Document:

Exhibit 10.5

 

SECURITY
AND PLEDGE AGREEMENT

 

SECURITY AND PLEDGE
AGREEMENT, dated as of December __, 2020 (this “Agreement”), made by Cannabics Pharmaceuticals Inc., a Nevada
corporation, with offices located at 11 Habarzel St, Tel Aviv, Israel 6971017 (the “Company”), and each of the
undersigned direct and indirect Subsidiaries of the Company from time to time, if any (each a “Grantor” and
together with the Company, collectively, the “Grantors”), in favor of 3i LP, in its capacity as collateral agent
(in such capacity, the “Collateral Agent” as hereinafter further defined) for the Noteholders (as defined below)
party to the Securities Purchase Agreement, dated as of December 16 2020 (as amended, modified, supplemented, extended, renewed,
restated or replaced from time to time, the “Securities Purchase Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, the Company
and each party listed as a “Buyer” on the Schedule of Buyers attached to the Securities Purchase Agreement (each a
“Buyer” and collectively, the “Buyers”) are parties to the Securities Purchase Agreement,
pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes”
and “Warrants” issued pursuant thereto (as such Notes or Warrants may be amended, modified, supplemented, extended,
renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”
or “Warrants”, respectively);

 

WHEREAS, certain Grantors
(other than the Company) from time to time (each a “Guarantor” and collectively, the “Guarantors”)
may execute and deliver one or more guarantees (each, a “Guaranty” and collectively, the “Guaranties”)
in form and substance acceptable to and in favor of the Collateral Agent, for the benefit of itself and the Noteholders (as defined
below), with respect to the Company’s obligations under the Securities Purchase Agreement, the Notes, and the other “Transaction
Documents” (as defined in the Securities Purchase Agreement);

 

WHEREAS, it is a condition
precedent to the Buyers’ obligation to purchase the Notes and Warrants issued pursuant to the Securities Purchase Agreement
that the Grantors shall have executed and delivered to the Collateral Agent this Agreement providing for the grant to the Collateral
Agent, for the benefit of the Noteholders, of a valid, enforceable, and perfected security interest in all personal property of
each Grantor to secure all of the Company’s obligations under the Transaction Documents and the Guarantors’ obligations
under the Guaranties, as applicable; and

 

WHEREAS, each Grantor
has determined that the execution, delivery and performance of this Agreement directly benefits, and is in the best interest of,
such Grantor.

 

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

 

Section
1.     Definitions.

 

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

 

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

 

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

 

 

 

    	 	1	 

     

    

 

“Affiliate”
of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with
such Person and any officer or director of such Person. A Person shall be deemed to be “controlled by” any other Person
if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.

 

“Bankruptcy
Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable
bankruptcy, insolvency or similar laws).

 

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

 

“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.

 

“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights
or other securities exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any
Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.

 

“Closing Date”
means the date the Company initially issues the Notes and the Warrants pursuant to the terms of the Securities Purchase Agreement.

 

“Code”
means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that,
if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

 

“Collateral”
shall have the meaning set forth in Section 2(a) of this Agreement.

 

“Collateral
Agent” shall have the meaning set forth in the preamble hereto.

 

“Company”
shall have the meaning set forth in the preamble hereto.

 

“Controlled
Account Agreement” means a deposit account control agreement or securities account control agreement with respect to
a Pledged Account, in form and substance satisfactory to the Collateral Agent, as the same may be amended, modified, supplemented,
extended, renewed, restated or replaced from time to time.

 

“Controlled
Accounts” means the Deposit Accounts, Commodity Accounts, Securities Accounts, and/or Foreign Currency Controlled Account
of the Grantors listed on Schedule IV attached hereto.

 

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

 

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

 

 

 

    	 	2	 

     

    

 

“Domestic
Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

 

“Event of
Default” shall have the meaning set forth in Section 4(a) of the Notes.

 

“Excluded
Collateral” means the voting Capital Stock of any Foreign Subsidiary to the extent that (x) such Capital Stock represents
more than 65% of the issued and outstanding voting Capital Stock of such Foreign Subsidiary and (y) pledging more than 65% of the
total outstanding voting Capital Stock of such Foreign Subsidiary would result in a material adverse tax consequence to a Grantor.

 

“Foreign Currency
Controlled Accounts” means any Controlled Account of the Company or its Subsidiaries holding non-United States dollar
deposits.

 

“Foreign Subsidiary”
means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof,
Puerto Rico or the District of Columbia.

 

“GAAP”
means U.S. generally accepted accounting principles consistently applied.

 

“Governmental
Authority” means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other
political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guaranteed
Obligations” shall have the meaning set forth in Section 2 of each Guaranty.

 

“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.

 

“Guaranty”
or “Guaranties” shall have the meaning set forth in the recitals hereto.

 

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

 

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

 

“Intellectual
Property Security Agreement” means the Intellectual Property Security Agreement required to be delivered pursuant to
Section 5(h)(i) of this Agreement, in the form attached hereto as Exhibit A.

 

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

 

“Lien”
means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.

 

“Notes”
shall have the meaning set forth in the recitals hereto.

 

“Noteholders”
means, at any time, the holders of the Notes at such time.

 

“Obligations”
shall have the meaning set forth in Section 3 of this Agreement.

 

“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Obligations.

 

 

 

    	 	3	 

     

    

 

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

 

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

 

“Perfection
Requirement” or “Perfection Requirements” shall have the meaning set forth in Section 4(j) of this
Agreement.

 

“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental Authority.

 

“Pledged Accounts”
means all of each Grantor’s right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities Accounts
(in all cases, including, without limitation, all Controlled Accounts and Foreign Currency Control Accounts).

 

“Pledged Entity”
means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each
other Person, any right in or interest in or to all or a portion of whose Capital Stock is acquired or otherwise owned by a Grantor
after the date hereof.

 

“Pledged Equity”
means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter
owned by such Grantor, regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds
thereof and all rights relating thereto, also including any certificates representing the Securities and/or Capital Stock, the
right to receive any certificates representing any of the Securities and/or Capital Stock, all warrants, options, share appreciation
rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income,
profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments,
and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution
of, on account of, or in exchange for any or all of the foregoing.

 

“Pledged Operating
Agreements” means all of each Grantor’s rights, powers and remedies under the limited liability company operating
agreements of each of the Pledged Entities that are limited liability companies, as may be amended, modified, supplemented, extended,
renewed, restated or replaced from time to time.

 

“Pledged Partnership
Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of
the Pledged Entities that are partnerships, as may be amended, modified, supplemented, extended, renewed, restated or replaced
from time to time.

 

“Securities
Purchase Agreement” shall have the meaning set forth in the recitals hereto.

 

“Subsidiary”
means any Person in which a Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity
or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of
such Person, and all of the foregoing, collectively, “Subsidiaries”.

 

 

 

    	 	4	 

     

    

 

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

 

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

 

Section
2.     Grant of
Security Interest.

 

(a)            
As collateral security for the due and punctual payment and performance all of the Obligations, as and when due, each Grantor
hereby pledges and assigns to the Collateral Agent, for itself and for the benefit of the Noteholders, and grants to the Collateral
Agent, for itself and for the benefit of the Noteholders, a continuing security interest in, all personal property and assets of
such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind,
nature and description, whether tangible or intangible (collectively, the “Collateral”), including, without
limitation, the following:

 

(i)             
all Accounts;

 

(ii)            
all Chattel Paper (whether tangible or Electronic Chattel Paper);

 

(iii)          
all Commercial Tort Claims, including, without limitation, those specified on Schedule VI hereto;

 

(iv)           
all Documents;

 

(v)            
all Equipment;

 

(vi)           
all Fixtures;

 

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

 

(viii)        
all Goods;

 

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

 

(x)            
all Inventory;

 

(xi)           
all Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity,
Pledged Operating Agreements and Pledged Partnership Agreements);

 

(xii)          
all Intellectual Property and all Licenses;

 

(xiii)        
all Letter-of-Credit Rights;

 

 

 

    	 	5	 

     

    

 

(xiv)        
all Pledged Accounts, all cash and other property from time to time deposited therein, and all monies and property in the
possession or under the control of the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent
of the Collateral Agent or any such Noteholder;

 

(xv)          
all Supporting Obligations;

 

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

 

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

 

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

 

(b)            
Notwithstanding anything herein to the contrary, the term “Collateral” shall not include any Excluded
Collateral.

 

(c)            
Each Grantor agrees not to further encumber, or permit any other Lien to exist that encumbers, any of its Copyrights, Copyright
applications, Copyright registrations and like protections in each work of authorship and derivative work, whether published or
unpublished, any Licenses, Patents, Patent applications and like protections, including improvements, divisions, continuations,
renewals, reissues, extensions, and continuations-in-part of the same, Trademarks, service marks and, to the extent permitted under
applicable law, any applications therefor, whether registered or not, and the goodwill of the business of such Grantor connected
with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims
for damage by way of any past, present, or future infringement of any of the foregoing, in each case without the Collateral Agent’s
prior written consent (which consent may be withheld or given in the Collateral Agent’s sole discretion).

 

(d)            
The Grantors agree that the pledge of the shares of Capital Stock acquired by a Grantor of any and all Persons now or hereafter
existing who is a Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges
or other similar agreements or instruments, executed and delivered by the relevant Grantors in favor of the Collateral Agent, which
pledge agreements will provide for the pledge of such shares of Capital Stock in accordance with the laws of the applicable foreign
jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its
sole discretion, take such actions in such foreign jurisdictions that will result in the perfection of the Lien created in such
shares of Capital Stock.

