effective
Date of the next effective succeeding restated Schedule.

 

ARTICLE
V

RIGHTS AND POWERS OF ADMINISTRATIVE AGENT.

 

5.01.       Administrative
Agent May Perform. If any Debtor fails to perform any agreement contained herein, Administrative Agent may itself perform,
or cause performance of, such agreement, and the expenses of Administrative Agent incurred in connection therewith shall be payable
by Debtors under Section 5.07.

 

5.02.       Administrative
Agent's Duties. The powers conferred on Administrative Agent hereunder are solely to protect Administrative Agent's and Secured
Parties' interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually received by Administrative Agent and Secured Parties
hereunder, neither Administrative Agent nor any other Secured Party shall have any duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities, tenders, or other matters relative to any Collateral,
whether or not Administrative Agent or any other Secured Party has or is deemed to have knowledge of such matters, or as to the
taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any reasonable care in
the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to
that which Administrative Agent accords its own property. Except as provided in this Section 5.02, neither Administrative
Agent nor any other Secured Party shall have any duty or liability to protect or preserve any Collateral or to preserve rights
pertaining thereto. Nothing contained in this Agreement shall be construed as requiring or obligating Administrative Agent or any
other Secured Party, and neither Administrative Agent nor any other Secured Party shall be required or obligated, to (a) present
or file any claim or notice or take any action with respect to any Collateral or in connection therewith or (b) notify any
Debtor of any decline in the value of any Collateral. This Section 5.02 shall survive the termination of this Agreement,
and any satisfaction and discharge of each Debtor by virtue of any payment, court order, or Law.

 

5.03.       Events
of Default. The occurrence of an Event of Default under the Credit Agreement shall constitute an Event of Default under this
Agreement (each, an "Event of Default").

 

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5.04.       Remedies.
If an Event of Default exists:

 

(a)       Administrative
Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available
to it or any other Secured Party pursuant to any applicable Laws, all the rights and remedies of a secured party on default under
the UCC (whether or not the UCC applies to the affected Collateral) and also may require each Debtor to, and each Debtor will at
its expense and upon request of Administrative Agent forthwith, assemble all or part of the Collateral as directed by Administrative
Agent and make it available to Administrative Agent at a place to be designated by Administrative Agent which is reasonably convenient
to both parties for public or private sale, at any of Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery and upon such other terms as Administrative Agent may deem commercially reasonable. Each Debtor agrees that, to the extent
notice of sale shall be required by Law, 10 days' notice to such Debtor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.

 

(b)       All
proceeds received by Administrative Agent upon any sale of, collection of, or other realization upon, all or any part of the Collateral
shall be applied as set forth in the Credit Agreement and the other Loan Documents.

 

(c)       All
payments received by each Debtor under or in connection with any Collateral shall be received in trust for the benefit of Administrative
Agent, shall be segregated from other funds of such Debtor, and shall be forthwith paid or delivered over to Administrative Agent
in the same form as so received (with any necessary endorsement).

 

(d)       Because
of the Securities Act of 1933, as amended (the "Securities Act"), and other Laws, including without limitation
state "blue sky" Laws, or contractual restrictions or agreements, there may be legal restrictions or limitations affecting
Administrative Agent in any attempts to dispose of the Collateral and Administrative Agent's enforcement of its rights under this
Agreement. For these reasons, Administrative Agent is authorized by each Debtor, but not obligated, if any Event of Default exists,
to sell or otherwise dispose of any of the Collateral at private sale, subject to an investment letter, or in any other manner
which will not require the Collateral, or any part thereof, to be registered in accordance with the Securities Act or any other
Law. Administrative Agent is also hereby authorized by each Debtor, but not obligated, to take such actions, give such notices,
obtain such consents, and do such other things as Administrative Agent may deem required or appropriate under the Securities Act
or other securities Laws or other Laws or contractual restrictions or agreements in the event of a sale or disposition of any Collateral.
Each Debtor understands that Administrative Agent may in its discretion approach a restricted number of potential purchasers and
that a sale under such circumstances may yield a lower price for the Collateral than would otherwise be obtainable if the same
were registered and/or sold in the open market. No sale so made in good faith by Administrative Agent shall be deemed to be not
"commercially reasonable" because so made. Each Debtor agrees that if an Event of Default exists and Administrative Agent
sells the Collateral or any portion thereof at any private sale or sales, Administrative Agent shall have the right to rely upon
the advice and opinion of appraisers and other Persons, which appraisers and other Persons are acceptable to Administrative Agent,
as to the best price reasonably obtainable upon such a private sale thereof. In the absence of fraud or gross negligence, such
reliance shall be conclusive evidence that Administrative Agent and the other Secured Parties handled such matter in a commercially
reasonable manner under applicable Law.

 

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(e)       After
notice to any Debtor, Administrative Agent and such Persons as Administrative Agent may reasonably designate shall have the right,
at such Debtor's own cost and expense, to verify under reasonable procedures the validity, amount, quality, quantity, value, condition,
and status of, or any other matter relating to, the Collateral, including, in the case of Accounts or Collateral in the possession
of any third Person, by contacting Account Debtors or the third Person possessing such Collateral for the purpose of making such
a verification. Administrative Agent shall have the absolute right to share any information it gains from such inspection or verification
with any Secured Party.

 

(f)       For
purposes of enabling Administrative Agent to exercise rights and remedies under this Agreement, each Debtor grants to Administrative
Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Debtor or any other
Person; provided, that if the license granted to Administrative Agent is a sublicense, each Debtor shall be solely responsible
for, and indemnify Administrative Agent and each Secured Party against, any royalty or other compensation payable to such Debtor's
licensor or other Person) to use all of such Debtor's Software, and including in such license reasonable access to all media in
which any of the licensed items may be recorded and all related manuals. The use of such license by Administrative Agent shall
be exercised, at the option of Administrative Agent, if an Event of Default exists; provided, that any license, sub-license,
or other transaction entered into by Administrative Agent in accordance herewith shall be binding upon such Debtor notwithstanding
any subsequent cure or waiver of an Event of Default.

