Document:

EX-4.1

 Exhibit 4.1 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE FEDERAL OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR HYPOTHECATED IN ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH LAWS AS MAY BE APPLICABLE OR, AN OPINION OF COUNSEL THAT AN EXEMPTION FROM SUCH APPLICABLE LAWS EXIST. 

SENIOR SECURED PROMISSORY NOTE 
  

							
	Principal Amount:     	 	$320,000.00	  	Issuance Date:	 	August 7, 2015
	Maturity Date:	 	December 31, 2015	  		 	

 FOR VALUE RECEIVED, Authentidate Holding Corp., a Delaware corporation (the “Borrower”), with
its principal offices located at 300 Connell Drive, Fifth Floor, Berkeley Heights, N.J. 07922, hereby promises to pay to the order of MKA 79, LLC (the “Holder”) at such address as the Holder designates in writing to the Borrower,
the principal sum of Three Hundred and Twenty Thousand Dollars ($320,000.00) (the “Principal Amount”), on the earlier of the Maturity Date stated above, or such earlier date as this note may be payable in accordance with
Section 4, below. This Senior Secured Promissory Note (this “Note”) is a direct obligation of the Borrower. 
 1.
Interest on this Note shall be computed at the rate of 10.0% per annum, payable in arrears on the Maturity Date or such earlier date as this note may be payable in accordance with Section 4, below, at which time all accrued and unpaid
interest shall be immediately due and payable. All computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in the period for which such interest is payable. Accrued interest on the outstanding
principal amount shall be due and payable on the Maturity Date or on any earlier date on which the Principal Amount of this Note becomes due and payable. Payments of all amounts due hereunder shall be made in lawful money of the United States. 

2. Payment of the Principal Amount of this Note, and interest thereon, shall be made upon the surrender of this Note to the Borrower, at its
chief executive office (or such other office within the United States as shall be designated by the Borrower to the Holder hereof) (the “Designated Office”), in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts. If the Maturity Date (or earlier date of payment) shall be a Saturday or a Sunday or shall be a legal holiday in the State of New York, then such action may be taken or such
right may be exercised on the next succeeding day which is not a legal holiday. For purposes of this note, a “month” shall mean a 30 day period. The Borrower may prepay this obligation in whole or part at any time and from time to time
without premium or penalty of any kind, upon ten (10) days advance written notice to the Holder, provided that any prepayment shall be applied first to accrued but unpaid interest and any other sums owed to Holder, and then to reduce the
Principal Amount of the Note. 
 3. Seniority and Certain Covenants. 

(a) Seniority and Security. The obligations of the Borrower under this Note are secured by certain assets of the Borrower pursuant to
the Security Agreement, dated as of the Issuance Date of this Note (the “Security Agreement”) between the Borrower and the Holder. This Note shall be senior in right of payment to all other Indebtedness of the Borrower and its
subsidiaries, subject to the terms herein. 
 (b) Negative Covenants. As long as any portion of this Note remains outstanding, unless
the Holder shall have otherwise given prior written consent, the Borrower shall not, and shall not permit any of the subsidiaries to, directly or indirectly: 

(i) other than Permitted Indebtedness (as defined in the Security Agreement), enter into, create, incur, assume, guarantee or suffer to exist
any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; 

  
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 (ii) other than Permitted Liens (as defined in the Security Agreement), enter into, create,
incur, assume or suffer to exist any Liens (as defined in the Security Agreement) of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; or 

(iii) prepay any Indebtedness (as defined in the Security Agreement), other than pursuant to payments of Permitted Indebtedness. For purposes
of clarity, nothing herein shall restrict or limit the Borrower’s payment of the principal amount of, or interest on, any instruments evidencing Indebtedness issued by the Borrower prior to the date hereof and as such instruments may have been
amended to date, in accordance with their terms, and any deferrals, renewals or extensions thereof, and any notes or other instruments or evidences of Indebtedness issued in respect of or in exchange thereof. 

(c) Notwithstanding the foregoing provisions of this Section 3, if any transaction contemplated by Section 3(b) provides for the
repayment of this Note at or prior to the closing of such transaction, then the consent of the Holder shall not be required, provided that this Note is paid in full at or prior to the closing of such transaction. 

4. Events of Default. 

(a) For purposes of this Note, an “Event of Default” shall consist of any of the following events: 

(1) The Borrower shall fail to pay any portion of the Principal Amount of this Note or any accrued, but unpaid interest thereon, when the
same becomes due and payable, whether at the Maturity Date or at any accelerated date of maturity or at any other date fixed for payment, and such default continues for 5 days or more. 

(2) The Borrower shall voluntarily commence any case, proceeding or other action under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking other relief with respect to its debts;
or a court shall enter an order for relief or any such adjudication or appointment, which case, proceeding or action or order, adjudication, or appointment, as the case may be, remains undismissed, undischarged or unbonded for a period of 30 days,
then, or any time thereafter during the continuance of any of such events. 
 (3) A final judgment for money damages or order for the
payment of money damages in excess of One Hundred Thousand Dollars ($100,000) (exclusive of amounts covered by insurance) shall be entered against the Borrower, which has not been vacated or stayed within 10 days of entry. 

(4) Any material representation or warranty of the Borrower herein shall prove to have been false in any material respect upon the date when
made. 
 (5) The occurrence of a default (after giving effect to any grace periods or rights to cure held by the Borrower) under any
material indebtedness of the Borrower. 
 (6) The Borrower shall liquidate, dissolve, terminate or suspend its business operations. 

  
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 (b) Acceleration of Payment. If an Event of Default with respect to the Borrower (other
than an Event of Default specified in Section 4(a)(2) hereof) occurs and is continuing, the Holder, by written notice to the Borrower, may declare due and payable the Principal Amount of this Note, plus accrued and unpaid interest thereon. Upon
a declaration of acceleration, such principal shall be immediately due and payable. If an Event of Default specified in Section 4(a)(2) occurs with respect to the Borrower, the principal of this Note shall become and be immediately due and
payable, without any declaration or other act on the part of the Holder. Further, upon an Event of Default, from such date of the Event of Default, Holder shall be entitled, and this Note shall bear interest at the rate of 16% per annum. Upon
the payment in full of the amounts due under this Note, the Holder shall promptly surrender this Note to or as directed by the Borrower. 

