Document:

Exhibit 10.3

 

FORM OF SERIES B WARRANT

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

Fuse
Science, Inc.

 

Series
B Warrant To Purchase Common Stock

 

Warrant No.: B-1

Date of Issuance: [____________], 2014 (“Issuance Date”)

 

Fuse Science, Inc., a
Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, _____________________________, the registered holder hereof or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants
to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or
times on or after the earlier of the Authorized Share Increase Date and the Authorized Share Increase Deadline (as such terms are
defined in the Securities Purchase Agreement), but not after 11:59 p.m., New York time, on the Expiration Date (as defined below),
[          ]1 (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below)
(the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 16. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”)
issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of January _, 2014 (the “Subscription
Date”), by and among the Company and the investors (the “Buyers”) referred to therein (the “Securities
Purchase Agreement”).

 

 

1          Insert
number of shares of Common Stock equal 150% of the initial number of Conversion Shares (as defined in the Securities Purchase Agreement)
issuable pursuant to the Notes issuable contemporaneously with this Warrant on the applicable Closing Date (without regard for
any limitations on conversion set forth therein).

 

    	 

    	 

    

 

		1.	EXERCISE OF WARRANT.

 

(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part, by delivery (whether
via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”),
of the Holder’s election to exercise this Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid,
the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise
multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate Exercise Price”)
in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that
such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver
the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect
to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance
of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise
Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant
after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the
date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation
of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer
agent (the “Transfer Agent”). On or before the third (3rd) Trading Day following the date on which the Company
has received such Exercise Notice, the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate
number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, issue and deliver to the Holder or, at the Holder’s instruction pursuant
to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable overnight courier to the address
as specified in the applicable Exercise Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective
of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section
1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant
Shares being acquired upon an exercise, then, at the request of the Holder, the Company shall as soon as practicable and in no
event later than three (3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee)
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately
prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No
fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common
Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may
be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing,
except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise (as defined in Section 1(d)),
the Company’s failure to deliver Warrant Shares to the Holder on or prior to the second (2nd) Trading Day after the Company’s
receipt of the Aggregate Exercise Price shall not be deemed to be a breach of this Warrant.

 

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(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $[ ]2, subject to adjustment as provided
herein.

 

(c)          Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue to the Holder within
the later of (i) three (3) Trading Days after receipt of the applicable Exercise Notice and (ii) two (2) Trading Days after the
Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share
Delivery Deadline”), a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for
such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the
case may be) (a “Delivery Failure”) and if on or after such Share Delivery Deadline the Holder (or any other
Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common Stock, or a sale of a number
of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable upon such exercise that
the Holder so anticipated receiving from the Company, then, in addition to all other remedies available to the Holder, the Company
shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or
on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and
deliver such certificate or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which
the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such shares of Common Stock)
shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which
the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock multiplied by (B)
the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable
Exercise Notice and ending on the date of such issuance and payment under this clause (ii).

 

 

2          Insert
dollar amount equal to the Closing Bid Price as of close of business of the Principal Market immediately prior to the time of execution
of the Securities Purchase Agreement.

 

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(d)          Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), the Holder may, in its
sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise
the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

	Net Number =	(A x B) - (A x C)
	D

 

For purposes of the foregoing formula:

 

A= the total number of shares with
respect to which this Warrant is then being exercised.

 

B= the quotient of (x) the sum
of the VWAP of the Common Stock of each of the five (5) Trading Days ending at the close of business on the Principal Market immediately
prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) five (5).

 

C= the Exercise Price then in effect
for the applicable Warrant Shares at the time of such exercise.

 

D= the lowest of (x) as applicable,
(i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice
if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading
Day, and (ii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise
Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof during such
Trading Day or after the close of “regular trading hours” on such Trading Day, (y) the VWAP of the Common Stock at
the close of business on the Principal Market on the Trading Day immediately prior to the applicable Exercise Date, and (z) the
quotient of (A) the sum of the VWAP of the Common Stock of each of the five (5) Trading Days ending at the close of business on
the Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (B) five
(5).

 

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(e)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 13.

 

(f)          Limitations
on Exercises. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by
the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in excess
of 9.99% (the “Maximum Percentage”) of the Common Stock. To the extent the above limitation applies, the determination
of whether this Warrant shall be exercisable (vis-à-vis other convertible, exercisable or exchangeable securities owned
by the Holder or any of its affiliates) and of which such securities shall be exercisable (as among all such securities owned by
the Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company
for conversion, exercise or exchange (as the case may be). No prior inability to exercise this Warrant pursuant to this paragraph
shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of
exercisability. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without
limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934
Act (as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this
paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common
Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of
holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including,
without limitation, pursuant to this Warrant or securities issued pursuant to the Securities Purchase Agreement. By written notice
to the Company, any Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified
in such notice; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to
the Company, and (ii) any such increase or decrease will apply only to the Holder sending such notice and not to any other holder
of SPA Warrants.

 

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(g)          Insufficient
Authorized Shares. From and after the earlier of the Authorized Share Increase Date and the Authorized Share Increase Deadline,
the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard to any limitation otherwise
contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise of this Warrant). If,
notwithstanding the foregoing, and not in limitation thereof, at any time after the earlier of the Authorized Share Increase Date
and the Authorized Share Increase Deadline, while any of the SPA Warrants remain outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock (an “Authorized Share Failure”) to satisfy its obligation
to reserve for issuance upon exercise of the SPA Warrants at least a number of shares of Common Stock equal to the number of shares
of Common Stock as shall from time to time be necessary to effect the exercise of all of the SPA Warrants then outstanding (the
“Required Reserve Amount”), then the Company shall immediately take all action necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the
SPA Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date
of the occurrence of an Authorized Share Failure, but in no event later than thirty (30) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized
shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and
shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they approve such proposal. In the event that the Company
is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure by the Company to have sufficient
shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of
Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to
the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorized
Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable
Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment
under this Section 1(g) and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any brokerage commissions and other out-of-pocket
expenses, if any, of the Holder incurred in connection therewith.

 

		2.	ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES.

The Exercise Price and number of Warrant Shares issuable upon exercise of
this Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

(a)          Stock
Dividends and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company, at any time on or after
the date of the Securities Purchase Agreement, (i) pays a stock dividend on one or more classes of its then outstanding shares
of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares
of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more
classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii)
or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any
event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then
the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

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(b)          Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the date of the Securities Purchase Agreement, the Company
issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities
issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then, immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an
amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted
Exercise Price and consideration per share under this Section 2(b)), the following shall be applicable:

 

(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option and
(y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option minus
(2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

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(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 2(b), except as contemplated below, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.

 

(iii)        Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time,
the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have
been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued
or sold. For purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of
the date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section
2(b) shall be made if such adjustment would result in an increase of the Exercise Price then in effect. 

 

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(iv)        Calculation
of Consideration Received. If any Option or Convertible Security or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company, together comprising one integrated transaction, (x)
such Option or Convertible Security (as applicable) or Adjustment Right (as applicable) will be deemed to have been issued for
consideration equal to the Black Scholes Consideration Value thereof and (y) the other securities issued or sold or deemed to have
been issued or sold in such integrated transaction shall be deemed to have been issued for consideration equal to the difference
of (I) the aggregate consideration received or receivable by the Company minus (II) the Black Scholes Consideration Value of each
such Option or Convertible Security (as applicable) or Adjustment Right (as applicable). If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor
will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or
Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the
Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in
which case the amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs
of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent
manifest error and the fees and expenses of such appraiser shall be borne by the Company.

 

(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

 

(c)          Holder’s
Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities. In addition to and not
in limitation of the other provisions of this Section 2, if the Company in any manner issues or sells any Options or Convertible
Securities (any such securities, “Variable Price Securities”) after the Subscription Date that are convertible
into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the
shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting
customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of
the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall
provide written notice thereof via facsimile and overnight courier to the Holder on the date of issuance of such Convertible Securities
or Options. From and after the date the Company issues any such Convertible Securities or Options with a Variable Price, the Holder
shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon
exercise of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes
of such exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder’s
election to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable
Price for any future exercises of this Warrant.

 

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(d)          Stock
Combination Event Adjustment. If at any time and from time to time on or after the Issuance Date there occurs any stock split,
stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a “Stock
Combination Event”) and the product of (i) the quotient determined by dividing (A) the Exercise Price in effect immediately
prior to the Stock Combination Event by (B) the arithmetic average of the Weighted Average Price during the fifteen (15) Trading
Days immediately prior to the Stock Combination Event; and (ii) the arithmetic average of the Weighted Average Price during the
fifteen (15) Trading Days immediately following the date of such Stock Combination Event (each, an “Event Market Price”)
is less than the Exercise Price then in effect (after giving effect to the adjustment in clause (b) above), then on the sixteenth
(16th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect on such sixteenth (16th)
Trading Day (after giving effect to the adjustment in clause (b) above) shall be reduced (but in no event increased) to the Event
Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an
increase in the Exercise Price hereunder, no adjustment shall be made.

 

(e)          Other
Events. In the event that the Company (or any Subsidiary (as defined in the Securities Purchase Agreement)) shall take any
action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from
dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment
in the Exercise Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that
no such adjustment pursuant to this Section 2(e) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting
its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good
faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination
shall be final and binding and whose fees and expenses shall be borne by the Company.

 

(f)          Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(g)          Adjustment.
If immediately following the close of business on the tenth consecutive Trading Day immediately following [         ]3 or, at
the election of the Holder, such later date thereafter when the Company shall have satisfied its current public information requirement
under Rule 144(c)(1) (the “Adjustment Date”), the Exercise Price then in effect exceeds the Adjusted Market
Price as of such Adjustment Date (the “Adjusted Exercise Price”), the Exercise Price hereunder shall be reset
to the Adjusted Exercise Price as of such Adjustment Date (each, an “Exercise Price Adjustment”). Notwithstanding
the foregoing, to the extent the Holder delivers one or more Exercise Notices to the Company during the Adjusted Market Price Measuring
Period with respect to an Exercise Price Adjustment, in addition to the shares of Common Stock issued or issuable to the Holder
with respect to each such Exercise Notice, on the later of (A) the applicable Share Delivery Date with respect to such Exercise
Notice and (B) the applicable Adjustment Date, the Holder shall receive an additional number of shares of Common Stock equal to
the difference of (x) the quotient of (I) the Exercise Amount with respect to such Exercise Notice, divided by (II) the Adjusted
Exercise Price, less (y) the number of shares of Common Stock issued or otherwise issuable to the Holder with respect to such Exercise
Notice. Except as otherwise provided in this Section 2(g), the Adjusted Exercise Price, if any, shall not apply to any Exercise
Amount converted into Common Stock prior to such Adjustment Date.