 

(g)       For
the purpose of enabling Administrative Agent to exercise rights and remedies under this Agreement, each Debtor grants (to the extent
not otherwise prohibited by a license with respect thereto) to Administrative Agent an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to any Debtor or any other Person; provided, that if the license granted
to Administrative Agent is a sublicense, such Debtor shall be solely responsible for, and indemnify Administrative Agent and Secured
Parties against, any royalty or other compensation payable to such Debtor's licensor or other Person) to use, license, or sub-license
any of the Collateral consisting of Intellectual Property wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored and to all Software used for the use, compilation,
or printout thereof. In connection therewith, each Debtor shall execute and deliver a license agreement to Administrative Agent
to evidence the grant of such license. The use of such license by Administrative Agent shall be exercised, at the option of Administrative
Agent, if an Event of Default exists; provided, that any license, sub-license, or other transaction entered into by Administrative
Agent in accordance herewith shall be binding upon each Debtor notwithstanding any subsequent cure or waiver of an Event of Default.

 

5.05.       Appointment
of Receiver or Trustee. In connection with the exercise of Administrative Agent's rights under this Agreement or any other
Loan Document, Administrative Agent may, if an Event of Default exists, obtain the appointment of a receiver or trustee to assume,
upon receipt of any necessary judicial or other Governmental Authority consents or approvals, control or ownership of any Collateral.
Such receiver or trustee shall have all rights and powers provided to it by Law or by court order or provided to Administrative
Agent under this Agreement or any other Loan Document. Upon the appointment of such trustee or receiver, each Debtor shall cooperate,
to the extent necessary or appropriate, in the expeditious preparation, execution, and filing of an application to any Governmental
Authority or for consent to the transfer, control or assignment of such Collateral to the receiver or trustee. To the extent required
by applicable Law, Administrative Agent shall provide to each Debtor notice of the request for or appointment of such receiver
or trustee.

 

    	Security agreement–Page  26	 

     

    

 

5.06.       Further
Approvals Required.

 

(a)       In
connection with the exercise by Administrative Agent of rights under this Agreement that affects the disposition of or use of any
Collateral (including rights relating to the disposition of or operation under any Permit), it may be necessary to obtain the prior
consent or approval of Governmental Authorities and other Persons to a transfer or assignment of Collateral. Each Debtor shall
execute, deliver, and file, and hereby appoints (to the extent not prohibited by applicable Law) Administrative Agent as its attorney-in-fact
(exercisable if an Event of Default exists), to execute, deliver, and file on such Debtor's behalf and in such Debtor's name all
applications, certificates, filings, instruments, and other documents (including without limitation any application for an assignment
or transfer of control or ownership) that may be necessary or appropriate, in Administrative Agent's reasonable opinion, to obtain
such consents or approvals. Each Debtor shall use commercially reasonable efforts to obtain the foregoing consents, waivers, and
approvals, including receipt of consents, waivers, and approvals under applicable agreements regardless of whether a Default or
Event of Default exists.

 

(b)       Each
Debtor acknowledges that there is no adequate remedy at Law for failure by it to comply with the provisions of this Section
5.06 and that such failure would not be adequately compensable in damages, and therefore agrees that this Section 5.06
may be specifically enforced.

 

5.07.       INDEMNITY
AND EXPENSES.

 

(a)       EACH
DEBTOR SHALL INDEMNIFY ADMINISTRATIVE AGENT, L/C ISSUER, EACH LENDER AND EACH RELATED PARTY THEREOF FROM, AND HOLD EACH OF THEM
HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, REASONABLE AND DOCUMENTED
OUT-OF-POCKET COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY
ARISE FROM OR RELATE TO (i) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF THIS AGREEMENT,
(ii) ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (iii) ANY BREACH BY SUCH DEBTOR OF ANY REPRESENTATION, WARRANTY,
COVENANT, OR OTHER AGREEMENT CONTAINED HEREIN, (iv) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP
OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF SUCH DEBTOR OR ANY OF ITS
SUBSIDIARIES, OR (v) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER
LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
REASONABLE AND DOCUMENTED OUT-OF-POCKET COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
CONTRIBUTORY OR ORDINARY NEGLIGENCE OF SUCH PERSON.

 

(b)       Any
amount to be paid under this Section 5.07 shall be a demand obligation owing by Debtors and if not paid within 10 days of
demand shall bear interest, to the extent not prohibited by and not in violation of applicable Law, from the date of expenditure
until paid at a rate per annum equal to the Default Interest Rate. The obligations of Debtors under this Section 5.07 shall
survive payment of the Notes and other obligations hereunder and the assignment of any right hereunder.

 

    	Security agreement–Page  27	 

     

    

 

ARTICLE
VI

MISCELLANEOUS

 

6.01.       Waiver
of Subrogation. Until the Release Date, no Debtor shall assert, enforce, or otherwise exercise (a) any right of subrogation
to any of the rights or Liens of Administrative Agent, any other Secured Party or any Person acting for the benefit of Administrative
Agent or any other Secured Party against any other Obligated Party or any Collateral or other security, or (b) any right of
recourse, reimbursement, contribution, indemnification, or similar right against any other Obligated Party on all or any part of
the Obligations or any other Obligated Party, and until the Release Date, each Debtor hereby waives any and all of the foregoing
rights and the benefit of, and any right to participate in, and Collateral or other security given to Administrative Agent or any
other Secured Party or any other Person acting for the benefit of Administrative Agent or any other Secured Party, to secure payment
of the Obligations. This Section 6.01 shall survive the termination of this Agreement, and any satisfaction and discharge
of each Debtor by virtue of any payment, court order, or Law.

 

6.02.       Cumulative
Rights. All rights of Administrative Agent and each other Secured Party under the Loan Documents and Bank Product Agreements
are cumulative of each other and of every other right which Administrative Agent and each other Secured Party may otherwise have
at Law or in equity or under any other agreement. The exercise of one or more rights shall not prejudice or impair the concurrent
or subsequent exercise of other rights.

