Document:

Exhibit 10.17

 

DEVELOPMENT AND MANUFACTURING SERVICES AGREEMENT

 

THIS DEVELOPMENT AND MANUFACTURING SERVICES AGREEMENT is made and entered into as of August 17, 2011 (the “Effective Date”) by and between Anterios, Inc., a Delaware corporation having an address at 142 West 57th (Suite 4A), New York, NY 10019, (“Anterios”) and QuaDPharma, a New York corporation having an address at 11342 Main St., Clarence, New York, 14031 (“Manufacturer”).

 

RECITALS:

 

WHEREAS, Anterios desires to engage Manufacturer to perform certain Development or Manufacturing Services (as those terms are defined below), on the terms and conditions set forth below, and Manufacturer desires to perform such Services for Anterios.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants of the parties set forth in this Agreement, the parties hereto agree as follows:

 

1.             Definitions. Unless this Agreement expressly provides to the contrary, the following terms, whether used in the singular or plural, have the respective meanings set forth below:

 

1.1          “Affiliate” means, with respect to a party, any person or entity which controls, is controlled by or is under common control with such party. As used in this Section, “control” means (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non-corporate entities, the direct or indirect power to manage, direct or cause the direction of the management and policies of the non-corporate entity or the power to elect at least fifty percent (50%) of the members of the governing body of such non-corporate entity.

 

1.2          “Agreement” means this Development and Manufacturing Services Agreement, together with all Appendices attached hereto, as amended from time to time by the parties in accordance with Section 15.6, and all fully signed Work Orders entered into by the parties.

 

1.3         “Anterios Indemnitee” has the meaning set forth in Section 12.1.

 

1.4          “Anterios Equipment” means the Equipment, if any, identified on the applicable Work Order as being provided by Anterios or purchased or otherwise acquired by Manufacturer at Anterios’ expense.

 

Confidential to Anterios, Inc.

 

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1.5          “Anterios Materials” means the materials, and any intermediates or derivatives thereof, identified in the applicable Work Order as being provided by Anterios including labels (if any) for Product.

 

1.6          “Anterios Technology” means (a) Anterios Materials, (b) Product and any intermediates or derivatives thereof, (c) Specifications and (d) the Technology of Anterios owned, developed or obtained by or on behalf of Anterios prior to the Effective Date, (e) the Technology developed or obtained by or on behalf of Anterios by Manufacturer under this Agreement that is not Manufacturer Technology, or (f) the Technology developed or obtained by or on behalf of Anterios independent of this Agreement and without reliance upon the Confidential Information of Manufacturer.

 

1.7          “API/Drug Substance” means the active pharmaceutical ingredient identified on the applicable Work Order or any intermediate or component of such active pharmaceutical ingredient.

 

1.8          “Applicable Law” means all applicable ordinances, rules, regulations, laws, guidelines, guidances, requirements and court orders of any kind whatsoever of any Authority, as amended from time to time, including without limitation, cGMP (if applicable).

 

1.9          “Authority” means any United States, Canada, and/or European Union government regulatory authority responsible for granting approvals for the performance of Services under this Agreement or for issuing regulations governing the Manufacture and/or Development of Product, including, without limitation, the FDA.

 

1.10        “Batch” means a specific quantity of Product that is intended to be of uniform character and quality, manufactured according to the Specifications (hereinafter defined), and is produced during the same cycle of Manufacture as defined by the applicable Batch record.

 

1.11        “Batch Documentation” has the meaning set forth in Section 6.2.

 

1.12        “Certificate of Analysis” means a document, signed by an authorized representative of Manufacturer, describing Specifications for, and testing methods applied to, Product, and the results thereof.

 

1.13        “Certificate of Compliance” means a document, signed by an authorized representative of Manufacturer, certifying that a particular Batch was Manufactured in accordance with cGMP (if applicable), all other Applicable Law, and the Specifications.