 

 

3            Insert
six month anniversary of the Issuance Date

 

    	10

    	 

    

  

3.          
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date
on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s
right to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall
not be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock
as a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

 

4.          PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS; REDEMPTION.

 

(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership
of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Maximum Percentage).

 

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(b)          Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities
Purchase Agreement) in accordance with the provisions of this Section 4(b), including agreements to deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is
quoted on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this
Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall
be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of
the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable
Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its
Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction
had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing,
and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company
to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not
in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders
of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter
have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction
but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable
upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to
receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant).

 

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(c)          Black
Scholes Value.

 

(i)          Fundamental
Transaction Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder
delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the
consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the
date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant
to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this
Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.

 

(ii)         Event
of Default Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder
delivered at any time after the occurrence of an Event of Default (as defined in the Notes) (assuming for such purpose that the
Notes remain outstanding), the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder
on the date of such request by paying to the Holder cash in an amount equal to the Event of Default Black Scholes Value.

 

(d)          Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage,
applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of
this Warrant (or any such other warrant)).

 

(e)          Redemption
at the Election of Holder. In addition to any other rights herein, at the request of the Holder delivered at any time after
the Issuance Date, the Company shall purchase this Warrant from the Holder on the date of such request by paying to the Holder
cash in an amount equal to the product of (x) the maximum number of Warrant Shares issuable hereunder (without regard to any restrictions
or limitations on exercise hereunder) and (y) 75% of the greatest VWAP with respect to any Trading Day during the sixty Trading
Day period immediately preceding the date of the redemption request by the Holder.

 

    	13

    	 

    

 

5.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation (as defined in
the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith
carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without
limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon
the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action necessary to
reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the
exercise of the SPA Warrants, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

 

6.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

7.          REISSUANCE
OF WARRANTS.

 

(a)          Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

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(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional
shares of Common Stock shall be given.

 

(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

8.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment
of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of
such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of
shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being
provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the
extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or
any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase
Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution specified
by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

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9.          AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended and
the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.

 

10.         SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

11.         GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

12.         CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Initial Closing Date (as defined in the Securities Purchase Agreement) in such other
Transaction Documents unless otherwise consented to in writing by the Holder.

 

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13.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Closing Sale Price or fair market
value or the arithmetic calculation of the Warrant Shares (as the case may be), the Company or the Holder (as the case may be)
shall submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile (i) within two (2) Business
Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii)
if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute
(including, without limitation, as to whether any issuance or sale or deemed issuance or sale was an issuance or sale or deemed
issuance or sale of Excluded Securities). If the Holder and the Company are unable to agree upon such determination or calculation
(as the case may be) of the Exercise Price, the Closing Sale Price or fair market value or the number of Warrant Shares (as the
case may be) within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Company
or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed
determination of the Exercise Price, the Closing Sale Price or fair market value (as the case may be) to an independent, reputable
investment bank selected by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to an independent, outside
accountant selected by the Holder that is reasonably acceptable to the Company. The Company shall cause at its expense the investment
bank or the accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the
Company and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations
or calculations (as the case may be). Such investment bank’s or accountant’s determination or calculation (as the
case may be) shall be binding upon all parties absent demonstrable error.

 

14.         REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without
limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon
the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in
respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

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15.         TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise
be required by Section 2(g) of the Securities Purchase Agreement.

 

16.         CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)          “Adjusted
Market Price” means, for any given date, the lesser of (i) the initial Exercise Price and (ii) the quotient of (x) the
sum of the VWAP of the Common Stock for each of the Trading Days during the ten (10) consecutive Trading Day period ending and
including the Trading Day immediately prior to such given date, divided by (y) ten (10) (such period, the “Adjusted Market
Price Measuring Period”). All such determinations to be appropriately adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions during such Adjusted Market Price Measuring Period.

 

(b)          “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights of the type described
in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with,
or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).

 

(c)          “Approved
Stock Plan” means any benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the date hereof pursuant to which shares of Common Stock, options to purchase Common Stock and other equity incentive awards
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.

 

(d)          “Black
Scholes Consideration Value” means the value of the applicable Option or Convertible Security (as the case may be) as
of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option
or Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of such Option or Convertible Security (as the case may be) as of the date of issuance of such Option
or Convertible Security (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the date of issuance of such Option or Convertible Security (as the case may be).

 

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(e)          “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s
request pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of
the Common Stock during the period beginning on the Trading Day immediately preceding the earliest to occur of (x) the public disclosure
of the applicable Fundamental Transaction, (y) the consummation of the applicable Fundamental Transaction and (z) the date on which
the Holder first became aware of the applicable Fundamental Transaction and ending on the Trading Day of the Holder’s request
pursuant to Section 4(c)(i) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction
(if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a
strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c)(i), (iii)
a zero cost of borrow, (iv) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater
of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c)(i) and (2) the
remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction or as of the date of the
Holder’s request pursuant to Section 4(c)(i) if such request is prior to the date of the consummation of the applicable Fundamental
Transaction, and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the HVT function
on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public disclosure
of the applicable Fundamental Transaction (or, solely to the extent such Fundamental Transaction is not disclosed to the public,
the date of the consummation of the such Fundamental Transaction).

 

(f)          “Bloomberg”
means Bloomberg, L.P.

 

(g)          “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(h)          “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market,
as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing
trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such
security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc.
(formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

 

    	19

    	 

    

 

(i)          “Common
Stock” means (i) the Company’s shares of common stock, $0.01 par value per share, and (ii) any capital stock into
which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(j)          “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

(k)          “Eligible
Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market,
the Nasdaq Capital Market or the Principal Market.

 

(l)          “Event
of Default Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c)(ii), which value is calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the highest Closing Sale Price
of the Common Stock during the period beginning on the date of the occurrence of the Event of Default through the date all Events
of Default have been cured (assuming for such purpose that the Notes remain outstanding) or, if earlier, the Trading Day of the
Holder’s request pursuant to Section 4(c)(ii), (ii) a strike price equal to the Exercise Price in effect on the date of the
Holder’s request pursuant to Section 4(c)(ii), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for
a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to
Section 4(c)(ii) and (2) the remaining term of this Warrant as of the date of the occurrence of such Event of Default, (iv) a zero
cost of borrow and (v) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following later of (x) the
date of the occurrence of such Event of Default and (y) the date of the public announcement of such Event of Default.

 

(m)          “Excluded
Securities” means any (i) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers
or employees of the Company in their capacity as such pursuant to an Approved Stock Plan after the Authorized Share Increase Date,
provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after
the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding
immediately prior to the date Subscription Date and (B) the exercise price of any such options is not lowered after issuance by
subsequent amendment thereof, none of such options are amended subsequent to issuance to increase the number of shares issuable
thereunder and none of the terms or conditions of any such options are subsequent to issuance otherwise materially changed in any
manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible
Securities or contractual (other than options to purchase Common Stock or other equity incentive awards issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion price of any such
Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) is not lowered by subsequent amendment, none of such Convertible Securities (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are subsequently amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other
than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise
materially changed in any manner that adversely affects any of the Buyers; and (iii) the shares of Common Stock issuable upon conversion
of the Notes or otherwise pursuant to the terms of the Notes; (iv) the shares of Common Stock issuable upon exercise of the SPA
Warrants.

 

    	20

    	 

    

 

(n)          “Expiration
Date” means the date that is the seventh (7th) anniversary of the Issuance Date, or, if such date falls on a day other
than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next
date that is not a Holiday.

 

(o)          “Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares
of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any “person” or “group” (as these terms are used for
purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary
voting power represented by issued and outstanding Voting Stock of the Company.

 

(p)          “Notes”
has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all notes issued in exchange therefor
or replacement thereof.

 

(q)          “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(r)          “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

    	21

    	 

    

 

(s)          “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(t)          “Principal
Market” means the OTCQB Market.

 

(u)          “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

(v)         “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder.

 

(w)          “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

 

(x)          “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately
adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such
period.

 

[signature page follows]

 

    	22

    	 

    

  

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	FUSE SCIENCE, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	23

    	 

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS WARRANT TO PURCHASE COMMON STOCK

 

FUSE SCIENCE, INC.

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
Fuse Science, Inc., a Nevada corporation (the “Company”), evidenced by the Warrant to Purchase Common Stock
No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.

 

1. Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:

 

	
 

	 a “Cash Exercise” with respect to Warrant Shares; and/or	
 

	 	 	 
	
 

	 a “Cashless Exercise” with respect to Warrant Shares.	
 

 

2. Payment of Exercise
Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.

 

3. Variable Price Election.
By indicating in the space that follows, the Holder elects to use the Variable Price pursuant to Section 2(c): ______

 

4. Delivery of Warrant
Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares in accordance
with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, to the following address:

 

	
          

	
         

	
          

 

Date: _______________ __, ______

 

Name of Registered Holder

 

	By:	
 

	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT B

  

ACKNOWLEDGMENT

 

The Company hereby acknowledges
this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance
with the Transfer Agent Instructions dated _________, 20__, from the Company and acknowledged and agreed to by _______________.

 

	 	FUSE SCIENCE, INC.
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:Exhibit 10.4

 

PLEDGE AND SECURITY AGREEMENT

 

PLEDGE AND SECURITY
AGREEMENT, dated as of January ___, 2014 (this “Agreement”), made by Fuse Science, Inc., a Nevada
corporation (the “Company”), and each of its existing “Subsidiaries” (as defined in the Securities
Purchase Agreement defined below) as named on the signature pages hereto (collectively, the “Existing Subsidiaries”)
and each other Subsidiary of the Company hereafter becoming party hereto (together with the Company and the Existing Subsidiaries,
each a “Grantor” and, collectively, the “Grantors”), in favor of Hudson Bay Master Fund
Ltd., in its capacity as collateral agent (in such capacity, the “Collateral Agent”) for the Buyers (as
defined below) party to the Securities Purchase Agreement, dated as of even date herewith (as amended, restated or otherwise modified
from time to time, the “Securities Purchase Agreement”).

