Document:

BRIDGE
LOAN

 

AND

 

SECURITY
AGREEMENT

 

Dated
as of October 2, 2015 between

 

TAURIGA
SCIENCES INC.,

a
Nevada corporation, as “Borrower”,

 

and

 

ALTERNATIVE
STRATEGY PARTNERS PTE. LTD.,

a
Singapore private limited company, as “Lender”

 

    	 	 	 

     

    

 

BRIDGE
LOAN AND SECURITY AGREEMENT

 

This
Bridge Loan and Security Agreement (as further amended, restated, supplemented or otherwise modified from time to time, this “Agreement”)
is dated as of October 2, 2015 is entered into by and between TAURIGA SCIENCES INC., a Nevada corporation (the “Borrower”)
and ALTERNATIVE STRATEGY PARTNERS PTE. LTD., a Singapore private limited company (the “Lender”).

 

WHEREAS,
the Lender and the Borrower have agreed to enter into this Agreement in order to, among other things (a) set forth the terms and
conditions under which the Lender will make the Bridge Loan to Borrower, (b) evidence the Bridge Loan; and,

 

WHEREAS,
it is the intention of the Borrower and the Lender that, subject to the terms and conditions of the “Loan Documents”
(defined herein below), all of the “Obligations” (defined herein below) shall be secured by a first
priority “Lien” (defined herein below) on all of the Borrower’s personal and real property, including
without limitation, all of the Borrower’s assets;

 

NOW
THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt, sufficiency and
adequacy of which are hereby acknowledged, the parties hereto hereby agree to amend and restate the Original Agreement in its
entirety and otherwise agree as follows:

 

ARTICLE
1 - INTERPRETATION

 

1.1 Definitions.
The terms defined in Article 10 will have the meanings therein specified for purposes of this Agreement.

 

1.2 Inconsistency.
In the event of any inconsistency between the provisions of any Loan Document and this Agreement, the provisions of this Agreement
will be controlling for the purpose of all relevant transactions.

 

1.3 General.
All capitalized terms used which are not specifically defined herein shall have meanings provided in Article 9 of the UCC to the
extent the same are used or defined therein. Unless otherwise specified herein, any agreement, contract, instrument or other document
referred to herein shall mean such agreement, contract, instrument or other document as modified, amended, restated or supplemented
from time to time. Unless otherwise specified, as used in the Loan Documents or in any certificate, report, instrument or other
document made or delivered pursuant to any of the Loan Documents, all accounting terms not defined in this Agreement shall have
the meanings given to such terms in and shall be interpreted in accordance with GAAP. The terms “herein”, “hereof”
and similar terms refer to this Agreement as a whole. In the computation of periods of time from a specified date to a later specified
date in any Loan Document, the terms “from” means “from and including” and the words “to”
and “until” each mean “to but excluding” and the word “through” means “to and including.”
In any other case, the terms “includes”, “include” and “including” when used in any Loan Document
means “including without limitation.” Unless otherwise expressly indicated, the meaning of any term defined (including
by reference) in any Loan Document shall be equally applicable to both the singular and plural forms of such term. All references
in a Loan Document to Articles, Sections, Exhibits, Attachments, Appendices and Schedules shall be construed to refer to Articles
and Sections of, and Exhibits, Attachments, Appendices and Schedules to, the Loan Document in which such references appear. Any
reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting
such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time.

 

ARTICLE
2 - THE LOANS

 

2.1 Bridge
Loan.

 

(a) Subject
to the terms and conditions of this Agreement, Lender agrees make a term loan to Borrower on the date of Closing A in an amount
not to exceed $180,000 (the “Bridge Loan”).

 

(b) Subject
to the terms and conditions of this Agreement, the Lender may, in its sole discretion, during the Availability Period make additional
term loans, (the “Additional Loans”). The proceeds of the Bridge Loan and the Additional Loans, if any,
may be used solely to fund Borrower’s obligation(s) to make the Investor Deposit and the “Investment”
(as defined in the Term Sheet) pursuant to the Term Sheet, and the Bridge Loan and each Additional Loan, if any, shall be treated
as one of the term Loans under this Agreement and the other Loan Documents.

 

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(c) The
Loans are not a revolving credit facility and Borrower does not have the right to repay and re-borrow hereunder and payments of
principal on the Loans shall permanently reduce the Loans.

 

2.2 Notes
Evidencing Loans; Repayment Each Loan shall be evidenced by
a separate Note payable to the order of Lender, in the total principal amount of the Loan. Principal and interest of each Loan
shall be payable at the times and in the manner set forth in the Note payment thereof shall be effected by automatic debit of
the appropriate funds from Borrower’s Primary Operating Account as set forth in Section 5.10. Repayment of the Loans and
payment of all other amounts owed to Lender will be paid by Borrower in the currency in Dollars.

 

 2.3 Procedures for Borrowing.

 

(a) At
least five (5) Business Days’ prior to a proposed Borrowing Date (or such lesser period of time as may be agreed upon by
Lender in its sole discretion), Lender shall have received from Borrower a written request for a borrowing hereunder (a “Borrowing
Request”). Each Borrowing Request shall be in substantially the form of Exhibit B, shall be irrevocable,
shall be executed by a responsible executive or financial officer of Borrower, shall be accompanied by such other information
and documentation as Lender may reasonably request, including the original executed Note(s) for the Loan(s) covered by the Borrowing
Request and with respect to each Additional Loan, shall specify: (i) the proposed date of such requested Loan, which shall be
a Business Day, (ii) the specific uses for the requested Loan including, with respect to each payment to be made with the proceeds
of such Loan, (A) the payee, (B) the amount (C) the date of payment, (D) the bank and wire transfer information, if available,
and (iii) after giving effect to the proposed Loan, the undisbursed portion of the Maximum Amount.

 

(b) No
later than 1:00 p.m. Eastern Time (Standard Time or Daylight Time, as then applicable) on the Borrowing Date, if Borrower has
satisfied the conditions precedent in Article 4 by 9:00 a.m. Eastern Time (Standard Time or Daylight Time, as then applicable)
on such Borrowing Date, Lender shall make the Loan available to Borrower in immediately available funds; provided that with respect
to any or all Loans hereunder, the Lender, may at its sole option, disburse the proceeds of such Loan directly to another payee
in the amounts and on the dates specified in the Borrowing Request that was submitted in connection with such Loan.

 

2.4 Interest.
Interest on the outstanding principal balance of each Loan shall accrue daily at the Designated Rate from the Borrowing Date.
Interest shall be due and payable in full on the Maturity Date (defined hereinafter).

 

2.5 Interest
Rate Calculation. Interest, along with charges and fees under
this Agreement and any Loan Document, shall be calculated for actual days elapsed on the basis of a 360-day year, which results
in higher interest, charge or fee payments than if a 365-day year were used. In no event shall Borrower be obligated to pay Lender
interest, charges or fees at a rate in excess of the highest rate permitted by applicable law from time to time in effect.

 

2.6 Default
Interest. Any unpaid payments in respect of the Obligations
shall bear interest from their respective maturities, whether scheduled or accelerated, at the Default Rate. If an Event of Default
exists, the Obligations shall bear interest at the Default Rate. In all such events, the Default Rate may be accrued from the
initial date of any nonpayment or Event of Default until all existing Events of Default are waived in writing in accordance with
the terms of this Agreement. Borrower shall pay such interest in cash on demand. The Lender shall not be required to (A) accelerate
the Loans or (B) exercise any other rights or remedies under the Loan Documents or applicable law in order to charge the Default
Rate.

 

2.7 Late
Charges. If Borrower is late in making any payment in respect
of the Obligations by more than five (5) days, then Borrower agrees to pay a late charge of five percent (5%) of the payment due,
but not less than fifty dollars ($50.00) for any one such delinquent payment. This late charge may be charged by Lender for the
purpose of defraying the expenses incidental to the handling of such delinquent amounts. Borrower acknowledges that such late
charge represents a reasonable sum considering all of the circumstances existing on the date of this Agreement and represents
a fair and reasonable estimate of the costs that will be sustained by Lender due to the failure of Borrower to make timely payments.
Borrower further agrees that proof of actual damages would be costly and inconvenient. Such late charge shall be paid without
prejudice to the right of Lender to collect any other amounts provided to be paid or to declare a default under this Agreement
or any of the other Loan Documents or from exercising any other rights and remedies of Lender.

 

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2.8
Repayment; Prepayment.

 

(a) Scheduled
Repayment. Borrower shall pay interest at Lender’s office in like money on the unpaid principal amount of the Loan at
a rate per annum equal to eleven and one-half (11.5%) percent. The entire principal balance in the amount of ONE HUNDRED EIGHTY
and 00/100’s ($180,000.00) U.S. Dollars, plus all accrued but unpaid interest shall be due and payable at Lender’s
office in full on the Maturity Date (hereinafter defined) , unless an earlier date is otherwise required under the terms of this
Loan Agreement or the Note.

 

(b) Voluntary
Prepayments. No Loan may be prepaid except as set forth in subsection 2.8(c) below for mandatory prepayment.

  

(c) Mandatory
Prepayments. If the Borrower or any Subsidiary, whether in a single transaction or a series of transactions sells or issues
any equity interests or any Indebtedness that results in gross proceeds to the Borrower in any fiscal year in excess of $8,000,000
(a “Next Financing”) then Borrower promptly shall pay so much of such amounts to the Lender, for application to the
Obligations as set forth in 2.8(e), up to a maximum equal to such amount as may be required to fully satisfy such Obligations.

 

(d) Maturity
Date. Notwithstanding anything to the contrary in any Loan Document, the full amount of the Obligations shall be due and payable
(the “Maturity Date”) no later than the earlier to occur of (1) the date upon which the Obligations
are accelerated following the occurrence of an Event of Default or otherwise become due and payable prior to their scheduled maturity
or (2)(A) with respect to the Bridge Loan, December 23, 2015 and (B) with respect to each of the Additional Loans (if any), on
December 23, 2015 unless an earlier date is otherwise required under the terms hereof.

 

(e) Application
of Payments. All payments pursuant to this Section 2.8 shall be applied in the following order of priority to the payment
of: (i) all then unpaid fees and expenses of Lender under the Loan Documents; (ii) any and all other Obligations that are due
and owing under the Loan Documents, except the principal balance of the Loans and accrued and unpaid interest thereon; (iii) accrued
and unpaid interest on the Loans (pro rata based on the outstanding principal balances thereof); (iv) the principal amount of
the Bridge Loan and the Additional Loans, on a pro rata basis; and (v) with respect to payments pursuant to Section 2.8(c), ratably
against the remaining Obligations.

 

2.9 Lender’s
Records. Principal, interest, and all other sums owed under
any Loan Document shall be evidenced by entries in records maintained by Lender for such purpose. Each payment on and any other
credits with respect to principal, interest, and all other sums outstanding under any Loan Document shall be evidenced by entries
in such records. Absent manifest error, Lender’s records shall be conclusive evidence thereof.

 

 2.10 Grant of Security Interests; Filing of Financing Statements.

 

(a) To
secure the timely payment and performance of all of Borrower’s Obligations, Borrower hereby grants to Lender continuing
security interests in all of the Collateral. In connection with the foregoing, Borrower authorizes Lender to prepare and file
any financing statements describing the Collateral without otherwise obtaining Borrower’s signature or consent with respect
to the filing of such financing statements.

 

(b) In
furtherance of Borrower’s grant of the security interests in the Collateral pursuant to Section 2.10(a) above, Borrower
hereby pledges and grants to Lender a security interest in all the Shares, together with all proceeds and substitutions thereof,
all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection
therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the Obligations. On the
Execution Date or at any time thereafter following Lender’s request, the certificate or certificates for the Shares will
be delivered to Lender, accompanied by an instrument of assignment duly executed in blank by Borrower, unless such Shares have
not been certificated. To the extent required by the terms and conditions governing the Shares, Borrower shall cause the books
of each entity whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares. Upon the occurrence
and during the continuance of an Event of Default hereunder, Lender may effect the transfer of any securities included in the
Collateral (including but not limited to the Shares) into the name of Lender and cause new certificates representing such securities
to be issued in the name of Lender or its transferee(s). Borrower will execute and deliver such documents, and take or cause to
be taken such actions, as Lender may reasonably request to perfect or continue the perfection of Lender’s security interest
in the Shares. Unless an Event of Default shall have occurred and be continuing, Borrower shall be entitled to exercise any voting
rights with respect to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall
be cast or consent, waiver or ratification given or action taken which would be inconsistent with any of the terms of this Agreement
or which would constitute or create any violation of any of such terms. All such rights to vote and give consents, waivers and
ratifications shall terminate upon the occurrence and continuance of an Event of Default.

 

(c) Borrower
is and shall remain absolutely and unconditionally liable for the performance of its obligations under the Loan Documents, including,
without limitation, any deficiency by reason of the failure of the Collateral to satisfy all amounts due Lender under any of the
Loan Documents.

 

(d) All
Collateral pledged by Borrower under this Agreement shall secure the timely payment and performance of all Obligations (other
than inchoate indemnity obligations) under this Agreement, the Notes and the other Loan Documents (excluding the Warrants). Except
as expressly provided in this Agreement, no Collateral pledged under this Agreement shall be released until such time as all Obligations
(other than inchoate indemnity obligations) under this Agreement and the other Loan Documents (excluding the Warrants) have been
satisfied and paid in full.

 

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ARTICLE
3 - REPRESENTATIONS AND WARRANTIES

 

Borrower
represents and warrants that, as of the Execution Date and each Borrowing Date:

 

3.1 Due
Organization. Borrower is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its incorporation, and is duly qualified to conduct business and
is in good standing in each other jurisdiction in which its business is conducted or its properties are located, except where
the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.

 

3.2 Authorization,
Validity and Enforceability. The execution, delivery and performance
of all Loan Documents executed by Borrower are within Borrower’s powers, have been duly authorized, and are not in conflict
with Borrower’s certificate of incorporation or by-laws, or the terms of any charter or other organizational document of
Borrower, as amended from time to time; and all such Loan Documents constitute valid and binding obligations of Borrower, enforceable
in accordance with their terms (except as may be limited by bankruptcy, insolvency and similar laws affecting the enforcement
of creditors’ rights in general, and subject to general principles of equity).

 

3.3 Compliance
with Applicable Laws. Borrower has complied with all licensing,
permit and fictitious name requirements necessary to lawfully conduct the business in which it is engaged, and to any sales, leases
or the furnishing of services by Borrower, including without limitation those requiring consumer or other disclosures, the noncompliance
with which would have a Material Adverse Effect.

 

3.4 No
Conflict. The execution, delivery, and performance by Borrower
of all Loan Documents are not in conflict in any material respect with any law, rule, regulation, order or directive, or any indenture,
agreement, or undertaking to which Borrower is a party or by which Borrower may be bound or affected. Without limiting the generality
of the foregoing, the issuance of the Warrants to Lender (or its designee) and the grant of registration rights in connection
therewith do not violate any agreement or instrument by which Borrower is bound or require the consent of any holders of Borrower’s
securities other than consents which have been obtained prior to the Execution Date.

 

3.5 No
Litigation, Claims or Proceedings. There is no litigation, tax
claim, proceeding or dispute pending, or, to the knowledge of Borrower, threatened against or affecting Borrower, its property
or the conduct of its business which could reasonably be expected to have a Material Adverse Effect.