 

1.14        “cGMP” means current good manufacturing practices and regulations applicable to the Manufacture of Product that are promulgated by any Authority as may be amended or supplemented from time to time; if in the United States, then cGMP shall include, without limitation, the Current Good Manufacturing Practices set forth in 21 C.F.R. 210 and 21 C.F.R. 211 and relevant FDA guidance documents; and if in the

 

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European Union, then cGMP shall include, without limitation, the European Community Directive 91/356/EEC, Directive 2001/20/EC, Directive 2001/83/EC and all relevant implementations of such directives and relevant guidelines including the EC Guidelines, as may be amended or supplemented from time to time In the event of any conflict among Applicable Laws pertaining to the Manufacture of Product, cGMP as specified in the United States Code of Federal Regulations will be applied unless the Parties agree otherwise in writing.

 

1.15        “Change Order” has the meaning set forth in Section 5.3.

 

1.16        “Confidential Information” has the meaning set forth in Section 10.

 

1.17        “Develop” or “Development” means the studies and other activities conducted by Manufacturer under this Agreement to develop all or any part of a Manufacturing Process including, without limitation, analytical tests and methods, formulations and dosage forms.

 

1.18        “Equipment” means any equipment or machinery, including Anterios Equipment, used by Manufacturer in the Development and/or Manufacturing of Product, or the holding, processing, testing, or release of Product.

 

1.19        “Facility” means the facilities of Manufacturer identified in the applicable Work Order.

 

1.20        “FDA” means the United States Food and Drug Administration, and any successor agency having substantially the same functions.

 

1.21        “FDCA” means the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. §321 et seq., as amended from time to time.

 

1.22          “force majeure” has the meaning set forth in Section 15.2.

 

1.23        “Improvements” means all Technology and discoveries, inventions, developments, modifications, innovations, updates, enhancements, improvements, writings or rights (whether or not protectable under patent, trademark, copyright or similar laws) that are conceived, discovered, invented, developed, created, made or reduced to practice in the performance of Services under this Agreement. For the avoidance of doubt, Improvements does not include Manufacturer Technology and any Improvements to Manufacturer Technology.

 

1.24        “Investigation” shall mean a detailed and thorough review of any atypical Manufacturing outcome or out of specification (00S) test result (or any other matter requiring review pursuant to the terms of this Agreement) that is documented in a written report and approved at a senior management level of Anterios and Manufacturer. Each such written report shall include, without limitation, a detailed description of the atypical event, deviation or other matter, all steps taken to review such atypical event, deviation or

 

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other matter, a root cause analysis, identification of other lots of Product affected, if any, the proposed andlor taken corrective actions with applicable timelines and a recommendation for permanent correction.

 

1.25        “Improvements to Manufacturer Technology” means Improvements which are directed to the Manufacturer Technology, which are developed solely by Manufacturer, and which are not specific to any API/Drug Substance, Product or derivative thereof, and which do not require use of Confidential Information of Anterios.

 

1.26        “IND” means an Investigational New Drug application filed with the FDA in accordance with Applicable Law.

 

1.27        “Manufacture” and “Manufacturing” means any steps, processes and activities necessary to produce Product, including without limitation, the manufacturing, processing, packaging, labeling, quality control testing, release, storage or supply of Product.

 

1.28        “Manufacturer Indemnitee” has the meaning set forth in Section 12.2.

 

1.29        “Manufacturer Technology” means the Technology of Manufacturer (a) existing prior to the Effective Date, or (b) developed or obtained by or on behalf of Manufacturer independent of this Agreement and without reliance upon Confidential Information of Anterios.

 

1.30        “Manufacturing Process” means any and all processes (or any step in any process) used or planned to be used by Manufacturer to Manufacture Product, as evidenced in the Batch Documentation or master Batch Documentation.

 

1.31              “Product” means any drug product comprised of APUDrug Substance, and any intermediate or component of the foregoing, in each case as specified in the applicable Work Order, including, if applicable, bulk packaging and/or labeling as provided in such Work Order, manufactured and/or packaged according to the Specifications (hereinafter defined).

 

1.32        “Quality Agreement” has the meaning set forth in Section 2.2.

 

1.33        “Records” has the meaning set forth in Section 5.4(a).

 

1.34        “Representative” has the meaning set forth in Section 3.1.