 

(e)            
In addition, to secure the prompt and complete payment, performance and observance of the Obligations and in order to induce
the Buyers as aforesaid, each Grantor hereby grants to the Collateral Agent, for itself and for the ratable benefit of the Noteholders,
a right of set-off against the property of such Grantor held by the Collateral Agent, for itself and for the ratable benefit of
the Noteholders, consisting of property described above in Section 2(a) now or hereafter in the possession or custody of
or in transit to the Collateral Agent, for any purpose, including safekeeping, collection or pledge, for the account of such Grantor,
or as to which such Grantor may have any right or power; provided that such right shall only to be exercised after an Event of
Default has occurred and is continuing.

 

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

 

 

 

    	 	6	 

     

    

 

(a)            
 (i) the payment by the Company and each Grantor, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement,
this Agreement, the Notes and the other Transaction Documents, and (ii) in the case of the Guarantors, the payment by such Guarantors,
as and when due and payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A)
all principal of, interest, make-whole and other amounts on the Notes (including, without limitation, all interest, make-whole
and other amounts that accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of
such interest is enforceable or is allowable in such Insolvency Proceeding), and (B) all fees, interest, premiums, penalties, contract
causes of action, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under
this Agreement or any of the Transaction Documents; and

 

(b)            
the due performance and observance by each Grantor of all of its other obligations from time to time existing in respect
of any of the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders
under the Notes.

 

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

 

(a)            
Schedule I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization
or formation and the organizational identification number of each Grantor in such state. The information set forth in Schedule
I hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name
(or operated under any other name), jurisdiction of organization or organizational identification number from those set forth in
Schedule I hereto except as disclosed in Schedule I hereto.

 

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

 

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

 

(d)            
All Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory
of each Grantor hereafter existing will be, located and/or based at the addresses specified therefor in Schedule III hereto,
except that each Grantor will give the Collateral Agent written notice of any change in the location of any such Collateral within
20 days of such change, other than to locations set forth on Schedule III hereto (and with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected its Liens thereon). Each Grantor’s principal place of
business and chief executive office, the place where each Grantor keeps its Records concerning the Collateral and all originals
of all Chattel Paper are located and will continue to be located at the addresses specified therefor in Schedule III
hereto. None of the Accounts is or will be evidenced by Promissory Notes or other Instruments.

 

(e)            
Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of (i) each Promissory
Note, Security and other Instrument owned by each Grantor, (ii) each Pledged Account of each Grantor, together with the name
and address of each institution at which each such Pledged Account is maintained, the account number for each such Pledged Account
and a description of the purpose of each such Pledged Account and (iii) the name of each Foreign Currency Controlled Account, together
with the name and address of each institution at which each such Foreign Currency Controlled Account is maintained and the amount
of cash or cash equivalents held in each such Foreign Currency Controlled Account. Set forth in Schedule II hereto is a
complete and correct list of each trade name used by each Grantor and the name of, and each trade name used by, each Person from
which each Grantor has acquired any substantial part of the Collateral.

 

 

 

    	 	7	 

     

    

 

(f)             
Each Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule
II hereto, including all schedules and exhibits thereto, which represent all of the Licenses of the Grantors existing on the
date of this Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to
the subject matter thereof, and there are no other agreements, arrangements or understandings, written or oral, relating to the
matters covered thereby or the rights of such Grantor or any of its Affiliates in respect thereof. Each material License now existing
is, and any material License entered into in the future will be, the legal, valid and binding obligation of the parties thereto,
enforceable against such parties in accordance with its terms. No default under any material License by any such party has occurred,
nor does any defense, offset, deduction or counterclaim exist thereunder in favor of any such party.

 

(g)            
Each Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, which is
the only Intellectual Property necessary to conduct its business in substantially the same manner as conducted as of the date hereof.
Schedule II hereto sets forth a true and complete list of all Intellectual Property and Licenses owned or used by each Grantor
as of the date hereof, and applications for grant or registration of Intellectual Property. To the knowledge of each Grantor, all
such Intellectual Property of such Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable,
is valid and enforceable and has not been abandoned in whole or in part. Except as set forth in Schedule II, no such
Intellectual Property is the subject of any licensing or franchising agreement. Except as set forth in Schedule II, no Grantor
has any knowledge of any infringement upon or conflict with the Patent, Trademark, Copyright, trade secret rights of others and,
each Grantor is not now infringing or in conflict with any Patent, Trademark, Copyright, trade secret or similar rights of others,
and to the knowledge of each Grantor, no other Person is now infringing or in conflict in any material respect with any such properties,
assets and rights owned or used by each Grantor. No Grantor has received any notice that it is violating or has violated the Trademarks,
Patents, Copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights of publicity
or other intellectual property rights of any third party.

 

(h)            
Each Grantor is and will be at all times the sole and exclusive owner of the Collateral pledged by such Grantor hereunder
free and clear of any Liens, except for Permitted Liens thereon. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording or filing office except such as (i) may have been
filed in favor of the Collateral Agent and/or the Noteholders relating to this Agreement or the other Transaction Documents, and
(ii) are securing Permitted Liens as of the date hereof and disclosed on Schedule VII hereto.

 

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

 

(j)             
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required
for (i) the grant by each Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral,
or (ii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, except for (A) the filing under
the Code as in effect in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of
which financing statements have been duly filed and are in full force and effect, (B) with respect to all Pledged Accounts, and
all cash and other property from time to time deposited therein, the execution of a Controlled Account Agreement with the depository
or other institution with which the applicable Pledged Accounts are maintained, as provided in Section 5(h)(i), (C) with
respect to Commodity Contracts, the execution of a control agreement with the commodity intermediary with which such Commodity
Contract is carried, as provided in Section 5(h)(i), (D) with respect to the perfection of the security interest
created hereby in the United States Intellectual Property and Licenses, the recording of the appropriate Intellectual Property
Security Agreement in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (E) with
respect to the perfection of the security interest created hereby in foreign Intellectual Property and Licenses, registrations
and filings in jurisdictions located outside of the United States and covering rights in such jurisdictions relating to such foreign
Intellectual Property and Licenses, (F) with respect to the perfection of the security interest created hereby in any Letter-of-Credit
Rights, the consent of the issuer of the applicable letter of credit to the assignment of proceeds as provided in the Code as in
effect in the applicable jurisdiction, (G) with respect to Investment Property constituting uncertificated securities, the applicable
Grantor causing the issuer thereof either (i) to register the Collateral Agent as the registered owner of such securities or (ii)
to agree in an authenticated record with such Grantor and the Collateral Agent that such issuer will comply with instructions with
respect to such securities originated by the Collateral Agent without further consent of such Grantor, such authenticated record
to be in form and substance satisfactory to the Collateral Agent, (H) with respect to Investment Property constituting certificated
securities or instruments, such items to be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable
form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting
Commodity Contracts, Electronic Chattel Paper or Letter of Credit Rights, the taking of such actions, and (J) the Collateral Agent
having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses (A) through (J) each
a “Perfection Requirement” and collectively, the “Perfection Requirements”).

 

 

 

    	 	8	 

     

    

 

(k)            
This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable security interest in the Collateral,
as security for the Obligations. The performance of the Perfection Requirements results in the perfection of such security interest
in the Collateral. Such security interest is (or in the case of Collateral in which each Grantor obtains rights after the date
hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid, enforceable and perfected
security interests in all personal property of each Grantor (other than Excluded Collateral). Such recordings and filings and all
other action necessary to perfect and protect such security interest have been duly taken (and, in the case of Collateral in which
any Grantor obtains rights after the date hereof, will be duly taken), except for the Collateral Agent’s having possession
of all Documents, Chattel Paper, Instruments and cash constituting Collateral after the date hereof and the other actions, filings
and recordations described above, including the Perfection Requirements.

 

(l)             
As of the date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims,
except for the Commercial Tort Claims described in Schedule VI.

 

(m)          
All of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV, and is presently
represented by the certificates listed on Schedule IV hereto (if applicable). As of the date hereof, there are no existing
options, warrants, calls or commitments of any character whatsoever relating to the Pledged Equity other than as contemplated and
permitted by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial owner of the Pledged
Equity, as applicable. None of the Pledged Equity has been issued or transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes
100% or such other percentage as set forth on Schedule IV of the issued and outstanding shares of Capital Stock of
the applicable Pledged Entity.

 

(n)            
Such Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (ii) has all
requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted
and as presently contemplated and to execute and deliver this Agreement and each other Transaction Document to which such Grantor
is a party, and to consummate the transactions contemplated hereby and thereby and (iii) is duly qualified to do business and is
in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary, except where the failure to be so qualified would not result in a Material
Adverse Effect.

 

(o)            
The execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such
Grantor is a party (i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action,
(ii) do not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership
or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties,
(iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Transaction Document) upon
or with respect to any of its assets or properties, and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or
its operations or any of its assets or properties.

 

(p)            
This Agreement and each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, will
be, a legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other
similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).

 

(q)            
There are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

 

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

 

 

 

    	 	9	 

     

    

 

(a)            
Further Assurances. Each Grantor will, at its expense, at any time and from time to time, promptly execute and deliver
all further instruments and documents and take all further action that the Collateral Agent may reasonably request in order to:
(i) perfect and protect the security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent
to exercise and enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation, the Controlled
Accounts; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously
all Chattel Paper and each License and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral
with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such Chattel Paper, License or Collateral
is subject to the security interest created hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note,
Security (subject to the limitations set forth in Section 2), Chattel Paper or other Instrument, now or hereafter owned
by any Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory
to the Collateral Agent, (C) executing and filing (to the extent, if any, that any Grantor’s signature is required thereon)
or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or that
the Collateral Agent may reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing
to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral in each case as the Collateral Agent may reasonably request, all in reasonable detail,
(E) if any Collateral shall be in the possession of a third party, notifying such Person of the Collateral Agent’s security
interest created hereby and obtaining a written acknowledgment from such Person, in form and substance reasonably satisfactory
to the Collateral Agent, that such Person holds possession of the Collateral for the benefit of the Collateral Agent (for the benefit
the Noteholders), (F) if at any time after the date hereof, any Grantor acquires or holds any Commercial Tort Claim, promptly
notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim
and granting to the Collateral Agent a security interest therein and in the proceeds thereof, which writing shall incorporate the
provisions hereof and shall be in form and substance satisfactory to the Collateral Agent, (G) upon the acquisition after
the date hereof by any Grantor of any motor vehicle or other Equipment subject to a certificate of title or ownership (other than
a motor vehicle or Equipment that is subject to a purchase money security interest), causing the Collateral Agent to be listed
as the lienholder on such certificate of title or ownership and delivering evidence of the same to the Collateral Agent in accordance
with Section 5(j) hereof; and (H) taking all actions required by the Code or by other law, as applicable, in any relevant
Code jurisdiction, or by other law as applicable in any foreign jurisdiction.