 

3.6 Correctness
of Financial Statements. Borrower’s financial statements
which have been delivered to Lender fairly and accurately reflect in all material respects Borrower’s financial condition
in accordance with GAAP as of the latest date of such financial statements (except in the case of unaudited financial statements,
for the omission of footnotes and subject to normal year-end adjustments); and, since that date there has been no Material Adverse
Change. It is understood and acknowledged by Lender that projections and forecasts delivered by or on behalf of Borrowers in good
faith shall not be viewed as facts and that actual results may vary from such projections and forecasts.

 

3.7 Capital
Structure; No Subsidiaries. As of the Execution Date, Schedule
3 (a) identifies the capital structure of the Borrower, both immediately before and immediately after giving effect to the issuance
of the Warrants and other transactions anticipated to occur on the Execution Date. Schedule 3 sets forth the name and percentage
ownership or other control relationship for each entity in which Borrower is, or will by reason of the Bridge Loan and/or any
Additional Loans is likely to become, a majority owner or has a control relationship. Except as set forth on Schedule 3, Borrower
is not a majority owner of or in a control relationship with any other business entity. Following the Execution Date, the summary
of Borrower’s capital structure most recently delivered to the Lender pursuant to 5.1(h) is true and correct in all material
respects

 

3.8 Environmental
Matters. To its knowledge after reasonable inquiry, Borrower
has concluded that Borrower is in compliance with Environmental Laws, except to the extent a failure to be in such compliance
would not reasonably be expected to have a Material Adverse Effect.

 

3.9 No
Event of Default. No Default or Event of Default has occurred
and is continuing.

 

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3.10 Full
Disclosure. None of the representations or warranties made by
Borrower in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements
contained in any exhibit, report, statement or certificate furnished by or on behalf of Borrower in connection with the Loan Documents
(including disclosure materials delivered by or on behalf of Borrower to Lender prior to the Execution Date or pursuant
to Section 5.2 hereof), contains any untrue statement of a material fact or omits any material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of
the time when made or delivered. It is understood and acknowledged by Lender that projections and forecasts delivered by or on
behalf of Borrowers in good faith shall not be viewed as facts and that actual results may vary from such projections and forecasts.

 

 3.11 Specific Representations Regarding Collateral.

 

(a) Title. Except
for the security interests created by this Agreement and Permitted Liens,

(i) Borrower
is and will be the unconditional legal and beneficial owner of the Collateral, and (ii) the Collateral is genuine and subject
to no Liens, rights or defenses of others. There exist no prior assignments or encumbrances of record with the U.S. Patent and
Trademark Office or U.S. Copyright Office affecting any Collateral in favor of any third party, other than Permitted Liens.

 

(b) Rights
to Payment. The names of the obligors, amount owing to Borrower, due dates and all other information with respect to the Rights
to Payment are and will be correctly stated in all material respects in all Records relating to the Rights to Payment. Borrower
further represents and warrants, to its knowledge, that each Person appearing to be obligated on a Right to Payment has authority
and capacity to contract and is bound as it appears to be.

 

(c) Location
of Collateral. Borrower’s chief executive office, Inventory, Records, Equipment, and any other offices or places of
business are located at the address(es) shown on Schedule 3 (not including moveable items of Equipment in the possession of Borrower’s
employees, such as laptops, monitors, printers and cell phones), or in transit to such locations, as updated by Borrower from
time to time in accordance with Section 5.9(c).

 

(d) Business
Names. Other than its full corporate name, Borrower has not conducted business using any trade names or fictitious business
names except as shown on Schedule 3.

 

(e) Bank
Accounts. The Borrower and its subsidiaries do not maintain any Deposit, securities, commodities or other investment accounts
except as shown on Schedule 3.

 

 3.12 Copyrights, Patents, Trademarks and Licenses.

 

(a) Borrower
owns or is licensed or otherwise has the right to use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other similar rights that are reasonably necessary for the operation of its business,
without conflict with the rights of any other Person, and each patent, trademark and copyright owned by Borrower is listed on
the exhibits to the Intellectual Property Security Agreement or has been disclosed in writing to the Lender and the Lender has
a first priority security interest in such patent, trademark or copyright.

 

(b) To
Borrower’s knowledge, no slogan or other advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by Borrower infringes upon any rights held by any other Person.

 

(c) No
claim or litigation regarding any of the foregoing is pending or, to Borrower’s knowledge, threatened, and to Borrower’s
knowledge no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending
or proposed which, in either case, could reasonably be expected to have a Material Adverse Effect.

 

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3.13 Regulatory
Compliance. Borrower has met the minimum funding requirements
of ERISA with respect to any employee benefit plans subject to ERISA. No event has occurred resulting from Borrower’s failure
to comply with ERISA that is reasonably likely to result in Borrower’s incurring any liability that could have a Material
Adverse Effect. Borrower is not an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning
of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower has complied, in all material respects
with all the provisions of the Federal Fair Labor Standards Act.

 

3.14 Shares.
Borrower has full power and authority to create a first priority Lien on the Shares and no disability or contractual obligation
exists that would prohibit Borrower from pledging the Shares pursuant to this Agreement. To Borrower’s knowledge, there
are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable
with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable.
To Borrower’s knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative
or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings.

 

3.15 Survival.
The representations and warranties of Borrower as set forth in this Agreement survive the execution and delivery of this Agreement.

 

ARTICLE
4 - CONDITIONS PRECEDENT

 

4.1 Conditions
to Bridge Loan and Additional Loans. The Borrower shall not
be entitled to request that the Lender make, and the Lender shall not be obligated to make, the Bridge Loan on the Execution Date
or any Additional Loan thereafter until the following conditions have been fulfilled and the Lender has received the documents
described below, duly executed and in form and substance satisfactory to Lender and its counsel:

 

(a) Resolutions.
A certified copy of the resolutions of (i) the Board of Directors of Borrower (which, if in the form of a unanimous written consent,
shall be duly executed by each member of the Board of Directors and notarized) authorizing the execution, delivery and performance
by Borrower of the Loan Documents, an increase in the number of directors sitting on the Board of Directors by one and the election
of the additional director, which shall be the Investor Director, and (ii) the shareholders of the Borrower confirming the appointment
of the Investor Director and approving the entry into an indemnification agreement with respect to the Investor Director.

 

(b) Incumbency
and Signatures. A certificate of the secretary of Borrower certifying the names of the officer or officers of Borrower authorized
to sign the Loan Documents, together with a sample of the true signature of each such officer.

 

(c) Charter
Documents. Copies of the organizational and charter documents of Borrower (e.g., Articles or Certificate of Incorporation
and Bylaws), as amended through the Execution Date, together with (i) a summary of the Borrower’s capital structure as of
the Execution Date and (ii) copies of all documents related to the stock of the Borrower and any other agreements, instruments
or other documents that relate in any way to voting, rights of first refusal, anti-dilution rights, rights to acquire equity,
rights to incur debt or any other restrictive agreement pursuant to which a third party consent or approval is required for the
Borrower to enter into and perform its obligations under this Agreement, certified by an officer of Borrower as being true, correct
and complete as of the Execution Date.

 

(d) Intellectual
Property Security Agreement. Short form Intellectual Property Security Agreement executed by Borrower in form and substance
satisfactory to Lender suitable for filing with the United States Patent and Trademark Office.

 

(e) This
Agreement. Original counterparts of this Agreement, with all schedules completed and attached thereto, and disclosing such
information as is acceptable to Lender.

 

(f) Reserved.

 

(g) Warrants.
Warrants issued by Borrower to Lender (or its designee), substantially in the forms attached hereto as Exhibits E-1 and E-2
and satisfactory to Lender in its sole and absolute discretion, exercisable for such number, type and class of shares of Borrower’s
capital stock, and for an initial exercise price as is specified therein.

 

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(h) Financing
Statements. Filing copies (or other evidence of filing satisfactory to Lender and its counsel) of such UCC financing statements,
collateral assignments, account control agreements, and termination statements, with respect to the Collateral as Lender shall
request.

 

(i) Lien
Searches. UCC lien, judgment, bankruptcy and tax lien searches of Borrower from such jurisdictions or offices as Lender may
reasonably request, all as of a date reasonably satisfactory to Lender and its counsel.

 

(j) Good
Standing Certificate. A certificate of status or good standing of Borrower as of a date acceptable to Lender from the jurisdiction
of Borrower’s organization and any foreign jurisdictions where Borrower is required to be qualified to do business and the
failure to be so qualified could reasonably be expected to have a Material Adverse Effect.

 

(k) Other
Conditions. Each of the conditions set forth in Section 4.3 are fulfilled and the Lender has received the documents described
in Section 4.3, duly executed and in form and substance satisfactory to Lender and its counsel.

 

(l) Other
Documents. Such other documents and instruments as Lender may reasonably request to effectuate the intents and purposes of
this Agreement.

 

4.2 Conditions
to Additional Loan. The Borrower shall not be entitled to request
that the Lender make any Additional Loan(s), until the following conditions have been fulfilled and the Lender has received the
documents described below, duly executed and in form and substance satisfactory to Lender and its counsel:

 

(a) Legal
Opinion. The opinion of legal counsel for Borrower as to such matters as Lender may reasonably request, in form and substance
satisfactory to Lender.

 

(b) Insurance
Certificates. Insurance certificates showing Lender as loss payee or additional insured.

 

(c) Employment
Agreements. Copies of an employment agreement with each of the Key Employees shall have been delivered to the Lender
within thirty (30) days of the Execution Date, which agreement shall contain an acknowledgement from such Key Employee of the
terms of Sections 5.13, 7.1(k), and Section 5.14.

 

(d) Charter
Documents. Copies of the organizational and charter documents of Borrower (e.g., Articles or Certificate of Incorporation
and Bylaws), as amended through the proposed date of the second Additional Loan, including the provisions contemplated by
Section 5.17, certified by an officer of Borrower as being true, correct and complete as such date.

 

(e) Other
Conditions. Each of the conditions set forth in Section 4.3 are fulfilled and the Lender has received the documents
described in Section 4.3, duly executed and in form and substance satisfactory to Lender and its counsel.

 

(f) Other
Documents. Such other documents and instruments as Lender may reasonably request to effectuate the intents and purposes of
this Agreement, including releases in favor of the Released Parties from the Chief Executive Officer and Chief Financial Officer
of the Borrower.

 

4.3 Conditions
to All Loans. The Borrower shall not be entitled to request
that the Lender make any Loans hereunder, until the following conditions are fulfilled and the Lender has received the
documents described below, duly executed and in form and substance satisfactory to Lender and its counsel:

 

(a) No
Default. No Default or Event of Default has occurred and is continuing or will result from the making of any such Loan, and
the representations and warranties of Borrower contained in Article 3 of this Agreement are true and correct in all material respects
as of the Borrowing Date of such Loan, except to the extent such representations and warranties are made as of a specified date
in which case such representations and warranties shall be true and correct in all material respects as of such earlier date and
provided that such materiality qualifier shall not be applicable to any representation or warranty already qualified or modified
by materiality in the text thereof.

 

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(b) No
Material Adverse Change. No event has occurred that has had or could reasonably be expected to have a Material Adverse Change.
Loan. Borrowing Request. Borrower shall have delivered to Lender a Borrowing Request for such Note. Borrower shall have delivered
an original executed Note evidencing such Loan, substantially in the form attached hereto as Exhibit A.

 

(c) Supplemental
Lien Filings. Borrower shall have executed and delivered such amendments or supplements to this Agreement and additional Security
Documents, financing statements and third party waivers as Lender may reasonably request in connection with the proposed Loan,
in order to create, protect or perfect or to maintain the perfection of Lender’s Liens on the Collateral.

 

(d) Financial
Projections. Borrower shall have delivered to Lender Borrower’s business plan and/or financial projections or forecasts
as most recently approved by Borrower’s Board of Directors.

 

ARTICLE
5 - AFFIRMATIVE COVENANTS

 

During
the term of this Agreement and until its performance of all Obligations (other than inchoate indemnity obligations), Borrower
will:

 

5.1 Notice
to Lender. Promptly give written notice to Lender of:

 

(a) Any
litigation or administrative or regulatory proceeding affecting Borrower where the amount claimed against Borrower is at the Threshold
Amount or more, or where the granting of the relief requested could reasonably be expected to have a Material Adverse Effect;
or of the acquisition by Borrower of any commercial tort claim, including brief details of such claim and such other information
as Lender may reasonably request to enable Lender to better perfect its Lien in such commercial tort claim as Collateral.

 

(b) Any
dispute which may exist between Borrower and any governmental or regulatory authority which, if determined adversely to Borrower,
could reasonably be expected to have a Material Adverse Effect.

 

(c) The
occurrence of any Default or any Event of Default after Borrower has knowledge or becomes aware thereof.

 

(d) Any
change in the location of any of Borrower’s places of business or Collateral with an aggregate value in excess of $25,000
(not including moveable items of Equipment in the possession of Borrower’s employees, such as laptops, monitors, printers
and cell phones) at least ten (10) days in advance of such change, or of the establishment of any new, or the discontinuance of
any existing, place of business. Any dispute or default by Borrower or any other party under any joint venture, partnering, distribution,
cross-licensing, strategic alliance, collaborative research or manufacturing, license or similar agreement which could reasonably
be expected to have a Material Adverse Effect.

 

(e) Any
other matter which has resulted or could reasonably be expected to result in a Material Adverse Change.

 

 (f) Any Subsidiary Borrower intends to acquire or create.

 

(g) Any
change in the capital structure of the Borrower, along with a revised and updated capital structure summary.

 

5.2 Financial
Statements. Deliver to Lender or cause to be delivered to Lender,
in form and detail reasonably satisfactory to Lender the following financial and other information, which Borrower warrants shall
be accurate and complete in all material respects:

 

    	 	 9	 

     

    

 

(a) Monthly
Financial Statements. As soon as available but no later than thirty (30) days after the end of each month, Borrower’s
balance sheet as of the end of such period, and Borrower’s income statement and Borrower’s cash flow statement for
such period and for that portion of Borrower’s financial reporting year ending with such period, prepared in accordance
with GAAP (except for the omission of footnotes and subject to normal year end adjustments) and attested by a responsible financial
officer of Borrower as being complete and correct and fairly presenting in all material respects Borrower’s financial condition
and the results of Borrower’s operations. After a Qualified Public Offering, the foregoing interim financial statements
shall be delivered no later than 45 days after each fiscal quarter and for the quarter-annual fiscal period then ended.

 

(b) Year-End
Financial Statements. Contemporaneously with delivery to Borrower’s Board of Directors, after and as of the end of each
financial reporting year, a complete copy of Borrower’s audit report, which shall include balance sheet; income statement,
statement of changes in equity and statement of cash flows for such year, prepared in accordance with GAAP and certified by an
independent certified public accountant selected by Borrower and satisfactory to Lender (the “Accountant”).
The Accountant’s certification shall not be qualified or limited due to a restricted or limited examination by the Accountant
of any material portion of Borrower’s records or otherwise. Notwithstanding the foregoing, if Borrower’s Board of
Directors does not require Borrower’s financial statements to be audited for a particular reporting year, then Borrower
shall deliver to Lender unaudited financial statements for such year, including the items described in, and in the timeframe specified
in, this Section 5.2(b).