 

6.03.       Amendments;
Waivers. No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Debtor, shall be
effective unless in writing signed by Administrative Agent and each Debtor, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No election not to exercise, failure to exercise or
delay in exercising any right, nor any course of dealing or performance, shall operate as a waiver of any right of Administrative
Agent or any Secured Party under this Agreement or applicable Laws, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other right of Administrative Agent or any Secured Party
under this Agreement or applicable Laws.

 

6.04.       Continuing
Security Interest; Release. This Agreement creates a continuing security interest in the Collateral and shall (a) remain
in full force and effect until the Release Date, (b) be binding upon each Debtor and its successors and assigns, and (c) inure
to the benefit of, and be enforceable by, Administrative Agent and its successors, transferees and assigns. Upon the occurrence
of the Release Date, this Agreement and all obligations (other than those expressly stated to survive such termination) of Administrative
Agent and each Debtor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party,
and all rights to the Collateral shall revert to the granting parties and Administrative Agent will, at each Debtor's expense,
execute and deliver to each Debtor such documents (including without limitation UCC termination statements) as such Debtor shall
reasonably request to evidence such termination and shall deliver to such Debtor any Collateral held by Administrative Agent hereunder.
Each Debtor agrees that to the extent that Administrative Agent or any other Secured Party receives any payment or benefit and
such payment or benefit, or any part thereof, is subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other Person under any Debtor Relief Law, common law or equitable cause,
then to the extent of such payment or benefit, the Obligations or part thereof intended to be satisfied shall be revived and continued
in full force and effect as if such payment or benefit had not been made and, further, any such repayment by Administrative Agent
or any other Secured Party, to the extent that Administrative Agent or any other Secured Party did not directly receive a corresponding
cash payment, shall be added to and be additional Obligations payable upon demand by Administrative Agent or any other Secured
Party and secured hereby, and, if the Lien and security interest, any power of attorney, proxy or license hereof shall have been
released, such Lien and security interest, power of attorney, proxy and license shall be reinstated with the same effect and priority
as on the date of execution hereof all as if no release of such Lien or security interest, power of attorney, proxy or license
had ever occurred. This Section 6.04 shall survive the termination of this Agreement, and any satisfaction and discharge
of each Debtor by virtue of any payment, court order, or Law.

 

    	Security agreement–Page  28	 

     

    

 

6.05.       Governing
Law; Jurisdiction; Venue; Service of Process.

 

(a)       Governing
Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract
or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other
Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed
in accordance with, the law of the State of Texas (without reference to applicable rules of conflicts of laws).

 

(b)       Jurisdiction.
Each Debtor irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or
description, whether in law or equity, whether in contract or in tort or otherwise, against Administrative Agent, any Lender, L/C
Issuer or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions
relating hereto or thereto, in any forum other than the courts of the State of Texas sitting in Dallas County, and of the United
States District Court of the Northern District of Texas, and any appellate court from any thereof, and each of the parties hereto
irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action,
litigation or proceeding may be heard and determined in such Texas State court or, to the fullest extent permitted by applicable
law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or in any other Loan Document shall affect any right that Administrative Agent, any Lender, or L/C Issuer
may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Debtor or
its properties in the courts of any jurisdiction.

 

(c)       Waiver
of Venue. Each Debtor irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection
that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

 

(d)       Service
of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 6.11.
Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable
law.

 

6.06.       Waiver
of Right to Trial by Jury. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.06.

 

    	Security agreement–Page  29	 

     

    

 

6.07.       Administrative
Agent's Right to Use Agents. Administrative Agent may exercise its rights under this Agreement through an agent or other designee.

 

6.08.       No
Interference, Compensation or Expense. Administrative Agent may exercise its rights under this Agreement (a) without resistance
or interference by any Debtor and (b) without payment of any rent, license fee, or compensation of any kind to any Debtor.

 

6.09.       Waivers
of Rights Inhibiting Enforcement. Each Debtor waives (a) any claim that, as to any part of the Collateral, a private sale,
should Administrative Agent elect so to proceed, is, in and of itself, not a commercially reasonable method of sale for such Collateral,
(b) except as otherwise provided in this Agreement, TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, NOTICE OR JUDICIAL
HEARING IN CONNECTION WITH ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT SUCH DEBTOR WOULD OTHERWISE HAVE UNDER ANY LAW AND ALL OTHER REQUIREMENTS
AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF ADMINISTRATIVE AGENT'S OR SECURED
PARTIES' RIGHTS HEREUNDER and (c) all rights of redemption, appraisement or valuation.

 

6.10.       Obligations
Not Affected. To the fullest extent not prohibited by applicable Laws, the obligations of each Debtor under this Agreement
shall remain in full force and effect without regard to, and shall not be impaired or affected by:

 

(a)       any
amendment, addition, or supplement to, or restatement of any Loan Document, Bank Product Agreement or any instrument delivered
in connection therewith or any assignment or transfer thereof;

 

(b)       any
exercise, non-exercise, or waiver by Administrative Agent or any other Secured Party of any right, remedy, power, or privilege
under or in respect of, or any release of any guaranty, any collateral, or the Collateral or any part thereof provided pursuant
to, this Agreement, any Loan Document or any Bank Product Agreement;

 

(c)       any
waiver, consent, extension, indulgence, or other action or inaction in respect of this Agreement, any other Loan Document or any
Bank Product Agreement or any assignment or transfer of any thereof;

 

(d)       any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation, or the like of any Obligated Party
or any other Person, whether or not any Debtor shall have notice or knowledge of any of the foregoing; or

 

(e)       any
other event which may give any Debtor or any other Obligated Party a defense to, or a discharge of, any of its obligations under
any Loan Document or any Bank Product Agreement.