(c) Collections. If an Event of Default with respect to this Note occurs and is continuing, the Holder may pursue any available remedy
by proceeding at law or in equity to collect the defaulted payment or to enforce the performance of any provision of this Note. Notwithstanding any other provision in this Note, the Holder of this Note shall have the right, which is absolute and
unconditional, to receive payment of the Principal Annual, plus accrued and unpaid interest thereon, in respect of the Note held by the Holder, on or after the final Maturity Date, or to bring suit for the enforcement of any such payment on or after
such date, and such rights shall not be impaired or affected adversely without the consent of the Holder. 
 (d) No Exclusive Right or
Remedy. Except as otherwise provided herein, no right or remedy conferred in this Note upon the Holder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy. No delay or omission of the Holder of this Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or
any acquiescence therein. Every right and remedy given by this Section 4 or by law to the Holder may be exercised from time to time, and as often as may be deemed expedient, by the Holder. 

5. Transferability; Loss and Replacement. 

(a) This Note has not been registered under the Securities Act, or the securities laws of any state or other jurisdiction. Neither this Note
nor any interest or participation herein may be reoffered, sold, assigned, transferred, pledged, encumbered or otherwise disposed of (a “Transfer”) in the absence of registration under the Securities Act and any applicable state
securities laws, or unless (i) such transaction is exempt from, or not subject to, registration under the Securities Act or the securities laws of any state or other jurisdiction and (ii) is made in compliance with applicable federal and
state statutory resale restrictions, if any. The Holder by its acceptance of this Note agrees that it shall not offer, sell, assign, transfer, pledge, encumber or otherwise dispose of this Note or any portion thereof or interest therein other than
in a minimum denomination of $50,000 principal amount (or any integral multiple of $10,000 in excess thereof) and then (other than with respect to a Transfer pursuant to a registration statement that is effective at the time of such Transfer) only
(a) to the Borrower, (b) to an affiliate of the Holder, (c) to a Person it reasonably believes to be an “accredited investor” within the meaning of Rule 501(a) under the Securities Act, or (d) pursuant to a transaction
in compliance with Rule 144 or Rule 144A under the Securities Act, and in the case of (b), (c) and (d) above in which the transferor furnishes the Borrower with such certifications, legal opinions or other information as the Borrower may
reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act as applicable. 

  
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 (b) By receipt and acceptance of this Note, Holder and any permitted transferee represents and
warrants to the Borrower that (i) it is an “accredited investor” as defined in Rule 501(a) under the Securities Act; (ii) either alone or together with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Note, and has so evaluated the merits and risks of such investment; (iii) is able to bear the economic risk of an
investment in the Note and, at the present time, is able to afford a complete loss of such investment; (iv) understands that the Note will be characterized as “restricted securities” under U.S. federal securities laws and have not
been and are not being registered under the Securities Act or any state securities laws, must be held indefinitely and may not be offered for sale, sold, assigned or transferred except in accordance therewith and (vii) it has reviewed the
Borrower’s filings with the Securities and Exchange Commission (“SEC Reports”) and has been afforded (A) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of
the Borrower concerning the terms and conditions of this Note and the merits and risks of the prospective investment in the Note and the Borrower generally and, (B) it has access to information about the Borrower and its subsidiaries and their
respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate the terms and conditions of this Note and the merits and risks of the prospective investment in the Borrower.

 (c) The Transfer of this Note is registrable on the books of the Borrower upon surrender of this Note for registration of Transfer at the
Borrower’s designated office, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Borrower duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon
one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. Prior to due presentation of this Note for registration of Transfer, the Borrower and any
agent of the Borrower may treat the Person in whose name this Note is registered as the owner thereof for all purposes, whether or not this Note be overdue, and neither the Borrower nor any such agent shall be affected by notice to the contrary.
Upon presentation of this Note for registration of Transfer at the Borrower’s designated office accompanied by (i) certification by the transferor that such Transfer is in compliance with the terms hereof and (ii) by a written
instrument of Transfer in a form approved by the Borrower executed by the Holder, in person or by the Holder’s attorney thereunto duly authorized in writing, and including the name, address and telephone and fax numbers of the transferee and
name of the contact person of the transferee, such Note shall be transferred on the Note Register, and a new Note of like tenor and bearing the same legends shall be issued in the name of the transferee and sent to the transferee at the address and
c/o the contact person so indicated. Transfers and exchanges of Notes shall be subject to such additional restrictions as are set forth in the legends on the Notes and to such additional reasonable regulations as may be prescribed by the Borrower as
specified herein. Successive registrations of Transfers as aforesaid may be made from time to time as desired, and each such registration shall be noted on the Note register. No Transfer shall be allowed except to an “accredited investor”
as defined under the rules and regulations of the Securities and Exchange Commission. 
 (d) Upon receipt by the Borrower of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and in the case of loss, theft or destruction, receipt of indemnity reasonably satisfactory to the Borrower and upon surrender and cancellation of this Note,
if mutilated, the Borrower will deliver a new Note of like tenor and dated as of such cancellation, in lieu of such Note. 

  
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 6. Miscellaneous. 

(a) This Note and the Security Agreement constitutes the entire agreement between the parties relating to the subject matter hereof and
supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Neither this Note nor any term hereof may be amended or waived orally or in writing, except that any term of this Note may be
amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), and such amendment or waiver shall be applicable upon the approval of the Borrower and the
Holder. 
 (b) This Note and the rights and obligations of the Holder and of the undersigned shall be governed and construed in accordance
with the laws of the State of New York. 
 (c) Upon the occurrence and during the continuance of an Event of Default under this Note, the
Borrower shall, upon demand, pay to the Holder the amount of any and all reasonable costs and expenses (including reasonable attorneys’ fees) that Holder may incur in connection with the enforcement or collection of this Note. 

(d) No failure or delay on the part of the Holders hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies. 
 (e) The Borrower hereby, to the fullest extent permitted by applicable law, waives presentment,
demand, notice (including without limitation notice of default (except as otherwise specifically set forth herein), notice of protest, notice of intention to accelerate maturity, notice of acceleration of maturity and notice of nonpayment or
dishonor), protest and all other demands and notices in connection with delivery, acceptance, performance, default, acceleration or enforcement of or under this Note, and the bringing of suit and diligence in taking any action to collect amounts
owing hereunder or in proceeding against any of the rights and properties securing payment hereof, and is directly and primarily liable for the amount of all sums owing or to be owing hereon. No extension of the time for the payment of this Note
made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of the Borrower under this Note. 