 

WITNESSETH:

 

WHEREAS, the Company
and each party listed as a “Buyer” on the Schedule of Buyers (as such schedule may be amended, restated or otherwise
modified from time to time) attached thereto, each a “Buyer”, and collectively, the “Buyers”)
are parties to the Securities Purchase Agreement, pursuant to which the Company shall be required to sell, and the Buyers shall
purchase or have the right to purchase, the “Notes” (as defined in the Securities Purchase Agreement);

 

WHEREAS, the Buyers and
the Collateral Agent have required that the Existing Subsidiaries execute a Guaranty and this Agreement;

 

WHEREAS, it is a condition
precedent to the Buyers consummating the transactions contemplated by the Securities Purchase Agreement that the Company shall
have executed and delivered to the Collateral Agent this Agreement providing for the grant to the Collateral Agent for the benefit
of the Buyers of a security interest in all personal property of the Company to secure all of the Company’s obligations under
the Securities Purchase Agreement and the “Notes” (as defined therein) issued pursuant thereto (as such Notes may be
amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, collectively, the “Notes”)
and the other Transaction Documents (as defined in the Securities Purchase Agreement);

 

WHEREAS, each of the
Existing Subsidiaries will derive substantial benefits from the execution of the Securities Purchase Agreement;

 

WHEREAS, each of the
Existing Subsidiaries, the Company and each other Grantor (i) are or will be mutually dependent on each other in the conduct of
their respective businesses as an integrated operation, with the credit needed from time to time by one often being provided through
financing obtained by the other and the ability to obtain such financing being dependent on the successful operations of each of
the Existing Subsidiaries, the Company and each other Grantor and (ii) will receive a mutual benefit from the proceeds received
by the Company in respect of the issuance of the Notes;

 

    	 

    	 

    

  

WHEREAS, it is a condition
precedent to the Buyers consummating the transaction contemplated by the Securities Purchase Agreement that each of the Existing
Subsidiaries shall have granted to the Collateral Agent for the benefit of the Buyers a security interest in all personal property
of each of the Existing Subsidiaries to secure the Company’s obligations under the Securities Purchase Agreement and the
Notes, and that each future Subsidiary of the Company becomes a party to this Agreement; and

 

WHEREAS, each of the
Existing Subsidiaries and each other Grantor has determined that the execution, delivery and performance of this Agreement directly
benefits, and are in the best interest of such applicable Grantor; and

 

NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement,
each Grantor agrees with the Collateral Agent, for the benefit of the Buyers, as follows:

 

Section
1.          Definitions.

 

(a)          Reference
is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this
Agreement and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in Articles 8 or 9 of the
Uniform Commercial Code (the “Code”) as in effect from time to time in the State of New York, and which are
not otherwise defined herein, shall have the same meanings herein as set forth therein; provided, that terms used herein
which are defined in the Code as in effect in the State of New York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute except as the Collateral Agent may otherwise determine.

 

(b)          The
following terms shall have the respective meanings provided for in the Code: “Accounts”, “Cash Proceeds”,
“Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity Contracts”,
“Deposit Account”, “Documents”, “Equipment”, “Fixtures”, “General Intangibles”,
“Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit
Rights”, “Noncash Proceeds”, “Payment Intangibles”, “Proceeds”, “Promissory Notes”,
“Security”, “Record”, “Security Account”, “Software”, and “Supporting Obligations”.

 

(c)          As
used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:

 

“Collateral”
shall have the meaning set forth in Section 2 hereof.

 

“Copyright Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing
for the grant of any right to use or sell any works covered by any copyright (including, without limitation, all Copyright Licenses
set forth in Schedule II hereto).

 

    	-2-

    	 

    

  

“Copyrights”
means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout
the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original
works of authorship fixed in any tangible medium of expression, acquired or used by any Grantor (including, without limitation,
all copyrights described in Schedule II hereto), all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency
of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations
in part and extensions or renewals thereof.

 

“Event of
Default” means (i) any defined event of default under any one or more of the Transaction Documents, in each instance,
after giving effect to any notice, grace, or cure periods provided for in the applicable Transaction Document, (ii) the failure
by the Company to pay any amounts when due under the Notes or any other Transaction Document, or (iii) the breach of any representation,
warranty or covenant by any Grantor under this Agreement.

 

“Existing Issuer”
has the meaning specified therefor in the definition of the term “Pledged Shares”.

 

“Guaranty”
means the Guaranty, dated as of the date hereof, by the Existing Subsidiaries in favor of the Buyers and the Collateral Agent.

 

“Insolvency
Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code (Chapter 11
of Title 11 of the United States Code) or under any other bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, or extensions generally with creditors, or proceedings seeking reorganization, arrangement,
or other similar relief.

 

“Intellectual
Property” means the Copyrights, Trademarks and Patents.

 

“Licenses”
means the Copyright Licenses, the Trademark Licenses and the Patent Licenses.

 

“Lien”
means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security
or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement,
any capitalized lease and any assignment, deposit arrangement or financing lease intended as, or having the effect of, security.

 

“Obligations”
shall have the meaning set forth in Section 3 hereof.

 

“Patent Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing
for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all
Patent Licenses set forth in Schedule II hereto).

 

    	-3-

    	 

    

  

“Patents”
means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets,
ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and
other general intangibles of like nature, of any Grantor, now existing or hereafter acquired (including, without limitation, all
domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts,
methods, techniques, processes, proprietary information, technology, know-how and formulae described in Schedule II hereto),
all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings
in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country
or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals
thereof.

 

“Permitted Liens”
means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any Lien created by operation of law, such as materialmen’s
liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability that
is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iii) Liens granted hereunder
securing the Obligations and (iv) leases or subleases and licenses and sublicenses granted to others in the ordinary course of
the Grantors’ business, not interfering in any material respect with the business of a Grantor.

 

“Pledged Debt”
means the indebtedness described in Schedule VII hereto and all indebtedness from time to time owned or acquired by a Grantor,
the promissory notes and other Instruments evidencing any or all of such indebtedness, and all interest, cash, Instruments, Investment
Property, financial assets, securities, capital stock, other equity interests, stock options and commodity contracts, notes, debentures,
bonds, promissory notes or other evidences of indebtedness and all other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such indebtedness.

 

“Pledged Interests”
means, collectively, (a) the Pledged Debt, (b) the Pledged Shares and (c) all security entitlements in any and all of the foregoing.

 

“Pledged Issuer”
has the meaning specified therefor in the definition of the term “Pledged Shares”.

 

“Pledged Shares”
means (a) the shares of capital stock or other equity interests described in Schedule VIII hereto, whether or not evidenced or
represented by any stock certificate, certificated security or other Instrument, issued by the Persons described in such Schedule
VIII (the “Existing Issuers”), (b) the shares of capital stock or other equity interests at any time and from
time to time acquired by a Grantor of any and all Persons now or hereafter existing (such Persons, together with the Existing Issuers,
being hereinafter referred to collectively as the “Pledged Issuers” and each individually as a “Pledged
Issuer”), whether or not evidenced or represented by any stock certificate, certificated security or other Instrument,
and (c) the certificates representing such shares of capital stock, all options and other rights, contractual or otherwise, in
respect thereof and all dividends, distributions, cash, Instruments, Investment Property, financial assets, securities, capital
stock, other equity interests, stock options and commodity contracts, notes, debentures, bonds, promissory notes or other evidences
of indebtedness and all other property (including, without limitation, any stock dividend and any distribution in connection with
a stock split) from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such
capital stock.

 

    	-4-

    	 

    

 

“Trademark Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and providing
for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark
licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter
owned by any Grantor and now or hereafter covered by such licenses (including, without limitation, all Trademark Licenses described
in Schedule II hereto).

 

“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like
nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and foreign
trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names,
trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), all applications,
registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or
any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business
symbolized by such marks and all customer lists, formulae and other Records of any Grantor relating to the distribution of products
and services in connection with which any of such marks are used.

 

Section
2.          Grant of Security Interest. As collateral security
for all of the Obligations, each Grantor hereby pledges and assigns to the Collateral Agent for the benefit of the Buyers, and
grants to the Collateral Agent for the benefit of the Buyers a continuing security interest in, all personal property of such Grantor,
wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind and description,
tangible or intangible (collectively, the “Collateral”), including, without limitation, the following:

 

(a)          all
Accounts;

 

(b)          all
Chattel Paper (whether tangible or electronic);

 

(c)          the
Commercial Tort Claims specified on Schedule VI hereto;

 

(d)          all
Deposit Accounts (including, without limitation, all cash, and all other property from time to time deposited therein and the monies
and property in the possession or under the control of the Collateral Agent or a Buyer or any affiliate, representative, agent
or correspondent of the Collateral Agent or a Buyer);

 

(e)          all
Documents;

 

(f)          all
Equipment;

 

(g)          all
Fixtures;

 

    	-5-

    	 

    

  

(h)          all
General Intangibles (including, without limitation, all Payment Intangibles);

 

(i)          all
Goods;

 

(j)          all
Instruments (including, without limitation, Promissory Notes and each certificated Security);

 

(k)          all
Inventory;

 

(l)          all
Investment Property;

 

(m)          all
Copyrights, Patents and Trademarks, and all Licenses;

 

(n)          all
Letter-of-Credit Rights;

 

(o)          all
Supporting Obligations;

 

(p)          all
Pledged Interests;

 

(q)          all
other tangible and intangible personal property of such Grantor (whether or not subject to the Code), including, without limitation,
all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions and replacements of and to any of the property of such Grantor described in the preceding clauses
of this Section 2 (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and
warranties now or hereafter held by such Grantor in respect of any of the items listed above), and all books, correspondence, files
and other Records, including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession
or under the control of such Grantor or any other Person from time to time acting for such Grantor that at any time evidence or
contain information relating to any of the property described in the preceding clauses of this Section 2 or are otherwise
necessary or helpful in the collection or realization thereof; and

 

(r)          all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;

 

in each case, howsoever
such Grantor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

 

Section
3.          Security for Obligations. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether now existing
or hereafter incurred (collectively, the “Obligations”):

 

    	-6-

    	 

    

  

(a)          the
prompt payment by each Grantor, as and when due and payable (by scheduled maturity, required prepayment, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, the Notes, the Guaranty
and the other Transaction Documents, including, without limitation, (A) all principal of and interest on the Notes (including,
without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not
the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding), (B) all
amounts from time to time owing by such Grantor under the Guaranty, and (C) all fees, commissions, expense reimbursements, indemnifications
and all other amounts due or to become due under any of the Transaction Documents; and

 

(b)          the
due performance and observance by each Grantor of all of its other obligations from time to time existing in respect of any of
the Transaction Documents for so long as the Notes are outstanding.