 

(c) Compliance
Certificates. Simultaneously with the delivery of each set of financial statements referred to in paragraphs (a) and (b) above,
a certificate of the chief financial officer of Borrower (or other executive officer) substantially in the form of Exhibit
C hereto (i) setting forth in reasonable detail any calculations required to establish whether Borrower is in compliance with
any covenants or tests set forth herein, and (ii) stating, among other things, whether any Default or Event of Default exists
on the date of such certificate, and if so, setting forth the details thereof and the action which Borrower is taking or proposes
to take with respect thereto.

 

(d) Government
Required Reports; Press Releases. Promptly after sending, issuing, making available, or filing, copies of all material statements
released to any news media for publication, all reports, proxy statements, and financial statements that Borrower sends or makes
generally available to its stockholders, and, not later than five (5) days after actual filing or the date such filing was first
due, all registration statements and reports that Borrower files or is required to file with the Securities and Exchange Commission.

 

(e) Other
Information. Such other statements, lists of property and accounts, budgets (as updated), sales projections, forecasts, reports,
409A valuation reports (as updated), operating plans, financial exhibits, capitalization tables (as updated) and information relating
to equity and debt financings consummated after the Execution Date (including post-closing capitalization table(s)), or other
information as Lender may from time to time reasonably request. In addition to the foregoing, Borrower will promptly provide Lender
with copies of all notices, minutes, consents and other materials, financial or otherwise, which Borrower provides to its board
of directors, provided that in all cases Borrower may exclude confidential compensation information, attorney/client privileged
communications, matters that present a direct conflict of interest to Lender, such as a take-out financing proposal, and executive
session materials.

 

 5.3 Managerial Assistance from Lender.

 

(a) Borrower
agrees that (i) it will make its officers, directors, employees and affiliates available at such times as Lender may reasonably
request for Lender to consult with and advise as to the conduct of Borrower’s business, its equipment and financing plans,
and its financial condition and prospects, (ii) Lender shall have the right to inspect Borrower’s books, records, facilities
and properties at reasonable times during normal business hours on reasonable advance notice (but in no case more than once per
calendar year at Borrower’s expense if no Event of Default has occurred and is continuing), (iii) Lender shall be entitled
to appoint a non-voting observer to the Board of Directors of the Borrower, who shall be entitled to attend all board and committee
meetings and receive all notices, minutes, consents and other materials the Borrower provides to its Board of Directors, and (vi)
Lender shall be entitled to recommend prospective candidates for election or nomination for election to Borrower’s Board
of Directors and Borrower shall give due consideration to (but shall not be bound by) such recommendations, it being the intention
of the parties that Lender shall be entitled through such rights, inter alia, to furnish “significant managerial assistance”,
as defined in Section 2(a)(47) of the Investment Company Act of 1940, to Borrower.

 

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(b) Without
limiting the generality of (a) above, if Lender reasonably believes that financial or other developments affecting Borrower have
impaired or are likely to impair Borrower’s ability to perform its obligations under this Agreement, permit Lender reasonable
access to Borrower’s management and Board of Directors and opportunity to present Lender’s views with respect to such
developments.

 

Lender
shall cooperate with Borrower to ensure that the exercise of Lender’s rights shall not disrupt the business of Borrower.
The rights enumerated above shall survive the payment and satisfaction of all of Borrower’s Obligations to Lender but shall
not be construed as giving Lender control over Borrower’s management or policies.

 

5.4 Existence.
Maintain and preserve Borrower’s existence, present form of business, and all rights and privileges necessary in the normal
course of its business; and keep all Borrower’s property in good working order and condition, ordinary wear and tear excepted.

 

5.5 Insurance.
Obtain and keep in force insurance in such amounts and types as is usual in the type of business conducted by Borrower, with insurance
carriers having a policyholder rating of not less than “A” and financial category rating of Class VII in “Best’s
Insurance Guide,” unless otherwise approved by Lender. Such insurance policies must be in form and substance reasonably
satisfactory to Lender, and shall list Lender as an additional insured or loss payee, as applicable, on endorsement(s) in form
reasonably acceptable to Lender. Borrower shall furnish to Lender such endorsements, and upon Lender’s request, copies of
any or all such policies. If no Event of Default has occurred and is continuing, proceeds payable under any casualty policy will,
at Borrower’s option, be payable to Borrower to replace the property subject to the claim to the extent set forth in Section
2.8(c), provided that any such replacement property shall be deemed Collateral in which Lender has been granted a first priority
security interest. If an Event of Default has occurred and is continuing (other than, during the Forbearance Period, the Existing
Defaults), then proceeds payable under any policy will be payable to Lender toward the satisfaction of the Obligations in accordance
with the terms of this Agreement.

 

5.6 Accounting
Records. Maintain adequate books, accounts and records, and
prepare all financial statements in accordance with GAAP (except in the case of unaudited financial statements for the omission
of footnotes and subject to normal year-end adjustments), and in compliance with the regulations of any governmental or regulatory
authority having jurisdiction over Borrower or Borrower’s business; and permit employees or agents of Lender at such reasonable
times and upon reasonable advance written notice as Lender may request, at Borrower’s expense, for one such inspection each
calendar year and for all such inspections while an Event of Default has occurred and is continuing, to inspect Borrower’s
properties, and to examine, and make copies and memoranda of Borrower’s books, accounts and records.

 

5.7 Compliance
with Laws. Comply with all laws (including Environmental Laws),
rules, regulations applicable to, and all orders and directives of any governmental or regulatory authority having jurisdiction
over, Borrower or Borrower’s business, and with all material agreements to which Borrower is a party, except where the failure
to so comply would not have a Material Adverse Effect.

 

5.8 Taxes
and Other Liabilities. Pay all Borrower’s Indebtedness
when due (subject to applicable cure periods); pay all taxes and other governmental or regulatory assessments, in each case, before
delinquency or before any penalty attaches thereto, except as may be contested in good faith by the appropriate procedures and
for which Borrower shall maintain appropriate reserves; and timely file all required tax returns.

 

 5.9 Special Collateral Covenants.

 

(a) Maintenance
of Collateral; Inspection. Do all things reasonably necessary to maintain, preserve, protect and keep all Collateral in good
working order and salable condition, ordinary wear and tear excepted, deal with the Collateral in all ways as are considered good
practice by owners of like property, and use the Collateral lawfully and, to the extent applicable, only as permitted by Borrower’s
insurance policies. Maintain, or cause to be maintained, complete and accurate Records relating to the Collateral. Upon reasonable
prior notice at reasonable times during normal business hours (but not more than once per calendar year unless an Event of Default
has occurred and is continuing), Borrower hereby authorizes Lender’s officers, employees, representatives and agents to
inspect the Collateral and to discuss the Collateral and the Records relating thereto with Borrower’s officers and employees,
and, in the case of any Right to Payment, after the occurrence and during the continuance of an Event of Default, with any Person
which is or may be obligated thereon.

 

    	 	 11	 

     

    

 

(b) Documents
of Title. Not sign or authorize the signing of any financing statement or other document naming Borrower as debtor or obligor
(other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest), or
acquiesce or cooperate in the issuance of any bill of lading, warehouse receipt or other document or instrument of title with
respect to any Collateral, except those negotiated to Lender, or those naming Lender as secured party, or if solely to create,
perfect or maintain a Permitted Lien.

 

(c) Change
in Location or Name. Without at least 10 days’ prior written notice to Lender: (a) not relocate any Collateral with
an aggregate value in excess of $25,000 (not including moveable items of Equipment in the possession of Borrower’s employees
such as laptops, monitors, printers, and cell phones) or Records, its chief executive office, or establish a place of business
at a location other than as specified in Schedule 3; and (b) not change its name, mailing address, location of Collateral with
an aggregate value in excess of $25,000 or Records, jurisdiction of incorporation or its legal structure.

 

(d) Decals,
Markings. At the request of Lender, firmly affix a decal, stencil or other marking to designated items of Equipment, indicating
thereon the security interest of Lender.

 

(e) Agreement
with Persons in Possession of Collateral. Use commercially reasonable efforts to obtain and maintain such acknowledgments,
consents, waivers and agreements (each a “Waiver”) from the owner, operator, lienholder, mortgagee,
landlord or any Person in possession of tangible Collateral in excess of $25,000 (not including moveable items of Equipment in
the possession of Borrower’s employees such as laptops, monitors, printers, and cell phones) per location as Lender may
require, all in form and substance satisfactory to Lender.

 

(f) Certain
Agreements on Rights to Payment. Other than in the ordinary course of business, not make any material discount, credit, rebate
or other reduction in the original amount owing on a Right to Payment or accept in satisfaction of a Right to Payment less than
the original amount thereof.

 

(g) Authorization
for Automated Clearinghouse Funds Transfer. (i) Authorize Lender to initiate debit entries to Borrower’s account specified
in Schedule 5.10 (the “Primary Operating Account”) through Automated Clearinghouse (“ACH”)
transfers, in order to satisfy the regularly scheduled payments of principal and interest (if any); (ii) provide Lender at least
thirty (30) days’ notice of any change in Borrower’s Primary Operating Account; and (iii) grant Lender any additional
authorizations necessary to begin ACH debits from a new account which becomes the Primary Operating Account.

 

5.10 Reserved.

 

5.11 Additional
Software Products. From the Execution Date until the fifth anniversary
thereof, ensure that affiliates of the Lender are provided with most favored nation pricing and other material terms on the Borrower’s
software development services and products.

 

5.12 Non-Compete.
Ensure that, prior to the date that the Obligations are repaid in full, none of the Key Employees shall, directly or indirectly,
(i) engage in any activity that is in any way competitive, or prepare to compete, with the business or demonstrably anticipated
business of the Borrower (a “Competitive Business”), whether through ownership, service or otherwise
or (ii) solicit, induce, recruit or encourage any of the Borrower’s employees, consultants or other service providers to
termination their relationship with the Borrower or attempt to do so. Within thirty (30) days of the Execution Date, the Borrower
shall cause each such Key Employee to enter into an employment agreement that contains an acknowledgment of the requirements of
this Section 5.13 and the Borrower shall deliver a copy of the same to the Lender.

 

5.13 Right
of First Refusal. If any Competitive Business in which a Key
Employee participates, whether as an owner, service provider or otherwise, raises capital through the sale of debt or equity securities
at any time prior to the date that the Obligations are repaid in full, the Borrower shall cause such Key Employee to offer a right
of first refusal for the Lender to purchase such debt or equity securities on terms no less favorable to the Lender than the terms
the Key Employee has received from a third party on arm’s-length basis.

 

5.14 Third
Party Releases. Within 180 (180) days of the Execution Date,
cause each vendor, supplier and other Person with whom Borrower has a valid account payable as of the Execution Date, as specified
on Schedule 5.15, to deliver to the Lender a release, in form and substance satisfactory to the Lender.

 

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5.15 Pre-Emptive
Rights. Until the occurrence of a Qualified Public Offering
or Change of Control, the Borrower shall ensure that at all times Lender or its affiliate has the pro rata right, but not an obligation,
based on the Lender’s and its affiliate’s aggregate percentage equity ownership, assuming full conversion and exercise
of all outstanding convertible and exercisable securities, to participate in subsequent debt and equity financings of the Borrower,
other than issuances in connection with employee equity incentive plans, bona fide business acquisitions by the Borrower, conversion
of existing convertible securities, or distribution, licensing, development or similar commercial transactions that are not primary
for financing purposes.

 

5.16 Amendment
of Certificate of Incorporation. Within thirty (30) days of
the Execution Date, (a) amend its certificate of incorporation to (i) require a unanimous vote of the Board of Directors of the
Borrower in order to approve any action which would cause the Borrower to liquidate, dissolve or commence any voluntary Insolvency
Proceeding and (ii) provide for the Lender’s permanent right to designate an Investor Director for election to the Board
of Directors of the Borrower without the consent of the Borrower’s stockholders or any third parties, and (b) deliver to
the Lender a copy of such amended certificate of incorporation, certified by the Secretary of State of Nevada.

 

ARTICLE
6 - NEGATIVE COVENANTS

 

During
the term of this Agreement and until the performance of all Obligations (other than inchoate indemnity obligations), Borrower
will not:

 

6.1
Indebtedness.
Incur, or otherwise become liable (as principal obligor, guarantor, surety, accommodation party or otherwise) for, any Indebtedness,
except, and subject to Section 5.16:

 

(a) Indebtedness
incurred for the acquisition of supplies or inventory on normal trade credit;

 

 (b) Indebtedness incurred pursuant to one or more transactions permitted under Section 6.4;

 

 (c) Indebtedness of Borrower under this Agreement;

 

 (d) Subordinated Debt;

 

 (e) any Indebtedness approved by Lender prior to the Execution Date as shown on Schedule 6.1;

 

(f) Indebtedness
of Borrower secured only by the security interests covered by subsection (c) of the definition of Permitted Lien not to exceed
$50,000 in aggregate amount outstanding at any time;

 

(g) Indebtedness
consisting of interest rate, currency, or commodity swap agreements, interest rate cap or collar agreements or arrangements entered
into in the ordinary course of business and designated to protect Borrower against fluctuations in interest rates, currency exchange
rates, or commodity prices and not for speculative purposes;

 

(h) Indebtedness
in respect of bank guarantees and similar instruments issued for the account of Borrower in the ordinary course of business supporting
obligations under (A) workers’ compensation, unemployment insurance and other social security laws and (B) bids, trade contracts,
statutory obligations, surety and appeal bonds, performance bonds and obligations of a like nature;

 

(i) Indebtedness
in respect of letters of credit issued for the account of Borrower in the ordinary course of business supporting obligations under
real property leases not to exceed $50,000 in aggregate amount outstanding at any time;

 

(j) extensions,
refinancings, modifications, amendments and restatements of any items of (a) through (i) above, provided that the principal amount
thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower.

 

    	 	 13	 

     

    

 

6.2 Liens.
Create, incur, assume or permit to exist any Lien, or grant any other Person a negative pledge, on any of Borrower’s property,
except Permitted Liens. Borrower and Lender agree that this covenant is not intended to constitute a lien, deed of trust, equitable
mortgage, or security interest of any kind on any of Borrower’s real property, and this Agreement shall not be recorded
or recordable. Notwithstanding the foregoing, however, violation of this covenant by Borrower shall constitute an Event of Default.

 

6.3 Dividends.
Pay any dividends or purchase, redeem or otherwise acquire or make any other distribution with respect to any of Borrower’s
capital stock, except (a) dividends or other distributions solely of capital stock of Borrower, (b) so long as no Event of Default
has occurred and is continuing, repurchases of stock from employees, directors or consultants at the lower of cost or fair market
value upon termination of employment under reverse vesting or similar repurchase plans not to exceed $25,000 in any calendar year,
(c) conversion of any of its securities into other securities or otherwise in exchange therefor, and (d) purchases or distributions
of capital stock in connection with the exercise of stock options or stock appreciation rights.