(f) To the extent that Holder receives any payment on account of any of Borrower’s obligations under this Note, and any such payment(s)
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, subordinate and/or required to be repaid to a trustee, receiver or any other person or entity under any bankruptcy act, state or federal law,
common law or equitable cause, then, to the extent of such payment(s) received, the Borrower’s obligations or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment(s) had not been
received by the Holder and applied on account of Borrower’s obligations. 
 (g) Section headings used herein are for convenience of
reference only, are not part of this Note and shall not affect the construction of, or be taken into consideration in interpreting, this Note. 

(h) If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision
is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If the Borrower is at any time 

  
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required or obligated to pay interest hereunder at a rate that would be in excess of a statutory or legally permitted rate, then the rate of interest shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum rate and any prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of the principal balance of this
Note. 
 (i) All notices, offers, acceptance and any other acts under this Note (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by FedEx or similar receipted next business day delivery, or by facsimile or email delivery followed by overnight next business day delivery to the Borrower at the address set forth above
(or such other address as the Borrower may by notice to the Holder may designate from time to time) and to the Holder at the address set forth in the Security Agreement (or such other address as the Holder by notice to the Borrower may designate
from time to time). Time shall be counted to, or from, as the case may be, the date of delivery. 
 (j) Borrower shall reimburse the Holder
for the reasonable attorneys’ fees incurred by Holder, in an amount not to exceed $10,000, in connection with the preparation and delivery of this Note. 

[Signature Page Follows] 

  
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 IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the Issuance Date.

  

			
	BORROWER:
	
	AUTHENTIDATE HOLDING CORP.
		
	By:	 	 /s/ Ian C. Bonnet

	Name:	 	Ian C. Bonnet
	Title:	 	Chief Executive Officer

  
 7EX-10.1

 Exhibit 10.1 

SECURITY AGREEMENT 

THIS SECURITY AGREEMENT (this “Agreement”) is made and entered into as of August 7, 2015 by Authentidate Holding Corp.,
a Delaware corporation (the “Company”) and MKA 79, LLC (the “Secured Party”). This Agreement is being executed and delivered by the Company and the Secured Party in connection with the Company’s issuance to the
Secured Party of that certain Senior Secured Promissory Note, dated as of the date first set forth above (the “Secured Note”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set
forth in the Secured Note. 
 W I T N E S S E T H: 

WHEREAS, the Secured Party has purchased from the Company, and the Company issued to the Secured Party, the Secured Note; and 

WHEREAS, in order to induce the Secured Party to extend the loans evidenced by the Secured Note, the Company has agreed to execute and deliver
to the Secured Party this Agreement and to grant the security interests described herein to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the Secured Note. 

NOW, THEREFORE, in consideration of the foregoing, the covenants set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Secured Party and the Company hereby agree as follows. 
 SECTION I 

DEFINITIONS 

Section 1.1. Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this
Section 1. Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial tort claim”, “deposit account”,
“document”, “equipment”, “fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”, “investment property”, “letter-of-credit rights”,
“proceeds” and “supporting obligations”) shall have the respective meanings given such terms in Article 9 of the UCC. 

(a) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United
States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 

(b) “Collateral” means the collateral in which the Secured Party are granted a security interest by this Agreement and which
consists of the following personal property of the Company, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements
thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith: all assets of the
Company, including without limitation all of the Company’s rights, title and interests in and to all of the following, whether now or hereafter existing or acquired by the Company: (i) accounts; (ii) as-extracted collateral;
(iii) chattel paper; (iv) deposit accounts; (v) documents; (vi) equipment; (vii) farm products; (viii) fixtures; (ix) general intangibles; (x) inventory; (xi) instruments; (xii) investment property;
(xiii) letter-of-credit rights; (xiv) other goods; (xv) supporting obligations; (xvi) commercial tort claims; and (xvii) all proceeds and products of all of the foregoing, including without limitation whatever is received
when any of the foregoing Collateral is sold, exchanged, leased, licensed, collected or otherwise disposed of and includes all distributions on account thereof, rights and claims 

 
arising therefrom, except for any assets that are part of the “Collateral” as defined under that certain Security Agreement dated as of May 29, 2015 among the Company and the
secured parties named therein. Notwithstanding the foregoing, none of the following items will be included in the Collateral: (a) assets if the granting of a security interest in such asset would (I) be prohibited by applicable law (but
proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC, shall not be deemed excluded from the Collateral regardless of such prohibition), or (II) be prohibited by contract (except to the extent such
prohibition is overridden by UCC Section 9-408) (but proceeds and receivables thereof shall not be deemed excluded from the Collateral regardless of such prohibition); (b) any property and assets, the pledge of which would require
approval, license or authorization of any governmental body, unless and until such consent, approval, license or authorization shall have been obtained or waived provided that the Company has used commercially reasonable efforts to obtain or waive
such consent, approval, license or authorization; (c) assets in circumstances where the Secured Party reasonably determines that the cost, burden or consequences (including adverse tax consequences) of obtaining or perfecting a security
interest in such assets is excessive in relation to the practical benefit afforded thereby; provided, however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to
the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset. 
 (c)
“General Intangibles” means general intangibles (as that term is defined in the UCC), and, in any event, includes payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations,
choses or things in action, goodwill (including the goodwill associated with any Trademark), Patents, Trademarks, Copyrights, URLs and domain names, industrial designs and other Intellectual Property or rights therein or applications therefor,
whether under license or otherwise, programs, programming materials, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing
agreements, including Intellectual Property Licenses, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, pension plan refunds, pension plan refund claims, insurance
premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the UCC, and any other personal property of the Company, other than those assets
which are excluded from the definition of the term “General Intangibles” pursuant to the UCC. 
 (d)
“Indebtedness” means (x) any liabilities for borrowed money or amounts (other than trade accounts payable, accrued expenses or deferred revenue incurred in the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP; provided, further,
however, that in no event shall the term Indebtedness include the capital stock surplus, retained earnings, minority interests in the common stock of subsidiaries, operating lease obligations, reserves for deferred income taxes and investment
credits, other deferred credits or reserves. 
 (e) “Intellectual Property” means the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under the laws of the United States, any
other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications
for letters patent of 

  
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the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise,
and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the
foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing. 
 (f)
“Liens” means any lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction, other than restrictions imposed by securities laws. 