 

6.11.       Notices
and Deliveries. All notices and other communications provided for herein to Administrative Agent or to any Debtor shall be
effectuated in the manner provided for in the Credit Agreement. Each Debtor appoints Borrower such Debtor's agent, and Borrower
shall act as agent for each other Debtor, for receipt of notices and other communications pursuant to the Loan Documents.

 

    	Security agreement–Page  30	 

     

    

 

6.12.       Severability.
Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate
the remainder of this Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.

 

6.13.       Successors
and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns (including, as to each Debtor, all Persons who may become bound as a debtor or a new debtor to
this Agreement); provided, no Debtor may assign any of its rights or obligations under this Agreement.

 

6.14.       Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement shall become effective when it shall have been executed by Administrative
Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each
of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic
imaging means (e.g. "pdf" or "tif") shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

6.15.       Additional
Debtors. Any Person who was not a "Debtor" under this Agreement at the time of initial execution hereof shall become
a "Debtor" hereunder if required pursuant to the terms of the Loan Documents by executing and delivering to Administrative
Agent a Joinder. Such Person shall also deliver such items to Administrative Agent in connection with the execution of such Joinder
as required by the terms of the Loan Documents and this Agreement. Any such Person shall thereafter be deemed a "Debtor"
for all purposes under this Agreement.

 

6.16.       ENTIRE
AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of Page Intentionally Left Blank;
Signature Pages Follow]

 

    	Security agreement–Page  31	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized
officers as of the date first above written.

 

	 	DEBTORS:
	 	 	 
	 	CARBON
    NATURAL GAS COMPANY
	 	 	 
	 	By:	
	 	 	Patrick R.
    McDonald
	 	 	Chief Executive
    Officer

  

	 	NYTIS
    EXPLORATION COMPANY LLC
	 	 	 	 
	 	By:	Nytis
    Exploration (USA) Inc.,
	 	 	its
    sole Manager
	 	 	 	 
	 	 	By:	
	 	 	 	Patrick
    R. McDonald
	 	 	     	Chief
    Executive Officer

 

	 	NYTIS
    EXPLORATION (USA) INC.
	 	 	 
	 	By:	
	 	 	Patrick
    R. McDonald
	 	 	Chief Executive
    Officer

 

	 	ADMINISTRATIVE
    AGENT:
	 	 
	 	LEGACYTEXAS
    BANK
	 	 
	 	By:	 
	 	 	Alison
    White
	 	 	Senior
    Vice President

 

 

Security Agreement – Signature Page

 

    	 

    	 

    

 

Schedule
1

 

Organization
and Names

 

(Schedule Effective Date: October 3, 2016)

 

Carbon Natural Gas Company:

 

	(a)Name:	Carbon Natural Gas Company
	(b)Jurisdiction of Organization	Delaware
	(c)Entity type:	Corporation
	(d)Changes in jurisdiction of organization, name or entity type:	 
	(e)Trade names:	None
	(f)Federal Taxpayer Identification Number:	26-0818050
	(g)Organizational number:	4411454
	(h)UCC Filing Office	Delaware

 

Nytis Exploration Company LLC:

 

	(a)Name:	Nytis Exploration Company LLC
	(b)Jurisdiction of Organization	Delaware
	(c)Entity type:	Limited Liability Company
	(d)Changes in jurisdiction of organization, name or entity type:	 
	(e)Trade names:	None
	(f)Federal Taxpayer Identification Number:	20-2621412
	(g)Organizational number:	3946676
	(h)UCC Filing Office	Delaware

 

Nytis Exploration (USA) Inc.:

 

	(a)Name:	Nytis Exploration (USA) Inc.
	(b)Jurisdiction of Organization	Delaware
	(c)Entity type:	Corporation
	(d)Changes in jurisdiction of organization, name or entity type:	 
	(e)Trade names:	None
	(f)Federal Taxpayer Identification Number:	20-1941946
	(g)Organizational number:	3878062
	(h)UCC Filing Office	Delaware

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 1 – Page 1

 

    

     

    

 

Schedule
2

 

Addresses

 

(Schedule Effective Date: October 3, 2016)

 

Carbon Natural Gas Company:

 

1700 Broadway, Suite 1170

Denver, Colorado 80290

 

Nytis Exploration Company LLC:

 

2480 Fortune Drive, Suite 300

Lexington, Kentucky 40509

 

Nytis Exploration (USA) Inc.:

 

1700 Broadway, Suite 1170

Denver, Colorado 80290

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 2 – Page 1

 

    

     

    

 

Schedule
3

 

Pledged
Debt; Indebtedness Evidenced by Instruments

(Schedule Effective Date: October 3, 2016)

 

Carbon Natural Gas Company:

 

None.

 

Nytis Exploration Company LLC:

 

None.

 

Nytis Exploration (USA) Inc.:

 

None.

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 3 – Page 1

 

    

     

    

 

Schedule
4

Intellectual Property

 

(Schedule Effective Date: October 3, 2016)

 

Carbon Natural Gas Company:

 

None.

 

Nytis Exploration Company LLC:

 

None.

 

Nytis Exploration (USA) Inc.:

 

None.

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 4 – Page 1

 

    

     

    

 

Schedule
5

Subject to Confidential Treatment Status

 

 

 

 

 

 

 

 

 

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 5 – Page 1

 

    

     

    

 

Schedule
6

 

Commercial
Tort Claims 

(Schedule
Effective Date: October 3, 2016)

 

Carbon Natural Gas Company:

 

None.

 

Nytis Exploration Company LLC:

 

None.

 

Nytis Exploration (USA) Inc.:

 

None.