 

6.4 Fundamental
Changes. (a) Liquidate, dissolve or commence, or permit any
of Borrower’s Subsidiaries to commence, any voluntary Insolvency Proceeding with respect to itself or any of Borrower’s
Subsidiaries; (b) enter into, or permit any of Borrower’s Subsidiaries to enter into, any Change of Control; or (c) acquire,
or permit any of Borrower’s Subsidiaries to acquire, all or substantially all of the capital stock or property of another
Person. Notwithstanding anything to the contrary in this Section 6.4, Borrower may enter into a transaction that will constitute
a Change of Control so long as: (i) the Person that results from such Change of Control (the “Surviving Entity”)
shall be reasonably acceptable to the Lender and shall have executed and delivered to Lender an agreement in form and substance
reasonably satisfactory to Lender, containing an assumption by the Surviving Entity of the due and punctual payment and performance
of all Obligations and performance and observance of each covenant and condition of Borrower in the Loan Documents; (ii) all such
obligations of the Surviving Entity to Lender shall be guaranteed by any Person that directly or indirectly owns or controls 50%
or more of the voting stock of the Surviving Entity; (iii) immediately after giving effect to such Change of Control, no Event
of Default or, event which with the lapse of time or giving of notice or both, would result in an Event of Default shall have
occurred and be continuing; (iv) the Investor Director shall have approved of such Change of Control; and (v) the credit risk
to Lender, in its sole discretion, with respect to the Obligations and the Collateral shall not be increased. In determining whether
the proposed Change of Control would result in an increased credit risk, Lender may consider, among other things, changes in Borrower’s
management team, employee base, access to equity markets, venture capital support, financial position and/or disposition of intellectual
property rights which may reasonably be anticipated as a result of the Change of Control. In addition, (i) a Subsidiary may merge
or consolidate into another Subsidiary and (ii) Borrower may consolidate or merge with any of Borrower’s Subsidiaries provided
that Borrower is the continuing or surviving Person. Except in connection with a transaction permitted by this Section 6.4 or
as contemplated by Section 5.17, the Borrower shall not amend its organizational documents or remove the Investor Director without
the express prior written consent of the Lender.

 

6.5 Sales
of Assets. Sell, transfer, lease, license or otherwise dispose
of (a “Transfer”) any of Borrower’s assets except (i) non-exclusive licenses of Intellectual Property in the
ordinary course of business consistent with industry practice, provided that such licenses of Intellectual Property neither result
in a legal transfer of title of the licensed Intellectual Property nor have the same effect as a sale of such Intellectual Property;
Transfers of worn-out, obsolete or surplus property (each as determined by Borrower in its reasonable judgment); (iii) Transfers
of Inventory in the ordinary course of business; (iv) Transfers constituting Permitted Liens; (v) Transfers permitted in Section
6.6 hereunder; and (vi) Transfers of Collateral (other than Intellectual Property) for fair consideration and in the ordinary
course of its business.

 

6.6
Loans/Investments. Make
or suffer to exist any loans, guaranties, advances, or investments, except:

 

(a) accounts
receivable in the ordinary course of Borrower’s business;

 

(b) investments
in domestic certificates of deposit issued by, and other domestic investments with, financial institutions organized under the
laws of the United States or a state thereof, having at least One Hundred Million Dollars ($100,000,000) in capital and a rating
of at least “investment grade” or “A” by Moody’s or any successor rating agency;

 

    	 	 14	 

     

    

 

(c) investments
in marketable obligations of the United States of America or its agencies in any State and in open market commercial paper given
the highest credit rating by a national credit agency and maturing not more than one year from the creation thereof;

 

 (d) temporary advances to cover incidental expenses to be incurred in the ordinary course of business;

 

(e) investments
in joint ventures, strategic alliances, licensing and similar arrangements customary in Borrower’s industry and which do
not require Borrower to assume or otherwise become liable for the obligations of any third party not directly related to or arising
out of such arrangement or, without the prior written consent of Lender, require Borrower to transfer ownership of non-cash assets
to such joint venture or other entity;

 

(f) investments
of cash in one or more wholly-owned Subsidiaries of Borrower, so long as each such Person has been made a co-borrower hereunder
or has executed and delivered to Lender an agreement, in form and substance reasonably satisfactory to Lender, containing a guaranty
of the Obligations.

 

(g) Investments
(including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement
of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

 

(h) Investments
consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates,
in the ordinary course of business;

 

(i) the
formation or acquisition of Subsidiaries after the Execution Date, subject to compliance with Section 6.14 of this Agreement;
and

 

 (j) other investments in an aggregate amount not to exceed $100,000 in any calendar year.

 

For
the avoidance of doubt, this Section 6.6 shall not be deemed to prohibit Borrower from making cash capital expenditures in the
ordinary course of business.

 

6.7 Transactions
with Related Persons. Directly or indirectly enter into any
transaction with or for the benefit of a Related Person on terms more favorable to the Related Person than would have been obtainable
in an “arms’ length” dealing other than sales of equity securities to existing investors and employees in Borrower
for capital raising purposes.

 

6.8 Other
Business. Engage in any material line of business other than
the business Borrower conducts as of the Execution Date, or any business closely related thereto.

 

6.9 Financing
Statements and Other Actions. Fail to execute and deliver to
Lender all financing statements, notices and other documents (including, without limitation, any filings with the United States
Patent and Trademark Office and the United States Copyright Office) from time to time reasonably requested by Lender to maintain
a perfected first priority security interest in the Collateral in favor of Lender, subject to Permitted Liens; perform such other
acts, and execute and deliver to Lender such additional conveyances, assignments, agreements and instruments, as Lender may at
any time request in connection with the administration and enforcement of this Agreement or Lender’s rights, powers and
remedies hereunder, in the case of each of the foregoing promptly following Lender’s request.

 

6.10 Compliance.
Become an “investment company” or controlled by an “investment company,” within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Loan for such purpose. Fail to meet
the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur,
fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the Collateral or the priority of Lender’s Lien
on the Collateral, or permit any of its subsidiaries to do any of the foregoing.

 

    	 	 15	 

     

    

 

6.11 Other
Deposit and Securities Accounts. Maintain any Deposit Accounts
or accounts holding securities owned by Borrower except (i) Deposit Accounts and investment/securities accounts as set forth in
Schedule 3, and (ii) other Deposit Accounts and securities/investment accounts, in each case, with respect to which Borrower and
Lender shall have taken such action as Lender reasonably deems necessary to obtain a perfected first priority security interest
therein, subject to Permitted Liens. The provisions of the previous sentence shall not apply to Deposit Accounts (x) exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees
provided that the aggregate balance in such accounts does not exceed $100,000 for more than seven (7) consecutive days.

 

6.12 Prepayment
of Indebtedness. Prepay, redeem or otherwise satisfy in any
manner prior to the scheduled repayment thereof any Indebtedness (other than the Loans). Notwithstanding the foregoing, Lender
agrees that the conversion or exchange into Borrower’s equity securities of any Indebtedness (other than the Loans) shall
not be prohibited by this Section 6.12.

 

6.13 Repayment
of Subordinated Debt. Repay, prepay, redeem’ or otherwise
satisfy in any manner any Subordinated Debt, except in accordance with the terms of any subordination agreement among Borrower,
Lender and the holder(s) of such Subordinated Debt. Notwithstanding the foregoing, Lender agrees that the conversion or exchange
into Borrower’s equity securities of any Subordinated Debt and the payment of cash in lieu of fractional shares shall not
be prohibited by this Section 6.13.

 

 6.14 Subsidiaries.

 

(a) Acquire
or create any Subsidiary, unless such Subsidiary becomes, at Lender’s option, either a co- borrower hereunder or executes
and delivers to Lender one or more agreements, in form and substance reasonably satisfactory to Lender, containing a guaranty
of the Obligations that is secured by first priority Liens on such Person’s assets. For clarity, the parties acknowledge
and agree that Lender shall have the exclusive right to determine whether any such Person will be made a co-borrower hereunder
or a guarantor of the Obligations. Prior to the acquisition or creation of any such Subsidiary, Borrower shall notify Lender thereof
in writing, which notice shall contain the jurisdiction of such Person’s formation and include a description of such Person’s
fully diluted capitalization and Borrower’s purpose for its acquisition or creation of such Subsidiary. Notwithstanding
the foregoing, Lender shall not have the right to require a Foreign Subsidiary to become a co-borrower hereunder or execute and
deliver to Lender one or more agreements containing a guaranty of the Obligations that is secured by first priority Liens on such
Person’s assets if any of the foregoing actions could reasonably be expected to result in material adverse tax consequences
to Borrower.

 

(b) Sell,
transfer, encumber or otherwise dispose of Borrower’s ownership interest in any Subsidiary other than Permitted Liens.

 

(c) Cause
or permit a Subsidiary to do any of the following: (i) grant Liens on such Subsidiary’s assets, except for Liens that would
constitute Permitted Liens if incurred by Borrower and Liens on any property held or acquired by such Subsidiary in the ordinary
course of its business securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring
such property; provided, that such Lien attaches solely to the property acquired with such Indebtedness and the proceeds thereof
and that the principal amount of such Indebtedness does not exceed one hundred percent (100%) of the cost of such property; and
(ii) issue any additional Shares.

 

6.15 Leases.
Create, incur, assume, or suffer to exist any obligation as lessee for the rental or hire of any personal property (“Personal
Property Leases”), except (i) Personal Property Leases constituting Indebtedness (which shall be subject to Section
6.1(f)) and (ii) Personal Property Leases not constituting Indebtedness that do not in the aggregate require Borrower to make
payments (including taxes, insurance, maintenance and similar expenses which Borrower is required to pay under the terms of any
lease) in any fiscal year of Borrower in excess of $50,000.

 

6.16 Use
of Proceeds. Use the proceeds of any Additional Loan for any
purpose other than the uses specified in Section 2.1(b) and in the Borrowing Request pursuant to which such Additional Loan was
made.

 

    	 	 16	 

     

    

 

ARTICLE
7 - EVENTS OF DEFAULT

 

7.1
Events of Default; Acceleration.
Upon the occurrence and during the continuation of any Default, the obligation of Lender to make any additional Loan shall be
suspended. The occurrence of any of the following (each, an “Event of Default”) shall terminate any
obligation of Lender to make any additional Loan; and shall, at the option of Lender (1) make all sums of interest and principal,
as well as any other Obligations and amounts owing under any Loan Documents immediately due and payable without notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor or any other notices or demands and (2) give Lender
the right to exercise any other right or remedy provided by contract or applicable law:

 

(a) Borrower
shall fail to pay any principal or interest under this Agreement or any Note, or fail to pay any fees or other charges when due
under any Loan Document; provided that with respect to the first such failure, the Borrower shall have a period of five (5) days
from the date such payment first became due in which to cure such Default before it shall be an Event of Default hereunder.

 

 (b) An Event of Default as defined in any other Loan Document shall have occurred.

 

(c) Any
representation or warranty made, or financial statement, certificate or other document provided, by Borrower under any Loan Document
shall prove to have been false or misleading in any material respect when made or deemed made herein.

 

(d) (i)
Borrower shall fail to pay its debts generally as they become due; or (ii) Borrower shall commence any Insolvency Proceeding with
respect to itself, an involuntary Insolvency Proceeding shall be filed against Borrower, or a custodian, receiver, trustee, assignee
for the benefit of creditors, or other similar official, shall be appointed to take possession, custody or control of the properties
of Borrower, and such involuntary Insolvency Proceeding, petition or appointment is acquiesced to by Borrower or is not dismissed
within forty five (45) days; or

(ii) the
dissolution, winding up, or termination of the business or cessation of operations of Borrower (including any transaction or series
of related transactions deemed to be a liquidation, dissolution or winding up of Borrower pursuant to the provisions of Borrower’s
charter documents); or (iv) Borrower shall take any corporate action for the purpose of effecting, approving, or consenting to
any of the foregoing.

 

(e) Borrower
shall be in default beyond any applicable period of grace or cure under any other agreement involving the borrowing of money,
the purchase of property, the advance of credit or any other monetary liability of any kind to Lender or to any Person in an amount
in excess of the Threshold Amount.

 

(f) Any
governmental or regulatory authority shall take any judicial or administrative action, or any defined benefit pension plan maintained
by Borrower shall have any unfunded liabilities, any of which, in the reasonable judgment of Lender, could reasonably be expected
to have a Material Adverse Effect.

 

(g) Any
sale, transfer or other disposition of all or substantially all of the assets of Borrower, including without limitation to any
trust or similar entity, shall occur.

 

(h) Any
judgment(s) singly or in the aggregate in excess of the Threshold Amount shall be entered against Borrower which, if not fully
covered by insurance, remain unsatisfied, unvacated or unstayed pending appeal for ten (10) or more days after entry thereof.

 

(i) Borrower
shall fail to perform or observe any covenant contained in Sections 5.11 through 5.16 or Article 6 of this Agreement, and, with
respect to the covenants contained in Section 5.15, if capable of being cured, the breach of such covenant is not cured within
5 days after the date on which such breach occurred.

 

(j) Borrower
shall fail to perform or observe any covenant contained in Article 5 (other than Sections 5.11 through 5.16) or elsewhere in this
Agreement or any other Loan Document (other than a covenant which is dealt with specifically elsewhere in this Article 7) and,
if capable of being cured, the breach of such covenant is not cured within 30 days after the sooner to occur of Borrower’s
receipt of notice of such breach from Lender or the date on which such breach first becomes known to any officer of Borrower;
provided, however that if such breach is not capable of being cured within such 30-day period and Borrower timely notifies Lender
of such fact and Borrower diligently pursues such cure, then the cure period shall be extended to the date requested in Borrower’s
notice but in no event more than 90 days from the initial breach; provided, further, that such additional 60-day opportunity to
cure shall not apply in the case of any failure to perform or observe any covenant which has been the subject of a prior failure
within the preceding 180 days or which is a willful and knowing breach by Borrower.

 

    	 	 17	 

     

    

 

(k) Any
of the Key Employees ceases to be employed full-time by the Borrower for a period of more than five 5 days, other than as a result
of the death or disability of such Key Employee.

 

7.2 Remedies
upon Default. Upon the occurrence and during the continuance
of an Event of Default, Lender shall be entitled to, at its option, exercise any or all of the rights and remedies available to
a secured party under the UCC or any other applicable law, and exercise any or all of its rights and remedies provided for in
this Agreement and in any other Loan Document. The obligations of Borrower under this Agreement shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any Obligations is rescinded or must otherwise be returned
by Lender upon, on account of, or in connection with, the insolvency, bankruptcy or reorganization of Borrower or otherwise, all
as though such payment had not been made.