(g) “Majority in Interest” shall mean the holders of fifty-one percent (51%) or more of the then outstanding principal
amount of all then outstanding Secured Notes at the time of such determination. 
 (h) “Material Adverse Effect” means an
event or occurrence that has a material adverse effect on (i) the legality, validity or enforceability of the Note or this Security Agreement; (ii) the results of operations, assets, business, prospects or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) the Company’s ability to perform in any material respect on a timely basis its obligations under the Note or this Security Agreement. 

(i) “Obligations” means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or
several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of the Company to the Secured Party, including, without limitation, all obligations under this Agreement and the Secured Note, whether now or
hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased,
created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the term “Obligations” shall include, without limitation:
(i) principal of, and interest on the Secured Note and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Company from time to time under or in connection with this
Agreement or the Secured Note; and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company. 
 (j) “Permitted
Indebtedness” means (a) Indebtedness secured by Permitted Liens, including without limitation Indebtedness incurred in connection with arrangements contemplated by clause (h) of the definition of the term “Permitted
Liens”; (b) Indebtedness to trade creditors or for professional services incurred in the ordinary course of business; (c) all capital lease obligations and other obligations or liabilities created or arising under any conditional sale
or other title retention agreement with respect to property used or acquired by the subject Person, even if the rights and remedies of the lessor, seller or lender thereunder are limited to repossession of such property and the present value of
lease payments due under synthetic leases; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such

  
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Person in the ordinary course of the business of such Person; (e) purchase money financing and equipment financing facilities covering existing and newly-acquired property, plant or
equipment; (f) Indebtedness of any amount outstanding immediately prior to the execution of this Agreement; (g) Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by
the Secured Note, which Indebtedness does not provide at any time for the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until after the maturity date of the Secured
Note; (h) Indebtedness incurred by the Company that is unsecured; (i) a maximum of $2,100,000 of additional senior secured debentures that the Company may hereafter issue pursuant to the terms and conditions of that certain Securities
Purchase Agreement dated as of May 29, 2015 among the Company and the purchasers executing such agreement; and (j) extensions, refinancings and renewals of any items of Permitted Indebtedness described above (including the issuance of new
debt or convertible debt securities in exchange for the cancellation of existing debt securities in an Alternative Transaction), provided that the principal amount is not increased or, other than with respect to debt or convertible debt securities
issued by the Company in an Alternative Transaction, the terms modified to impose more burdensome terms upon the Company or its Subsidiaries, as the case may be. As used herein, an “Alternative Transaction” is a transaction between the
Company and the holder of any Prior Notes pursuant to which such Prior Notes are surrendered and exchanged for other equity and/or debt securities of the Company on such terms as may be agreed upon by the Company. Permitted Indebtedness shall
include, without limitation, (i) the principal amount of such Indebtedness, (ii) unpaid accrued interest thereon, and (iii) all other obligations of the Company arising out of the Permitted Indebtedness now existing or hereafter
arising, together with all costs of collecting such obligations (including attorneys’ fees), including, without limitation, all interest accruing after the commencement by or against the Company of any bankruptcy, reorganization or similar
proceeding. 
 (k) “Permitted Liens” means: (a) Liens for taxes not yet due or delinquent or being contested in good
faith and by appropriate proceedings, for which adequate reserves have been established; (b) Liens in respect of property or assets imposed by law which were incurred in the ordinary course of business, such as carriers’,
warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by
appropriate proceedings; (c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, and other Liens to secure the performance
of tenders, statutory obligations, contract bids, government contracts, performance and return of money bonds and other similar obligations, incurred in the ordinary course of business, whether pursuant to statutory requirements, common law or
consensual arrangements; (d) Liens in favor of the Secured Party; (e) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of goods;
(f) Liens which constitute rights of setoff of a customary nature or banker’s liens, whether arising by law or by contract; (g) leases or subleases and licenses or sublicenses granted in the ordinary course of Company’s business;
(h) Liens in the ordinary course of business (A) upon or in any equipment acquired or held by the Company (or any of its Subsidiaries) to secure the purchase price of such equipment or Indebtedness incurred solely for the purpose of
financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such
equipment; (i) Liens in existence prior to the execution of this Agreement; (j) Liens that are expressly subordinated to the Liens granted pursuant to the Security Agreement; and (k) Liens incurred in connection with the extension,
renewal or refinancing of the Permitted Indebtedness secured by Liens of the type described above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of
the Indebtedness being extended, renewed or refinanced does not increase. 

  
 4 

 (l) “Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 

(m) “Prior Notes” means instruments evidencing Indebtedness issued by the Company prior to the date of this Agreement, as
such instruments may be amended to date, and any deferrals, renewals or extensions thereof, and any notes or other instruments or evidences of Indebtedness issued in respect of or in exchange thereof. 

(n) “Subsidiary” means, in respect of any Person, any corporation, association, partnership or other business entity of which
more than 50% of the total voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners
or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person. 

(o) “UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of New York and or any
other applicable law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. 

SECTION II 

COLLATERAL; OBLIGATION SECURED 

Section 2.1. Grant and Description. In order to secure the full and complete payment and performance of the Obligations when due,
the Company hereby grants to the Secured Party, subject to the Permitted Liens, a first priority security interest in all of the Company’s rights, titles, and interests in and to the Collateral (the “Security Interest”) and
subject to the Permitted Liens, pledges, collaterally transfers, and assigns the Collateral to the Secured Party, all upon and subject to the terms and conditions of this Security Agreement. If the grant, pledge, or collateral transfer or assignment
of any specific item of the Collateral is expressly prohibited by any contract or by law, then the Security Interest created hereby nonetheless remains effective to the extent allowed by such contract, the UCC or other applicable laws, but is
otherwise limited by that prohibition. The Security Interest granted herein shall terminate in accordance with Section 7.1 hereof. 