 

(b)            
Location of Collateral. Each Grantor will keep the Collateral (i) at the locations specified therefor on Schedule
III hereto, or (ii) at such other locations set forth on Schedule III and with respect to which the Collateral Agent
has filed financing statements and otherwise fully perfected its Liens thereon, or (iii) at such other locations in the United
States, provided that 30 days prior to any change in the location of any Collateral to such other location, or upon the acquisition
of any Collateral to be kept at such other locations, the Grantors shall give the Collateral Agent written notice thereof and deliver
to the Collateral Agent a new Schedule III indicating such new locations and such other written statements and schedules
as the Collateral Agent may require.

 

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

 

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

 

 

 

    	 	10	 

     

    

 

(e)            
Insurance.

 

(i)             
Each Grantor will, at its own expense, maintain insurance (including, without limitation, comprehensive general liability,
hazard, rent and business interruption insurance) with respect to its properties (including all real properties leased or owned
by it) and business, in such amounts and covering such risks, in such form and with responsible and reputable insurance companies
or associations as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated and in any event, in amount, adequacy
and scope reasonably satisfactory to the Collateral Agent.

 

(ii)           
To the extent requested by the Collateral Agent at any time and from time to time, each such policy for liability insurance
shall provide for all losses to be paid on behalf of the Collateral Agent and any Grantor as their respective interests may appear,
and each policy for property damage insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral
Agent. In addition to and without limiting the foregoing, to the extent requested by the Collateral Agent at any time and from
time to time, each such policy shall in addition (A) name the Collateral Agent as an additional insured party and/or loss payee,
as applicable, thereunder (without any representation or warranty by or obligation upon the Collateral Agent) as its interests
may appear, (B) contain an agreement by the insurer that any loss thereunder shall be payable to the Collateral Agent on its own
account notwithstanding any action, inaction or breach of representation or warranty by any Grantor, (C) provide that there shall
be no recourse against the Collateral Agent for payment of premiums or other amounts with respect thereto, and (D) provide that
at least 30 days’ prior written notice of cancellation, lapse, expiration or other adverse change shall be given to the Collateral
Agent by the insurer. Any Grantor will, if so requested by the Collateral Agent, deliver to the Collateral Agent original or duplicate
policies of such insurance (including certificates demonstrating compliance with this Section 5(e)) and, as often as the Collateral
Agent may reasonably request, a report of a reputable insurance broker with respect to such insurance. Any Grantor will also, at
the request of the Collateral Agent, execute and deliver instruments of assignment of such insurance policies and cause the respective
insurers to acknowledge notice of such assignment.

 

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

 

(iv)          
Notwithstanding anything to the contrary in subsection 5(e)(iii) above, following and during the continuance of an Event
of Default, all insurance payments in respect of each Grantor’s properties and business shall be paid to the Collateral Agent
and applied as specified in Section 7(b) hereof.

 

(f)             
Provisions Concerning the Accounts and the Licenses.

 

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

 

 

 

    	 	11	 

     

    

 

(ii)           
Each Grantor will (except as otherwise provided in this subsection (f)), continue to collect, at its own expense, all
amounts due or to become due under the Accounts. In connection with such collections, any Grantor may (and, at the Collateral Agent’s
direction, will) take such action as any Grantor or the Collateral Agent may deem necessary or advisable to enforce collection
or performance of the Accounts; provided, however, that the Collateral Agent shall have the right at any time following
the occurrence and during the continuance of an Event of Default to notify the Account Debtors or obligors under any Accounts of
the assignment of such Accounts to the Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts
due or to become due to any Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such notification
and at the expense of any Grantor and to the extent permitted by applicable law, to enforce collection of any such Accounts and
to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as any Grantor might have
done. After receipt by any Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify,
or has enforced or intends to enforce any Grantor’s rights against the Account Debtors or obligors under any Accounts as
referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including Instruments) received
by any Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder (for the
benefit the Noteholders), shall be segregated from other funds of any Grantor and shall be forthwith paid over to the Collateral
Agent in the same form as so received (with any necessary endorsement) to be applied as specified in Section 7(b) hereof,
and (B) no Grantor will adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account
Debtor or obligor thereof or allow any credit or discount thereon. In addition, upon the occurrence and during the continuance
of an Event of Default, the Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and financial
institutions with which any Grantor either maintains a Deposit Account or a lockbox (including, without limitation, any Controlled
Account) or deposits the proceeds of any Accounts to send immediately to the Collateral Agent by wire transfer (to such deposit
account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct) all or a portion of
such securities, cash, investments and other items held by such institution. Any such securities, cash, investments and other items
so received by the Collateral Agent shall be applied as specified in accordance with Section 7(b) hereof.

 

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

 

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

 

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

 

(g)            
Transfers and Other Liens.

 

(i)             
Except as otherwise expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, sell,
lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single
transaction or a series of related transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and
other dispositions of such assets or rights by such Grantor for value in the ordinary course of business consistent with past practices
and (B) sales of Inventory and product in the ordinary course of business.

 

(ii)           
Except as permitted under Section 14(e) of the Notes, no Grantor shall, directly or indirectly, redeem, repurchase or declare
or pay any cash dividend or distribution on any of its Capital Stock.

 

(iii)         
No Grantor shall, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes
or Warrants (other than as contemplated by the Securities Purchase Agreement and the Notes) or (B) issue any other securities that
would cause a breach or default under the Notes or the Securities Purchase Agreement.

 

 

    	 	12	 

     

    

 

(iv)          
No Grantor shall enter into, renew, extend or be a party to, any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services
of any kind) with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice
and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to
it than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.

 

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

 

(h)            
Intellectual Property.

 

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

 

 

 

    	 	13	 

     

    

 

(ii)           
In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for
the registration of any Patent, Trademark or Copyright or the United States Copyright Office or the United States Patent and Trademark
Office, as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof
unless it gives the Collateral Agent prior written notice thereof. Upon request of the Collateral Agent, any Grantor shall execute,
authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably
request to evidence the Collateral Agent’s security interest hereunder in such Intellectual Property and the General Intangibles
of any Grantor relating thereto or represented thereby, and each Grantor hereby appoints the Collateral Agent its attorney-in-fact
to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified
and confirmed, and such power (being coupled with an interest) shall be irrevocable until all Obligations are Paid in Full.

 

(i)             
Pledged Accounts.

 

(A) Within (x) twenty
(20) days of written request by Collateral Agent, or (y) five (5) Business Days upon the occurrence of an Event of Default, each
Grantor shall cause each bank and other financial institution which maintains a Controlled Account (each a “Controlled
Account Bank”) to execute and deliver to the Collateral Agent, in form and substance satisfactory to the Collateral Agent,
a Controlled Account Agreement with respect to such Controlled Account, duly executed by each Grantor and such Controlled Account
Bank, pursuant to which such Controlled Account Bank among other things shall irrevocably agree, with respect to such Controlled
Account, that (i) at any time after any Grantor, the Collateral Agent or any Buyer shall have notified such Controlled Account
Bank that an Event of Default has occurred or is continuing, such Controlled Account Bank will comply with any and all instructions
originated by the Collateral Agent directing the disposition of the funds in such Controlled Account without further consent by
such Grantor, (ii) such Controlled Account Bank shall waive, subordinate or agree not to exercise any rights of setoff or recoupment
or any other claim against the applicable Controlled Account other than for payment of its service fees and other charges directly
related to the administration of such Controlled Account and for returned checks or other items of payment, (iii) at any time after
any Grantor, the Collateral Agent or any Buyer shall have notified such Controlled Account Bank that an Event of Default has occurred
or is continuing, with respect to each such Controlled Account, such Controlled Account Bank shall not comply with any instructions,
directions or orders of any form with respect to such Controlled Accounts other than instructions, directions or orders originated
by the Collateral Agent, (iv) all funds deposited by any Grantor with such Controlled Account Bank shall be subject to a perfected,
first priority security interest in favor of the Collateral Agent, and (v) upon receipt of written notice from the Collateral Agent
during the continuance of an Event of Default, such Controlled Account Bank shall immediately send to the Collateral Agent by wire
transfer (to such account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct)
all such funds and other items held by it. No Grantor shall create or maintain any Pledged Account without the prior written consent
of the Collateral Agent and complying with the terms of this Agreement.

 

(B) If at any time
after the Closing Date, the average daily balance of any Account that is not subject to a Controlled Account Agreement exceeds
$50,000 during any calendar month (including the calendar month in which the Closing Date occurs), the Company shall immediately
notify the Collateral Agent of same and, at if requested by the Collateral Agent, either (x) within two (2) Business Days following
such date, transfer to a Controlled Account an amount sufficient to reduce the total aggregate amount of the cash in such Account
to an amount not in excess of $50,000 or (y) deliver, in accordance with Section 5(i)(A) above, to the Collateral Agent
a Controlled Account Agreement with respect to such Account, duly executed by such Grantor and the depositary bank in which such
Account is maintained.