 

Section
4.          Representations and Warranties.  Each Grantor represents
and warrants as follows:

 

(a)          Schedule
I hereto sets forth (i) the exact legal name of such Grantor, (ii) the organizational identification number of such Grantor
or states that no such organizational identification number exists and (iii) the state or jurisdiction of organization of such
Grantor.

 

(b)          There
is no pending or written notice threatening any action, suit, proceeding or claim affecting such Grantor before any governmental
authority or any arbitrator, or any order, judgment or award by any governmental authority or arbitrator, that may adversely affect
the grant by such Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral, or the
exercise by the Collateral Agent of any of its rights or remedies hereunder.

 

(c)          All
Federal, state and local tax returns and other reports required by applicable law to be filed by such Grantor have been filed,
or extensions have been obtained, and all taxes, assessments and other governmental charges imposed upon such Grantor or any property
of such Grantor (including, without limitation, all federal income and social security taxes on employees’ wages) and which
have become due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof in accordance with United States generally accepted accounting principles
consistently applied (“GAAP”).

 

(d)          All
Equipment, Fixtures, Goods and Inventory of such Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory of
such Grantor hereafter existing will be, located and/or based at the addresses specified therefor in Schedule III hereto,
except that such Grantor will give the Collateral Agent not less than 30 days’ prior written notice of any change of the
location of any such Collateral, other than to locations set forth on Schedule III and with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected its Liens thereon. Such Grantor’s chief place of business
and chief executive office, the place where such Grantor keeps its Records concerning Accounts and all originals of all Chattel
Paper are located at the addresses specified therefor in Schedule III hereto. None of the Accounts is evidenced by Promissory
Notes or other Instruments. Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement,
of (i) each Promissory Note, Security and other Instrument owned by each Grantor and (ii) each Deposit Account, Securities Account
and Commodities Account of each Grantor, together with the name and address of each institution at which each such Account is maintained,
the account number for each such Account and a description of the purpose of each such Account. Set forth in Schedule II
hereto is a complete and correct list of each trade name used by each Grantor and the name of, and each trade name used by, each
person from which such Grantor has acquired any substantial part of the Collateral.

 

    	-7-

    	 

    

 

(e)          Such
Grantor has delivered or made available to the Collateral Agent complete and correct copies of each License described in Schedule
II hereto, including all schedules and exhibits thereto, which represents all of the Licenses existing on the date of this
Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter
thereof, and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby
or the rights of such Grantor or any of its affiliates in respect thereof. Each material License now existing is, and any material
License entered into in the future will be, the legal, valid and binding obligation of the parties thereto, enforceable against
such parties in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in
equity or in law). No default under any material License by any such party has occurred, nor does any defense, offset, deduction
or counterclaim exist thereunder in favor of any such party.

 

(f)          Such
Grantor owns and controls, or otherwise possesses adequate rights to use, all Trademarks, Patents and Copyrights, which are the
only trademarks, patents, copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights
of publicity necessary to conduct its business in substantially the same manner as conducted as of the date hereof. Schedule
II hereto sets forth a true and complete list of all registered copyrights, issued patents, Trademarks (including, without
limitation, any Internet domain names and the registrar of each such Internet domain name), and Licenses annually owned or used
by such Grantor as of the date hereof. To the best knowledge of each Grantor, all such Intellectual Property of such Grantor is
subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not been
abandoned in whole or in part. Except as set forth in Schedule II, no such Intellectual Property is the subject of any licensing
or franchising agreement. Such Grantor has no knowledge of any conflict with the rights of others to any Intellectual Property
and, to the best knowledge of such Grantor, such Grantor is not now infringing or in conflict with any such rights of others in
any material respect, and to the best knowledge of such Grantor, no other Person is now infringing or in conflict in any material
respect with any such properties, assets and rights owned or used by such Grantor. Such Grantor has not received any notice that
it is violating or has violated the trademarks, patents, copyrights, inventions, trade secrets, proprietary information and technology,
know-how, formulae, rights of publicity or other intellectual property rights of any third party.

 

(g)          Such
Grantor is and will be at all times the sole and exclusive owner of, or otherwise has and will have adequate rights in, the Collateral
free and clear of any Liens, except for Permitted Liens on any Collateral. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any recording or filing office except (A) such
as may have been filed in favor of the Collateral Agent relating to this Agreement, and (B) such as may have been filed to
perfect any Permitted Liens.

 

    	-8-

    	 

    

 

(h)          The
exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting such Grantor or any of its properties and will not result in or require the creation of any Lien,
upon or with respect to any of its properties.

 

(i)          No
authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body,
or any other Person, is required for (i) the grant by such Grantor, or the perfection, of the security interest purported
to be created hereby in the Collateral, or (ii) the exercise by the Collateral Agent of any of its rights and remedies hereunder,
except (A) for the filing under the Uniform Commercial Code as in effect in the applicable jurisdiction of the financing statements,
all of which financing statements have been duly filed and are in full force and effect, (B) with respect to the perfection
of the security interest created hereby in the Intellectual Property, for the recording of the appropriate Assignment for Security,
substantially in the form of Exhibit A hereto, as applicable, in the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, and (C) with respect to the perfection of the security interest created hereby in
foreign Intellectual Property and Licenses, for registrations and filings in jurisdictions located outside of the United States
and covering rights in such jurisdictions relating to the Intellectual Property and Licenses.

 

(j)          This
Agreement creates in favor of the Collateral Agent a legal, valid and enforceable security interest in the Collateral as security
for the Obligations. The Collateral Agent’s having possession of all Instruments and cash constituting Collateral from time
to time, the recording of the appropriate Assignment for Security executed pursuant hereto in the United States Patent and Trademark
Office and the United States Copyright Office, as applicable, and the filing of the financing statements and the other filings
and recordings, as applicable, described in Schedule V hereto and, with respect to the Intellectual Property hereafter existing
and not covered by an appropriate Assignment for Security, the recording in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, of appropriate instruments of assignment, result in the perfection of such security
interests. Such security interests are, or in the case of Collateral in which such Grantor obtains rights after the date hereof,
will be, perfected, first priority security interests, subject only to Permitted Liens and the recording of such instruments of
assignment. Such recordings and filings and all other actions necessary or desirable to perfect and protect such security interest
have been duly taken, except for the Collateral Agent’s having possession of Instruments and cash constituting Collateral
after the date hereof and the other filings and recordations described in Section 4(f) hereof.

 

(k)          As
of the date hereof, such Grantor does not hold any Commercial Tort Claims nor is aware of any such pending claims, except for such
claims described in Schedule VI.

 

(l)          The
Existing Subsidiaries are the only Subsidiaries of the Company as of the date hereof.

 

    	-9-

    	 

    

  

Section
5.          Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding, unless the Collateral Agent shall otherwise consent in writing:

 

(a)          Further
Assurances. Each Grantor will at its expense, at any time and from time to time, promptly execute and deliver all further instruments
and documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect and protect
the security interest purported to be created hereby; (ii) enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder in respect of the Collateral; or (iii) otherwise effect the purposes of this Agreement, including,
without limitation: (A) marking conspicuously all Chattel Paper and each License and, at the request of the Collateral Agent,
each of its Records pertaining to the Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper, License or Collateral is subject to the security interest created hereby, (B)  delivering and pledging
to the Collateral Agent hereunder each Promissory Note, Security, Chattel Paper or other Instrument, now or hereafter owned by
such Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory
to the Collateral Agent, (C) executing and filing (to the extent, if any, that such Grantor’s signature is required
thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary
or desirable or that the Collateral Agent may request in order to perfect and preserve the security interest purported to be created
hereby, (D) furnishing to the Collateral Agent from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral in each case as the Collateral Agent may reasonably request,
all in reasonable detail, (E) if any Collateral shall be in the possession of a third party, notifying such Person of the
Collateral Agent’s security interest created hereby and obtaining a written acknowledgment from such Person that such Person
holds possession of the Collateral for the benefit of the Collateral Agent, which such written acknowledgement shall be in form
and substance satisfactory to the Collateral Agent, (F) if at any time after the date hereof, such Grantor acquires or holds
any Commercial Tort Claim, promptly notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description
of such Commercial Tort Claim and granting to the Collateral Agent a security interest therein and in the proceeds thereof, which
writing shall incorporate the provisions hereof and shall be in form and substance satisfactory to the Collateral Agent, (G) upon
the acquisition after the date hereof by such Grantor of any motor vehicle or other Equipment subject to a certificate of title
or ownership (other than a Motor Vehicle or Equipment that is subject to a purchase money security interest), causing the Collateral
Agent to be listed as the lienholder on such certificate of title or ownership and delivering evidence of the same to the Collateral
Agent in accordance with the Securities Purchase Agreement; and (H) taking all actions required by any earlier versions of
the Uniform Commercial Code or by other law, as applicable, in any relevant Uniform Commercial Code jurisdiction, or by other law
as applicable in any foreign jurisdiction.

 

(b)          Location
of Equipment and Inventory. Each Grantor will keep the Equipment and Inventory at the locations specified therefor in Section 4(g)
hereof or, upon not less than thirty (30) days’ prior written notice to the Collateral Agent accompanied by a new Schedule
III hereto indicating each new location of the Equipment and Inventory, at such other locations in the United States.

 

    	-10-

    	 

    

  

(c)          Condition
of Equipment. Each Grantor will maintain or cause the Equipment (necessary or useful to its business) to be maintained and
preserved in good condition, repair and working order, ordinary wear and tear excepted, and will forthwith, or in the case of any
loss or damage to any Equipment of such Grantor within a commercially reasonable time after the occurrence thereof, make or cause
to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent
with past practice, or which the Collateral Agent may reasonably request to such end. Such Grantor will promptly furnish to the
Collateral Agent a statement describing in reasonable detail any such loss or damage in excess of $25,000 to any Equipment.

 

(d)          Taxes,
Etc. Each Grantor agrees to pay promptly when due all property and other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory, except
to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty,
fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been
set aside for the payment thereof.

 

(e)          Insurance.