Section 2.2. Financing Statements; Further Assurances. 

(a) The Secured Party shall be named as the sole secured party on any and all financing statements and security agreements filed pursuant to
this Security Agreement and is authorized to file any and all terminations of such financing statements at such time or times as it determines is appropriate pursuant to the Security Agreement. 

(b) As soon as practicable following the execution and delivery of this Agreement and upon the authorization of the Secured Party, the Company
shall: 
 (i) file with the State of Delaware and any other offices that the Secured Party may reasonably request in writing an initial
financing statement that (i) indicates the Collateral in a manner consistent with the definition of the term “Collateral” as contained in this Agreement, and (ii) contains any other information required by Article 9 of the
UCC of the state or such jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether the Company is an organization, the type of organization, and any organization identification number
issued to the Company; 

  
 5 

 (ii) if necessary to perfect the Security Interest granted in the Collateral hereunder, file
with the U.S. Patent and Trademark Office, such financing statements and/or patent security agreements in the form necessary to record the Liens granted hereunder on the Company’s patents and patent applications; and 

(iii) upon the reasonable request of the Secured Party, file such additional financing statements and other documents, including amendments
to the financing statements, in order to maintain the Liens in the Collateral. 
 (c) Until the Obligations are paid and performed in full,
the Company covenants and agrees that it will, at its own expense and upon the request of the Secured Party (or the Majority in Interest if there is more than one Secured Party), but in all cases subject to the rights of the grantees of the
Permitted Liens: (i) after an Event of Default, file or cause to be filed such applications and take such other actions as the Secured Party (or the Majority in Interest if there is more than one Secured Party) may reasonably request to obtain
the consent or approval of any governmental authority to the rights of the Secured Party hereunder, including, without limitation, the right to sell all the Collateral upon an Event of Default without additional consent or approval from such
governmental authority; (ii) from time to time, either before or after an Event of Default, promptly execute and deliver to the Secured Party all such other assignments, certificates, supplemental documents, and financing statements, and do all
other acts or things as the Secured Party (or the Majority in Interest if there is more than one Secured Party) may reasonably request in order to more fully create, evidence, perfect, continue, and preserve the priority of the Security Interest and
to carry out the provisions of this Agreement; and (iii) either before or after an Event of Default, pay all filing fees in connection with any financing, continuation, or termination statement or other instrument with respect to the Security
Interest. 
 Section 2.3. Priority. The Secured Party hereby covenants and agrees with the Company that the Company has granted
and may subsequently grant, from time to time, Permitted Liens and that the security interest granted to the Secured Party in the Collateral hereunder is (i) subordinated to the respective Permitted Liens in the Collateral that was granted and
remains outstanding immediately prior to the date hereof (the “Senior Permitted Liens”) or as contemplated in Section 2.1, above; (ii) senior to other Liens granted by the Company in the Collateral after the date hereof;
and (iii) that as between all Secured Party, the Security Interest granted to each Secured Party under this Agreement is pari passu with the Security Interests of the other Secured Party. The priorities specified herein are applicable
irrespective of the time, order or method of attachment or perfection of security interests or the time or order of filing of financing statements. The Secured Party agrees not to seek to challenge, to avoid, to subordinate or to contest or directly
or indirectly to support any other Person in challenging, avoiding, subordinating or contesting in any judicial or other proceeding, including, without limitation, any proceeding involving the Company, the priority, validity, extent, perfection or
enforceability of any Senior Permitted Liens in all or any part of the Collateral. The Secured Party further covenants and agrees that it shall not take any action that is in violation of, or inconsistent with, the provisions of this section. 

SECTION III 

COVENANTS 

Section 3.1. Duties of the Company Regarding Collateral. At all times from and after the date hereof and until the Secured Note
has been paid in full or this Agreement is sooner terminated, the Company agrees that it shall: 
 (a) Preserve the Collateral in good
condition and order (ordinary wear and tear excepted) and not permit it to be abused or misused; 

  
 6 

 (b) Not allow any of the Collateral to be affixed to real estate, except for any property deemed
to be fixtures; 
 (c) Maintain good and complete title to the Collateral subject only to Permitted Liens; 

(d) Keep the Collateral free and clear at all times of all Liens other than Permitted Liens; 

(e) Take or cause to be taken such acts and actions as shall be necessary or appropriate to assure that the Secured Party’s security
interest in the Collateral (other than the Permitted Liens) not become subordinate to or on parity with the security interests, Liens or claims of any other Person; 

(f) Except as permitted pursuant to this Agreement, refrain from selling, assigning or otherwise disposing of any of the Collateral or moving
or removing any of the Collateral, without obtaining the prior written consent of the Secured Party (or the Majority in Interest if there is more than one Secured Party), or until all of the Obligations have been fully performed and paid in full;
provided, however, that concurrently with any disposition permitted by this Section 3.1, (x) the security interest granted hereby shall automatically be released from the Collateral so disposed, and (y) the security
interest shall continue in the Proceeds (as defined in the UCC) of such Collateral or any property purchased with such Proceeds; and provided further, that, the Secured Party shall execute and deliver, at the Company’s sole cost and
expense, any releases or other documents reasonably requested by the Company, that are in form and substance reasonably acceptable to the executing party, confirming the release of the security interest in that portion of the Collateral that is the
subject of a disposition permitted by this Section 3.1; 
 (g) Except in the ordinary course of business, the Company may not
(i) transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for non-exclusive licenses granted by the Company in its ordinary course of business and sales of inventory or obsolete capital
equipment by the Company in its ordinary course of business) without the prior written consent of either the Secured Party (or the Majority in Interest if there is more than one Secured Party) or (ii) consign any of its inventory which
constitutes any part of the Collateral, or sell any of its inventory which constitutes any part of the Collateral on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Party, which
shall not be unreasonably withheld; 
 (h) Promptly provide to the Secured Party such financial statements, reports, lists and schedules
related to the Collateral and any other information relating to the Collateral as the Secured Party may reasonably request from time to time and execute any documents related thereto, including, but not limited to any Intellectual Property Security
Agreement; 
 (i) Maintain, at the place where the Company is entitled to receive notices under the Secured Note, a current record of where
all material Collateral is located, permit representatives of the Secured Party at any time, upon reasonable prior written notice during normal business hours to inspect and make abstracts from such records (provided, that so long as no Event
of Default exists, the Secured Party shall conduct such inspections no more frequently than semi-annually); 
 (j) Within three
(3) Business Days notify the Secured Party if any Event of Default (as hereinafter defined) occurs; and 
 (k) In accordance with
prudent business practices, endeavor to collect or cause to be collected from each account debtor under its accounts, as and when due, any and all amounts owing under such accounts. 