 

(C) Notwithstanding
anything to the contrary contained in Section 5(i)(B) above, and without limiting any of the foregoing, if at any time after
the Closing Date, the total aggregate amount of the cash of the Company and any of its Subsidiaries, in the aggregate, that is
not held in a Controlled Account exceeds $100,000, in the aggregate, with respect to Accounts worldwide (the “Maximum
Free Cash Amount”), the Company shall immediately notify the Collateral Agent of same and, at if requested by the Collateral
Agent, either (x) within two (2) Business Days following such date, transfer to a Controlled Account an amount sufficient to reduce
the total aggregate amount of the cash that is not held in a Controlled Account to an amount not in excess of the Maximum Free
Cash Amount or (y) deliver, in accordance with Section 5(i)(A) above, to the Collateral Agent a Controlled Account Agreement
with respect to such Account (or Accounts), duly executed by such Grantor and the depositary bank in which such Account (or Accounts)
is maintained, as necessary to reduce the total aggregate amount of the cash that is not held in a Controlled Account to an amount
not in excess of the Maximum Free Cash Amount.

 

 

    	 	14	 

     

    

 

(j)             
Motor Vehicles.

 

(i)             
Upon the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for each motor vehicle with a value in excess of $10,000 owned by it, with the Collateral Agent listed as
lienholder, for the benefit of the Noteholders.

 

(ii)           
Each Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective the date hereof and terminating upon
the termination of this Agreement, for the purpose of (A) executing on behalf of such Grantor title or ownership applications
for filing with appropriate Governmental Authorities to enable motor vehicles now owned or hereafter acquired by such Grantor to
be retitled and the Collateral Agent listed as lienholder thereof, (B) filing such applications with such Governmental Authorities,
and (C) executing such other agreements, documents and instruments on behalf of, and taking such other action in the name
of, such Grantor as the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (including, without
limitation, for the purpose of creating in favor of the Collateral Agent a perfected Lien on the motor vehicles and exercising
the rights and remedies of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and
is irrevocable until all of the Obligations are Paid in Full.

 

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

 

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

 

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

 

(l)             
Inspection and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof
or such professionals or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and expense) (i) to
examine and make copies of and abstracts from any Grantor’s records and books of account, (ii) to visit and inspect its properties,
(iii) to verify materials, leases, Instruments, Accounts, Inventory and other assets of any Grantor from time to time, and
(iv) to conduct audits, physical counts, appraisals and/or valuations, examinations at the locations of any Grantor. Each
Grantor shall also permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountants or other
professionals or other Persons as the Collateral Agent may designate to discuss such Grantor’s affairs, finances and accounts
with any of its directors, officers, managerial employees, independent accountants or any of its other representatives. Without
limiting the foregoing, the Collateral Agent may, at any time, in the Collateral Agent’s own name, in the name of a nominee
of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account
Debtors of such Grantor, parties to contracts with such Grantor and/or obligors in respect of Instruments of such Grantor to verify
with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating
to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other receivables.

 

 

 

    	 	15	 

     

    

 

(m)          
Future Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary, simultaneously with the creation
or acquisition of such Subsidiary, such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary, cause such Subsidiary to
become a party to this Agreement as an additional “Grantor” hereunder, (ii) deliver to the Collateral Agent updated
Schedules to this Agreement, as appropriate (including, without limitation, an updated Schedule IV to reflect the grant
by such Grantor of a Lien on all Pledged Equity now or hereafter owned by such Grantor), (iii) if such Subsidiary is a Domestic
Subsidiary, cause such Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of the Collateral Agent in
form and substance acceptable to the Collateral Agent, (iv) deliver to the Collateral Agent the stock certificates representing
all of the Capital Stock of such Subsidiary, along with undated stock powers for each such certificates, executed in blank (or,
if any such shares of Capital Stock are uncertificated, confirmation and evidence reasonably satisfactory to the Collateral Agent
that the security interest in such uncertificated securities has been transferred to and perfected by the Collateral Agent, in
accordance with Sections 8-313, 8-321 and 9-115 of the Code or any other similar or local or foreign law that may be applicable),
and (v) duly execute and/or cause to be delivered to the Collateral Agent, in form and substance acceptable to the Collateral Agent,
such opinions of counsel and other documents as the Collateral Agent shall request with respect thereto; provided, however, that
no Grantor shall be required to pledge any Excluded Collateral. Each Grantor hereby authorizes the Collateral Agent to attach such
updated Schedules to this Agreement and agrees that all Pledged Equity listed on any updated Schedule delivered to the Collateral
Agent shall for all purposes hereunder be considered Collateral. The Grantors agree that the pledge of the shares of Capital Stock
acquired by a Grantor of Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share
charges, or other similar agreements or instruments, executed and delivered by the relevant Grantor in favor of the Collateral
Agent, which pledge agreements will provide for the pledge of such shares of Capital Stock in accordance with the laws of the applicable
foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time,
in its sole discretion, take actions in such foreign jurisdictions that will result in the perfection of the Lien created in such
shares of Capital Stock.

 

Section
6.     Additional
Provisions Concerning the Collateral.

 

(a)            
To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent
to execute any such agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments
or other documents in such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any
time and from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral
(including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all
personal property” (or words of similar effect) or that describe or identify the Collateral by type or in any other manner
as the Collateral Agent may determine regardless of whether any particular asset of such Grantor falls within the scope of Article
9 of the Code or whether any particular asset of such Grantor constitutes part of the Collateral, and (B) contain any other information
required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including, without limitation, whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor) and (iii) ratifies such authorization to the extent that the
Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof. A photocopy
or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law.

 

(b)            
Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in
the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral Agent’s
discretion, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral
Agent pursuant to Section 5(e) hereof, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any
drafts or other instruments, documents and chattel paper in connection with clause (i) or (ii) above, (iv) to file any claims or
take any action or institute any proceedings which the Collateral Agent may deem necessary or desirable for the collection of any
Collateral or otherwise to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral, (v) to
execute assignments, licenses and other documents to enforce the rights of the Collateral Agent and the Noteholders with respect
to any Collateral, and (vi) to verify any and all information with respect to any and all Accounts. This power is coupled with
an interest and is irrevocable until all of the Obligations are Paid in Full.

 

 

 

    	 	16	 

     

    

 

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

 

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

 

(e)            
The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

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

 

(g)            
As long as no Event of Default shall have occurred and be continuing and until written notice shall be given to the applicable
Grantor:

 

(i)             
Each Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any
part thereof for all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any
other Transaction Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which
would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Equity or which would
authorize, effect or consent to (unless and to the extent expressly permitted by the Securities Purchase Agreement):

 

 

 

    	 	17	 

     

    

 

(A)       the
dissolution or liquidation, in whole or in part, of a Pledged Entity;

 

(B)       the
consolidation or merger of a Pledged Entity with any other Person;

 

(C)       the
sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the
Collateral Agent;

 

(D)       any
change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance
of any additional shares of its Capital Stock; or

 

(E)       the
alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.

 

(h)            
(i)Each Grantor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and
interest paid in respect of the Pledged Equity to the extent not in violation of the Securities Purchase Agreement other than any
and all: (A) dividends and interest paid or payable other than in cash in respect of any Pledged Equity, and instruments and other
property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends and
other distributions paid or payable in cash in respect of any Pledged Equity in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash
paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, any Pledged Equity;
provided, however, that until actually paid all rights to such distributions shall remain subject to the Lien created by this Agreement;
and

 

(ii)       all
dividends and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with
clause (i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered
to the Collateral Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of
the Collateral Agent (for the benefit the Noteholders), be segregated from the other property or funds of such Grantor, and be
forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement).

 

 

 

    	 	18	 

     

    

 

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

 

(a)            
The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for
herein, in any other Transaction Document or otherwise available to it, all of the rights and remedies of a secured party upon
default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control
of the Collateral, including, without limitation, transfer into the Collateral Agent’s name or into the name of its nominee
or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the benefit of the Noteholders,
all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto
as though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at
its expense and upon request of the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by
the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent
that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased
by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate
the Collateral Agent’s rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation,
and (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale,
(A) sell the Collateral or any part thereof in one or more parcels at public or private sale (including, without limitation,
by credit bid), at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or (B) lease,
license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable.
Each Grantor agrees that, to the extent notice of sale or any other disposition of its respective Collateral shall be required
by law, at least ten (10) days’ notice to any Grantor of the time and place of any public sale or the time after which any
private sale or other disposition of its respective Collateral is to be made shall constitute reasonable notification. The Collateral
Agent shall not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives
any claims against the Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective
Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was
less than the aggregate amount of the Obligations, even if the Collateral Agent accepts the first offer received and does not offer
such Collateral to more than one offeree, and waives all rights that any Grantor may have to require that all or any part of such
Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such sale
of its respective Collateral by the Collateral Agent shall be made without warranty, (ii) the Collateral Agent may specifically
disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i)
and (ii) above shall not adversely affect the commercial reasonableness of any such sale of Collateral. In addition to the foregoing,
(1) upon written notice to any Grantor from the Collateral Agent after and during the continuance of an Event of Default,
such Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose
described in such notice; (2) the Collateral Agent may, at any time and from time to time after and during the continuance of an
Event of Default, upon 10 days’ prior notice to such Grantor, license, whether general, special or otherwise, and whether
on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout the universe for such term or terms, on such
conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral Agent may,
at any time, pursuant to the authority granted in Section 6 hereof or otherwise (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments
of assignment of the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording
or registration in any country.

 

(b)            
Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of
any sale or disposition of or collection from, or other realization upon, all or any part of the Collateral shall be applied as
follows (subject to the provisions of the Securities Purchase Agreement): first, to pay any fees, indemnities or expense
reimbursements then due to the Collateral Agent (including those described in Section 8 hereof); second, to pay any
fees, indemnities or expense reimbursements then due to the Noteholders, on a pro rata basis; third to pay interest due
under the Notes owing to the Noteholders, on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes,
whether or not then due, owing to the Noteholders, on a pro rata basis; fifth, to pay or prepay any other Obligations, whether
or not then due, in such order and manner as the Collateral Agent shall elect, consistent with the provisions of the Securities
Purchase Agreement. Any surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the Payment in Full
of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent
jurisdiction shall direct.