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 6 – Page 1

 

    

     

    

 

Schedule
7

 

Equity Interests

 

(Schedule Effective Date: October 3, 2016)

 

Carbon Natural Gas Company:

 

	Issuer Name:	 	Nytis Exploration (USA) Inc.
	Jurisdiction of Organization:	 	Delaware
	Entity Type:	 	Corporation
	Equity Interests of issuer owned by Debtor:	 	100 shares of common stock
	Percentage of the issued and outstanding Equity Interests of issuer owned by Debtor:	 	100%
	Authorized Capital Stock:	 	
        101,000

        100,000 shares of common;

        1,000 shares of preferred

	Issued Capital Stock:	 	100 shares of common stock
	Outstanding Capital Stock:	 	100 shares of common stock
	Certificates representing Equity Interest of issuer:	 	No. 24
	Constituent Documents of issuer  provide that Equity Interest of issuer is a security:  	 	N/A

 

 

	Issuer Name:	 	Crawford County Gas Gathering Company, LLC
	Jurisdiction of Organization:	 	Indiana
	Entity Type:	 	Limited liability company
	Equity Interests of issuer owned by Debtor:	 	Membership interest
	Percentage of the issued and outstanding Equity Interests of issuer owned by Debtor:	 	50%
	Authorized Capital Stock:	 	N/A
	Issued Capital Stock:	 	N/A
	Outstanding Capital Stock:	 	N/A
	Certificates representing Equity Interest of issuer:	 	N/A
	Constituent Documents of issuer  provide that Equity Interest of issuer is a security:  	 	N/A

 

Schedule 7 – Page 1

 

    

     

    

 

	                          	 	                                                          
	Subject to Confidential Treatment Status	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

Schedule 7 – Page 2

 

    

     

    

 

Nytis Exploration Company LLC:

 

	Issuer Name:	 	Various Partnerships (see chart below)

 

Subject to Confidential Treatment Status

 

	Issuer Name:	 	Brushy Gap Coal & Gas, Inc.
	Jurisdiction of Organization:	 	Kentucky
	Entity Type:	 	Corporation
	Equity Interests of issuer owned by Debtor:	 	100 shares of common stock
	Percentage of the issued and outstanding Equity Interests of issuer owned by Debtor:	 	100%
	Authorized Capital Stock:	 	120 shares of common stock
	Issued Capital Stock:	 	100 shares of common stock
	Outstanding Capital Stock:	 	100 shares of common stock
	Certificates representing Equity Interest of issuer:	 	Not prepared
	Constituent Documents of issuer  provide that Equity Interest of issuer is a security:  	 	N/A

 

Schedule 7 – Page 3

 

    

     

    

 

Nytis Exploration (USA) Inc.:

 

	Issuer Name:	 	Nytis Exploration Company LLC
	Jurisdiction of Organization:	 	Delaware
	Entity Type:	 	Limited liability company
	Equity Interests of issuer owned by Debtor:	 	Membership Interests
	Percentage of the issued and outstanding Equity Interests of issuer owned by Debtor:	 	97.5%
	Authorized Capital Stock:	 	N/A
	Issued Capital Stock:	 	N/A
	Outstanding Capital Stock:	 	N/A
	Certificates representing Equity Interest of issuer:	 	No
	Constituent Documents of issuer  provide that Equity Interest of issuer is a security:  	 	No

 

[Remainder of Page Intentionally Left Blank]

 

Schedule 7 – Page 4

 

    

     

    

 

EXHIBIT A

 

Form of Security Agreement Joinder

 

SECURITY
AGREEMENT JOINDER NO. ___

 

SECURITY AGREEMENT JOINDER
NO. ___ (this "Joinder") is dated as of _______________, to the Security Agreement dated as of October 3, 2016
(such agreement, together will all amendments and restatements and Joinders, the "Security Agreement"), among
the initial signatories thereto and each other Person who from time to time thereafter became a party thereto pursuant to Section 6.15
thereof (each, individually, a "Debtor" and collectively, the "Debtors"), in favor of LEGACYTEXAS
BANK, as Administrative Agent (in such capacity, "Administrative Agent"), for the benefit of each Secured Party.

 

BACKGROUND.

 

Capitalized terms not otherwise
defined herein have the meaning specified in the Security Agreement. The Security Agreement provides that additional parties may
become Debtors under the Security Agreement by execution and delivery of this form of Joinder. Pursuant to the provisions of Section 6.15
of the Security Agreement, the undersigned is becoming a Debtor under the Security Agreement. The undersigned desires to become
a Debtor under the Security Agreement in order to induce Secured Parties to continue to make and maintain financial accommodations
under the Loan Documents and Bank Product Agreements.

 

AGREEMENT.

 

NOW, THEREFORE, in consideration
of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Secured Parties to continue to make and maintain financial accommodations under the Loan Documents
and Bank Product Agreements, the undersigned hereby agrees with Administrative Agent, for the benefit of Secured Parties, as follows:

 

1.       Joinder.
In accordance with the Security Agreement, the undersigned hereby becomes a Debtor under the Security Agreement with the same force
and effect as if it were an original signatory thereto as a Debtor and the undersigned hereby (a) agrees to all the terms
and provisions of the Security Agreement applicable to it as a Debtor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Debtor thereunder are true and correct on and as of the date hereof. Each reference
to a "Debtor" in the Security Agreement shall be deemed to include the undersigned.

 

2.       Assignment
and Grant of Security Interest. As security for the payment and performance, as the case may be, in full of the Obligations,
the undersigned hereby assigns to, and pledges and grants to Administrative Agent, for it and the benefit of Secured Parties, a
security interest in the entire right, title, and interest of the undersigned in and to all Collateral, whether now or hereafter
existing, owned, arising or acquired.

 

3.       Representations
and Warranties. On and as of the date hereof or each Schedule Effective Date, as appropriate, the undersigned makes each representation
and warranty set forth in Article III of the Security Agreement.

 

4.       Notices.
All communications and notices hereunder shall be in writing and given as provided in Section 6.11 of the Security
Agreement.

 

EXHIBIT A – Form of Security Agreement Joinder
– Page 1

 

    

     

    

 

5.       Governing
Law. This Joinder and any claims, controversy, dispute or cause of action (whether
in contract or tort or otherwise) based upon, arising out of or relating to this Joinder and the transactions contemplated hereby
and thereby shall be governed by, and construed in accordance with, the law of the State of Texas (without reference to applicable
rules of conflicts of laws).