 

(i)          Each
Grantor will, at its own expense, maintain insurance (including, without limitation, commercial general liability and property
insurance) with respect to the Equipment and Inventory in such amounts, against such risks, in such form and with responsible and
reputable insurance companies or associations as is required by any governmental authority having jurisdiction with respect thereto
or as is carried by such Grantor as of the date hereof and in any event, in amount, adequacy and scope reasonably satisfactory
to the Collateral Agent. Each such policy for liability insurance shall provide for all losses to be paid on behalf of the Collateral
Agent and such Grantor as their respective interests may appear, and each policy for property damage insurance shall provide for
all losses to be adjusted with, and paid directly to, the Collateral Agent. Each such policy shall in addition (A) name the Collateral
Agent as an additional insured party thereunder (without any representation or warranty by or obligation upon the Collateral Agent)
as their interests may appear, (B) contain an agreement by the insurer that any loss thereunder shall be payable to the Collateral
Agent on its own account notwithstanding any action, inaction or breach of representation or warranty by such Grantor, (C) provide
that there shall be no recourse against the Collateral Agent for payment of premiums or other amounts with respect thereto, and
(D) provide that at least 30 days’ prior written notice of cancellation, lapse, expiration or other adverse change shall
be given to the Collateral Agent by the insurer. Such Grantor will, if so requested by the Collateral Agent, deliver to the Collateral
Agent original or duplicate policies of such insurance and, as often as the Collateral Agent may reasonably request, a report of
a reputable insurance broker with respect to such insurance. Such Grantor will also, at the request of the Collateral Agent, execute
and deliver instruments of assignment of such insurance policies and cause the respective insurers to acknowledge notice of such
assignment.

 

    	-11-

    	 

    

  

(ii)         Reimbursement
under any liability insurance maintained by a Grantor pursuant to this Section 5(e) may be paid directly to the Person who
shall have incurred liability covered by such insurance. In the case of any loss involving damage to Equipment or Inventory, any
proceeds of insurance maintained by a Grantor pursuant to this Section 5(e) shall be paid to the Collateral Agent (except
as to which paragraph (iii) of this Section 5(e) is not applicable), such Grantor will make or cause to be made the necessary
repairs to or replacements of such Equipment or Inventory, and any proceeds of insurance maintained by such Grantor pursuant to
this Section 5(e) shall be paid by the Collateral Agent to such Grantor as reimbursement for the costs of such repairs or
replacements.

 

(iii)        All
insurance payments in respect of such Equipment or Inventory shall be paid to the Collateral Agent and applied as specified in
Section 7(b) hereof.

 

(f)          Provisions
Concerning the Accounts and the Licenses.

 

(i)          Each
Grantor will (A) give the Collateral Agent at least 30 days’ prior written notice of any change in such Grantor’s name,
identity or organizational structure, (B) maintain its jurisdiction of incorporation as set forth in Section 4(a) hereto,
(C) immediately notify the Collateral Agent upon obtaining an organizational identification number, if on the date hereof such
Grantor did not have such identification number, and (D) keep adequate records concerning the Accounts and Chattel Paper and permit
representatives of the Collateral Agent during normal business hours on reasonable notice to such Grantor, to inspect and make
abstracts from such Records and Chattel Paper.

 

(ii)         Each
Grantor will, except as otherwise provided in this subsection (f), continue to collect, at its own expense, all amounts due
or to become due under the Accounts. In connection with such collections, such Grantor may (and, at the Collateral Agent’s
direction, will) take such action as such Grantor or the Collateral Agent may deem necessary or advisable to enforce collection
or performance of the Accounts; provided, however, that the Collateral Agent shall have the right at any time, upon
the occurrence and during the continuance of an Event of Default, to notify the account debtors or obligors under any Accounts
of the assignment of such Accounts to the Collateral Agent and to direct such account debtors or obligors to make payment of all
amounts due or to become due to such Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such
notification and at the expense of such Grantor and to the extent permitted by law, to enforce collection of any such Accounts
and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might
have done. After receipt by a Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to
notify, or has enforced or intends to enforce a Grantor’s rights against the account debtors or obligors under any Accounts
as referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including Instruments)
received by such Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder,
shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Agent in the same form
as so received (with any necessary endorsement) to be held as cash collateral and applied as specified in Section 7(b) hereof,
and (B) such Grantor will not adjust, settle or compromise the amount or payment of any Account or release wholly or partly any
account debtor or obligor thereof or allow any credit or discount thereon. In addition, upon the occurrence and during the continuance
of an Event of Default, the Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and financial
institutions with which such Grantor either maintains a Deposit Account or a lockbox or deposits the proceeds of any Accounts to
send immediately to the Collateral Agent by wire transfer (to such account as the Collateral Agent shall specify, or in such other
manner as the Collateral Agent shall direct) all or a portion of such securities, cash, investments and other items held by such
institution. Any such securities, cash, investments and other items so received by the Collateral Agent shall (in the sole and
absolute discretion of the Collateral Agent) be held as additional Collateral for the Obligations or distributed in accordance
with Section 7 hereof.

 

    	-12-

    	 

    

  

(iii)        Upon
the occurrence and during the continuance of any breach or default under any material License referred to in Schedule II
hereto by any party thereto other than a Grantor, the Grantor party thereto will, promptly after obtaining knowledge thereof, give
the Collateral Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes
to take with respect thereto and thereafter will take reasonable steps to protect and preserve its rights and remedies in respect
of such breach or default, or will obtain or acquire an appropriate substitute License.

 

(iv)        Each
Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by
it by which any other party to any material License referred to in Schedule II hereto purports to exercise any of its rights
or affect any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.

 

(v)         Each
Grantor will exercise promptly and diligently each and every right which it may have under each material License (other than any
right of termination) and will duly perform and observe in all respects all of its obligations under each material License and
will take all action reasonably necessary to maintain such Licenses in full force and effect. No Grantor will, without the prior
written consent of the Collateral Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any provision of,
any material License referred to in Schedule II hereto.

 

(g)          Transfers
and Other Liens.

 

(i)          No
Grantor will sell, assign (by operation of law or otherwise), lease, license, exchange or otherwise transfer or dispose of any
of the Collateral, except (A) Inventory in the ordinary course of business and (B) worn-out or obsolete assets not necessary to
the business.

 

(ii)         No
Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.

 

    	-13-

    	 

    

 

(h)          Intellectual
Property.

 

(i)          If
applicable, each Grantor shall, upon the Collateral Agent’s written request, duly execute and deliver the applicable Assignment
for Security in the form attached hereto as Exhibit A. Each Grantor (either itself or through licensees) will, and will
cause each licensee thereof to, take all action necessary to maintain all of the Intellectual Property in full force and effect,
including, without limitation, using the proper statutory notices and markings and using the Trademarks on each applicable trademark
class of goods in order to so maintain the Trademarks in full force and free from any claim of abandonment for non-use, and such
Grantor will not (nor permit any licensee thereof to) do any act or knowingly omit to do any act whereby any Intellectual Property
may become invalidated; provided, however, that so long as no Event of Default has occurred and is continuing, such
Grantor shall not have an obligation to use or to maintain any Intellectual Property (A) that relates solely to any product
or work that has been, or is in the process of being, discontinued, abandoned or terminated, (B) that is being replaced with Intellectual
Property substantially similar to the Intellectual Property that may be abandoned or otherwise become invalid, so long as the failure
to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual
Property and so long as such replacement Intellectual Property is subject to the Lien created by this Agreement or (C) that is
substantially the same as another Intellectual Property that is in full force, so long the failure to use or maintain such Intellectual
Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such other
Intellectual Property is subject to the Lien and security interest created by this Agreement. Each Grantor will cause to be taken
all necessary steps in any proceeding before the United States Patent and Trademark Office and the United States Copyright Office
or any similar office or agency in any other country or political subdivision thereof to maintain each registration of the Intellectual
Property (other than the Intellectual Property described in the proviso to the immediately preceding sentence), including, without
limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference and cancellation
proceedings and payment of maintenance fees, filing fees, taxes or other governmental fees in the ordinary course of business.
If any Intellectual Property (other than Intellectual Property described in the proviso to the first sentence of subsection (i)
of this clause (h)) is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, such
Grantor shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly notify the Collateral
Agent and (y) to the extent such Grantor shall deem appropriate under the circumstances, promptly sue for infringement, misappropriation,
dilution or other violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation,
dilution or other violation, or take such other actions as such Grantor shall deem appropriate under the circumstances to protect
such Intellectual Property. Each Grantor shall furnish to the Collateral Agent from time to time upon its request statements and
schedules further identifying and describing the Intellectual Property and Licenses and such other reports in connection with the
Intellectual Property and Licenses as the Collateral Agent may reasonably request, all in reasonable detail and promptly upon request
of the Collateral Agent, following receipt by the Collateral Agent of any such statements, schedules or reports, such Grantor shall
modify this Agreement by amending Schedule II hereto, as the case may be, to include any Intellectual Property and License,
as the case may be, which becomes part of the Collateral under this Agreement and shall execute and authenticate such documents
and do such acts as shall be necessary or, in the judgment of the Collateral Agent, desirable to subject such Intellectual Property
and Licenses to the Lien and security interest created by this Agreement. Notwithstanding anything herein to the contrary, upon
the occurrence and during the continuance of an Event of Default, such Grantor may not abandon or otherwise permit any Intellectual
Property to become invalid without the prior written consent of the Collateral Agent, and if any Intellectual Property is infringed,
misappropriated, diluted or otherwise violated in any material respect by a third party, such Grantor will take such action as
the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property.

 

    	-14-

    	 

    

  

(ii)         In
no event shall a Grantor, either itself or through any agent, employee, licensee or designee, file an application for the registration
of any Trademark or Copyright or the issuance of any Patent with the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, or in any similar office or agency of the United States or any country or any political subdivision
thereof unless it gives the Collateral Agent prior written notice thereof. Upon request of the Collateral Agent, each Grantor shall
execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral Agent
may reasonably request to evidence the Collateral Agent’s security interest hereunder in such Intellectual Property and the
General Intangibles of such Grantor relating thereto or represented thereby, and such Grantor hereby appoints the Collateral Agent
its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until the complete conversion
of all of the Company’s obligations under the Notes to equity securities of the Company and/or indefeasible payment in full
in cash of all obligations under the Notes (together with any matured indemnification obligations as of the date of such conversion
and/or payment, but excluding any inchoate or unmatured contingent indemnification obligations).

 

(iii)        Upon
the Collateral Agent’s request, each Grantor shall cause each domain registrar where any of such Grantor’s Internet
domain names are registered, whether as of the date of this Agreement or at any time hereafter, to execute and deliver to the Collateral
Agent a domain name control agreement, in form and substance reasonably satisfactory to the Collateral Agent, duly executed by
such Grantor and such domain registrar, or enter into other arrangements in form and substance satisfactory to the Collateral Agent,
pursuant to which such domain registrar shall irrevocably agree, inter alia, that (i) it will comply at any time
with the instructions originated by the Collateral Agent to such domain registrar directing substitution of the Collateral Agent
or its designee as the registered owner of such Internet domain names, without further consent of such Grantor, which instructions
the Collateral Agent will not give to such domain registrar in the absence of a continuing Event of Default.