 

 

 

    	 	19	 

     

    

 

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

 

(d)            
To the extent that applicable law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses
deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work
in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access
to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to
exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same
business as any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature,
(viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition
of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii)
to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment bankers, consultants, attorneys
and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor
acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by the Collateral
Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated
in this section. Without limitation upon the foregoing, nothing contained in this section shall be construed to grant any rights
to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this section.

 

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

 

Section
8.     Indemnity
and Expenses.

 

(a)            
Each Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the
Noteholders harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and
expenses (including, without limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s counsel)
to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this
Agreement), except to the extent resulting from such Person’s gross negligence or willful misconduct, as determined by a
final judgment of a court of competent jurisdiction no longer subject to appeal.

 

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

 

 

 

    	 	20	 

     

    

 

Section
9.     Notices,
Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail,
first-class postage prepaid and return receipt requested), telecopied, e-mailed or delivered, if to any Grantor, to the Company’s
address, or if to the Collateral Agent or any Noteholder, to it at its respective address, each as set forth in Section 9(f) of
the Securities Purchase Agreement; or as to any such Person, at such other address as shall be designated by such Person in a written
notice to all other parties hereto complying as to delivery with the terms of this Section 9. All such notices and
other communications shall be effective (a) if sent by certified mail, return receipt requested, when received or three (3) Business
Days after deposited in the mails, whichever occurs first, (b) if telecopied or e-mailed, when transmitted (during normal business
hours) and confirmation is received, and otherwise, the day after the notice or communication was transmitted and confirmation
is received, or (c) if delivered in person, upon delivery. For the avoidance of doubt, all Foreign Subsidiaries, as Grantors, hereby
appoint the Company as its agent for receipt of service of process and all notices and other communications in the United States
at the address specified below.

 

Section
10.  Miscellaneous.

 

(a)            
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and
the Collateral Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to
any departure by each Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the Collateral
Agent (and approved by the Required Holders), and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, modification or waiver of this Agreement shall be effective to the
extent that it (1) applies to fewer than all of the holders of Notes or (2) imposes any obligation or liability on any holder of
Notes without such holder’s prior written consent (which may be granted or withheld in such holder’s sole discretion).

 

(b)            
No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right reasonably hereunder or
under any of the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right reasonably preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies
of the Collateral Agent or any Noteholder provided herein and in the other Transaction Documents are cumulative and are in addition
to, and not exclusive of, any rights or remedies provided by law. The rights of the Collateral Agent or any Noteholder under any
of the other Transaction Documents against any party thereto are not conditional or contingent on any attempt by such Person to
exercise any of its rights under any of the other Transaction Documents against such party or against any other Person, including
but not limited to, any Grantor.

 

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

 

(d)            
This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect
until Payment in Full of the Obligations, and (ii) be binding on each Grantor and all other Persons who become bound as debtor
to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the
Collateral Agent and the Noteholders hereunder, to the benefit of the Collateral Agent and the Noteholders and their respective
permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence,
without notice to any Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations
under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become
vested with all of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon
any such assignment or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the
assignee of the Collateral Agent or such Noteholder. None of the rights or obligations of any Grantor hereunder may be assigned
or otherwise transferred without the prior written consent of the Collateral Agent, and any such assignment or transfer without
such consent of the Collateral Agent shall be null and void.

 

(e)            
Upon the Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby shall terminate
and all rights to the Collateral shall revert to the respective Grantor that granted such security interests hereunder, and (ii)
the Collateral Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such
of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute
and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any
representation, warranty or recourse whatsoever.

 

 

 

    	 	21	 

     

    

 

(f)             
Governing Law; Jurisdiction; Jury Trial.

 

(i)             
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.

 

(ii)           
Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the
other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section
9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit
or taking other legal action against any Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce
a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.

 

(iii)         
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING
OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

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

 

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

 

(h)            
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of
any executed counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.

 

(i)             
This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of
the Obligations is rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i)
the occurrence of any Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such
payment had not been made).

 

Section
11.  Material Non-Public Information.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Agreement, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the
Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose
such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that
a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate
to the Collateral Agent and any applicable Noteholder contemporaneously with delivery of such notice, and in the absence of any
such indication, the Collateral Agent and each Noteholder shall be allowed to presume that all matters relating to such notice
do not constitute material, non-public information relating to the Company or its Subsidiaries. Nothing contained in this Section
11 shall limit any obligations of the Company or any rights of the Collateral Agent or any Noteholder, under Section 4(k) of the
Securities Purchase Agreement.

 

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

    	 	22	 

     

    

 

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

 

	
         

         
	
        GRANTORS:

         

	 	
        CANNABICS PHARMACEUTICALS
        Inc. 

         

         

        By:_________________

        Eyal Barad

        Director, CEO

         

 

 

3I, LP

as Collateral Agent

 

 

By:     ________________________________

Name:

Title:

 

 

 

    	 	23	 

     

    

 

EXHIBIT A

 

FORM OF
INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This INTELLECTUAL PROPERTY
SECURITY AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this “IP Security
Agreement”), dated December __, 2020, is made by the Persons listed on the signature pages hereof (collectively, the
“Grantors”) in favor of 3i, LP, in its capacity as collateral agent (the “Collateral Agent”)
for the Noteholders. All capitalized terms not otherwise defined herein shall have the meanings respectively ascribed thereto in
the Security Agreement (as defined below).

 

WHEREAS, Cannabics Pharmaceuticals
Inc., a Nevada corporation (the “Company”), and each party listed as a “Buyer” therein (collectively,
the “Buyers”) are parties to that certain Securities Purchase Agreement, dated December 16, 2020, pursuant to
which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes”
and “Warrants” (each as defined therein) issued pursuant thereto (as such Notes and Warrants may be amended, modified,
supplemented, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”
and “Warrants”, respectively);

 

WHEREAS, it is a condition
precedent to the purchase of the Notes and Warrants under the Securities Purchase Agreement that each Grantor has executed and
delivered that certain Security and Pledge Agreement, dated December __, 2020, made by the Grantors to the Collateral Agent (as
amended, modified, supplemented, renewed, restated or replaced from time to time, the “Security Agreement”);
and

 

WHEREAS, under the terms
of the Security Agreement, the Grantors have granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and
the Noteholders, a security interest in, among other property, certain intellectual property of the Grantors, and have agreed as
a condition thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United States
Copyright Office and other governmental authorities.

 

WHEREAS, the Grantors
have determined that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best
interest of, the Grantors.

 

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

 

SECTION 1. Grant of
Security. Each Grantor hereby grants to the Collateral Agent for the ratable benefit of the Collateral Agent and the Noteholders
a security interest in all of such Grantor’s right, title and interest in and to the following (the “Collateral”):

 

(i)       the
Patents and Patent applications set forth in Schedule A hereto;

 

(ii)       the
Trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security
interest shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together with the goodwill symbolized thereby;

 

(iii)       all
Copyrights, whether registered or unregistered, now owned or hereafter acquired by such Grantor, including, without limitation,
the copyright registrations and applications and exclusive copyright licenses set forth in Schedule C hereto;

 

(iv)       all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all
rights in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;

 

 

 

    	 	24	 

     

    

 

(v)       any
and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise
recover, such damages; and

(vi)       any
and all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral of or arising from any of the foregoing.

 

SECTION 2. Security
for Obligations. The grant of a security interest in, the Collateral by each Grantor under this IP Security Agreement secures
the payment of all Obligations of such Grantor now or hereafter existing under or in respect of the Notes and the Transaction Documents,
whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, premiums, penalties,
fees, indemnifications, contract causes of action, costs, expenses or otherwise.

 

SECTION 3. Recordation.
Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.

 

SECTION 4. Execution
in Counterparts. This IP Security Agreement may be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

SECTION 5. Grants,
Rights and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement.
Each Grantor does hereby acknowledge and confirm that the grant of the security interest hereunder to, and the rights and remedies
of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions
of which are incorporated herein by reference as if fully set forth herein.

 

SECTION 6. Governing
Law; Jurisdiction; Jury Trial.

 

(i)             
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.

 

(ii)           
Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the
other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section
9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit
or taking other legal action against any Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce
a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.

 

(iii)         
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING
OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

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

 

[The remainder of the
page is intentionally left blank]

 

 

 

    	 	25	 

     

    

 

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

 

	 	CANNABICS PHARMACEUTICALS INC.
	 	 
	 	By____________________
	 	     EYAL BARAD
	 	      DIR., CEO
	 	 
	 	Address for Notices:
	 	#3 Bethesda Metro Center, #700
	 	Bethesda, Md 20814
	 	(202) 536-5191
	 	EyalBarad@Cannabics.com

 

 

 

    	 	26	 

     

    

 

 

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

 

	 	grin ultra ltd.
	 	 
	 	By __________________
	 	       EYAL BARAD
	 	       DIR.
	 	 
	 	Address for Notices:
	 	11 HaBarzel St
	 	Tel Aviv, Israel 6971017

 

 

    	 	27	 

     

    

 

Schedule A

 

Patents

 

 

	Grantor	Country	Title	Application or Patent No.	
         