 

7.3 Sale
of Collateral. Subject to the Forbearance Period, upon the occurrence
and during the continuance of an Event of Default, Lender may sell all or any part of the Collateral, at public or private sales,
to itself, a wholesaler, retailer or investor, for cash, upon credit or for future delivery, and at such price or prices as Lender
may deem commercially reasonable. To the extent permitted by law, Borrower hereby specifically waives all rights of redemption
and any rights of stay or appraisal which it has or may have under any applicable law in effect from time to time. Any such public
or private sales shall be held at such times and at such place(s) as Lender may determine. In case of the sale of all or any part
of the Collateral on credit or for future delivery, the Collateral so sold may be retained by Lender until the selling price is
paid by the purchaser, but Lender shall not incur any liability in case of the failure of such purchaser to pay for the Collateral
and, in case of any such failure, such Collateral may be resold. Lender may, instead of exercising its power of sale, proceed
to enforce its security interest in the Collateral by seeking a judgment or decree of a court of competent jurisdiction. Without
limiting the generality of the foregoing, if an Event of Default is in existence,

 

(1) Subject
to the rights of any third parties, Lender may license, or sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any Copyrights, Patents or Trademarks included in the Collateral throughout the world for such
term or terms, on such conditions and in such manner as Lender shall in its sole discretion determine;

 

(2) Lender
may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee all rights and remedies of Borrower in, to and under any Copyright
Licenses, Patent Licenses or Trademark Licenses and take or refrain from taking any action under any thereof, and Borrower hereby
releases Lender from, and agrees to hold Lender free and harmless from and against any claims arising out of, any lawful action
so taken or omitted to be taken with respect thereto other than claims arising out of Lender’s gross negligence or willful
misconduct; and

 

(3) Upon
request by Lender, Borrower will execute and deliver to Lender a power of attorney, in form and substance reasonably satisfactory
to Lender for the implementation of any lease, assignment, license, sublicense, grant of option, sale or other disposition of
a Copyright, Patent or Trademark. In the event of any such disposition pursuant to this clause 3, Borrower shall supply its know-how
and expertise relating to the products or services made or rendered in connection with Patents, the manufacture and sale of the
products bearing Trademarks, and its customer lists and other records relating to such Copyrights, Patents or Trademarks and to
the distribution of said products, to Lender.

 

(4) If,
at any time when Lender shall determine to exercise its right to sell the whole or any part of the Shares hereunder, such Shares
or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act (or any
similar statute), then Lender may, in its discretion (subject only to applicable requirements of law), sell such Shares or part
thereof by private sale in such manner and under such circumstances as Lender may deem necessary or advisable, but subject to
the other requirements of this Article 7, and shall not be required to effect such registration or to cause the same to be effected.
Without limiting the generality of the foregoing, in any such event, Lender in its discretion may (i) in accordance with applicable
securities laws proceed to make such private sale notwithstanding that a registration statement for the purpose of registering
such Shares or part thereof could be or shall have been filed under the Securities Act (or similar statute), (ii) approach and
negotiate with a single possible purchaser to effect such sale, and (iii) restrict such sale to a purchaser who is an accredited
investor under the Securities Act and who will represent and agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such Shares or any part thereof. in addition to a private sale as
provided above in this Article 7, if any of the Shares shall not be freely distributable to the public without registration under
the Securities Act (or similar statute) at the time of any proposed sale pursuant to this Article 7, then Lender shall not be
required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable requirements
of law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions:

 

    	 	 18	 

     

    

 

(A) as
to the financial sophistication and ability of any Person permitted to bid or purchase at any such sale;

 

(B) as
to the content of legends to be placed upon any certificates representing the Shares sold in such sale, including restrictions
on future transfer thereof;

 

(C) as
to the representations required to be made by each Person bidding or purchasing at such sale relating to such Person’s access
to financial information about Borrower or any of its Subsidiaries and such Person’s intentions as to the holding of the
Shares so sold for investment for its own account and not with a view to the distribution thereof; and

 

(D) as
to such other matters as Lender may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding
any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of
creditors’ rights and the Securities Act and all applicable state securities laws.

 

(5) Borrower
recognizes that Lender may be unable to effect a public sale of any or all the Shares and may be compelled to resort to one or
more private sales thereof in accordance with clause (4) above. Borrower also acknowledges that any such private sale may result
in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue
of such sale being private. Lender shall be under no obligation to delay a sale of any of the Shares for the period of time necessary
to permit the applicable Subsidiary to register such securities for public sale under the Securities Act, or under applicable
state securities laws, even if Borrower and/or the Subsidiary would agree to do so.

 

7.4 Borrower’s
Obligations upon Default. Upon the request of Lender after the
occurrence and during the continuance of an Event of Default, Borrower will:

 

(a) Assemble
and make available to Lender the Collateral at such place(s) as Lender shall reasonably designate, segregating all Collateral
so that each item is capable of identification; and

 

(b) Subject
to the rights of any lessor, permit Lender, by Lender’s officers, employees, agents and representatives, to enter any premises
where any Collateral is located, to take possession of the Collateral, to complete the processing, manufacture or repair of any
Collateral, and to remove the Collateral, or to conduct any public or private sale of the Collateral, all without any liability
of Lender for rent or other compensation for the use of Borrower’s premises.

 

7.5 Control
Agreements. Lender agrees that it shall not deliver a notice
of exclusive control, or any similar notice, to any depositary bank or securities intermediary pursuant to a control agreement
among Borrower, Lender, and such depositary bank or securities intermediary unless an Event of Default has occurred and is continuing.

 

7.6 Forbearance.
Neither this Agreement, nor any actions taken in accordance with this Agreement or the Loan Documents, including Lender’s
continued making of Loans to Borrower, shall be construed as a waiver of or consent to any existing or future defaults under the
Loan Documents, as to which Lender’s rights shall remain reserved. Should Lender, in its sole discretion, forbear upon the
declaration, demand or enforcement of any of Lender’s rights or remedies, all of Lender’s rights and remedies under
the Loan Documents and at law and in equity shall be available without restriction or modification, as if the forbearance had
not occurred. Lender has fully and timely performed all of its obligations and duties in compliance with the Loan Documents and
applicable law, and has acted reasonably, in good faith and appropriately under the circumstances.

 

    	 	 19	 

     

    

 

ARTICLE
8 - SPECIAL COLLATERAL PROVISIONS

 

8.1 Compromise
and Collection. Borrower and Lender recognize that setoffs,
counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Rights to Payment; that certain
of the Rights to Payment may be or become uncollectible in whole or in part; and that the expense and probability of success of
litigating a disputed Right to Payment may exceed the amount that reasonably may be expected to be recovered with respect to such
Right to Payment. Borrower hereby authorizes Lender, after and during the continuance of an Event of Default, to compromise with
the obligor, accept in full payment of any Right to Payment such amount as Lender shall negotiate with the obligor, or abandon
any Right to Payment. Any such action by Lender shall be considered commercially reasonable so long as Lender acts in good faith
based on information known to it at the time it takes any such action.

 

8.2 Performance
of Borrower’s Obligations. Without having any obligation
to do so, upon reasonable prior notice to Borrower, Lender may perform or pay any obligation which Borrower has agreed to perform
or pay under this Agreement, including, without limitation, the payment or discharge of taxes or Liens levied or placed on or
threatened against the Collateral. In so performing or paying, Lender shall determine the action to be taken and the amount necessary
to discharge such obligations. Borrower shall reimburse Lender on demand for any amounts paid by Lender pursuant to this Section,
which amounts shall constitute Obligations secured by the Collateral and shall bear interest from the date of demand at the Default
Rate.

 

8.3 Power
of Attorney. For the purpose of protecting and preserving the
Collateral and Lender’s rights under this Agreement, Borrower hereby irrevocably appoints Lender, with full power of substitution,
as its attorney-in-fact with full power and authority, after the occurrence and during the continuance of an Event of Default,
to do any act which Borrower is obligated to do hereunder; to exercise such rights with respect to the Collateral as Borrower
might exercise; to use such Inventory, Equipment, Fixtures or other property as Borrower might use; to enter Borrower’s
premises; to give notice of Lender’s security interest in, and to collect the Collateral; and before or after Default, to
execute and file in Borrower’s name any financing statements, amendments and continuation statements, account control agreements
or other Security Documents necessary or desirable to create, maintain, perfect or continue the perfection of Lender’s security
interests in the Collateral. Borrower hereby ratifies all that Lender shall lawfully do or cause to be done by virtue of this
appointment.

 

8.4 Authorization
for Lender to Take Certain Action. The power of attorney created
in Section 8.3 is a power coupled with an interest and shall be irrevocable. The powers conferred on Lender hereunder are solely
to protect its interests in the Collateral and shall not impose any duty upon Lender to exercise such powers. Lender shall be
accountable only for amounts that it actually receives as a result of the exercise of such powers and in no event shall Lender
or any of its directors, officers, employees, agents or representatives be responsible to Borrower for any act or failure to act,
except for gross negligence or willful misconduct. After the occurrence and during the continuance of an Event of Default, Lender
may exercise this power of attorney without notice to or assent of Borrower, in the name of Borrower, or in Lender’s own
name, from time to time in Lender’s sole discretion and at Borrower’s expense. To further carry out the terms of this
Agreement, after the occurrence and during the continuance of an Event of Default, Lender may:

 

(a) Execute
any statements or documents or take possession of, and endorse and collect and receive delivery or payment of, any checks, drafts,
notes, acceptances or other instruments and documents constituting Collateral, or constituting the payment of amounts due and
to become due or any performance to be rendered with respect to the Collateral.

 

(b) Sign
and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts; drafts, certificates and statements
under any commercial or standby letter of credit relating to Collateral; assignments, verifications and notices in connection
with Accounts; or any other documents relating to the Collateral, including without limitation the Records.

 

(c) Use
or operate Collateral or any other property of Borrower for the purpose of preserving or liquidating Collateral.

 

(d) File
any claim or take any other action or proceeding in any court of law or equity or as otherwise deemed appropriate by Lender for
the purpose of collecting any and all monies due or securing any performance to be rendered with respect to the Collateral.

 

    	 	 20	 

     

    

  

(e) Commence,
prosecute or defend any suits, actions or proceedings or as otherwise deemed appropriate by Lender for the purpose of protecting
or collecting the Collateral. In furtherance of this right, upon the occurrence and during the continuance of an Event of Default,
Lender may apply for the appointment of a receiver or similar official to operate Borrower’s business.

 

(f) Prepare,
adjust, execute, deliver and receive payment under insurance claims, and collect and receive payment of and endorse any instrument
in payment of loss or returned premiums or any other insurance refund or return, and apply such amounts at Lender’s sole
discretion, toward repayment of the Obligations or replacement of the Collateral.

 

8.5 Application
of Proceeds. Any Proceeds and other monies or property received
by Lender pursuant to the terms of this Agreement or any Loan Document may be applied by Lender first to the payment of expenses
of collection, including without limitation reasonable attorneys’ fees, and then to the payment of the Obligations in such
order of application as Lender may elect.

 

8.6 Deficiency.
If the Proceeds of any disposition of the Collateral are insufficient to cover all costs and expenses of such sale and the payment
in full of all the Obligations, plus all other sums required to be expended or distributed by Lender, then Borrower shall be liable
for any such deficiency.

 

8.7 Lender
Transfer. Upon the transfer of all or any part of the Obligations,
Lender may transfer all or part of the Collateral and shall be fully discharged thereafter from all liability and responsibility
with respect to such Collateral so transferred, and the transferee shall be vested with all the rights and powers of Lender hereunder
with respect to such Collateral so transferred, but with respect to any Collateral not so transferred, Lender shall retain all
rights and powers hereby given.

 

 8.8 Lender’s Duties.

 

(a) Lender
shall use reasonable care in the custody and preservation of any Collateral in its possession. Without limitation on other conduct
which may be considered the exercise of reasonable care, Lender shall be deemed to have exercised reasonable care in the custody
and preservation of such Collateral if such Collateral is accorded treatment substantially equal to that which Lender accords
its own property, it being understood that Lender shall not have any responsibility for ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, declining value, tenders or other matters relative to any Collateral, regardless
of whether Lender has or is deemed to have knowledge of such matters; or taking any necessary steps to preserve any rights against
any Person with respect to any Collateral. Under no circumstances shall Lender be responsible for any injury or loss to the Collateral,
or any part thereof, arising from any cause beyond the reasonable control of Lender.

 

(b) Lender
may at any time deliver the Collateral or any part thereof to Borrower and the receipt of Borrower shall be a complete and full
acquittance for the Collateral so delivered, and Lender shall thereafter be discharged from any liability or responsibility therefor.

 

(c) Neither
Lender, nor any of its directors, officers, employees, agents, attorneys or any other person affiliated with or representing Lender
shall be liable for any claims, demands, losses or damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower
or any other party through the ordinary negligence of Lender, or any of its directors, officers, employees, agents, attorneys
or any other person affiliated with or representing Lender.

 

8.9 Termination
of Security Interests. Upon the payment in full of the Obligations
(other than inchoate Indemnity obligations) and satisfaction of all Borrower’s obligations under this Agreement and the
other Loan Documents (other than the Warrants and inchoate indemnity obligations), the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Borrower. Upon any such termination, Lender shall, at Borrower’s
expense, execute and deliver to Borrower such documents as Borrower shall reasonably request to evidence such termination. In
connection therewith, Borrower agrees to provide Lender with information as to whether the securities issuable upon the exercise
of any Warrant issued in connection with this Agreement constitute “qualified small business stock” for purposes of
Section 1202(c) of the Internal Revenue Code and Section 18152.5 of the California Revenue and Taxation Code.

 

    	 	 21	 

     

    

 

ARTICLE
9 - GENERAL PROVISIONS

 

9.1 Notices.
Any notice given by any party under any Loan Document shall be in writing and personally delivered, sent by overnight courier,
or United States mail, postage prepaid, or sent by facsimile, email, or other authenticated message, charges prepaid, to the other
party’s or parties’ addresses as follows:

 

If
to the Lender:

 

Alternative
Strategy Partners Pte. Ltd.

10
Collyer Quay Level 40 #40-53

Ocean Financial Centre, Singapore 049315

 Fax: 

Attn: 

Email: 

 

If
to the Borrower:

 

TAURIGA
SCIENCES INC.

39
Old Ridgebury Road, Danbury, Connecticut 06180 U.S.A.

Fax:

Attn:
 Seth Shaw

 CEO

Email:
sshaw@tauriga.com

 

 

Each
party may change the address or facsimile number to which notices, requests and other communications are to be sent by giving
written notice of such change to each other party. Notice given by hand delivery shall be deemed received on the date delivered;
if sent by overnight courier, on the next Business Day after delivery to the courier service; if by first class mail, on the third
Business Day after deposit in the U.S. Mail; if by facsimile or e-mail of a PDF document (with confirmation of transmission),
on the date of transmission if sent during normal business hours of the recipient, and on the next Business Day if sent after
normal business hours of the recipient.

 

9.2 Binding
Effect. The Loan Documents shall be binding upon and inure to
the benefit of Borrower and Lender and their respective successors and assigns; provided, however, that Borrower may not assign
or transfer Borrower’s rights or obligations under any Loan Document. Lender reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in, Lender’s rights and obligations under the Loan
Documents. In connection with any of the foregoing, Lender may disclose all documents and information which Lender now or hereafter
may have relating to the Loans, Borrower, or its business, provided that any Person who receives such information shall have agreed
in writing in advance to maintain the confidentiality of such information on terms no less favorable to Borrower than are set
forth in Section 9.13 hereof.

 

9.3 No
Waiver. Any waiver, consent or approval by Lender of any Event
of Default or breach of any provision, condition, or covenant of any Loan Document must be in writing and shall be effective only
to the extent set forth in writing. No waiver of any breach or default shall be deemed a waiver of any later breach or default
of the same or any other provision of any Loan Document. No failure or delay on the part of Lender in exercising any power, right,
or privilege under any Loan Document shall operate as a waiver thereof, and no single or partial exercise of any such power, right,
or privilege shall preclude any further exercise thereof or the exercise of any other power, right or privilege. Lender has the
right at its sole option to continue to accept interest and/or principal payments due under the Loan Documents after default,
and such acceptance shall not constitute a waiver of said default or an extension of the maturity of any Loan unless Lender agrees
otherwise in writing.