 

1.35        “Reprocess” and “Reprocessing” means introducing a Product back into the process and repeating appropriate manipulation steps that are part of the established Manufacturing Process. Continuation of a process step after an in-process control test show the process to be incomplete is not considered reprocessing.

 

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1.36        “Rework” and “Reworking” means subjecting a Product to one or more processing steps that are different from the established Manufacturing Process.

 

1.37        “Services” means the Development, Manufacturing and/or other services described in a Work Order entered into by the parties.

 

1.38        “Specifications” means the list of tests, references to any analytical procedures and appropriate acceptance criteria which are numerical limits, ranges or other criteria for tests described in order to establish a set of criteria to which Product at any stage of Manufacture should conform to be considered acceptable for its intended use that are provided by or approved by Anterios, as such specifications are amended or supplemented from time to time by Anterios in writing.

 

1.39        “Technology” means all methods, techniques, trade secrets, copyrights, know-how, data, documentation, regulatory submissions, specifications and other intellectual property of any kind (whether or not protectable under patent, trademark, copyright or similar laws).

 

1.40        “Work Order” shall mean that document attached hereto at Appendix B  for a given project under which Manufacturer agrees to perform Services for such project pursuant to this Agreement. Each Work Order shall be agreed upon by the parties on a project-by-project basis as set forth in Section 2.1 and attached to and made a part of this Agreement.

 

2.            Engagement of Manufacturer.

 

2.1          Services and Work Orders. From time to time, Anterios may wish to engage Manufacturer to perform Services for Anterios. Such Services will be set forth in a Work Order. Each Work Order will be appended to this Agreement and will set forth the material terms for the project, and may include the scope of work, specified Services, Specifications, deliverables, timelines, milestones (if any), quantity, budget, payment schedule and such other details and special arrangements as are agreed to by the parties with respect to the activities to be performed under such Work Order. No Work Order will be effective unless and until it has been agreed to and signed by authorized representatives of both parties. Documents relating to the relevant project, including without limitation Specifications, timelines, Gantt charts, proposals, quotations and any other relevant documentation, will be attachments to the applicable Work Order and incorporated in the Work Order by reference. Each fully signed Work Order will be subject to the terms of this Agreement and will be incorporated herein and form part of this Agreement. Manufacturer will perform the Services specified in each fully signed Work Order, as amended by any applicable Change Order(s), and in accordance with the terms and conditions of such Work Order and this Agreement. Notwithstanding the foregoing, nothing in this Agreement will obligate either party to enter into any Work Order under this Agreement. The parties acknowledge that, although time is of the essence in this Agreement, the timing and results of the Services cannot be guaranteed

 

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and hereby agree that immaterial deviations shall not be deemed a breach of this Agreement.

 

2.2          Quality Agreement. The parties will also agree upon a Quality Agreement containing quality assurance provisions for the method transfer, analytical work, and Manufacture of Product (“Quality Agreement”), which agreement is attached as Appendix A and is applicable to all Work Orders agreed upon between the parties. It is understood that the Quality Agreement may be amended from time to time by mutual written agreement of the parties. The most current mutually agreed upon Quality Agreement will apply to activities as they are performed.

 

2.3 Service Standard. Manufacturer will provide the Services with due care and diligence, and in accordance with (i) this Agreement (including but not limited to all Work Orders entered into hereunder and the Specifications); (ii) Applicable Law (including but not limited to cGMP); (iii) the Quality Agreement; and (iv) the then-prevailing accepted industry standards.

 

2.4          Conflict Between Documents. If there is any conflict, discrepancy, or inconsistency between the terms of this Agreement and any Work Order, Quality Agreement, purchase order, or other form used by the parties, the terms of this Agreement will control.

 

3.            Project Performance.

 

3.1          Representatives. Each party will appoint a representative having primary responsibility for day-to-day interactions with the other party for the Services (each, a “Representative”), who will be identified in the applicable Work Order. Each party may change its Representative by providing written notice to the other party in accordance with Section 15.3; provided that Manufacturer will use reasonable efforts to provide Anterios with at least [*] prior written notice of any change in its Representative for the Services. Except for notices or communications required or permitted under this Agreement, which will be subject to Section 15.3, or unless otherwise mutually agreed by the parties in writing, all communications between Manufacturer and Anterios regarding the conduct of the Services pursuant to such Work Order will be addressed to or routed directly through the parties’ respective Representatives. In addition to the primary representative, Anterios’ QA representative or designee may communicate directly with Manufacturer’s QA group regarding quality issues provided however, that each Representative is copied on or present during, all communications.