        Application or Registration Date
	Assignees
	Cannabics Pharmaceuticals Inc.	United States	System and method for high throughput screening of cancer cells	PCT/IL2016/050471	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	China	System and method for high throughput screening of cancer cells	201680030825.5	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Japan	System and method for high throughput screening of cancer cells	TBD	TBD	 
	Cannabics Pharmaceuticals Inc.	Japan	System and method for high throughput screening of cancer cells	2019-0031693	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Canada	System and method for high throughput screening of cancer cells	2983557	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	India	System and method for high throughput screening of cancer cells	201717032756	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	United States	System and method for high throughput screening of cancer cells	15/559,052	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Israel	System and method for high throughput screening of cancer cells	254571	
        4/5/2016 (Application Date)

         

        4/30/2018 (Registration Date)
	 
	Cannabics Pharmaceuticals Inc.	Australia	System and method for high throughput screening of cancer cells	2016268526	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Europe	System and method for high throughput screening of cancer cells	16799471.4	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Brazil	System and method for high throughput screening of cancer cells	BR 11 2017 021767 8	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Mexico	System and method for high throughput screening of cancer cells	MX/a/2017/013035	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	South Africa	System and method for high throughput screening of cancer cells	2017/06960	
        4/5/2016 (application Date)

         

        9/26/2018 (Registration Date)
	 

 

 

 

    	 	28	 

     

    

 

	Grantor	Country	Title	Application or Patent No.	
         

        Application or Registration Date
	Assignees

 

	Cannabics Pharmaceuticals Inc.	Hong Kong	System and method for high throughput screening of cancer cells	18112994.1	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Israel	Cannabinoid compositions, methods of manufacture and use thereof	244278	24/2/2016	 
	Cannabics Pharmaceuticals Inc.	Israel	Cannabinoid compositions, methods of manufacture and use thereof	PCT/IL2017/050231	23/2/2017	 
	Cannabics Pharmaceuticals Inc.	Canada	Cannabinoid compositions, methods of manufacture and use thereof	3054392	23/2/2017	 
	Cannabics Pharmaceuticals Inc.	United States	Cannabinoid compositions, methods of manufacture and use thereof	16/872,526	23/2/2017	 
	Cannabics Pharmaceuticals Inc.	Israel	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	PCT/IL2018/050004	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	Israel	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	62553929	4/9/2017	 
	Cannabics Pharmaceuticals Inc.	United States	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	16/644,393	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	Canada	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	3074819	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	Israel	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	273060	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	United States	Novel system and method for microbiome profiling and modulation by means of cannabis administration	16/182,726	7/11/2018	 
	Cannabics Pharmaceuticals Inc.	United States	Composition and method for treating colon cancer with cannabinoids	63/009,071	13/4/2020	 

 

 

 

    	 	29	 

     

    

 

Schedule B

Trademarks

 

	

Grantor	

Country	

Trademark	
         

        Application or

 Registration
        No.
	
         

        Application or Registration
        Date

         
	

Assignees
	
         

        Cannabics Pharmaceuticals
        Inc.

         
	United States	WORD	4867078	10/20/2013	 

 

 

 

    	 	30	 

     

    

 

Schedule C

 

Copyrights

 

None.

 

 

 

 

 

 

 

 

 

    	 	31	 

     

    

 

SCHEDULE I

Legal Names; Organizational Identification
Numbers;

States or Jurisdiction of Organization

 

	Grantor’s Name	State of Organization	Federal

Employer I.D.	Organizational I.D.
	 	 	 	 
	Cannabics Pharmaceuticals Inc.	Nevada	20-3373669	C24227-2004
	Grin Ultra Ltd.	Israel	N/A	515125557

 

 

 

 

 

    	 	32	 

     

    

 

SCHEDULE II

Patents

 

	Grantor	Country	Title	Application
    or Patent No.	Application
                                         or Registration Date
	Assignees
	Cannabics Pharmaceuticals Inc.	United States	System and method for high throughput screening of cancer cells	PCT/IL2016/050471	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	China	System and method for high throughput screening of cancer cells	201680030825.5	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Japan	System and method for high throughput screening of cancer cells	TBD	TBD	 
	Cannabics Pharmaceuticals Inc.	Japan	System and method for high throughput screening of cancer cells	2019-0031693	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Canada	System and method for high throughput screening of cancer cells	2983557	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	India	System and method for high throughput screening of cancer cells	201717032756	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	United States	System and method for high throughput screening of cancer cells	15/559,052	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Israel	System and method for high throughput screening of cancer cells	254571	
        4/5/2016 (Application Date)

         

        4/30/2018 (Registration Date)
	 
	Cannabics Pharmaceuticals Inc.	Australia	System and method for high throughput screening of cancer cells	2016268526	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Europe	System and method for high throughput screening of cancer cells	16799471.4	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Brazil	System and method for high throughput screening of cancer cells	BR 11 2017 021767 8	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Mexico	System and method for high throughput screening of cancer cells	MX/a/2017/013035	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	South Africa	System and method for high throughput screening of cancer cells	2017/06960	
        4/5/2016 (application Date)

         

        9/26/2018 (Registration Date)
	 
	Cannabics Pharmaceuticals Inc.	Hong Kong	System and method for high throughput screening of cancer cells	18112994.1	4/5/2016	 
	Cannabics Pharmaceuticals Inc.	Israel	Cannabinoid compositions, methods of manufacture and use thereof	244278	24/2/2016	 
	Cannabics Pharmaceuticals Inc.	Israel	Cannabinoid compositions, methods of manufacture and use thereof	PCT/IL2017/050231	23/2/2017	 
	Cannabics Pharmaceuticals Inc.	Canada	Cannabinoid compositions, methods of manufacture and use thereof	3054392	23/2/2017	 
	Cannabics Pharmaceuticals Inc.	United States	Cannabinoid compositions, methods of manufacture and use thereof	16/872,526	23/2/2017	 

 

 

 

    	 	33	 

     

    

 

 

	Grantor	Country	Title	Application
    or Patent No.	
        Application or Registration
        Date
	Assignees
	Cannabics Pharmaceuticals Inc.	Israel	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	PCT/IL2018/050004	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	Israel	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	62553929	4/9/2017	 
	Cannabics Pharmaceuticals Inc.	United States	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	16/644,393	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	Canada	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	3074819	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	Israel	Method for sensitivity testing of cannabinoids on patient-derived tumor biopsies and ctcs	273060	2/1/2018	 
	Cannabics Pharmaceuticals Inc.	United States	Novel system and method for microbiome profiling and modulation by means of cannabis administration	16/182,726	7/11/2018	 
	Cannabics Pharmaceuticals Inc.	United States	Composition and method for treating colon cancer with cannabinoids	63/009,071	13/4/2020	 

 

 

 

    	 	34	 

     

    

 

Trademarks

 

	Grantor	Country	Trademark	Trademark No.	Filing Date	Publication Date	Registration Date	Assignees
	Cannabics Pharmaceuticals Inc.	United States	WORD	4867078	10/20/2013	03/15/2016	05/31/2016	None.

Copyrights

 

None. 

 

Licenses – None.

 

	Licensor	Licensee	 	Type	Scope	Term
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

    	 	35	 

     

    

 

SCHEDULE III

 

Locations

	
         

        Grantor
	
         

        Chief Executive
        Office
	
         

        Chief Place of Business

        
	
         

        Books and Records
	
         

        Inventory,
Equipment, Etc.

	
        Cannabics Pharmaceuticals
        Inc.

         
	
        11 Habarzel St

        Tel Aviv, Israel

        6971017
	
        11 Habarzel St

        Tel Aviv, Israel

        6971017
	
        11 Habarzel St

        Tel Aviv, Israel

        6971017
	
        Laboratory

        #12 Eli Horovitz St

        Rehovot, Israel 76103

	Grin Ultra Ltd.	
        11 Habarzel St

        Tel Aviv, Israel

        6971017
	
        11 Habarzel St

        Tel Aviv, Israel

        6971017
	
        11 Habarzel St

        Tel Aviv, Israel

        6971017
	
        Laboratory

        #12 Eli Horovitz St

        Rehovot, Israel 76103

 

 

 

 

 

    	 	36	 

     

    

 

SCHEDULE IV

 

Promissory Notes, Securities, Deposit
Accounts,

Securities Accounts and Commodities Accounts

 

Securities

 

	Grantor	
        Name of Issuer /

        Pledged Entity
	Description	Class	Certificate

No.(s)
	Cannabics Pharmaceuticals Inc.	Grin Ultra Ltd.	Equity	Common Stock	N/A
	Cannabics Pharmaceuticals Inc.	Digestix Bioscience Inc.	Equity	Common Stock	N/A
	Cannabics Pharmaceuticals Inc.	Wize Pharma, Inc.	Equity	Common Stock	N/A
	Cannabics Pharmaceuticals Inc.	Seedo Corp.	Equity	Common Stock	N/A

 

 

Deposit Accounts, Securities Accounts and Commodities Accounts

 

	Grantor	Name and Address of Institution	Account No.
	Grin Ultra Ltd.	Bank Hapoalim	1114141
	 	
        10 Abba Even St

        Tel Aviv, Israel
	 
	 	 	 

 

 

Foreign Currency Controlled Accounts - NONE

 

	Grantor	Name and Address of Institution	Account No.
	 	 	 
	 	 	 
	 	 	 

 

 

 

 

 

 

    	 	37	 

     

    

 

 

SCHEDULE V

 

Financing Statements

 

	Grantor	Jurisdiction for Filing Financing Statement
	Cannabics Pharmaceuticals Inc.	Nevada
	Grin Ultra Ltd.	Israel and Washington D.C.

 

 

 

    	 	38	 

     

    

 

SCHEDULE VI

 

Commercial Tort Claims

NONE.

 

 

 

    	 	39	 

     

    

 

 

SCHEDULE VII

 

Permitted Liens

NO LIENS TO DATE.

 

 

 

 

 

 

 

    	 	40Exhibit 10.6

 

GUARANTY

 

This GUARANTY, dated
as of December __, 2020 (this “Guaranty”), is made by each of the undersigned (each a “Guarantor”,
and collectively, the “Guarantors”), in favor
of 3i, LP in its capacity as collateral agent (in such capacity, the “Collateral Agent” as hereinafter further
defined) for the “Buyers” party to the Securities Purchase Agreement (each as defined below).