 

    	 	 22	 

     

    

 

9.4 Rights
Cumulative. All rights and remedies existing under the Loan
Documents are cumulative to, and not exclusive of, any other rights or remedies available under contract or applicable law.

 

9.5 Unenforceable
Provisions. Any provision of any Loan Document executed by Borrower
which is prohibited or unenforceable in any jurisdiction, shall be so only as to such jurisdiction and only to the extent of such
prohibition or unenforceability, but all the remaining provisions of any such Loan Document shall remain valid and enforceable.

 

9.6 Accounting
Terms. Except as otherwise provided in this Agreement, accounting
terms and financial covenants and information shall be determined and prepared in accordance with GAAP.

 

9.7 Indemnification;
Exculpation. Borrower shall pay and protect, defend and indemnify
Lender and Lender’s employees, officers, directors, shareholders, affiliates, correspondents, agents and representatives
(other than Lender, collectively “Agents”) against, and hold Lender and each such Agent harmless from,
all claims, actions, proceedings, liabilities, damages, losses, expenses (including, without limitation, reasonable attorneys’
fees and costs) and other amounts incurred by Lender and each such Agent, arising from (i) the matters contemplated by this Agreement
or any other Loan Documents, (ii) any dispute between Borrower and a third party, or (iii) any contention that Borrower has failed
to comply with any law, rule, regulation, order or directive applicable to Borrower’s business; provided, however, that
this indemnification shall not apply to any of the foregoing incurred solely as the result of Lender’s or any Agent’s
gross negligence or willful misconduct. This indemnification shall survive the payment and satisfaction of all of Borrower’s
Obligations to Lender.

 

9.8 Reimbursement.
Borrower shall reimburse Lender for all costs and expenses, including without limitation reasonable attorneys’ fees and
disbursements expended or incurred by Lender in any arbitration, mediation, judicial reference, legal action or otherwise in connection
with (a) the preparation and negotiation of the Loan Documents, (b) the amendment and enforcement of the Loan Documents, including
without limitation during any workout, attempted workout, and/,or in connection with the rendering of legal advice as to Lender’s
rights, remedies and obligations under the Loan Documents, (c) collecting any sum which becomes due Lender under any Loan Document,
(d) any proceeding for declaratory relief, any counterclaim to any proceeding, or any appeal, or (e) the protection, preservation
or enforcement of any rights of Lender. For the purposes of this section, attorneys’ fees shall include, without limitation,
fees incurred in connection with the following: (1) contempt proceedings; (2) discovery; (3) any motion, proceeding or other activity
of any kind in connection with an Insolvency Proceeding; (4) garnishment, levy, and debtor and third party examinations; and (5)
postjudgment motions and proceedings of any kind, including without limitation any activity taken to collect or enforce any judgment.
All of the foregoing costs and expenses shall be payable upon demand by Lender, and if not paid within forty-five (45) days of
presentation of invoices shall bear interest at the Default Rate.

 

9.9 Execution
in Counterparts. This Agreement and the other Loan Documents
may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same agreement. Any party may execute this Agreement and the other Loan Documents by facsimile signature or scanned
signature in PDF (or like) format, and any such facsimile signature or scanned signature shall be deemed an original signature
and each of the parties is hereby authorized to rely thereon.

 

9.10 Entire
Agreement. The Loan Documents are intended by the parties as
the final expression of their agreement and therefore contain the entire agreement between the parties and supersede all prior
understandings or agreements concerning the subject matter hereof. This Agreement may be amended only in a writing signed by Borrower
and Lender.

 

 9.11 Governing Law and Jurisdiction.

 

(a) THIS
AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

 

(b) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
OF BORROWER AND LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF BORROWER AND LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING 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 ACTION OR PROCEEDING IN SUCH JURISDICTION IN
RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. BORROWER AND LENDER EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

 

    	 	 23	 

     

    

 

9.12
Waiver of Jury Trial. TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, BORROWER AND LENDER EACH WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY
OR ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. BORROWER AND LENDER EACH AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEMS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

9.13 No
Consequential Damages. Neither the Lender nor any of its respective
affiliates, nor the managers, members, employees, officers, directors, trustees, partners, equity owners, agents, advisors, representatives,
accountants, attorneys, successors, assigns or affiliates of any of the foregoing shall be liable for any special, indirect, consequential
or punitive damages.

 

9.14 Release
of Claims. Borrower hereby acknowledges and agrees that as of
the date hereof it has no defense, counterclaim, offset, cross-complaint, claim or demand of any kind or nature whatsoever that
can be asserted to reduce or eliminate all or any part of its liability to repay the obligations or to seek affirmative relief
or damages of any kind or nature from the Lender. To the extent permitted by applicable law, Borrower hereby voluntarily and knowingly
releases and forever discharges Lender and each of its affiliates’ respective predecessors, agents, employees, directors,
officers, partners, affiliates, attorneys, successors and assigns (collectively, the “Released Parties”)
from any and all liabilities, obligations, losses, damages, penalties, claims, fees, costs, expenses, charges, advances and disbursements
of any kind (including fees, costs, expenses and charges of counsel (including in-house counsel)) resulting from any action, litigation,
proceeding, investigation, judgment or suit, of any nature whatsoever, whether known or unknown, anticipated or unanticipated,
suspected or unsuspected, fixed, contingent or conditional, or at law or in equity, in any case originating in whole or in part
on or before the date this Agreement is executed that Borrower may now or hereafter have against the Released Parties, if any,
irrespective of whether any such claims arise, directly or indirectly, out of contract, tort, violation of law or regulations,
or otherwise, and that arise, directly or indirectly, from any of the Loans, the exercise of any rights and remedies under this
Agreement or any of the other Loan Documents, or the negotiation for and execution of this Agreement, including, without limitation,
any contracting for, charging, taking, reserving, collecting or receiving interest in excess of the highest lawful rate applicable.
Borrower hereby further specifically waives any rights that it may have under Section 1542 of the California Civil Code (to the
extent applicable), which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR,” and further waives any similar rights under applicable laws.

 

    	 	 24	 

     

    

  

9.15 Confidentiality.
Lender agrees to hold in confidence all confidential information that it receives from Borrower pursuant to the Loan Documents,
except for disclosure as shall be reasonably required (it being understood that the Persons to whom such disclosure is made will
be informed of the confidential nature of such information and instructed to keep such information confidential): (a) to legal
counsel and accountants for Lender; (b) to other professional advisors to Lender; (c) to regulatory officials having jurisdiction
over Lender to the extent required by law; (d) to Lender’s investors and prospective investors, and in Lender’s SEC
filings; (e) as required by law or legal process or in connection with any legal proceeding to which Lender and Borrower are adverse
parties; (f) in connection with a disposition or proposed disposition of any or all of Lender’s rights hereunder; (g) to
Lender’s subsidiaries or Affiliates in connection with their business with Borrower (subject to the same confidentiality
obligation set forth herein); (h) as required by valid order of a court of competent jurisdiction, administrative agency or governmental
body, or by any applicable law, rule, regulation, subpoena, or any other administrative or legal process, or by applicable regulatory
or professional standards, including in connection with any judicial or other proceeding involving Lender relating to this Agreement
and the transactions contemplated hereby; and (i) as required in connection with Lender’s examination or audit. For purposes
of this section, Lender and Borrower agree that “confidential information” shall mean any information regarding or
relating to Borrower other than: (i) information which is or becomes generally available to the public other than as result of
a disclosure by Lender in violation of this section, (ii) information which becomes available to Lender from any other source
(other than Borrower) which Lender does not know is bound by a confidentiality agreement with respect to the information made
available, and (iii) information that Lender knows on a non-confidential basis prior to Borrower disclosing it to Lender. In addition,
Borrower agrees that Lender may use Borrower’s name, logo and/or trademark in connection with certain promotional materials
that Lender may disseminate to the public, including, but are not limited to, brochures, internet website, press releases and
any other materials relating the fact that Lender has a financing relationship with Borrower.

 

ARTICLE
10 - DEFINITIONS

 

“Account”
means any “account,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which Borrower
now holds or hereafter acquires any interest and, in any event, shall include, without limitation, all accounts receivable, book
debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, Documents or Instruments) now
owned or hereafter received or acquired by or belonging or owing to Borrower (including, without limitation, under any trade name,
style or division thereof) whether arising out of goods sold or services rendered by Borrower or from any other transaction, whether
or not the same involves the sale of goods or services by Borrower (including, without limitation, any such obligation that may
be characterized as an account or contract right under the UCC) and all of Borrower’s rights in, to and under all purchase
orders or receipts now owned or hereafter acquired by it for goods or services, and all of Borrower’s rights to any goods
represented by any of the foregoing (including, without limitation, unpaid seller’s rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods), and all monies due or to become due to Borrower
under all purchase orders and contracts for the sale of goods or the performance of services or both by Borrower or in connection
with any other transaction (whether or not yet earned by performance on the part of Borrower), now in existence or hereafter occurring,
including, without limitation, the right to receive the proceeds of said purchase orders and contracts, and all collateral security
and guarantees of any kind given by any Person with respect to any of the foregoing.

 

“ACH”
has the meaning set forth in Section 5.10.

 

“Additional
Loans” has the meaning set forth in Section 2.1(b).

 

“Affiliate”
means any Person which directly or indirectly controls, is controlled by, or is under common control with Borrower. “Control,”
“controlled by” and “under common control with” mean direct or indirect possession of the power to direct
or cause the direction of management or policies (whether through ownership of voting securities, by contract or otherwise); provided,
that control shall be conclusively presumed when any Person or affiliated group directly or indirectly owns five percent (5%)
or more of the securities having ordinary voting power for the election of directors of a corporation.

 

“Agreement”
has the meaning set forth in the preamble.

 

“Availability
Period” means the period from the Execution Date until December 22, 2015.

 

“Bankruptcy
Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended.

 

    	 	 25	 

     

    

 

“Borrower”
has the meaning set forth in the preamble.

 

“Borrowing
Date” means the Business Day on which the proceeds of a Loan are disbursed by Lender.

 

“Borrowing
Request” has the meaning set forth in Section 2.3(a).

 

“Bridge
Loan” has the meaning set forth in Section 2.1(a).

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City .or San
Francisco are authorized or required by law to close.

 

“Change
of Control” means: (a) any sale, license, or other disposition of all or substantially all of the assets of Borrower;
(b) any reorganization, consolidation, merger or other transaction involving Borrower; or (c) any transaction or series of related
transactions in which any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power
to control the management of Borrower, or to control the equity interests of Borrower entitled to vote for members of the board
of directors or equivalent governing body of Borrower on a fully-diluted basis (and taking into account all such securities that
such Person or Persons have the right to acquire pursuant to any option right) representing 50% or more of the combined voting
power of such securities (other than (1) in connection with a Qualified Public Offering or (2) a sale to recognized venture capital
investors in a transaction or series of transactions effected by Borrower for financing purposes, so long as Borrower identifies
to Lender the venture capital investors prior to the closing of the transaction and provides Lender with a description of the
material terms of such transaction).

 

“Chattel
Paper” means any “chattel paper,” as such term is defined in the UCC, now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Collateral”
means all of Borrower’s right, title and interest in and to the following property, whether now owned or hereafter acquired
and wherever located: (a) all Receivables; (b) all Equipment; (c) all Fixtures; (d) all General Intangibles; (e) all Inventory;
(f) all Investment Property; (g) all Deposit Accounts; (h) all Shares; (i) all other Goods and personal property of Borrower,
whether tangible or intangible and whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, Borrower
and wherever located; (j) all Records; and (k) all Proceeds of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of the foregoing. Notwithstanding the foregoing the term “Collateral”
shall not include more than sixty-five percent (65%) of the issued and outstanding capital stock, membership units or other securities
entitled to vote owned or held of record by Borrower in any Subsidiary that is a controlled foreign corporation (as defined in
the Internal Revenue Code), provided that the Collateral shall include one hundred percent (100%) of the issued and outstanding
non-voting capital stock of such Subsidiary.

 

“Competitive
Business” has the meaning set forth in Section 5.14.

 

“Copyright
License” means any written agreement granting any right to use any Copyright or Copyright registration now owned
or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Copyrights”
means all of the following now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (i) all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any State thereof
or of any other country; (ii) all registrations, applications and recordings in the United States Copyright Office or in any similar
office or agency of the United States, any State thereof or any other country; (iii) all continuations, renewals or extensions
thereof; and (iv) any registrations to be issued under any pending applications.

 

“Default”
means an event which with the giving of notice, passage of time, or both would constitute an Event of Default.

 

“Default
Rate” means the lesser of (i) eighteen percent (18%) per annum or (ii) the maximum rate of interest permitted under
applicable law.

 

    	 	 26	 

     

    

 

“Deposit
Accounts” means any “deposit accounts,” as such term is defined in the UCC, now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Designated
Rate” means a fixed rate of interest per annum equal to eleven and one-half percent (11.50%).

 

“Documents”
means any “documents,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest.

 

“Dollars”
or “$” means lawful currency of the United States.

 

“Environmental
Laws” means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with,
any governmental authorities, in each case relating to environmental, health, or safety matters.

 

“Equipment”
means any “equipment,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or
affixed thereto.

 

“Event
of Default” means any event described in Section 7.1.

 

“Fixtures”
means any “fixtures,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest.

 

“Foreign
Subsidiary” means any Subsidiary that is organized under any laws other than the laws of the United States, any
of its states or the District of Columbia.

 

“GAAP”
means generally accepted accounting principles and practices consistent with those principles and practices promulgated or adopted
by the Financial Accounting Standards Board and the Board of the American Institute of Certified Public Accountants, their respective
predecessors and successors. Each accounting term used but not otherwise expressly defined herein shall have the meaning given
it by GAAP.

 

“General
Intangibles” means any “general intangibles,” as such term is defined in the UCC, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest and, in any event, shall include, without
limitation, all right, title and interest that Borrower may now or hereafter have in or under any contract, all customer lists,
Copyrights, Trademarks, Patents, websites, domain names, and all applications therefor and reissues, extensions, or renewals thereof,
other items of, and rights to, Intellectual Property, interests in partnerships, joint ventures and other business associations,
Licenses, permits, trade secrets, proprietary or confidential information, inventions (whether or not patented or patentable),
technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise, recipes, experience,
processes, models, drawings, materials and records, goodwill (including, without limitation, the goodwill associated with any
Trademark, Trademark registration or Trademark licensed under any Trademark License), claims in or under insurance policies, including
unearned premiums, uncertificated securities, money, cash or cash equivalents, deposit, checking and other bank accounts, rights
to sue for past, present and future infringement of Copyrights, Trademarks and Patents, rights to receive tax refunds and other
payments and rights of indemnification.

 

“Goods”
means any “goods,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which Borrower
now holds or hereafter acquires any interest.