 

3.2          Communications. The parties will hold project team meetings via teleconference or in person, on a weekly basis unless such time frequency is changed by mutual written agreement. Manufacturer will make written reports to Anterios as specified in the applicable Work Order. Anterios’ QA representative or designee may communicate directly with Manufacturer’s QA group regarding quality issues on an as-needed basis.

 

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3.3          Timelines.  As part of each Work Order, a project plan, including timelines for milestone initiation and completion of activities, will be provided by Manufacturer and agreed to by both parties. Manufacturer will use commercially reasonable efforts to complete tasks within the agreed upon timeline.

 

3.4          Subcontracting. Manufacturer may not subcontract with any third party to perform any of its obligations under this Agreement without the prior written consent of Anterios and such consent may be given by specification in an agreed upon Work Order. Manufacturer will be solely responsible for the performance of any permitted subcontractor, and for costs, expenses, damages, or losses of any nature arising out of such performance as if such performance had been provided by Manufacturer itself under this Agreement unless such subcontractor is designated by Anterios. Manufacturer will cause any such permitted subcontractor to be bound by, and to comply with, the terms of this Agreement, as applicable, including without limitation, all confidentiality, quality assurance, regulatory and other obligations and requirements of Manufacturer set forth in this Agreement.

 

3.5          Duty to Notify. If Manufacturer, at any time during the term of this Agreement, has reason to believe that it will be unable to perform or complete the Services, Manufacturer will promptly notify Anterios thereof. Compliance by 
 Manufacturer with this Section 3.5 will not relieve Manufacturer of any other obligation or liability under this Agreement.

 

4.            Materials and Equipment.

 

4.1          Supply of Materials. Unless the parties otherwise agree in a Work Order, Manufacturer will supply at Anterios cost and expense including any mutually agreed upon administration fees, in accordance with the relevant approved raw material specifications, all materials to be used by Manufacturer in the performance of Services under a Work Order other than the Anterios Materials specified in such Work Order. Anterios or its designees will provide Manufacturer with the Anterios Materials. Manufacturer agrees (a) to account for all Anterios Materials, (b) to provide Anterios with standard inventory reports upon reasonable request and to notify Anterios when the amount of Anterios Materials in Manufacturer’s possession reaches the minimum quantity of material as agreed upon by both Parties in the relevant Work Order, (c) not to provide Anterios Materials to any third party without the express prior written consent of Anterios, (d) not to use Anterios Materials for any purpose other than conducting the Services, including, without limitation, not to analyze, characterize, modify or reverse engineer any Anterios Materials or take any action to determine the structure or composition of any Anterios Materials unless required pursuant to a signed Work Order, and (e) to destroy or return to Anterios all unused quantities of Anterios Materials according to Anterios’ written directions. Anterios will advise Manufacturer if Anterios Materials are known or suspected to contain hazardous substances; Material Safety Data Sheets or equivalents for such materials will be provided by Anterios.

 