 

W
I T N E S S E T H :

 

WHEREAS, Cannabics Pharmaceuticals
Inc., a Nevada corporation (the “Company”),
and each party listed as a “Buyer” on the Schedule of Buyers attached to the Securities Purchase Agreement (each a
“Buyer” and collectively, the “Buyers”) are parties to the Securities Purchase Agreement,
pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes”
and “Warrants” issued pursuant thereto (as such Notes or Warrants may be amended, modified, supplemented, extended,
renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”
or “Warrants”, respectively);

 

WHEREAS, the Securities
Purchase Agreement requires that the Guarantors execute and deliver to the Collateral Agent, (i) a guaranty guaranteeing all of
the obligations of the Company under the Securities Purchase Agreement, the Notes and the other Transaction Documents (as defined
below); and (ii) a Security and Pledge Agreement, dated as of December __, 2020, granting the Collateral Agent a lien on and security
interest in all of their assets and properties (the “Security
Agreement”); and

 

WHEREAS, each Guarantor
has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of,
such Guarantor.

 

NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement,
each Guarantor hereby agrees with each Buyer as follows:

 

Section
1.     Definitions.
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used
in this Guaranty and the recitals hereto which are defined in the Securities Purchase Agreement or the Notes, and which are not
otherwise defined herein shall have the same meanings herein as set forth therein. In addition, the following terms when used in
the Guaranty shall have the meanings set forth below:

 

“Bankruptcy
Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable
bankruptcy, insolvency or similar laws).

 

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

 

“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.

 

“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights
or other securities exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any
Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.

 

“Collateral”
means all assets and properties of the Company and each Guarantor, wherever located and whether now or hereafter existing and
whether now owned or hereafter acquired, of every kind and description, tangible or intangible, including, without limitation,
the collateral described in Section 2 of the Security Agreement.

 

 

 

    	 	1	 

     

    

 

“Collateral
Agent” shall have the meaning set forth in the recitals hereto.

 

“Company”
shall have the meaning set forth in the recitals hereto.

 

“Governmental
Authority” means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other
political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guaranteed
Obligations” shall have the meaning set forth in Section 2 of this Guaranty.

 

“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.

 

“Indemnified
Party” shall have the meaning set forth in Section 13(a) of this Guaranty

 

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

 

“Notes”
shall have the meaning set forth in the recitals hereto.

 

“Obligations”
shall have the meaning set forth in Section 3 of the Security Agreement.

 

“Other Taxes”
shall have the meaning set forth in Section 12(a)(iv) of this Guaranty.

 

“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Guaranteed Obligations.

 

“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental Authority.

 

“Securities
Purchase Agreement” shall have the meaning set forth in the recitals hereto.

 

“Security
Agreement” shall have the meaning set forth in the recitals hereto.

 

“Subsidiary”
means any Person in which a Guarantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity
or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of
such Person, and all of the foregoing, collectively, “Subsidiaries”.

 

“Taxes”
shall have the meaning set forth in Section 12(a) of this Guaranty.

 

“Transaction
Party” means the Company and each Guarantor, collectively, “Transaction Parties”.

 

Section
2.     Guaranty.

 

(a)            
The Guarantors, jointly and severally, hereby unconditionally and irrevocably, guaranty to the Collateral Agent, for the
benefit of the Collateral Agent and the Buyers, the punctual payment, as and when due and payable, by stated maturity or otherwise,
of all Obligations, including, without limitation, all interest, make-whole and other amounts that accrue after the commencement
of any Insolvency Proceeding of the Company or any Guarantor, whether or not the payment of such interest, make-whole and/or other
amounts are enforceable or are allowable in such Insolvency Proceeding, and all fees, interest, premiums, penalties, causes of
actions, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any of the
Transaction Documents (all of the foregoing collectively being the “Guaranteed
Obligations”), and agrees to pay any and all costs and expenses (including counsel fees and expenses) incurred
by the Collateral Agent in enforcing any rights under this Guaranty or any other Transaction Document. Without limiting the generality
of the foregoing, each Guarantor’s liability hereunder shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Company to the Collateral Agent or any Buyer under the Securities Purchase Agreement and the
Notes but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving
any Transaction Party.

 

 

 

    	 	2	 

     

    

 

(b)            
Each Guarantor, and by its acceptance of this Guaranty, the Collateral Agent and each Buyer, hereby confirms that it is
the intention of all such Persons that this Guaranty and the Guaranteed Obligations of each Guarantor hereunder not constitute
a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal, provincial, state, or other applicable law to the extent applicable to this Guaranty
and the Guaranteed Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Collateral Agent, the Buyers
and the Guarantors hereby irrevocably agree that the Guaranteed Obligations of each Guarantor under this Guaranty at any time shall
be limited to the maximum amount as will result in the Guaranteed Obligations of such Guarantor under this Guaranty not constituting
a fraudulent transfer or conveyance.

 

Section
3.     Guaranty
Absolute; Continuing Guaranty; Assignments.

 

(a)            
The Guarantors, jointly and severally, guaranty that the Guaranteed Obligations will be paid strictly in accordance with
the terms of the Transaction Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Collateral Agent or any Buyer with respect thereto. The obligations of each Guarantor
under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted
against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party
or whether any Transaction Party is joined in any such action or actions. The liability of any Guarantor under this Guaranty shall
be as a primary obligor (and not merely as a surety) and shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way
relating to, any or all of the following:

 

(i)             
any lack of validity or enforceability of any Transaction Document;

 

(ii)           
any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations,
or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or extension
of the maturity of any Guaranteed Obligations or otherwise;

 

(iii)          
any taking, exchange, release or non-perfection of any Collateral;

 

(iv)          
any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations;

 

(v)            any
change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any
Transaction Party;

 

(vi)          any
manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations,
or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Transaction Party under the Transaction Documents or any other assets of any Transaction Party
or any of its Subsidiaries;

 

(vii)         any
failure of the Collateral Agent or any Buyer to disclose to any Transaction Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of any other Transaction Party now or hereafter known
to the Collateral Agent or any Buyer (each Guarantor waiving any duty on the part of the Collateral Agent or any Buyer to disclose
such information);

 

(viii)       
taking any action in furtherance of the release of any Guarantor or any other Person that is liable for the Obligations
from all or any part of any liability arising under or in connection with any Transaction Document without the prior written consent
of the Collateral Agent; or

 

(ix)           any
other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation
by the Collateral Agent or any Buyer that might otherwise constitute a defense available to, or a discharge of, any Transaction
Party or any other guarantor or surety.

 

 

 

    	 	3	 

     

    

 

(b)            
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of
the Guaranteed Obligations is rescinded or must otherwise be returned by the Collateral Agent, any Buyer, or any other Person upon
the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.

 

(c)            
This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed
Obligations (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity
Date of each Note (other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective
successors and assigns. This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent, the Buyers, and
their respective successors, and permitted pledgees, transferees and assigns. Without limiting the generality of the foregoing
sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations
under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to the Collateral Agent or such Buyer (as applicable) herein or otherwise, in
each case as provided in the Securities Purchase Agreement or such Transaction Document.

 

Section
4.     Waivers.
To the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, protest, notice of acceptance and
any other notice or formality of any kind with respect to any of the Guaranteed Obligations and this Guaranty and any requirement
that the Collateral Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral.
Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 4 is
knowingly made in contemplation of such benefits. The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge
that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future. Without
limiting the foregoing, to the extent permitted by applicable law, each Guarantor hereby unconditionally and irrevocably waives
(a) any defense arising by reason of any claim or defense based upon an election of remedies by the Collateral Agent or any
Buyer that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other
Transaction Parties, any other guarantor or any other Person or any Collateral, and (b) any defense based on any right of
set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor hereunder. Each Guarantor hereby
unconditionally and irrevocably waives any duty on the part of the Collateral Agent or any Buyer to disclose to such Guarantor
any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or
prospects of any other Transaction Party or any of its Subsidiaries now or hereafter known by the Collateral Agent or a Buyer.

 

Section
5.     Subrogation.
No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor
that arise from the existence, payment, performance or enforcement of any Guarantor’s obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate
in any claim or remedy of the Collateral Agent or any Buyer against any Transaction Party or any other guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation,
the right to take or receive from any Transaction Party or any other guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until there
has been Payment in Full of the Guaranteed Obligations. If any amount shall be paid to a Guarantor in violation of the immediately
preceding sentence at any time prior to Payment in Full of the Guaranteed Obligations and all other amounts payable under this
Guaranty, such amount shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the Collateral
Agent to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations
or other amounts payable under this Guaranty thereafter arising. If (a) any Guarantor shall make payment to the Collateral
Agent of all or any part of the Guaranteed Obligations, and (b) there has been Payment in Full of the Guaranteed Obligations, the
Collateral Agent will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

 

Section
6.     Representations,
Warranties and Covenants.

 

(a)            
Each Guarantor hereby represents and warrants as of the date first written above as follows:

 

(i)             
such Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all
requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted
and as presently contemplated and to execute, deliver and perform its obligations under this Guaranty and each other Transaction
Document to which such Guarantor is a party, and to consummate the transactions contemplated hereby and thereby and (C) is duly
qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased
by it or in which the transaction of its business makes such qualification necessary except where the failure to be so qualified
(individually or in the aggregate) would not result in a Material Adverse Effect.

 

 

 

    	 	4	 

     

    

 

(ii)           
The execution, delivery and performance by such Guarantor of this Guaranty and each other Transaction Document to which
such Guarantor is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership
action, (B) do not and will not contravene its charter, articles, certificate of formation or by-laws, its limited liability company
or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any
contractual restriction binding on such Guarantor or its properties do not and will not result in or require the creation of any
lien, security interest or encumbrance (other than pursuant to any Transaction Document) upon or with respect to any of its properties,
and (C) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
of any material permit, license, authorization or approval applicable to it or its operations or any of its properties.

 

(iii)         
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person
is required in connection with the due execution, delivery and performance by such Guarantor of this Guaranty or any of the other
Transaction Documents to which such Guarantor is a party (other than expressly provided for in any of the Transaction Documents).