 

    	 	 27	 

     

    

 

“Indebtedness”
of any Person means at any date, without duplication and without regard to whether matured or unmatured, absolute or
contingent: (i) all obligations of such Person for borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments; (iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary course of business; (iv) all obligations of such
Person as lessee under capital leases; (v) all obligations of such Person to reimburse or prepay any bank or other Person in
respect of amounts paid under a letter of credit, banker’s acceptance, or similar instrument, whether drawn or undrawn;
(vi) all obligations of such Person to purchase securities which arise out of or in connection with the sale of the same or
substantially similar securities; (vii) all obligations of such Person to purchase, redeem, exchange, convert or otherwise
acquire for value any capital stock of such Person or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, except to the extent that such obligations remain performable solely at the option of such Person and
excluding obligations arising from repurchases of Borrower’s stock to the extent permitted in Section 6.3 hereof;
(viii) all obligations to repurchase assets previously sold (including any obligation to repurchase any accounts or chattel
paper under any factoring, receivables purchase, or similar arrangement); (ix) obligations of such Person under interest rate
swap, cap, collar or similar hedging arrangements; and (x) all obligations of others of any type described in clause (i)
through clause (ix) above guaranteed by such Person.

 

“Insolvency
Proceeding” means with respect to a Person (a) any case, action or proceeding before any court or other governmental
authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors with respect to such Person, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets
for creditors, or other, similar arrangement in respect of such Person’s creditors generally or any substantial portion
of its creditors, undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code, but in each case, excluding
any avoidance or similar action against such Person commenced by an assignee for the benefit of creditors, bankruptcy trustee,
debtor in possession, or other representative of another Person or such other Person’s estate.

 

“Instruments”
means any “instrument,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest.

 

“Intellectual
Property” means all of Borrower’s Copyrights, Trademarks, Patents, Licenses, trade secrets, source codes,
customer lists, proprietary or confidential information, inventions (whether or not patented or patentable), technical information,
procedures, designs, knowledge, know-how, software, data bases, skill, expertise, experience, processes, models, drawings, materials,
records and goodwill associated with the foregoing.

 

“Intellectual
Property Security Agreement” means any Intellectual Property Security Agreement executed and delivered by Borrower
in favor of Lender, as the same may be amended, supplemented, or restated from time to time.

 

“Inventory”
means any “inventory,” as such term is defined in the UCC, wherever located, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest, and, in any event, shall include, without limitation, all inventory,
goods and other personal property that are held by or on behalf of Borrower for sale or lease or are furnished or are to be furnished
under a contract of service or that constitute raw materials, work in process or materials used or consumed or to be used or consumed
in Borrower’s business, or the processing, packaging, promotion, delivery or shipping of the same, and all finished goods,
whether or not the same is in transit or in the constructive, actual or exclusive possession of Borrower or is held by others
for Borrower’s account, including, without limitation, all goods covered by purchase orders and contracts with suppliers
and all goods billed and held by suppliers and all such property that may be in the possession or custody of any carriers, forwarding
agents, truckers, warehousemen, vendors, selling agents or other Persons.

 

“Investment
Property” means any “investment property,” as such term is defined in the UCC, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Investor
Director” means any Person designated by the Lender, who shall be elected to the Board of Directors of the Borrower
and whose approval will be required for the decision of Borrower to file a petition for bankruptcy or otherwise to wind up or
liquidate or enter into any transaction that would constitute a Change of Control.

 

“Key
Employees” means Seth Shaw and Ghalia Lahlou.

 

“Lender”
has the meaning set forth in the preamble.

 

    	 	 28	 

     

    

 

“Letter
of Credit Rights” means any “letter of credit rights,” as such term is defined in the UCC, now owned
or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest, including any right to payment
under any letter of credit.

 

“License”
means any Copyright License, Patent License, Trademark License or other license of rights or interests now held or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest and any renewals or extensions thereof.

 

“Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien
or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional
sale or other title retention agreement, any lease in the nature of a security interest, and the filing of any financing statement
(other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under
the UCC or comparable law of any jurisdiction.

 

“Loan”
means an extension of credit by Lender under this Agreement.

 

“Loan
Documents” means, individually and collectively, this Agreement, each Note, the Intellectual Property Security Agreement,
and any other security or pledge agreement(s), any Warrants issued by Borrower to Lender (or its designee) in connection with
this Agreement, the guarantee executed by the Guarantor and all other contracts, instruments, addenda and documents executed in
connection with this Agreement or the extensions of credit which are the subject of this Agreement.

 

“Material
Adverse Effect” or “Material Adverse Change” means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties, or condition (financial or otherwise) of Borrower; (b) a
material impairment of the ability of Borrower to perform under any Loan Document; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against Borrower of any Loan Document.

 

“Maximum
Amount” means, with respect to Additional Loans, two hundred and fifty thousand Dollars ($250,000.00).

 

“Next
Financing” shall mean the next sale after the Execution Date by the Company of debt or equity that results in gross
proceeds to the Company of at least $8,000,000.

 

“Note”
means a promissory note substantially in the form attached hereto as Exhibit A, executed by Borrower evidencing each Loan.

 

“Obligations”
means all debts, obligations and liabilities of Borrower to Lender currently existing or now or hereafter made, incurred or created
under, pursuant to or in connection with this Agreement or any other Loan Document (other than any Warrant), whether voluntary
or involuntary and however arising or evidenced, whether direct or acquired by Lender by assignment or succession, whether due
or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether Borrower may be liable
individually or jointly, or whether recovery upon such debt may be or become barred by any statute of limitations or otherwise
unenforceable; and all renewals, extensions and modifications thereof; and all attorneys’ fees and costs incurred by Lender
in connection with the collection and enforcement thereof as provided for in any Loan Document (other than any Warrant). For the
avoidance of doubt, the Obligations shall not include any obligations under the Warrants.

 

“Patent
License” means any written agreement granting any right with respect to any invention on which a Patent is in existence
now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Patents”
means all of the following property now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires
any interest: (a) all letters patent of, or rights corresponding thereto in, the United States or any other country, all registrations
and recordings thereof, and all applications for letters patent of, or rights corresponding thereto in, the United States or any
other country, including, without limitation, registrations, recordings and applications 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; (b) all reissues, continuations,
continuations-in-part or extensions thereof; (c) all petty patents, divisionals, and patents of addition; and (d) all patents
to be issued under any such applications.

 

    	 	 29	 

     

    

 

“Permitted
Lien” means:

 

(a) involuntary
Liens which, in the aggregate, would not have a Material Adverse Effect and which in any event would not exceed, in the aggregate,
the Threshold Amount;

 

(b) Liens
for current taxes or other governmental or regulatory assessments which are not delinquent, or which are contested in good faith
by the appropriate procedures and for which appropriate reserves are maintained;

 

(c) security
interests on any property held or acquired by Borrower in the ordinary course of business securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring such property; provided, that such Lien attaches solely
to the property acquired with such Indebtedness and the proceeds thereof and that the principal amount of such Indebtedness does
not exceed one hundred percent (100%) of the cost of such property;

 

 (d) Liens in favor of Lender;

 

(e) bankers’
liens, rights of setoff and similar Liens incurred on deposits made in the ordinary course of business as long as an account control
agreement (or equivalent) for each account in which such deposits are held in a form acceptable to Lender has been executed and
delivered to Lender unless waived by Lender in writing;

 

(f) materialmen’s,
mechanics’, repairmen’s, employees’ or other like Liens arising in the ordinary course of business and which
are not delinquent for more than 45 days or are being contested in good faith by appropriate proceedings;

 

(g) any
judgment, attachment or similar Lien, unless the judgment it secures has not been discharged or execution thereof effectively
stayed and bonded against pending appeal within 30 days of the entry thereof;

 

 (h) licenses or sublicenses of Intellectual Property in accordance with the terms of Section 6.5 hereof;

 

 (i) Liens securing Subordinated Debt;

 

(j) Liens
which have been approved by Lender in writing prior to the Execution Date, as shown on Schedule 6.2 hereto;

 

(k) Liens
in favor of any depository bank or securities intermediary as described in any deposit account control agreement or securities
account control agreement among a Borrower, Lender, and such depository bank or securities intermediary;

 

(l) Liens
incurred or deposits made to secure the performance of tenders, bids, real property leases, letters of credit that secure real
property leases, statutory or regulatory obligations (other than Liens arising under ERISA or environmental Liens), surety and
appeal bonds, government contracts, performance and return-of-money bonds, and other obligations of like nature, in each case,
in the ordinary course of business;

 

(m) 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

 

(n) easements,
reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar Liens affecting real property
not interfering in any material respect with the ordinary course of the business of Borrower;

 

(o) Liens
in favor of customs and revenue authorities arising as a matter of law, in the ordinary course of Borrowers’ business, to
secure payment of customs duties in connection with the importation of goods; and

 

(p) Liens
incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (n) above, but
any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount
of the indebtedness may not increase.

 

“Person”
means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county,
city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof).

 

    	 	 30	 

     

    

 

“Personal
Property Leases” has the meaning set forth in Section 6.15.

 

“Primary
Operating Account” has the meaning set forth in Section 5.10.

 

“Proceeds”
means “proceeds,” as such term is defined in the UCC and, in any event, shall include, without limitation, (a) any
and all Accounts, Chattel Paper, Instruments, cash or other forms of money or currency or other proceeds payable to Borrower from
time to time in respect of the Collateral, (b) any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to Borrower from time to time with respect to any of the Collateral, (c) any and all payments (in any form whatsoever) made or
due and payable to Borrower from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture
of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental authority),
(d) any claim of Borrower against third parties (i) for past, present or future infringement of any Copyright, Patent or Patent
License or (ii) for past, present or future infringement or dilution of any Trademark or Trademark License or for injury to the
goodwill associated with any Trademark, Trademark registration or Trademark licensed under any Trademark License and (e) any and
all other amounts from time to time paid or payable under or in connection with any of the Collateral.

 

“Qualified
Public Offering” means the closing of a firmly underwritten public offering (other than U.S. OTC Markets) of Borrower’s
common stock with aggregate proceeds of not less than $20,000,000 (prior to underwriting expenses and commissions).

 

“Receivables”
means all of Borrower’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, and letters of credit and
Letter of Credit Rights.

 

“Records”
means all Borrower’s computer programs, software, hardware, source codes and data processing information, all written documents,
books, invoices, ledger sheets, financial information and statements, and all other writings concerning Borrower’s business.

 

“Reinvestment
Amount” has the meaning set forth in Section 2.8(c).

 

“Related
Person” means any Affiliate of Borrower, or any officer, employee, director or equity security holder of Borrower
or any Affiliate.

 

“Released
Parties” has the meaning set forth in Section 9.14.

 

“Execution
Date” means the date of this Agreement.

 

“Rights
to Payment” means all Borrower’s accounts, instruments, contract rights, documents, chattel paper and all
other rights to payment, including, without limitation, the Accounts, all negotiable certificates of deposit and all rights to
payment under any Patent License, any Trademark License, or any commercial or standby letter of credit.

 

“Security
Documents” means this Agreement, the guaranty executed by the Guarantor, the Intellectual Property Security Agreement,
and any and all account control agreements, collateral assignments, chattel mortgages, financing statements, amendments to any
of the foregoing and other documents from time to time executed or filed to create, perfect or maintain the perfection of Lender’s
Liens on the Collateral.

 

“Shares”
means: (a) one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned
or held of record by Borrower in any Subsidiary that is not a controlled foreign corporation (as defined in the Internal Revenue
Code), and (b) 65% of the issued and outstanding capital stock, membership units or other securities entitled to vote owned or
held of record by Borrower in any Subsidiary that is a controlled foreign corporation (as defined in the Internal Revenue Code).

 

“Subordinated
Debt” means Indebtedness (i) approved by Lender; and (ii) where the holder’s right to payment of such Indebtedness,
the priority of any Lien securing the same, and the rights of the holder thereof to enforce remedies against Borrower following
default have been made subordinate to the Liens of Lender and to the prior payment to Lender of the Obligations, either (A) pursuant
to a written subordination agreement approved by Lender in its sole but reasonable discretion or (B) on terms otherwise approved
by Lender in its sole but reasonable discretion.

 

    	 	 31	 

     

    

 

“Subsidiary”
means any Person a majority (determined on a “fully diluted” basis) of the equity ownership or voting stock of which
is directly or indirectly now owned or hereafter acquired by Borrower or by one or more other Subsidiaries, or in which Borrower
or one or more other Subsidiaries directly or indirectly now holds or hereafter acquires any interest.

 

“Supporting
Obligations” means any “supporting obligations,” as such term is defined in the UCC, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Surviving
Entity” has the meaning set forth in Section 6.4.

 

“Threshold
Amount” means one hundred thousand Dollars ($10,000).

 

“Trademark
License” means any written agreement granting any right to use any Trademark or Trademark registration now owned
or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Trademarks”
means all of the following property now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires
any interest: (a) all trademarks, tradenames, corporate names, business names, trade styles, service marks, logos, other source
or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles
of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and any applications
in connection therewith, including, without limitation, registrations, recordings and applications 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 (b) reissues, extensions or renewals thereof.

 

“Transfer”
has the meaning set forth in Section 6.5.

 

“UCC”
means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, that in
the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies
with respect to, Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in
a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions. Unless otherwise defined herein, terms that are
defined in the UCC and used herein shall have the meanings given to them in the UCC.

 

“Waiver”
has the meaning set forth in Section 5.9(e).

 

“Warrants”
means the warrants to be issued with respect to the Bridge Loan and the warrants to be issued with respect to the Additional Loan.

 

[Signature
page follows]

 

    	 	 32	 

     

    

  

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

BORROWER:

 

	 	TAURIGA
    SCIENCE INC.
	 	 	 	 
	 	By:	/s/
    Seth Shaw	 
	 	Name:	Seth Shaw	 
	 	Title:	CEO	 

 

LENDER:

 

	 	ALTERNATIVE
    STRATEGY PARTNERS PTE. LTD.
	 	 	 	 
	 	By:	/s/
    Yuhi Horiguchi	 
	 	Name:	Yuhi Horiguchi	 
	 	Title:	Director	 

 

[Signature
page lo Loan and Security Agreement ]

 

    	 	 33	 

     

    

 

Schedules
to

Bridge
Loan and Security Agreement

dated as of October 2, 2015

between

ALTERNATIVE
STRATEGY PARTNERS PTE. LTD.

and

TAURIGA
SCIENCES INC.

 

 

 

Schedule
1. Reserved.

 

Schedule
2. Reserved.

 

Schedule
3. Representations and Warranties

 

Section
3.7:

 

Pre-Execution
Capital Structure:

 

	Security	 	# of Shares*	 	 	%	 
	 	 	 	 	 	 	 
	Common Stock	 	 	 	 	 	 		 
	 	 	 		 	 	 		 
	Common Stock Warrants	 	 	 	 	 	 	 	 
	 	 	 		 	 	 		 
	Outstanding Options	 	 	 	 	 	 	 	 
	 	 	 		 	 	 	 	 
	Unallocated Option Pool	 	 	 	 	 	 	 	 
	 	 	 		 	 	 	 	 
	TOTAL	 	 		 	 	 	100.00	%

 

*
Share counts will vary depending on ___________________________________.

 

**
Assumes conversion of _________________________________________________.

 

***Assumes
conversion of _________________________________________________.

 

Schedules
- 1

 

    	 	 34	 

     

    

 

Subsidiaries:
Borrower has the following Subsidiaries: (insert identification & ownership details)

 

Section
3.11: With respect to Borrower and its subsidiaries:

 

	(A)	Its chief executive
    office is located at: ________________________________________________________.
	 	 