  
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 For purposes of clarity, nothing in this Agreement, including without limitation the restrictions
set forth in Section 3.1(f) of this Agreement, shall be construed as restricting the Company and its Subsidiaries from (I) granting licenses or sublicenses to any of the Collateral which constitutes Intellectual Property; (II) from
licensing, selling, leasing or renting, directly or indirectly, any inventory or other property sold or disposed of in the ordinary course of business and on ordinary business terms); (III) from engaging in joint ventures, strategic alliances or
other similar arrangements for bona fide business purposes consistent with industry practices; (IV) from utilizing the cash generated from the Company’s business operations in accordance with the business judgment of management or the board of
directors; or (V) from entering into transactions contemplated by the definition of Permitted Liens. 
 Section 3.2. Duties
with Respect to Intellectual Property. At all times from and after the date hereof and until the Secured Note has been paid in full or this Agreement is sooner terminated, the Company agrees that it shall: 

(a) Except to the extent that failure to act cannot reasonably be expected to have a Material Adverse Effect, take all commercially reasonable
steps necessary to (x) maintain the validity and enforceability of any Collateral that constitutes Intellectual Property in full force and effect and (y) pursue the application, obtain the relevant registration and maintain the
registration of each of its patents, trademarks and copyrights that is part of the Collateral, including, without limitation, by the payment of required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the U.S. Copyright Office or other governmental authorities, the filing of applications for renewal or extension, the filing of affidavits, the filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings. 

(b) Except to the extent that failure to act cannot reasonably be expected to have a Material Adverse Effect, not do or permit any act or
knowingly omit to do any act whereby any of its Intellectual Property that is part of the Collateral may lapse, be terminated, or become invalid or unenforceable or placed in the public domain (or in case of a trade secret, lose its competitive
value). 
 (c) Except to the extent that failure to act cannot reasonably be expected to have a Material Adverse Effect, take all
commercially reasonable steps to preserve and protect each item of its Intellectual Property that is part of the Collateral, including, without limitation, maintaining the quality of any and all products or services used or provided in connection
with any of the trademarks, consistent with the quality of the products and services as of the date hereof, and taking all commercially reasonable steps necessary to ensure that all licensed users of any of the Trademarks abide by the applicable
license’s terms with respect to the standards of quality. 
 Notwithstanding the foregoing provisions of this Section 3.2 or
anything to the contrary elsewhere in this Security Agreement, nothing in this Security Agreement shall prevent the Company or its Subsidiaries from discontinuing the use or maintenance of any of its Intellectual Property, the enforcement of its
license agreements or the pursuit of actions against infringers, if they determine in its reasonable business judgment that such discontinuance is desirable in the conduct of its business. 

Section 3.3. Other Encumbrances. At all times after the date hereof and until such time as there are no Obligations due to the
Secured Party or this Agreement is sooner terminated, the Company shall, subject to the rights of the holders of the Permitted Liens: (i) defend its title to, and the Secured Party’s 

  
 8 

 
interest in, the Collateral against all claims, (ii) take any action necessary to remove any encumbrances on the Collateral other than Permitted Liens, and (iii) defend the right, title
and interest of the Secured Party in and to any of the Company’s rights in the Collateral. 
 Section 3.4. Change Name or
Location. At all times after the date hereof and until such time as there are no Obligations due to the Secured Party or this Agreement is sooner terminated, the Company shall not, except upon 10 days’ prior written notice to the Secured
Party, change its company name or conduct its business under any name other than that set forth herein or change its jurisdiction of organization or incorporation, chief executive office, place of business from the current location. 

SECTION IV 

REPRESENTATIONS AND WARRANTIES 

The Company represents and warrants to each Secured Party as follows: 

Section 4.1. Title to Collateral. The Company is the owner of and has good and marketable title to, or has a valid and subsisting
leasehold interest in, all of the Collateral. 
 Section 4.2. No Other Encumbrances. Other than the Permitted Liens, the Company
has not granted, nor will it grant, a security interest in the Collateral to any other individual or entity, and to the actual knowledge of the Company, such Collateral is free and clear of any mortgage, pledge, lease, trust, bailment, lien,
security interest, encumbrance, charge or other arrangement, other than the Permitted Liens. 
 Section 4.3. No Other
Indebtedness. Other than Permitted Indebtedness, the Company has not incurred, created, assumed or guaranteed, nor will it incur, create, assume or guarantee any Indebtedness from any other individual or entity. 

Section 4.4. Authority; Enforceability. The execution, delivery and performance of this Agreement by the Company does not:
(i) violate any of the provisions of the Certificate of Incorporation or By-laws of the Company or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law, rule or regulation applicable to the
Company; or (ii) subject to the Secured Party’s performance of its respective obligations under any subordination agreements with respect to Permitted Liens or Permitted Indebtedness, conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing the Company’s debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected. The Company has the authority and capacity to perform
its obligations hereunder, and this Agreement is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of creditors’ rights or general equitable principles, whether applied in law or equity. 

Section 4.5. Company Name; Place of Business; Location of Collateral. The Company’s true and correct company name, all trade
name(s) under which it conducts its business, its jurisdiction of organization or incorporation and each of its chief executive offices, its place(s) of business and the locations of the Collateral or records relating to the Collateral are set forth
in Schedule I hereto. The Company’s place of business and chief executive office is where the Company is entitled to receive notices hereunder; the present and foreseeable location of the Company’s books and records concerning any
of the Collateral that is accounts is as set forth on Schedule I hereto, and the location of all other Collateral, including, without limitation, the Company’s inventory and equipment is as set forth on Schedule I
hereto. 