 

6.       Full
Force of Security Agreement. Except as expressly supplemented hereby, the Security Agreement remains in full force and effect
in accordance with its terms.

 

7.       Schedules.
Schedules 1 through 7 to the Security Agreement shall be supplemented by the addition of Schedules 1
through 7 attached hereto as to the undersigned.

 

8.       Severability.
Any provision of this Joinder held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate
the remainder of this Joinder and the effect thereof shall be confined to the provision held to be invalid or illegal.

 

9.       Counterparts.
This Joinder may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Joinder shall become effective when it shall have been executed by Administrative
Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each
of the other parties hereto. Delivery of an executed counterpart of a signature page of this Joinder by facsimile or other electronic
imaging means (e.g. "pdf" or "tif") shall be effective as delivery of a manually executed counterpart of this
Joinder.

 

10.       Loan
Document. This Joinder is a Loan Document for all purposes and each reference in any Loan Document to the Security Agreement
shall mean the Security Agreement as supplemented by this Joinder.

 

11.       ENTIRE
AGREEMENT. THIS JOINDER AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

 

[Remainder of Page Intentionally Left Blank;
Signature Pages Follow]

 

EXHIBIT A – Form of Security Agreement Joinder
– Page 2

 

    

     

    

 

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

 

	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

EXHIBIT A – Form of Security Agreement Joinder
– Signature Page

 

    

     

    

 

	 	ACCEPTED
    BY: 
	 	 	 
	 	LEGACYTEXAS BANK,
	 	as Administrative Agent
	 	 	 
	 	By:	               
	 	Name:	 
	 	Title:	 

 

 

EXHIBIT A – Form of Security Agreement Joinder
– Signature PageExhibit 10.11

 

		 	www.smartdisplayer.com

 

CARD
SUPPLY AGREEMENT

 

This
Agreement is entered into as of 2,15, 2017 by and between SmartDisplayer Technology, Co., Ltd. having a place of business at No.
2-1, Gongjian Rd., Qidu Dist., Keelung City, 20647, Taiwan (R.O.C.) (hereinafter referred to as "SD") and Shenzhen Qianhai
Exce-Card Technology Co., Ltd a place of business at at Room 228, Building 8

 

Dabu
Business Park, Dongpu Second Road, Tianhe District . Guangzhou (hereinafter referred to as "PURCHASER")

 

WITNESSETH

 

WHEREAS,
SD agrees to supply PURCHASER acoustic cards (hereinafter referred to as "Product") which is ISO 7810 compliant
and has an embedded battery, buzzer, button, FPC and secure element with Purchaser's applet. Please see Appendix (A) Product Requirements.

 

WHEREAS,
PURCHASER desire to purchase Product from SD

 

NOW,
THEREFORE, in consideration of these premises, and the mutual promises, covenants, agreements, terms and conditions set forth
in the Agreement, the parties agree to the following:

 

	1	Product Requirement and Supply

 

	 	1.1.	Product

 

1.1.1 "Product" means acoustic card which is ISO 7810 compliant and has an embedded battery, buzzer, button, FPC and secure element with Purchaser's applet, as required in Appendix (A)

 

1.1.2 Product requirement as in Appendix (A) may be amended by PURCHASER under both parties' agreement.

 

1.1.3 Fully functional final product, which based on product requirement, shall be delivered before the end of April in condition that SD receives PURCHASER's official purchase order and deposit within Feb. 15th, 2017.

 

	 	1.2.	Supply

 

1.2.1
SD shall supply Product to PURCHASER in perfect condition which conform to the requirement in Appendix (A) and all standards and
other quality requirements set forth herein and any accepted purchase order, or other descriptions furnished or adopted by PURCHASER
and agreed by SD(herein after "Relevant
Requirements").

 

    	 		 

     

    

 

		 	www.smartdisplayer.com

  

	2	The Shipment; Delivery date

 

	 	2.1.	As Appendix B Quotation and C Development Schedule,
20,000 units of Product will be shipped before the end of April 2017.
	 	 	 
	 	2.2.	If SD fails to comply with the shipment or delivery
date as specified in Clause 2.1 because of SD's liability, SD will be liable to a penalty of 0.1% per day of Unit price multiplied
by the number of units in delay up to the date of delivery. For the avoidance of doubt, the penalty in delay in this clause shall
not be treated as liquidated damages.

 

	3	Payment 

 

	 	3.1.	Price

 

3.1.1
As Appendix B

 

	 	3.2.	Payment Term

 

3.2.1
SD will submit invoice to PURCHASER referencing the necessary information to match line items from the purchase orders.

 

3.2.2
Within seven (7) business days after purchase order (P02017021501) is confirmed, PURCHASER shall pay SD a non-refundable down
payment equivalent to 30% of the total price on the purchase order.

 

	 	3.3.	3.2.3 PURCHASER shall pay the remaining 70% payment
based on the shipping quantity before each partial shipment.

 

	4	Intellectual Property Right

 

	 	4.1.	SD represents and warrants that SD owns all of any patent,
copyright, trademark, service mark or other proprietary rights in relation to Prod uct(thereinafter referred to as "Product
IPRs").
	 	 	 
	 	4.2.	SD grants to PURCHASER (including its customers or end-users)
the non-exclusive, non-assignable and royalty free license to commercialize, market, exploit, use, apply, and sell Product and
the grant of such rights to PURCHASER does not violate any agreement binding upon or any obligation of SD.
	 	 	 
	 	4.3.	SD represent and warrants that Product IPRs, or any
part thereof, does not violate or infringe upon any patent, copyright, service mark or other intellectual property rights of any
third party and SD agrees to indemnify and hold harmless PURCHASER from and against any and all third party claims, actions,
damages, liabilities, judgments, expenses, costs of litigation, investigation or proceeding (including reasonable attorney fees)
(hereinafter referred to as "IPR Loss") incurred as a result of any breach of representations and warranties, obligations,
covenants or agreements of this Article 4.