	(B)	Its
    Equipment is located at: (i) _______________________________________________________; and (ii) __________________________________________________________________________________.
	 	 
	(C)	Its
    Inventory is located at: (i) _______________________________________________________; and (ii) __________________________________________________________________________________.
	 	 
	(D)	Its Records are
    located at: ________________________________________________________________.
	 	 
	(E)	In
    addition to its chief executive office, it maintains offices or operates its business at the following locations: ______________________________________________________________________________.
	 	 
	(F)	Other
    than its full corporate name, it has conducted business using the following trade names or fictitious business names: ________________________________________________________________________.
	 	 
	(G)	Its Nevada state
    corporation identification number is: ___________________________.
	 	 
	(H)	Its U.S. federal
    tax identification number is: ___________________________________.
	 	 
	(I)	In
    addition to Borrower’s Primary Operating Account, Borrower maintains the following other Deposit Accounts and investment
    accounts:
	 	 
	 	Institution Name
	 	Address
	 	ABA No.
	 	Contact Name
	 	Phone No.
	 	E-mail
	 	Account Title
	 	Account No.

 

Schedule
5.10 Primary Operating Account

 

	Institution
    Name	 
	Address	 
	ABA No.	 
	Account Title	 
	Account No.	 
	SWIFT code	 

 

Schedules
-

 

    	 	 35	 

     

    

 

Schedule
5.15 Third Party Releases

 

TAURIGA
SCIENCES INC.

Liabilities
Detail

 

	 	 	As
    of	 	 	 	 	 	 
	 	 	 	 	 	 	Past	 	Balance
	 	 	Vendor	 	Due
    Date	 	Due	 	($USD)
	91 or more
    days past due	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total for 91
    or more days past due	 	 	 	 	 	 	 	 
	61 - 90 days
    past due	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total for 61
    - 90 days past due	 	 	 	 	 	 	 	 
	1 - 30 days
    past due	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total for 1
    - 30 days past due	 	 	 	 	 	 	 	 
	Current	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total
    for Current	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	TOTAL ACCOUNTS
    PAYABLE	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Other Current
    Liabilities	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 LIABILITIES	 		 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Long Term Liabilities	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 TOTAL
    LONG TERM LIABILITIES	 	
	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total
    Liabilities	 	 	 	 	 	 	 	.00

 

Schedules
-

 

    	 	 36	 

     

    

 

Schedule
6.1. Permitted Indebtedness

 

Indebtedness
of Borrower, not to exceed $_______________in aggregate amount outstanding, in connection with credit cards for which _________________are
cardholder(s), which are used solely for company travel and related expenses.

 

Schedule
6.2. Permitted Liens

 

None

 

    	 	 37Exhibit 4.2

 

WARRANT NUMBER

 

AXSOME THERAPEUTICS, INC

(A Delaware Corporation)

 

WARRANT TO PURCHASE          SHARES OF COMMON STOCK

 

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THIS CERTIFIES THAT, for value received, as of October 29, 2013 (the “Date of Issue”),                   (the “Holder”), is entitled to purchase, subject to the conditions set forth below, at any time during the Exercise Period (as defined in Section 1.1 below), up to             shares (“Shares”) of fully paid and non-assessable common stock, $0.0001 par value (“Common Stock”), of Axsome Therapeutics, Inc., a Delaware Corporation (the “Company”), at $9.55 per share (the “Warrant Price”), subject to the further provisions of this Warrant.

 

1.                                      EXERCISE OF WARRANT

 

The terms and conditions upon which this Warrant may be exercised, and the Common Stock covered hereby may be purchased, are as set forth above and as follows:

 

1.1                               Method of Exercise.  The Holder of this Warrant may, at any time or from time to time, during the period ending five years from the Date of Issue, unless extended by the Company in its sole discretion (the “Exercise Period”), exercise this Warrant for all or part of the Shares that may be purchased hereunder, as that number may be adjusted pursuant to Section 4 of this Warrant.  The Company agrees that the Shares purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the record owner of such Warrant Units as of the close of business on the date on which the exercise of this Warrant is effected by:

 

(a)                                 the surrender of the Warrant to the Secretary of the Company at its principal offices; and

 

(b)                                 the payment to the Company, by certified check or bank draft payable to its order, of an amount equal to the aggregate Warrant Price for the number of Shares for which the purchase rights hereunder are being exercised.

 

1

 

1.2                               Satisfaction with Requirements of Securities Act of 1933.  Notwithstanding the provisions of Section 7, exercise of this Warrant is contingent upon the Company’s satisfaction that the issuance of Common Stock upon the exercise is exempt from the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and all applicable state securities laws.  The Holder of this Warrant agrees to execute any and all documents deemed necessary by the Company to effect the exercise of this Warrant, including an instrument executed by the Holder certifying that the Shares are being acquired for the sole account of the Holder and not with a view to any resale or distribution.

 

1.3                               Issuance of Shares.  Certificates for the shares so purchased, together with any other securities or property to which the Holder is entitled upon such exercise, shall be delivered to the Holder by the Company at the Company’s expense as soon as practicable after the rights represented by this Warrant have been so exercised, but in any event not later than twenty (20) days following the date of exercise.  In case of a purchase of less than all the Shares which may be purchased under this Warrant, the Company shall cancel this Warrant and execute and deliver to the Holder within a reasonable time a new Warrant or Warrants of like tenor for the balance of the Shares purchasable under the Warrant surrendered upon exercise.  Each certificate delivered to Holder shall be registered in the name of Holder or Holder’s designees pursuant to the Form of Warrant Exercise attached hereto.

 

1.4                               Covenant.  The Company covenants and agrees that all shares of the Company’s common stock will, upon issuance on exercise of this Warrant, be duly authorized, validly issued, fully-paid and nonassessable, and free of all preemptive rights, liens and encumbrances, except for restrictions on transfer provided for herein and in the Company’s organizational documents, as amended from time to time.

 

2.                                      TRANSFERS

 

The Holder represents that by accepting this Warrant it understands that this Warrant and any securities obtainable upon exercise of this Warrant have not been registered for sale under Federal or state securities laws and are being offered and sold to the Holder pursuant to one or more exemptions from the registration requirements of such securities laws.  In the absence of an effective registration of such securities or an exemption therefrom, any certificates for such securities shall bear the legend set forth on the first page hereof.  The Holder understands that it must bear the economic risk of its investment in this Warrant and any securities obtainable upon exercise of this Warrant for an indefinite period of time, as this Warrant and such securities have not been registered under Federal or state securities laws and therefore cannot be sold unless subsequently registered under such laws, unless an exemption from such registration is available.

 

3.                                      FRACTIONAL SHARES

 

Notwithstanding that the number of Shares purchasable upon the exercise of this Warrant may have been adjusted pursuant to the terms hereof, the Company shall nonetheless not be required to issue fractions of Shares upon exercise of this Warrant or to distribute certificates that evidence fractional shares nor shall the Company be required to make any cash payments in lieu thereof upon exercise of this Warrant.  Holder hereby waives any right to receive fractional Shares.

 

2

 

4.                                      ANTIDILUTION PROVISIONS

 

4.1                               Stock Splits and Combinations.  If the Company shall at any time subdivide or combine its outstanding shares of Common Stock, this Warrant shall, after that subdivision or combination, evidence the right to purchase the number of shares of Common Stock that would have been issuable as a result of that change with respect to the shares of Common Stock which were purchasable under this Warrant immediately before that subdivision or combination.  If the Company shall at any time subdivide the outstanding shares of Common Stock, the Warrant Price then in effect immediately before that subdivision shall be proportionately decreased, and, if the Company shall at any time combine the outstanding shares of Common Stock, the Warrant Price then in effect immediately before that combination shall be proportionately increased.  Any adjustment under this section shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

4.2                               Reclassification, Exchange And Substitution.  If the Common Stock issuable upon exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares provided for above), the Holder of this Warrant shall, on its exercise, be entitled to purchase for the same aggregate consideration, in lieu of the Common Stock that the Holder would have become entitled to purchase but for such change, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to purchase by the Holder on exercise of this Warrant immediately before that change.

 

4.3                               Reorganizations, Mergers, Consolidations or Sale of Assets.  If at any time there shall be a capital reorganization of the Company’s Common Stock (other than a combination, reclassification, exchange, or subdivision of shares provided for elsewhere above) or merger or consolidation of the Company with or into another entity, or the sale of the Company’s properties and assets as, or substantially as, an entirety to any other person or entity, then, as a part of such reorganization, merger, consolidation or sale, lawful provision shall be made so that the Holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified in this Warrant and upon payment of the Warrant Price then in effect, the number of shares of Common Stock or other securities or property of the Company, or of the successor entity resulting from such merger or consolidation, to which a holder of the Common Stock deliverable upon exercise of this Warrant would have been entitled in such capital reorganization, merger, or consolidation or sale if this Warrant had been exercised immediately before that capital reorganization, merger, consolidation, or sale.  In any such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder of this Warrant after the reorganization, merger, consolidation, or sale to the end that the provisions of this Warrant (including adjustment of the Warrant Price then in effect and number of Shares purchasable upon exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.  The Company shall, within thirty (30) days after making such adjustment, give written notice (by first class mail, postage prepaid) to the Holder of this Warrant at the address of the Holder shown on the Company’s books.  That notice shall set forth,

 

3

 

in reasonable detail, the event requiring the adjustment and the method by which the adjustment was calculated, and specify the Warrant Price then in effect after the adjustment and the increased or decreased number of Shares purchasable upon exercise of this Warrant.  When appropriate, that notice may be given in advance and include as part of the notice required under other provisions of this Warrant.

 

4.4                               Reservation of Stock Issuable Upon Exercise.  The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the exercise of this Warrant such number of its shares of Common Stock as shall from time to time be sufficient to effect the exercise of this Warrant and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the exercise of this Warrant, in addition to such other remedies as shall be available to the Holder of this Warrant, the Company will use its best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but un-issued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

5.                                      RIGHTS PRIOR TO EXERCISE OF WARRANT

 

This Warrant does not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right to receive dividends or other distributions, to exercise any preemptive rights, to vote, or to consent or to receive notice as a stockholder of the Company.  If, however, at any time prior to the termination of this Warrant and prior to its exercise, any of the following events shall occur:

 

(a)                                 the Company shall declare any dividend payable in any securities upon its shares of Common Stock or make any distribution (other than a regular cash dividend) to the Holders of its shares of Common Stock; or

 

(b)                                 the Company shall offer to the holders of its shares of Common Stock any additional shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock or any right to subscribe for or purchase any thereof; or

 

(c)                                  a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation, merger, sale, transfer or lease of all or substantially all of its property, assets and business as an entirety) shall be proposed and action by the Company with respect thereto has been approved by the Company’s Board of Directors;

 

then in any one or more of said events the Company shall give notice in writing of such event to the Holder at the last address of the Holder as it shall appear on the Company’s records at least twenty (20) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividends, distribution, or subscription rights, or for the determination of stockholders entitled to vote on such proposed dissolution, liquidation or winding up.  Such notice shall specify such record date or the date of closing the transfer books, as the case may be.  Failure to publish, mail or receive such notice or any defect therein or in the publication or mailing thereof shall not affect the validity of any action taken in connection with such dividend, distribution or subscription rights, or such proposed dissolution, liquidation or winding up.  Each person in whose name any certificate for shares of Common

 

4

 

Stock is to be issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which this instrument was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such stock certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the stock transfer books are open.

 

6.                                      SUCCESSORS AND ASSIGNS

 

The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the Holder hereof and their respective successors and permitted assigns.

 

7.                                      RESTRICTED SECURITIES

 

The Holder acknowledges that this Warrant is, and each of the shares of Common Stock issuable upon the due exercise hereof will be, a restricted security, that he understands the provisions of Rule 144 of the Securities and Exchange Commission, and that the certificate or certificates evidencing such shares of Common Stock will bear a legend substantially similar to the following:

 

“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under the securities laws of any state.  They may not be sold, transferred or otherwise disposed of in the absence of an effective registration statement covering these securities under the said Act or laws, or an opinion of counsel satisfactory to the Company and its counsel that registration is not required thereunder.”

 

Holder agrees that the terms of Sections 1.3 to 1.23 of the Note Purchase Agreement by and between the Company and Brandon L. Jones dated as of the date hereof (the “Note Purchase Agreement”) apply to Holder as if Holder was a Subscriber (as defined in the Note Purchase Agreement).

 

8.                                      LOSS OR MUTILATION

 

Upon receipt by the Company of satisfactory evidence of the ownership of and the loss, theft, destruction, or mutilation of any Warrant, and (i) in the case of loss, theft, or destruction, upon receipt by the Company of indemnity satisfactory to it, or (ii) in the case of mutilation, upon receipt of such Warrant and upon surrender and cancellation of such Warrant, the Company shall execute and deliver in lieu thereof a new Warrant representing the right to purchase an equal number of shares of Common Stock.

 

The Holder also acknowledges that each of the Shares issuable upon the due exercise hereof will be subject to any transfer restrictions in the Company’s Articles of Incorporation, including a right of first refusal to the Company, and the certificate or certificates evidencing the Shares will bear a legend to this effect.

 

5

 

9.                                      NOTICES

 

All notices, requests, demands and other communications under this Warrant shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the date of actual receipt of registered or certified mail, postage prepaid, return receipt requested, and properly addressed as follows:  if to the Holder, at his address as shown in the Company records; and if to the Company, at its principal office, to the attention of the Chief Executive Officer.  Any party may change its address for purposes of this section by giving the other party written notice of the new address in the manner set forth above.

 

10.                               TERMINATION DATE

 

This Warrant shall terminate upon the sooner of (a) five years from the Date of Issue; or (b) the exercise of all or any portion of this Warrant pursuant to the terms of Section 1 hereof.

 

11.                               AMENDMENT AND WAIVER

 

Any term of this Warrant may be amended or waived with the written consent signed by the Company and the Holder.

 

12.                               GOVERNING LAW

 

This Warrant and any dispute, disagreement or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the internal laws of the State of Delaware without regard to conflicts of law.

 

This Warrant is hereby signed effective as of the Date of Issue.

 

	
 
    	
AXSOME   THERAPEUTICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    
	
Name and Address   of
    	
 
    	
 
    
	
Warrant Holder:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[NAME]
    	
 
    	
 
    
	
[ADDRESS]
    	
 
    	
 
    

 

6

 

FORM OF WARRANT EXERCISE

 

To:                             Chief Executive Officer

Axsome Therapeutics, Inc.

45 Rockefeller Plaza, Suite 2000

New York, NY 10111

 

Ladies and Gentlemen:

 

The undersigned, the Holder of the attached Warrant, hereby elects to exercise the purchase  right represented by such Warrant for, and to purchase thereunder,             shares of the Common Stock of Axsome Therapeutics, Inc. and such Holder herewith makes a payment of $              therefor.  Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the attached Warrant.

 

The undersigned requests that certificates for such Common Stock be issued in the name of and delivered to the address as follows:

 

	
Name:
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
DATED:                          ,   20   .
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature of Holder
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

7

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