  
 9 

 Section 4.6. Perfection; Security Interest. This Agreement creates in favor of the
Secured Party, a valid security interest in the Collateral, subject only to Permitted Liens securing the payment and performance of the Obligations. For Collateral in which the Security Interest may be perfected by the filing of financing
statements, once those financing statements have been properly filed in the appropriate jurisdictions, the Security Interest in such Collateral will be fully perfected, subject only to Permitted Liens. Other than the financing statements and with
respect to this Agreement, to the actual knowledge of the Company, there are no other financing statements or control agreements covering any Collateral, other than those evidencing Permitted Liens. 

SECTION V 
 EVENTS OF
DEFAULT 
 Section 5.1. Events of Default Defined. The occurrence of any of the following events prior to the
termination or expiration of this Agreement shall constitute an event of default under this Agreement (each, an “Event of Default”): 

(a) The failure of the Company to perform or comply in a material respect with any act, duty or obligation required to be performed under this
Agreement if such failure is not remedied within ten (10) business days after the Company receives written notice of such failure from the Secured Party (or the Majority in Interest if there is more than one Secured Party) or thirty
(30) days after the occurrence thereof; 
 (b) If any of the representations or warranties of the Company set forth in this Agreement
shall prove to have been incorrect in any material respect when made, or becomes incorrect in any material respect and, if subject to cure, is not cured within ten (10) business days after the Company receives written notice thereof from the
Secured Party (or the Majority in Interest if there is more than one Secured Party) or within thirty (30) days after the Company becomes aware, and immediately notifies the Secured Party, of any such incorrectness; 

(c) If any material portion of the Collateral shall be damaged, destroyed or otherwise lost and such damage, destruction or loss is not
covered by insurance; or 
 (d) If an “Event of Default” as defined in the Secured Note shall have occurred and is continuing.

 Section 5.2. Rights and Remedies Upon Default. If an Event of Default exists and is continuing, the Secured Party shall, at
its election (but subject to the remainder of this Agreement), exercise any and all rights available to a secured party under the UCC, in addition to any and all other rights afforded by the Secured Note and this Agreement, at law, in equity, or
otherwise, including, without limitation, (a) requiring the Company to assemble all or part of the Collateral and make it available to the Secured Party at a place to be designated by the Secured Party which is reasonably convenient to the
Secured Party and the Company, (b) surrendering any policies of insurance on all or part of the Collateral and receiving and applying the unearned premiums as a credit on the Obligation, (c) applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and the Company hereby consents to any such appointment), (d) applying to the Obligation any cash held by the Secured Party under this Security Agreement, and (e) as legally
permissible, selling, reselling, assigning and delivering or granting a license to use or otherwise dispose of the Collateral or any part thereof, in one or more parcels at public or private sale, at any of the Secured Party’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Secured Party may deem commercially reasonable. 

  
 10 

 Section 5.3. Notice. Reasonable notification of the time and place of any public sale
of the Collateral, or reasonable notification of the time after which any private sale or other intended disposition of the Collateral is to be made, shall be sent to the Company, the holders of Permitted Liens, and to any other person or entity
entitled to notice under the UCC. It is agreed that notice sent or given not less than ten calendar days prior to the taking of the action to which the notice relates is reasonable notification and notice for the purposes of this subparagraph. 

Section 5.4. Application of Proceeds. The Secured Party shall apply the proceeds of any sale or other disposition of the
Collateral hereunder in the following order: first, to the payment of all expenses incurred in retaking, holding, and preparing any of the Collateral for sale(s) or other disposition, in arranging for such sale(s) or other disposition, and in
actually selling or disposing of the same (all of which are part of the Obligation); second, toward repayment of amounts expended by the Secured Party in so acting hereunder; and third, toward payment of the balance of the Obligations
in the order and manner as the Secured Party determines in its sole discretion. Any surplus remaining shall be delivered to the Company or as a court of competent jurisdiction may direct. If the proceeds are insufficient to pay the Obligations in
full, then the Company shall remain liable for any deficiency. 
 Section 5.5. Compliance with Other Laws; Certain Limitations.
The Secured Party shall comply with any applicable state or federal laws in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. By
virtue of its execution of this Agreement, the Secured Party shall be deemed irrevocably to agree that it shall not take any action to enforce any provisions of this Agreement against the Company, to exercise any remedy hereunder or to give any
consents or approvals hereunder except as expressly provided in this Agreement or in the Secured Note. The Secured Party may exercise any of its rights or perform any of its obligations hereunder by or through its agents or employees. 

SECTION VI 

ADDITIONAL REMEDIES 

Section 6.1. Additional Remedies. If an Event of Default exists and is continuing, the Company shall: 

(a) Endorse any and all documents evidencing any Collateral (other than any Collateral if and to the extent subject to the Permitted Liens) in
accordance with the instructions provided by the Secured Party, and notify any payor that said documents have been so endorsed and that all sums due and owing pursuant to them should be paid directly to such Secured Party, or as otherwise instructed
by the Secured Party; 
 (b) Turn over to the Secured Party, or as otherwise instructed by the Secured Party, copies of all documents
evidencing any right to collection of any sums due to the Company arising from or in connection with any of the Collateral; 
 (c) Take any
action reasonably required by a Secured Party with reference to the Federal Assignment of Claims Act; and 
 (d) Keep all of its books,
records, documents and instruments relating to the Collateral in such manner as the Secured Party may require. 

  
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 SECTION VII 

MISCELLANEOUS 

Section 7.1. Termination and Release. This Agreement, and the Liens created by this Agreement shall automatically terminate in all
respects upon the full and final payment by the Company of the Secured Note or the conversion of the Secured Note into shares of capital stock of the Company, in accordance with the terms of the Secured Note. Further, the Liens created by this
Agreement on any of the Collateral shall be automatically released if the Company disposes of such Collateral pursuant to a transaction permitted by the Secured Note or otherwise consented to by the Secured Party (or the Majority in Interest if
there is more than one Secured Party, (or the Majority in Interest if there is more than one Secured Party). In connection with any termination or release pursuant to this Section 7.1, the Secured Party (or the Majority in Interest if there is
more than one Secured Party) shall promptly execute and deliver to the Company all documents that the Company shall reasonably request to evidence such termination or release. 

Section 7.2. Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided, that in such case the parties shall negotiate in good faith to replace such provision with a new
provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the parties. 