 

(i)          Deposit,
Commodities and Securities Accounts. Upon the Collateral Agent’s request, each Grantor shall cause each bank and other
financial institution with an account referred to in Schedule IV hereto to execute and deliver to the Collateral Agent a
control agreement, in form and substance reasonably satisfactory to the Collateral Agent, duly executed by such Grantor and such
bank or financial institution, or enter into other arrangements in form and substance satisfactory to the Collateral Agent, pursuant
to which such institution shall irrevocably agree, inter alia, that (i) it will comply at any time with the
instructions originated by the Collateral Agent to such bank or financial institution directing the disposition of cash, Commodity
Contracts, securities, Investment Property and other items from time to time credited to such account, without further consent
of such Grantor, which instructions the Collateral Agent will not give to such bank or other financial institution in the absence
of a continuing Event of Default, (ii) all cash, Commodity Contracts, securities, Investment Property and other items of such
Grantor deposited with such institution shall be subject to a perfected, first priority security interest in favor of the Collateral
Agent, (iii) any right of set off, banker’s Lien or other similar Lien, security interest or encumbrance shall be fully
waived as against the Collateral Agent, and (iv) upon receipt of written notice from the Collateral Agent during the continuance
of an Event of Default, such bank or financial institution shall immediately send to the Collateral Agent by wire transfer (to
such account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct) all such cash,
the value of any Commodity Contracts, securities, Investment Property and other items held by it. Without the prior written consent
of the Collateral Agent, such Grantor shall not make or maintain any Deposit Account, Commodity Account or Securities Account except
for the accounts set forth in Schedule IV hereto. The provisions of this paragraph 5(i) shall not apply to (i) Deposit Accounts
for which the Collateral Agent is the depositary and (ii) Deposit Accounts specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of a Grantor’s salaried employees.

 

    	-15-

    	 

    

  

(j)          Motor
Vehicles.

 

(i)          Upon
the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for all motor vehicles owned by it with the Collateral Agent listed as lienholder, for the benefit of the
Buyers.

 

(ii)         Each
Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective the date hereof and terminating upon the termination
of this Agreement, for the purpose of (A) executing on behalf of such Grantor title or ownership applications for filing with appropriate
state agencies to enable motor vehicles now owned or hereafter acquired by such Grantor to be retitled and the Collateral Agent
listed as lienholder thereof, (B) filing such applications with such state agencies, and (C) executing such other documents and
instruments on behalf of, and taking such other action in the name of, such Grantor as the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof (including, without limitation, for the purpose of creating in favor of the Collateral
Agent a perfected Lien on the motor vehicles and exercising the rights and remedies of the Collateral Agent hereunder). This appointment
as attorney-in-fact is coupled with an interest and is irrevocable until the complete conversion of all of the Company’s
obligations under the Notes to equity securities of the Company and/or indefeasible payment in full in cash of all obligations
under the Notes (together with any matured indemnification obligations as of the date of such conversion and/or payment, but excluding
any inchoate or unmatured contingent indemnification obligations).

 

(iii)        Any
certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by odometer statements for each
motor vehicle covered thereby.

 

(iv)        So
long as no Event of Default shall have occurred and be continuing, upon the request of such Grantor, the Collateral Agent shall
execute and deliver to such Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Collateral
Agent as lienholder on any certificate of title for any motor vehicle; provided, however, that any such instruments
shall be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from such Grantor stating
that such motor vehicle is to be sold or has suffered a casualty loss (with title thereto passing to the casualty insurance company
therefor in settlement of the claim for such loss) and the amount that such Grantor will receive as sale proceeds or insurance
proceeds. Any proceeds of such sale or casualty loss shall be paid to the Collateral Agent hereunder immediately upon receipt,
to be applied to the Obligations then outstanding.

 

    	-16-

    	 

    

  

(k)          Control.
Each Grantor hereby agrees to take any or all action that may be necessary or desirable or that the Collateral Agent may request
in order for the Collateral Agent to obtain control in accordance with Sections 9-105 – 9-107 of the Code with respect to
the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, (iii) Pledged Interests and (iv) Letter-of-Credit
Rights.

 

(l)          Inspection
and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such professionals
or other Persons as the Collateral Agent may designate, not more than once a year in the absence of an Event of Default, (i) to
examine and make copies of and abstracts from such Grantor’s records and books of account, (ii) to visit and inspect its
properties, (iii) to verify materials, leases, Instruments, Accounts, Inventory and other assets of such Grantor from time
to time and (iv) to conduct audits, physical counts, appraisals and/or valuations, examinations at the locations of such Grantor.
Each Grantor shall also permit the Collateral Agent or any agent or representatives thereof or such professionals or other Persons
as the Collateral Agent may designate to discuss such Grantor’s affairs, finances and accounts with any of its officers subject
to the execution by the Collateral Agent or its designee(s) of a mutually agreeable confidentiality agreement.

 

(m)          Future
Subsidiaries. If any Grantor shall hereafter create or acquire any Subsidiary, simultaneously with the creation of acquisition
of such Subsidiary, such Grantor shall cause such Subsidiary to become a party to this Agreement as an additional “Grantor”
hereunder, and to duly execute and/or deliver such opinions of counsel and other documents, in form and substance acceptable to
the Collateral Agent, as the Collateral Agent shall reasonably request with respect thereto.

 

Section
6.          Additional Provisions Concerning the Collateral.

 

(a)          Each
Grantor hereby (i) authorizes the Collateral Agent to file one or more Uniform Commercial Code financing or continuation statements,
and amendments thereto, relating to the Collateral (including, without limitation, financing statements describing the Collateral
as “all assets” or “all personal property” or words of similar effect) and (ii) ratifies such authorization
to the extent that the Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to
the date hereof. 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.

 

(b)          Each
Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and
stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral Agent’s discretion,
so long as an Event of Default shall have occurred and is continuing, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement (subject to the rights of such Grantor
under Section 5 hereof), including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral
Agent pursuant to Section 5(e) hereof, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any
drafts or other instruments, documents and chattel paper in connection with clause (i) or (ii) above, (iv) to file any claims or
take any action or institute any proceedings which the Collateral Agent may deem necessary or desirable for the collection of any
Collateral or otherwise to enforce the rights of the Collateral Agent and the Buyers with respect to any Collateral, and (v) to
execute assignments, licenses and other documents to enforce the rights of the Collateral Agent and the Buyers with respect to
any Collateral. This power is coupled with an interest and is irrevocable until the complete conversion of all of the Company’s
obligations under the Notes to equity securities of the Company and/or indefeasible payment in full in cash of all obligations
under the Notes (together with any matured indemnification obligations as of the date of such conversion and/or payment, but excluding
any inchoate or unmatured contingent indemnification obligations).

 

    	-17-

    	 

    

  

(c)          For
the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent shall
be lawfully entitled to exercise such rights and remedies upon and during an Event of Default, and for no other purpose, each Grantor
hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to such Grantor) to use, assign, license or sublicense any Intellectual Property now owned or
hereafter acquired by such Grantor, wherever the same may be located, including in such license reasonable access to all media
in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout
thereof. Notwithstanding anything contained herein to the contrary, but subject to the provisions of the Securities Purchase Agreement
that limit the right of such Grantor to dispose of its property and Section 5(h) hereof, so long as no Event of Default
shall have occurred and be continuing, such Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose
of or take other actions with respect to the Intellectual Property in the ordinary course of its business. In furtherance of the
foregoing, unless an Event of Default shall have occurred and be continuing, the Collateral Agent shall from time to time, upon
the request of a Grantor, execute and deliver any instruments, certificates or other documents, in the form so requested, which
such Grantor shall have certified are appropriate (in such Grantor’s judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual Property). Further, upon the
complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company and/or indefeasible
payment in full in cash of all obligations under the Notes (together with any matured indemnification obligations as of the date
of such conversion and/or payment, but excluding any inchoate or unmatured contingent indemnification obligations), the Collateral
Agent (subject to Section 10(e) hereof) shall release and reassign to such Grantor all of the Collateral Agent’s right,
title and interest in and to the Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever.
The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses
or sublicenses theretofore granted by such Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby
releases the Collateral Agent from any claims, causes of action and demands at any time arising out of or with respect to any actions
taken or omitted to be taken by the Collateral Agent under the powers of attorney granted herein other than actions taken or omitted
to be taken through the Collateral Agent’s gross negligence or willful misconduct, as determined by a final determination
of a court of competent jurisdiction.

 

    	-18-

    	 

    

  

(d)          If
a Grantor fails to perform any agreement contained herein, the Collateral Agent may itself perform, or cause performance of, such
agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral Agent incurred
in connection therewith shall be payable by such Grantor pursuant to Section 8 hereof and shall be secured by the Collateral.

 

(e)          The
powers conferred on the Collateral Agent hereunder are solely to protect its 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 it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

(f)          Anything
herein to the contrary notwithstanding, (i) each Grantor shall remain liable under the Licenses and otherwise with respect
to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights hereunder shall not release
such Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral
Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other
Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of such Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned hereunder.

 

    	-19-

    	 

    

 

Section
7.          Remedies Upon Event of Default. If any Event of Default
shall have occurred and be continuing:

 

(a)          The
Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code
applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation,
transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral Agent
has not theretofore done so) and thereafter receive, for the benefit of the Collateral Agent, all payments made thereon, give all
consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner
thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make it available
to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties,
and the Collateral Agent may enter into and occupy any premises owned or leased by such Grantor where the Collateral or any part
thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s rights and remedies
hereunder or under law, without obligation to such Grantor in respect of such occupation, and (iii) without notice except
as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of the Collateral Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem
commercially reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the
Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition
of its respective Collateral shall be required by law, at least ten (10) days’ notice to such Grantor of the time and place
of any public sale or the time after which any private sale or other disposition of its respective Collateral is to be made shall
constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale or other disposition of any Collateral
regardless of notice of sale having been given. The Collateral 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. Each Grantor hereby waives any claims against the Collateral Agent and the Buyers arising by reason
of the fact that the price at which its respective Collateral may have been sold at a private sale was less than the price which
might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Collateral Agent
accepts the first offer received and does not offer such Collateral to more than one offeree, and waives all rights that such Grantor
may have to require that all or any part of such Collateral be marshalled upon any sale (public or private) thereof. Each Grantor
hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent shall be made without warranty,
(ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and
(iii) such actions set forth in clauses (i) and (ii) above shall not adversely effect the commercial reasonableness of
any such sale of Collateral. In addition to the foregoing, (A) upon written notice to any Grantor from the Collateral Agent,
such Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose
described in such notice; (B) the Collateral Agent may, at any time and from time to time, upon 10 days’ prior notice to
such Grantor, license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual
Property, throughout the universe for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall
in its sole discretion determine to the extent consistent with any restrictions or conditions imposed upon such Grantor with respect
to such Intellectual Property by license or other contractual arrangement; and (C) the Collateral Agent may, at any time, pursuant
to the authority granted in Section 6 hereof (such authority being effective upon the occurrence and during the continuance
of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments of assignment of the Intellectual
Property (or any application or registration thereof), in form suitable for filing, recording or registration in any country.