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4.2          Ownership of Materials. Anterios will at all times retain title to and ownership of, and, at Anterios’ option, insure against risks to, the Anterios Materials, Product, any intermediates (and components thereof), and any work in process at each and every stage of the Manufacturing Process. Manufacturer will provide within the Facility an area or areas where the Anterios Materials, Product, any intermediates (and components thereof), and any work in process are segregated and stored in accordance with the Specifications and cGMP (if applicable), and in such a way as to be able at all times to clearly distinguish such materials from products and materials belonging to Manufacturer, or held by it for a third party’s account. Manufacturer will at all times take such measures as are required to protect the Anterios Materials, Product, any intermediates (and components thereof), and any work in process from risk of loss or damage at all stages of the Manufacturing Process, provided, however, that Manufacturer shall not be required to obtain any insurance specific to Anterios Materials, Product, any intermediates (or components thereof) or any work in process. Manufacturer will ensure that Anterios Materials, Product, any intermediates (and components thereof), and any work in process are free and clear of any liens or encumbrances. Manufacturer will immediately notify Anterios if at any time it believes any Product or Anterios Materials have been damaged, lost or stolen. Notwithstanding any provision of this Agreement to the contrary, in the event that any Anterios Materials, Product and intermediates (and components thereof), and/or any work in process is destroyed, damaged or lost prior to delivery to Anterios in accordance with Section 7 of this Agreement, Manufacturer’s sole liability, if any, shall be limited to reimbursing, recompensing or indemnifying Anterios for an amount equal to the cost to Anterios of Manufacturer’s Services that were performed in connection with such destroyed, damaged or lost Anterios Materials, Product, intermediates (and components thereof) or work in process.

 

4.3          Supply of Equipment. Unless otherwise agreed in a Work Order, Manufacturer will supply all Equipment necessary to perform the Services, except that Anterios will supply the Anterios Equipment, if any. The Anterios Equipment will not be used by Manufacturer except in performance of Services under the applicable Work Order unless agreed to in writing in advance. Title to the Anterios Equipment will remain with Anterios and Anterios will maintain insurance, at its sole risk and expense, against risk of damage to or loss of the Anterios Equipment; provided however, Manufacturer shall reimburse Anterios for any damage or loss of the Anterios Equipment that results from Manufacturer’s gross negligence, willful misconduct or breach of this Agreement. Manufacturer will ensure that the Anterios Equipment is properly labeled as Anterios property and remains free and clear of any liens or encumbrances. At Anterios’ written request, the Anterios Equipment will be returned to Anterios, or to Anterios’ designee. Manufacturer will be responsible, at its own cost to a maximum of [*] United States dollars [*], for routine maintenance of the Anterios Equipment. All routine maintenance costs exceeding  [*] and all non-routine maintenance (other than that required due to Manufacturer’s gross negligence, willful misconduct or breach of this Agreement) will be at Anterios’ expense. To the extent Anterios provides spare parts for the Anterios Equipment, such spare parts will remain the property of Anterios and will be used by Manufacturer only for

 

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maintenance of the Anterios Equipment. Manufacturer will immediately notify Anterios if at any time it believes any Anterios Equipment has been damaged, lost or stolen.

 

5.             Development and Manufacture of Product.

 

5.1          Resources; Applicable Law.  Manufacturer will comply with all Applicable Law in performing Services.

 

5.2          Facility.

 

(a)           Performance of Services. Manufacturer will perform all Services at the Facility, provide all staff with the appropriate and documented levels of training necessary to perform the Services in accordance with the terms of the applicable Work Order and this Agreement, and hold at such Facility all Equipment, Anterios Equipment, Anterios Materials and other items used in the Services. Manufacturer will not change the location of such Facility or use any additional facility for the performance of Services under this Agreement without at least  [*] prior written notice to, and prior written consent from, Anterios, which consent will not be unreasonably withheld or delayed (it being understood and agreed that Anterios may withhold consent pending satisfactory completion of a quality assurance audit and/or regulatory impact assessment of the new location or additional facility, as the case may be). Except to the extent otherwise provided in this Agreement, Manufacturer will maintain, at its own expense, the Facility and all Equipment required for the Manufacture of Product in a state of repair and operating efficiency consistent with the requirements of the cGMP (if applicable) and all Applicable Law.

 

(b)           Validation. Manufacturer will be responsible for performing all validation of the Facility, Equipment and cleaning and maintenance processes employed in the Manufacturing Process in accordance with cGMP, Manufacturer’s SOPs, the applicable Quality Agreement, and Applicable Law. Manufacturer will also be responsible for ensuring that all such validated processes are carried out in accordance with cGMPs, approved batch records, and Manufacturer’s controlling SOP’s. Notwithstanding anything in this Agreement to the contrary, Anterios is responsible for establishing the standards for Manufacturing, packaging and test method validation and any and all Manufacturing, packaging and test method validation shall be at Anterios’ sole cost and expense.