 

(iv)          
This Guaranty has been duly executed and delivered by each Guarantor and is, and each of the other Transaction Documents
to which such Guarantor is or will be a party, when executed and delivered, will be, a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms, except as may be limited by the Bankruptcy Code or
other applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or similar laws and equitable
principles (regardless of whether enforcement is sought in equity or at law).

 

(v)            There is no pending or, to the best knowledge of such Guarantor, threatened action, suit or proceeding against such Guarantor
or to which any of the properties of such Guarantor is subject, before any court or other Governmental Authority or any arbitrator
that (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this
Guaranty or any of the other Transaction Documents to which such Guarantor is a party or any transaction contemplated hereby or
thereby.

 

(vi)          Such
Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction
Documents, and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial
condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from the Collateral
Agent or any Buyer, any credit or other information concerning the affairs, financial condition or business of the Company or
the other Transaction Parties.

 

(vii)        
There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.

 

(b)            
Each Guarantor covenants and agrees that until Payment in Full of the Guaranteed Obligations, it will comply with each of
the covenants (except to the extent applicable only to a public company) which are set forth in Section 4 of the Securities
Purchase Agreement as if such Guarantor were a party thereto.

 

Section
7.     Right of
Set-off. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent and any Buyer may,
and is hereby authorized to, at any time and from time to time, without notice to the Guarantors (any such notice being expressly
waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Collateral Agent or any
Buyer to or for the credit or the account of any Guarantor against any and all obligations of the Guarantors now or hereafter existing
under this Guaranty or any other Transaction Document, irrespective of whether or not the Collateral Agent or any Buyer shall have
made any demand under this Guaranty or any other Transaction Document and although such obligations may be contingent or unmatured.
The Collateral Agent and each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made
by the Collateral Agent or such Buyer, provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of the Collateral Agent or any Buyer under this Section 7
are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent
or such Buyer may have under this Guaranty or any other Transaction Document in law or otherwise.

 

 

 

    	 	5	 

     

    

 

Section
8.     Limitation
on Guaranteed Obligations.

 

(a)            
Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability hereunder shall be limited
to an amount not to exceed as of any date of determination the greater of:

 

(i)            the amount of all Guaranteed Obligations, plus interest thereon at the applicable Interest Rate as specified in the Note;
and

 

(ii)            the amount which could be claimed by the Collateral Agent from any Guarantor under this Guaranty without rendering such
claim voidable or avoidable under the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law after taking into account, among other things, Guarantor’s right of contribution
and indemnification.

 

(b)            
Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability
of such Guarantor hereunder without impairing the guaranty hereunder or affecting the rights and remedies of the Collateral Agent
or any Buyer hereunder or under applicable law.

 

(c)            
No payment made by the Company, any Guarantor, any other guarantor or any other Person or received or collected by the Collateral
Agent or any other Buyer from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of
the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations
or any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed
Obligations up to the maximum liability of such Guarantor hereunder until after all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been Paid in Full.

 

Section
9.     Notices,
Etc. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Guaranty
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business Day after deposit with an nationally recognized overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. All notices and other communications provided for
hereunder shall be sent, if to any Guarantor, to the Company’s address and/or facsimile number, or if to the Collateral Agent
or any Buyer, to it at its respective address and/or facsimile number, each as set forth in Section 9(f) of the Securities Purchase
Agreement.

 

Section
10.   Governing Law; Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Guaranty shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State
of New York. Each Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any
of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim, obligation or defense that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section
9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Buyers from bringing suit or
taking other legal action against any Guarantor in any other jurisdiction to collect on a Guarantor’s obligations or to enforce
a judgment or other court ruling in favor of the Collateral Agent or a Buyer.

 

 

 

    	 	6	 

     

    

 

Section
11.  WAIVER OF JURY TRIAL, ETC.
EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS GUARANTY, ANY OTHER
TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

Section
12.  Taxes.

 

(a)            
All payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the
terms of the respective Transaction Document and shall be made without set-off, counterclaim, withholding, deduction or other defense.
Without limiting the foregoing, all such payments shall be made free and clear of and without deduction or withholding for any
present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of the Collateral Agent or any Buyer by the jurisdiction in which the Collateral Agent or such
Buyer is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities, collectively or individually, “Taxes”).
If any Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under
any other Transaction Document:

 

(i)             
the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to the Collateral Agent or any Buyer pursuant to this sentence) the Collateral Agent or each
Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made,

 

(ii)           
such Guarantor shall make such deduction or withholding,

 

(iii)         
such Guarantor shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with
applicable law, and

 

(iv)          
as promptly as possible thereafter, such Guarantor shall send the Collateral Agent or each Buyer an official receipt (or,
if an official receipt is not available, such other documentation as shall be satisfactory to the Collateral Agent, as the case
may be) showing payment.  In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery,
registration or enforcement of, or otherwise with respect to, this Guaranty or any other Transaction Document (collectively, “Other
Taxes”).

 

(b)            
Each Guarantor hereby indemnifies and agrees to hold each Indemnified Party harmless from and against Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 12)
paid by any Indemnified Party  as a result of any payment made hereunder or from the execution, delivery, registration or
enforcement of, or otherwise with respect to, this Guaranty or any other Transaction Document, and any liability (including penalties,
interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be paid within thirty (30) days from
the date on which the Collateral Agent or such Buyer makes written demand therefor, which demand shall identify the nature and
amount of such Taxes or Other Taxes.

 

(c)            
If any Guarantor fails to perform any of its obligations under this Section 12,
such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties that may become payable
as a result of any such failure. The obligations of the Guarantors under this Section 12
shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.

 

Section
13.   Indemnification.

 

(a)            
Without limitation of any other obligations of any Guarantor or remedies of the Collateral Agent or the Buyers under this
Guaranty or applicable law, except to the extent resulting from such Indemnified Party’s gross negligence or willful misconduct,
as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal, each Guarantor shall, to the
fullest extent permitted by law, indemnify, defend and save and hold harmless the Collateral Agent and each Buyer and each of their
affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”)
from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection
with or as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of any Transaction
Party enforceable against such Transaction Party in accordance with their terms.

 

 

 

    	 	7	 

     

    

 

(b)            
Each Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect,
in contract, tort or otherwise) or any fiduciary duty or obligation to any of the Guarantors or any of their respective affiliates
or any of their respective officers, directors, employees, agents and advisors, and each Guarantor hereby agrees not to assert
any claim against any Indemnified Party on any theory of liability, for special, indirect, consequential, incidental or punitive
damages arising out of or otherwise relating to the facilities, the actual or proposed use of the proceeds of the advances, the
Transaction Documents or any of the transactions contemplated by the Transaction Documents.

 

Section
14.  Miscellaneous.

 

(a)            
Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available
funds to the Collateral Agent or each Buyer, at such address specified by the Collateral Agent or such Buyer from time to time
by notice to the Guarantors.

 

(b)            
No amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by each Guarantor, the Collateral Agent and each Buyer,
and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(c)            
No failure on the part of the Collateral Agent or any Buyer to exercise, and no delay in exercising, any right or remedy
hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder or under any Transaction Document preclude any other or further exercise thereof or the exercise of any other
right or remedy. The rights and remedies of the Collateral Agent and the Buyers provided herein and in the other Transaction Documents
are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights and remedies of
the Collateral Agent and the Buyers under any Transaction Document against any party thereto are not conditional or contingent
on any attempt by the Collateral Agent or any Buyer to exercise any of their respective rights or remedies under any other Transaction
Document against such party or against any other Person.

 

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

 

(e)            
This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed
Obligations (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity
Date of each Note (other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective
successors and assigns. This Guaranty shall inure, together with all rights and remedies of the Collateral Agent hereunder, to
the benefit of and be enforceable by the Collateral Agent, the Buyers, and their respective successors, and permitted pledgees,
transferees and assigns. Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge,
assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of the Securities
Purchase Agreement or any other Transaction Document to any other Person in accordance with the terms thereof, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted to the Collateral Agent or such Buyer (as applicable)
herein or otherwise, in each case as provided in the Securities Purchase Agreement or such Transaction Document. None of the rights
or obligations of any Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of each Buyer.

 

(f)             
This Guaranty and the other Transaction Documents reflect the entire understanding of the transaction contemplated hereby
and shall not be contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.

 

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

 

 

 

    	 	8	 

     

    

 

Section
15.  Currency Indemnity.

 

If, for the purpose of
obtaining or enforcing judgment against Guarantor in any court in any jurisdiction, it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 15 referred to as the “Judgment Currency”)
an amount due under this Guaranty in any currency (the “Obligation Currency”) other than the Judgment Currency,
the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding (a) the date of actual
payment of the amount due, in the case of any proceeding in the courts of courts of the jurisdiction that will give effect to such
conversion being made on such date, or (b) the date on which the judgment is given, in the case of any proceeding in the courts
of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 15 being hereinafter
in this Section 15 referred to as the “Judgment Conversion Date”).

 

If, in the case of any
proceeding in the court of any jurisdiction referred to in the preceding paragraph, there is a change in the rate of exchange prevailing
between the Judgment Conversion Date and the date of actual receipt of the amount due in immediately available funds, the Guarantors
shall pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually
received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount
of the Obligation Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment
or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from the Guarantors under
this Section 15 shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of this Guaranty.

 

 

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    	 	9	 

     

    

 

IN WITNESS WHEREOF, each
Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.

	
         

         
	GUARANTORS:
	 	
        GRIN ULTRA LTD.

         

         

        By: ______________________

        EYAL BARAD, DIR., CEO

 

 

 

[Signatures continue on following
page]

 

 

 

 

 

    	 	10	 

     

    

 

	
        ACCEPTED BY:

         
	 
	
        3I, LP

        as Collateral Agent

         

        By: __________________

        Name:

        Title:
	 

 

 

 

    	 	11

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