 

(b)          Any
cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale of
or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of the Collateral Agent,
be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts
payable to the Collateral Agent pursuant to Section 8 hereof) in whole or in part by the Collateral Agent against, all or
any part of the Obligations in such order as the Collateral Agent shall elect, consistent with the provisions of the Securities
Purchase Agreement. Any surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the complete conversion
of all of the Company’s obligations under the Notes to equity securities of the Company and/or indefeasible payment in full
in cash of all obligations under the Notes (together with any matured indemnification obligations as of the date of such conversion
and/or payment, but excluding any inchoate or unmatured contingent indemnification obligations) shall be paid over to whomsoever
shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

 

    	-20-

    	 

    

 

(c)          In
the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which the Collateral
Agent and the Buyers are legally entitled, each shall be liable for the deficiency, together with interest thereon at the highest
rate specified in any of the applicable Transaction Documents for interest on overdue principal thereof or such other rate as shall
be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other client charges
of any attorneys employed by the Collateral Agent to collect such deficiency.

 

(d)          Each
Grantor hereby acknowledges that if the Collateral Agent complies with any applicable state, provincial, or federal law requirements
in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of
any sale or other disposition of the Collateral.

 

(e)          The
Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this
Agreement and the Collateral) for, or other assurances of payment of, the Obligations or to resort to such collateral security
or other assurances of payment in any particular order, and all of the Collateral Agent’s rights hereunder and in respect
of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing
or arising. To the extent that each Grantor lawfully may, such Grantor hereby agrees that it will not invoke any law relating to
the marshalling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s rights under
this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations
is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, such Grantor hereby irrevocably waives the benefits of all such laws.

 

Section
8.          Indemnity and Expenses.

 

(a)          Each
Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the Buyers, jointly
and severally, harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs
and expenses (including, without limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s counsel)
to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this
Agreement), except claims, losses or liabilities resulting solely and directly from such Person’s gross negligence or willful
misconduct, as determined by a final judgment of a court of competent jurisdiction.

 

(b)          Each
Grantor agrees, jointly and severally, to upon demand pay to the Collateral Agent the amount of any and all costs and expenses,
including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents
(including, without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral Agent
may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment,
waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.

 

    	-21-

    	 

    

  

Section
9.          Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt requested),
telecopied or delivered, if to a Grantor at its address specified below and if to the Collateral Agent to it, at its address specified
below; or as to any such Person, at such other address as shall be designated by such Person in a written notice to such other
Person complying as to delivery with the terms of this Section 9. All such notices and other communications shall be effective
(a) if sent by certified mail, return receipt requested, when received or five days after deposited in the mails, whichever
occurs first, (b) if telecopied, when transmitted (during normal business hours) and confirmation is received, otherwise,
the day after the notice was transmitted if confirmation is received, or (c) if delivered, upon delivery.

 

Section
10.         Miscellaneous.

 

(a)          No
amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Collateral
Agent, and no waiver of any provision of this Agreement, and no consent to any departure by a Grantor therefrom, shall be effective
unless it is in writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

(b)          No
failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right hereunder or under any of the other
Transaction Documents shall operate as a waiver thereof; 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. The rights and remedies of the Collateral Agent or any Buyer
provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights
or remedies provided by law. The rights of the Collateral Agent or any Buyer under any of the other Transaction Documents against
any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights under any of the
other Transaction Documents against such party or against any other Person, including, but not limited to, any Grantor.

 

(c)          To
the extent permitted by applicable law, each Grantor hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Obligations and this Agreement and any requirement that the Collateral Agent exhaust any right or take
any action against any other Person or any Collateral. Each Grantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated herein and that the waiver set forth in this Section 10(c) is knowingly
made in contemplation of such benefits. The Grantors hereby waive any right to revoke this Agreement, and acknowledge that this
Agreement is continuing in nature and applies to all Obligations, whether existing now or in the future.

 

(d)          No
Grantor may exercise any rights that it may now or hereafter acquire against any other Grantor that arise from the existence, payment,
performance or enforcement of any Grantor’s obligations under this Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of
the Collateral Agent against any Grantor or any Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to take or receive from any Grantor, directly or indirectly,
in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or
right, unless and until the complete conversion of all of the Company’s obligations under the Notes to equity securities
of the Company and/or indefeasible payment in full in cash of all obligations under the Notes (together with any matured indemnification
obligations as of the date of such conversion and/or payment, but excluding any inchoate or unmatured contingent indemnification
obligations). If any amount shall be paid to a Grantor in violation of the immediately preceding sentence at any time prior to
the complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company and/or indefeasible
payment in full in cash of all obligations under the Notes (together with any matured indemnification obligations as of the date
of such conversion and/or payment, but excluding any inchoate or unmatured contingent indemnification obligations), such amount
shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the Collateral Agent to be credited
and applied to the Obligations and all other amounts payable under the Transaction Documents, whether matured or unmatured, in
accordance with the terms of the Transaction Documents, or to be held as Collateral for any Obligations or other amounts payable
under the Transaction Documents thereafter arising.

 

    	-22-

    	 

    

 

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

 

(f)          This
Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the
complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company and/or indefeasible
payment in full in cash of all obligations under the Notes (together with any matured indemnification obligations as of the date
of such conversion and/or payment, but excluding any inchoate or unmatured contingent indemnification obligations), and (ii) be
binding on each Grantor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d)
of the Code and shall inure, together with all rights and remedies of the Collateral Agent and the Buyers hereunder, to the benefit
of the Collateral Agent and the Buyers and their respective permitted successors, transferees and assigns. Without limiting the
generality of clause (ii) of the immediately preceding sentence, without notice to any Grantor, the Collateral Agent and the Buyers
may assign or otherwise transfer their rights and obligations under this Agreement and any of the other Transaction Documents,
to any other Person and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to
the Collateral Agent and the Buyers herein or otherwise. Upon any such assignment or transfer, all references in this Agreement
to the Collateral Agent or any such Buyer shall mean the assignee of the Collateral Agent or such Buyer. None of the rights or
obligations of any Grantor hereunder may be assigned or otherwise transferred without the prior written consent of the Collateral
Agent, and any such assignment or transfer without the consent of the Collateral Agent shall be null and void.

 

(g)          Upon
the complete conversion of all of the Company’s obligations under the Notes to equity securities of the Company and/or indefeasible
payment in full in cash of all obligations under the Notes (together with any matured indemnification obligations as of the date
of such conversion and/or payment, but excluding any inchoate or unmatured contingent indemnification obligations), (i) this Agreement
and the security interests created hereby shall terminate and all rights to the Collateral shall revert to the respective Grantor
that granted such security interests hereunder, and (ii) the Collateral Agent will, upon such Grantor’s request and at such
Grantor’s expense, (A) return to such Grantor such of the Collateral as shall not have been sold or otherwise disposed of
or applied pursuant to the terms hereof, and (B) execute and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination, all without any representation, warranty or recourse whatsoever.

 

    	-23-

    	 

    

 

(h)          THIS
AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED
BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION
OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED
BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

(i)          ANY
LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY THE COURT.

 

(j)          EACH
GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) THE COLLATERAL AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION
DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

 

(k)          Nothing
contained herein shall affect the right of the Collateral Agent to serve process in any other manner permitted by law or commence
legal proceedings or otherwise proceed against any Grantor or any property of such Grantor in any other jurisdiction.

 

    	-24-

    	 

    

  

(l)          Each
Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, punitive or consequential damages.

 

(m)          Section
headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other
purpose.

 

(n)          This
Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together constitute one in the same Agreement.

 

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 

    	-25-

    	 

    

 

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

 

	 	COMPANY:
	 	 
	 	FUSE SCIENCE, INC., a Nevada corporation
	 	 	 
	 	By:	 
	 	Name:	Brian Tuffin
	 	Title:	Chief Executive Officer
	 	 	 
	 	EXISTING SUBSIDIARIES:
	 	 
	 	FS Consumer Products Group, Inc., a Florida corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	FSR&D, Inc., a Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	[Signature Page to Pledge and Security Agreement]

    	 

    

 

ACCEPTED BY:

 

	COLLATERAL AGENT:	 
	 	 
	Hudson Bay Master Fund Ltd.	 
	 	 	 
	By:  	Hudson Bay Capital Management LP, as its	 
	 	Investment Manager	 
	 	 	 
	By:	 	 
	Name:	Yoav Roth	 
	Title:	Authorized Signatory	 

  

    	[Signature Page to Pledge and Security Agreement]

    	 

    

  

SCHEDULE I

 

LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION
NUMBERS; STATES OR JURISDICTION OF ORGANIZATION

 

	Name	 	Identification Number	 	State of Organization
	 	 	 	 	 
	Fuse Science, Inc.	 	C7596-1988	 	Nevada
	 	 	 	 	 
	FS Consumer Products Group, Inc.	 	P11000098169	 	Florida
	 	 	 	 	 
	FSR&D, Inc.	 	4948807	 	Delaware

 

    	Sched. I-1

    	 

    

 

SCHEDULE II

 

INTELLECTUAL PROPERTY
AND LICENSES; TRADE NAMES

 

the
Company

 

	A.	COPYRIGHTS

 

	 	1.	Registered Copyrights	NONE.
	 	2.	Copyright Applications	NONE.
	 	3.	Copyright Licenses	NONE.

 

	B.	PATENTS

 

For each of the items below, please
see the attached Summary of Patent Matters for Fuse Science, Inc., dated 11/6/2013, from the Company’s IP counsel.

 

	 	1.	Registered Patents
	 	2.	Patents Applications
	 	3.	Patents Licenses

 

Exclusive Patent and Technology
License Agreement, with a thirty year term, dated November 2, 2011, by and among Fuse Science, Inc. (as Licensee), and Cure
IP Holdings LLC, Robert S. Davidson, Edward Maliski, Edward Maliski PhD., Eric Allen, and Platform Delivery Technologies, Inc.
(as Licensors).