 

    	 	2	 

     

    

 

		 	www.smartdisplayer.com

 

	 	4.4.	Notwithstanding anything to the contrary contained in
this Agreement, this Article
4 shall survive the termination or expiration of this Agreement.

 

	5	Warranty

 

	 	5.1.	SD represents and warrants that during twelve months
following the acceptance by PURCHASER, each Product shall be free from defects in material and workmanship and shall conform to
the Relevant Requirements, so long as the Product have been stored in normal conditions for storage of the Product and the defect
is not a result of any improper use, undue treatment or wear and tear or PURCHASER's or its subcontractor's manufacturing process.
Such warranty by SD shall run only to the benefit of PURCHASER, and the entire warranty claim made by PURCHASER's customers shall
be passed by PURCHASER onto SD in accordance with this Section. If, during the above-mentioned warranty period, any Product is
found to be defective: (i) PURCHASER shall notify SD, in writing, with a description of the alleged defects promptly upon discovery
of any non-conformance in the Product; (ii) PURCHASER shall, based on SD's request, offer SD the opportunity to inspect, under
confidentiality's obligations, the allegedly non-conforming Product; (iii) upon SD authorization, PURCHASER shall return such
Product, at SD's expense, to SD factory, and, (iv) provided SD's examination of such Product confirms that such Product do not
conform with the Relevant Requirements, and provided further that such non-conformance is not caused by abuse, misuse, negligence,
improper installation or packaging, improper testing or alteration by PURCHASER, PURCHASER's representative or agent or any third
party not authorized by SD, then SD will, at its option, either replace, or credit PURCHASER for such non-conforming Product.
This Section 5 shall in no event extend the warranty period for any Product replaced hereunder beyond the original warranty period.

 

    	 	3	 

     

    

 

		 	www.smartdisplayer.com

 

	6	Liabilities

 

	 	6.1.	SD
    shall be liable for any damages, costs, expenses, or losses incurred to PURCHASER resulting from any breach of this Agreement
    and indemnify and hold harmless PURCHASER from all third party claims, actions, damages, liabilities, judgments, expenses,
    costs of litigation, investigation or proceeding (including reasonable attorney fees) incured as a result of any breach of
    its representations, warranties, covenants, obligations or agreements in this Agreement.

 

	7	Inspection

 

	 	7.1.	PURCHASER shall have access to SD's facilities manufacturing
Product, during the reasonable working hour, and right to test and inspect the Product to confirm their orderly operation and
conformity to Relevant Requirements. SD shall be cooperative with PURCHASER for such inspection activities.

 

	 	7.2.	PURCHASER may deploy one or more PURCHASER's personnel
as inspector(s) for testing and inspecting Product thereof, after notice to SD. SD agrees to work with such inspector(s) in SD's
factory during a period notified by PURCHASER and agreed to by SD. The expenses required for accommodations of such inspectors
shall be borne by PURCHASER.

 

	 	7.3.	Inspection of PURCHASER prior to shipment pursuant to
this Article does not relieve the SD from any of its obligations under this Agreement.

 

	8	Term and Termination

 

	 	8.1.	This Agreement shall become effective upon execution
and continue in full force and effect until the end of the second contract year, unless terminated earlier in accordance with
Section 8.2. The renewal of this Agreement will be subject to the mutual written agreement of the parties.

 

	 	8.2.	Either party may immediately terminate this Agreement
at any time for cause in the event of any incurable material breach of this Agreement by the other party or in the event the other
party files (or has filed or has filed against it) any bankruptcy, insolvency, or receivership proceeding. If a material breach
of this Agreement can be cured, then the non-breaching party shall provide the breaching party with written notice of the material
breach specifying the conditions constituting the breach and the corrective action, which must be undertaken to cure such breach.
If the material breach is not cured within 90 days of the written notice thereof, then this Agreement shall terminate as set forth
in the written notice of material breach. If the material breach is not cured within 30 days of the written notice thereof, then
this Agreement shall terminate.

 

    	 	4	 

     

    

  

		 	www.smartdisplayer.com

 

	9	Confidentiality/Non-Disclosure Agreement

 

	 	9.1.	In the course of doing business under this agreement, one party may furnish to the other party data, designs, drawings, tracings,
layouts, requirements, specifications, samples, equipment, pricing, costs, yield information and other written information which
may be confidential and proprietary to the furnishing party, and which is clearly marked as "Confidential" or "Proprietary"
(hereinafter referred to as "Confidential Information"). Both parties agree to restrict the dissemination of Confidential
Information to only those employees, individual contractors and advisors who must be directly involved in using the Confidential
Information in the performance of their respective duties hereunder. Each of the parties may disclose Confidential Information
of the other on a "need to know" basis to vendors and other third parties engaged in manufacturing activities related
to the parties' respective products, provided that such vendors and other third parties have a written obligation to protect the
Confidential Information in substantially the same manner as provided herein and provided that the party making such a disclosure
gives written notice to the other party identifying each such vendor and other third party. Both parties agree to not release
details of this Agreement or to disclose Confidential Information to any party other than those authorized above without the written
approval of the other party. The receiving party shall promptly notify the furnishing party in writing of any unauthorized use
or disclosure of any Confidential Information.
	 	 	 
	 	9.2.	Neither party shall have an obligation to preserve the
confidential or proprietary nature of any Confidential Information received by such party hereunder which (i) was already known
to the receiving party free of any obligation to keep it confidential at the time of its disclosure by the furnishing party as
evidenced, for example, by written records prepared prior to such disclosure; (ii) is or becomes publicly known through no wrongful
act of the receiving party; (iii) is received from a third person having no direct or indirect secrecy or confidentiality obligation
with respect to such Confidential Information; (iv) is independently developed by an employee, agent or contractor of the receiving
party; (v) is disclosed to a third person by the furnishing party without similar restrictions on such third person's rights;
(vi) is approved for release by written authorization of the furnishing party; or (vii) is disclosed by the receiving party pursuant
to a valid order of a court or other governmental body or any political subdivisions thereof; provided, however, that the receiving
party shall first have given reasonable notice to the furnishing party and shall comply with any applicable protective order or
equivalent.