Section 7.3. Continuing Security Interest; Successors. This Agreement creates a continuing security interest in the Collateral and
shall (i) remain in full force and effect until the Obligations are paid and performed in full or this Agreement is sooner terminated in accordance with Section 7.1; and (ii) inure to the benefit of and be enforceable by the Secured
Party and their successors, transferees, and assigns. The Secured Party may assign its rights hereunder in connection with any private sale or transfer of its Secured Note in accordance with the terms of the Secured Note and applicable law, in which
case the term “Secured Party” shall be deemed to refer to such transferee as though such transferee was an original signatory hereto. 

Section 7.4. Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of New
York applicable to contracts made and to be performed entirely within the State of New York. The Company hereby irrevocably submit to the non-exclusive jurisdiction of the state and federal courts sitting in the City of New York, for the
adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waive, and agree 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. 

Section 7.5. Headings. The headings used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. 
 Section 7.6. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (c) the second
(2nd) Business Day following the date of mailing, if sent by U.S. nationally 

  
 12 

 
recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set
forth on the signature pages attached hereto. 
 Section 7.7. Entire Agreement; Amendments; Waivers. This Agreement constitutes
the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by Company and the Secured Party, or if there is more than one Secured Party, the Majority in Interest, and no provision hereof may be waived other
than by a written instrument signed by the party against whom enforcement of any such waiver is sought. The Secured Party shall not, by any act, any failure to act or any delay in acting be deemed to have (i) waived any right or remedy under
this Agreement, or (ii) acquiesced in any Event of Default or in any breach of any of the terms and conditions of this Agreement. No failure to exercise, nor any delay in exercising, any right, power or privilege of the Secured Party under this
Agreement shall operate as a waiver of any such right, power or privilege. No single or partial exercise of any right, power or privilege under this Agreement shall preclude any other or further exercise of any other right, power or privilege. A
waiver by a Secured Party of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion. 

Section 7.8. Multiple Counterparts. This Agreement has been executed in a number of identical counterparts, each of which shall be
deemed an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 

Section 7.9. Cumulative Remedies. The rights and remedies provided in this Agreement are cumulative, may be exercised singly or
concurrently, and are not exclusive of any other rights or remedies provided by law. 
 Section 7.10. Waivers. The Company
acknowledges that the Obligations arose out of a commercial transaction and hereby knowingly waives any right to require the Secured Party to (i) proceed against any person or entity, (ii) proceed against any other collateral under any
other agreement, (iii) pursue any other remedy available to the Secured Party, or (iv) make presentment, demand, dishonor, notice of dishonor, acceleration and/or notice of non-payment. 

Section 7.11. Release. No transfer or renewal, extension, assignment or termination of this Agreement or of any instrument or
document executed and delivered by the Company to the Secured Party, nor additional advances made by the Secured Party to the Company, nor the taking of further security, nor the retaking or re-delivery of the Collateral by the Secured Party nor any
other act of the Secured Party shall release the Company from any Obligation, except a release or discharge executed in writing by the Secured Party or the Majority in Interest if there is more than one Secured Party, with respect to such Obligation
or upon full payment and satisfaction of all Obligations and termination of the Secured Note. At such time the Obligations have been satisfied in full, the Secured Party or the Majority in Interest if there is more than one Secured Party, shall
execute and deliver to the Company all assignments and other instruments as may be reasonably necessary or proper to terminate the Secured Party’s security interest in the Collateral, subject to any disposition of the Collateral that may have
been made by or on behalf of the Secured Party pursuant to this Agreement. For the purpose of this Agreement, the Obligations shall be deemed to continue if the Company enters into any bankruptcy or similar proceeding at a time when any amount paid
to the Secured Party could be ordered to be repaid as a preference or pursuant to a similar theory, and shall continue until it is finally determined that no such repayment can be ordered. 

  
 13 

 Section 7.12. Separate Counsel. Secured Party has engaged and consulted with its own
attorney prior to the execution of this Agreement. The Secured Party understands, confirms and agrees that counsel to the Company is not acting as counsel to the Secured Party and the undersigned Secured Party has not relied upon any legal advice
except as provided by its own attorney and counsel. 
 Remainder of page intentionally left blank. Signature pages follow. 

  
 14 

 IN WITNESS WHEREOF, the Company and the Secured Party have duly executed this Agreement as of the
date first written above. 
  

					
	AUTHENTIDATE HOLDING CORP.
		
	By:	 	 /s/ Ian C. Bonnet

		 	Name:	 	Ian C. Bonnet
		 	Title:	 	Chief Executive Officer
	
	Address for Notice:
	
	Connell Corporate Center
	300 Connell Drive, 5th Floor
	Berkeley Heights, NJ 07922
	Attn:	 	President

 SIGNATURE PAGE TO SECURITY
AGREEMENT 

 SIGNATURE PAGE TO SECURITY
AGREEMENT 
  

					
	SECURED PARTY:
	
	MKA 79, LLC
		
	By:	 	 /s/ J. David Luce

		 	Name:	 	[                    ]
		 	Title:	 	[                    ]
	
	Address for Notices to Secured Party:
	
	[                    ]
	[                    ]
	[                    ]
	[                    ]

 Schedule I 

List of Collateral Locations, Executive Offices and 

Jurisdiction of Organization or Incorporation of Obligors 

 

			
		
	Company Name:	  	Authentidate Holding Corp.
		
	Executive Officers:	  	 Ian C. Bonnet – President and Chief Executive Officer

William A. Marshall – Chief Financial Officer and Treasurer

		
	Jurisdiction of Incorporation:	  	Delaware
		
	Subsidiaries of Company:	  	Authentidate, Inc.
		  	300 Connell Drive, 5th Floor
		  	Berkeley Heights, NJ 07922
		
		  	Express MD Solutions, LLC
		  	300 Connell Drive, 5th Floor
		  	Berkeley Heights, NJ 07922
		
		  	Trac Medical Solutions, Inc.
		  	300 Connell Drive, 5th Floor
		  	Berkeley Heights, NJ 07922
		
	 Location of Collateral
 and/or related
records:
	  	Authentidate Holding Corp.
		  	300 Connell Drive, 5th Floor
		  	Berkeley Heights, NJ 07922

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