 

	C.	TRADEMARKS

 

For each of the items below, please
see the attached Summary of Trademark Matters, dated 11/6/2013, from the Company’s IP Counsel.

 

	 	1.	Registered Trademarks
	 	2.	Trademark Applications
	 	3.	Trademark Licenses

 

	D.	OTHER INTELLECTUAL PROPERTY	NONE.
	 	 	 
	E.	TRADE NAMES	NONE.
	 	 	 
	F.	NAME OF, AND EACH TRADE NAME USED BY, EACH PERSON FROM WHICH A GRANTOR HAS ACQUIRED ANY SUBSTANTIAL PART OF THE COLLATERAL WITHIN THE PRECEDING FIVE YEARS
	 	 	 
		N/A	 

 

    	Sched. II-1

    	 

    

 

EXISTING SUBSIDIARIES

  

	A.	COPYRIGHTS

 

	 	1.	Registered Copyrights	NONE.
	 	2.	Copyright Applications	NONE.
	 	3.	Copyright Licenses	NONE.

 

	B.	PATENTS

 

	 	1.	Registered Patents	NONE.
	 	2.	Patents Applications	NONE.
	 	3.	Patents Licenses	NONE.

 

	C.	TRADEMARKS

 

	 	1.	Registered Trademarks	NONE.
	 	2.	Trademark Applications	NONE.
	 	3.	Trademark Licenses	NONE.

 

	D.	OTHER INTELLECTUAL PROPERTY	NONE.
	 	 	 
	E.	TRADE NAMES	NONE.
	 	 	 
	F.	NAME OF, AND EACH TRADE NAME USED BY, EACH PERSON FROM WHICH A GRANTOR HAS ACQUIRED ANY SUBSTANTIAL PART OF THE COLLATERAL WITHIN THE PRECEDING FIVE YEARS
	 	 
	 	N/A	 

 

    	Sched. II-2

    	 

    

 

SCHEDULE III

 

LOCATIONS OF the
Company

 

	LOCATION	
        Description of Location (State if Location

        (i) contains Rolling Stock, other Equipment, Fixtures, Goods
        or Inventory,

	 	(ii) is chief place of business and chief executive office, or
	 	(iii) contains Records concerning Accounts
	 	and originals of Chattel Paper)

 

The principal place of business for the Company is 6135 NW
167th Street, Suite E-21, Miami Lakes, FL 33015.

 

The Company has goods and inventory at the following locations:

 

	Location	 	Goods and Inventory at Location
	Unicep Packaging, Inc.	 	242,000 units finished goods inventory
	1702 Industrial Drive	 	 
	Sandpoint, ID 83864	 	 
	 	 	 
	Cure Pharmaceutical Corp.	 	Equipment and raw material
	Corporate HQ	 	 
	Receiving, & Manufacturing	 	 
	1620 Beacon Place 	 	 
	Oxnard, CA 93033	 	 
	 	 	 
	Smart Warehousing, LLC	 	Finished goods inventory
	1869 N. Topping Ave. 	 	 
	Kansas City, MO 64120 	 	 

 

    	Sched. III-1

    	 

    

 

LOCATIONS OF EXISTING SUBSIDIARIES

 

	LOCATION	Description of Location (State if Location
	 	(i) contains Rolling Stock, other Equipment, Fixtures, Goods or Inventory,
	 	(ii) is chief place of business and chief executive office, or
	 	(iii) contains Records concerning Accounts and originals of Chattel Paper)

 

The principal place of business for each of the Company’s
subsidiaries is 6135 NW 167th Street, Suite E-21, Miami Lakes, FL 33015.

 

    	Sched. III-2

    	 

    

 

SCHEDULE IV

 

PROMISSORY NOTES, SECURITIES, DEPOSIT ACCOUNTS,
SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS

 

the
Company

 

Promissory Notes:

 

Purchase Order Financing Notes (The
Company will use a portion of the proceeds to pay off a portion of the Purchase Order Financing Notes): 

 

	Principal & Interest outstanding:	 	$	202,086.27	 

 

Bridge Financing (This Indebtedness
will no longer be outstanding upon the execution of this Agreement):

 

	Principal & Interest outstanding:	 	$	775,000.00	 

 

Securities and Other Instruments:

 

NONE.

 

	Name and Address	 	 	 	 	 	 
	of Institution	 	 	 	 	 	 
	Maintaining Account	 	Acct. Number	 	Type of Account	 	Purpose of Account
	 	 	 	 	 	 	 
	Bank United	 	 	 	 
	15201 NW 67th Ave	 	 	 	 
	Miami Lakes, FL  33014	 	 	 	 
	 	 	 	 	 	 	 
	Same as above	 	9852626142	 	Checking	 	Main Operating Acct.
	Same as above	 	9852626142	 	Checking	 	Payroll Account
	Same as above	 	9852798245	 	Checking	 	CC receipt account
	Same as above	 	9852807023	 	Debit	 	Company debit card
	Same as above	 	9852866917	 	Checking	 	Investment Account

 

    	Sched. IV-1

    	 

    

 

EXISTING SUBSIDIARIES

 

Promissory Notes

 

NONE.

 

Securities and Other Instruments

 

NONE.

 

	Name and Address	 	 	 	 	 	 
	of Institution	 	 	 	 	 	 
	Maintaining Account	 	Account Number	 	 Type of Account	 	Purpose of Account

 

NONE.

 

    	Sched. IV-2

    	 

    

 

SCHEDULE V

 

UCC-1 FINANCING STATEMENTS

 

UCC Financing Statements
have been filed in the jurisdictions below against the Grantors:

 

	Debtor (Grantor)	Secured Party	Document No.
	 	 	 
	Fuse Science, Inc.	Jonathan Manela	2013027782-6
	 	Brian Tuffin	 
	 	 	 
	Fuse Science, Inc.	MusclePharm Corp.	2013029592-5

 

The foregoing UCC Financing Statements will
be terminated on, or before, the Initial Closing Date.

 

    	Sched. V-1

    	 

    

 

SCHEDULE VI

 

COMMERCIAL TORT CLAIMS

 

the
Company

 

COMMERCIAL TORT CLAIMS

 

NONE.

 

    	Sched. VI-1

    	 

    

 

EXISTING SUBSIDIARIES

 

COMMERCIAL TORT CLAIMS

 

NONE.

 

    	 

    	 

    

 

SCHEDULE VII

 

PLEDGED DEBT

 

	 	 	 	 	 	 	Principal Amount
	Grantor	 	Name of Maker	 	Description	 	Outstanding as of

 

NONE.

    	Sched. VII-2

    	 

    

 

SCHEDULE VIII

 

PLEDGED SHARES

 

	Grantor	 	Name of Pledged
 Issuer	 	Number of
 Shares	 	 	Percentage of
 Outstanding
 Shares	 	 	Class	 	 	Certificate
 Number	 
	Fuse Science, Inc.	 	FS Consumer Products Group, Inc.	 	 	1,000	 	 	 	100	%	 	 		 	 	 	001	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fuse Science, Inc.	 	FSR&D, Inc.	 	 	11,000	 	 	 	100	%	 	 	 	 	 	 	001	 

 

For each of the foregoing, see attached
Stock Certificate and corresponding Stock Power.

 

    	Sched. VIII-1

    	 

    

 

EXHIBIT A

 

ASSIGNMENT FOR SECURITY

 

[TRADEMARKS] [PATENTS] [COPYRIGHTS]

 

WHEREAS, ______________________________
(the “Assignor”) [has adopted, used and is using, and holds all right, title and interest in and to, the trademarks
and service marks listed on the annexed Schedule 1A, which trademarks and service marks are registered or applied for
in the United States Patent and Trademark Office (the “Trademarks”)] [holds all right, title and interest in
the letter patents, design patents and utility patents listed on the annexed Schedule 1A, which patents are issued
or applied for in the United States Patent and Trademark Office (the “Patents”)] [holds all right, title and
interest in the copyrights listed on the annexed Schedule 1A, which copyrights are registered in the United States Copyright
Office (the “Copyrights”)];

 

WHEREAS, the Assignor
has entered into a Pledge and Security Agreement, dated as of December [__], 2013 (as amended, restated or otherwise modified from
time to time the “Security Agreement”), in favor of Hudson Bay Master Fund Ltd., as collateral agent
for certain buyers (the “Assignee”);

 

WHEREAS, pursuant to
the Security Agreement, the Assignor has assigned to the Assignee and granted to the Assignee for the benefit of the Buyers (as
defined in the Security Agreement) a continuing security interest in all right, title and interest of the Assignor in, to and under
the [Trademarks, together with, among other things, the good-will of the business symbolized by the Trademarks] [Patents] [Copyrights]
and the applications and registrations thereof, and all proceeds thereof, including, without limitation, any and all causes of
action which may exist by reason of infringement thereof and any and all damages arising from past, present and future violations
thereof (the “Collateral”), to secure the payment, performance and observance of the “Obligations”
(as defined in the Security Agreement);

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor does hereby pledge, convey,
sell, assign, transfer and set over unto the Assignee and grants to the Assignee for the benefit of the Buyers a continuing security
interest in the Collateral to secure the prompt payment, performance and for the benefit of the Buyers observance of the Obligations.

 

The Assignor does hereby
further acknowledge and affirm that the rights and remedies of the Assignee with respect to the Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth
herein.

 

    	Exh. A-1

    	 

    

 

IN WITNESS WHEREOF, the
Assignor has caused this Assignment to be duly executed by its officer thereunto duly authorized as of _____________, 20__

 

	 	[GRANTOR]
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title: 

 

    	Exh. A-2

    	 

    

 

STATE OF ____________

ss.:

 

COUNTY OF __________

 

On this ____ day of _______________,
20__, before me personally came ________________, to me known to be the person who executed the foregoing instrument, and who,
being duly sworn by me, did depose and say that s/he is the ________________ of _______________________________________, a ____________________,
and that s/he executed the foregoing instrument in the firm name of _______________________________________, and that s/he had
authority to sign the same, and s/he acknowledged to me that he executed the same as the act and deed of said firm for the uses
and purposes therein mentioned.

 

    	Exh. A-3

    	 

    

 

SCHEDULE 1A TO ASSIGNMENT FOR SECURITY

 

[Trademarks and Trademark Applications]

[Patent and Patent Applications]

[Copyright and Copyright Applications]

Owned by ______________________________

  

    	Exh. A-4

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