 

    	 	5	 

     

    

 

		 	www.smartdisplayer.com

 

	10	General Provisions

 

	 	10.1.	Force Majeure. No Party shall be considered in default
of performance of its obligations (exclusive of either Party's obligation of payment) under this Agreement to the extent that
its performance is delayed or prevented by causes beyond its reasonable control, including, acts of God, civil disorders, acts
of any civil or military authority, or judicial action.

 

	 	10.2.	Severability. Should any provision of this Agreement
be held to be invalid, illegal or incapable of being enforced by reason of any rule or regulation of law, or public policy of
any government, or agency of government, all other conditions and provisions of this Agreement shall, nevertheless, remain in
full force and effect; and no covenant, condition or provision shall be deemed dependent upon any other covenant, condition or
provision unless so expressed herein. The parties agree to substitute for any invalid, illegal or unenforceable provision a valid,
lawful and enforceable provision that effectuates, to the fullest extent possible, the legal and commercial objectives of the
invalid, illegal or unenforceable provision.

 

	 	10.3.	Non-Waiver. A failure of either party to exercise any
right given to it hereunder, or to insist upon strict compliance by the other party of any obligation hereunder, shall not constitute
a waiver of the first party's right to exercise such a right, or to exact compliance with the terms hereof. Moreover, waiver by
either party of a particular default by the other party shall not be deemed a continuing waiver so as to impair the aggrieved
party's rights in respect to any subsequent default of the same or a different nature.

 

	 	10.4.	Relationship of the Parties. SD and PURCHASER are independent
contractors. Each party shall be solely responsible for determining its manner of performance of its obligations under this Agreement.
Neither party shall, nor represent itself to be, the partner, joint venture, broker, employee, servant, agent, or legal representative
of the other party for any purpose whatsoever. Neither party is granted any right or authority to assume or create any obligations
or responsibility, express or implied, on behalf of or in the name of the other party or to bind the other party in any matter
or thing whatsoever.

 

	 	10.5.	Assignments. Neither Party may assign or delegate this
Agreement or any of its rights, privileges or obligations, tasks or activities hereunder without the prior written consent of
the other Party, which consent shall not be unreasonably withheld. Any such attempted assignment or delegation in violation
of the foregoing shall be null and void.

 

    	 	6	 

     

    

 

		 	www.smartdisplayer.com

 

	 	10.6.	Applicable
    Law. The governing laws applicable to this Agreement and Annexes shall be the laws of PROC.

 

	 	10.7.	Resolution
    of Dispute. The Parties shall discuss and negotiate in good faith any dispute arising from or in connection with this Agreement.
    If no settlement can be reached through such discussions and negotiations, the Parties agree that the dispute shall be resolved
    exclusively and finally by binding arbitration to be held in the Republic of Korea. Disputes in which injunctive relief is
    sought are expressly excluded from the foregoing provision. Any controversy concerning whether a dispute is an abatable dispute
    shall be determined by the arbitrator(s). In any arbitration hereunder, the parties shall be entitled to conduct discovery
    to the fullest extent permitted by law. The parties intend their foregoing agreement to arbitrate disputes arising hereunder
    to be valid, enforceable and irrevocable.

 

	 	10.8.	Attorney's
    Fees to Prevailing Party. In the event of any arbitration or court action conducted hereunder, the prevailing party shall
    be entitled to recover from the losing party all fees and expenses incurred by the prevailing party in connection with the
    arbitration or court action, including reasonable attorney's fees. In the case of arbitration, the arbitrator(s) shall determine
    which party is the prevailing party.

 

	 	10.9.	Notices.
    All notices required or permitted to be given hereunder shall be in writing, shall make reference to this Agreement, and shall
    be delivered by hand, or dispatched by prepaid air courier or by registered or certified airmail, postage prepaid, addressed
    as follows:

 

	PURCHASER

Attn:
Zuyue Xiang / Chief Executive Officer

Address:
Room 228, Building 8 Dabu Business Park, Dongpu Second Road, Tianhe 

District,
 Guangzhou

 

	SD

Attn:
                                         George Ou / Chief Executive Officer

 

Address:
No. 2-1, Gongjian Rd., Qidu Dist., Keelung City, 20647, Taiwan

  

    	 	7	 

     

    

 

		 	www.smartdisplayer.com

 

Such notice shall be deemed served
when received by addressee or, if delivery is not accomplished by reason of some fault of the addressee, when tendered for delivery.
Either Party may give written notice of an address change or, after notice of such change has been received, any notice or request
shall thereafter be given to such Party at such changed address.

 

	 	10.10.	Survival. All obligations contemplated to be performed,
whether as a whole or in part, after termination or expiration of this Agreement, shall survive the termination or expiration
of this Agreement regardless of the basis for such termination.

 

	 	10.11.	Headings. The headings herein are inserted for convenience
only and shall in no way be construed as part of this Agreement, considered in the interpretation of this Agreement, or as a limitation
of the scope of the particular sections to which they refer.

 

	 	10.12.	Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

	 	10.13.	Expenses. Each Party shall bear its own expenses and
professional fees in the preparation, negotiation and execution of this Agreement.

 

In
Witness Whereof, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the
date first written above.

 

	Smart Displayer Technology Co.,
    Ltd.	 
	 	 	 
	By:	/s/ George Ou 	 
	 	George Ou 	 
	 	As Its Chief Executive Officer	 

 

PURCHASER

 

	By:	/s/ Zuyue
Xiang 	 
	 	Zuyue
Xiang 	 
	 	As Its Chief Executive Officer	 

 

Appendix
A Requirements 

Appendix
B Quotation for 20,000 units of acoustic card

Appendix C Quotation for Product development

 

 

8

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