 

(c)           Licenses and Permits. Manufacturer will be responsible for obtaining, at its expense, any permits, and any United States, Canada and/or European Union regulatory and government approvals with respect to the operation of its Facility and its Equipment, necessary for the performance of Services by Manufacturer under this Agreement. At Anterios’ request, Manufacturer will provide Anterios with copies of all such approvals and submissions to Authorities, and Anterios will have the right to use any and all information contained in such approvals or submissions in connection with regulatory approval and/or commercial development of Product.

 

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(d)                                 Drug Master Files. In the case of drug master files containing proprietary company information, Manufacturer will provide Anterios with the necessary information on its Facility and/or its Equipment for regulatory submissions and will grant Anterios approval to reference such information as Anterios deems necessary.

 

(e)                                  Access to Facility. Manufacturer will permit Anterios or its duly authorized representatives to observe and consult with Manufacturer during the performance of Services under this Agreement, including without limitation the Manufacturing of any Batch of Product. Manufacturer also agrees that Anterios and its duly authorized agents will have reasonable access, during operational hours and during active Manufacturing, to inspect the Facility and Manufacturing Process to ascertain compliance by Manufacturer with the terms of this Agreement, including, without limitation, inspection of (i) the Equipment and materials used in the performance of Services, (ii) the holding facilities for such materials and Equipment, and (iii) all Records relating to such Services and the Facility. Anterios will also have the right, at its expense, to conduct a reasonable number of “mock” pre-approval audits upon reasonable notice to Manufacturer, and Manufacturer agrees to cooperate with Anterios in such “mock audits.” It is understood by Anterios that all Anterios’ or its duly authorized representatives will be accompanied at all times by Manufacturer’s employees and Anterios will not have access to products or documents that are the property of any third party.

 

5.3                               Changes to Work Orders, Manufacturing Process and Specifications.

 

(a)                                 Changes to Work Orders. If the scope of work of a Work Order changes, then the applicable Work Order may be amended as provided in this Section 5.3(a). If a required modification to a Work Order is identified by Anterios, or by Manufacturer, the identifying party will notify the other party in writing as soon as reasonably possible. Manufacturer will provide Anterios with a Change Order containing a description of the required modifications and their effect on the scope, fees and timelines specified in the Work Order (“Change Order”) and will use reasonable efforts to do so within  [*] of receiving or providing such notice, as the case may be. No Change Order will be effective unless and until it has been signed by authorized representatives of both parties. If Anterios does not approve such Change Order, and has not terminated the Work Order, but requests the Work Order to be amended to take into account the modification, then the parties will use reasonable efforts to agree on a Change Order that is mutually acceptable. If practicable, Manufacturer will continue to work on the existing Work Order during any such negotiations, provided such efforts would facilitate the completion of the work envisioned in the proposed Change Order, but will not commence work in accordance with the Change Order until it is authorized in writing by Anterios.

 

(b)                                 Process/Specifications Changes. Any change or modification to the Manufacturing Process or Specifications for any Product must be approved in advance by Anterios and will be made in accordance with the change control provisions of the applicable Quality Agreement.

 

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5.4                            Record and Sample Retention.

 

(a)                                 Records. Manufacturer will keep complete and accurate records (including without limitation reports, accounts, notes, data, and records of all information and results obtained from performance of Services) of all work done by it under this Agreement, in form and substance as specified in the applicable Work Order, the applicable Quality Agreement, and this Agreement (collectively, the “Records”). All such Records will be the property of Anterios, provided, however, that Manufacturer shall be entitled to obtain copies and/or ownership, if necessary, of any Records required by Manufacturer to establish or maintain its rights to Manufacturer Technology or Improvements to Manufacturer Technology. Manufacturer will not transfer, deliver or otherwise provide any such Records to any party other than Anterios, without the prior written approval of Anterios. Records will be available at reasonable times for inspection, examination and copying by or on behalf of Anterios. All original Records of the Development and Manufacture of Product under this Agreement will be retained and archived by Manufacturer in accordance with cGMP (if applicable) and Applicable Law, but in no case for less than a period of  [*] following completion of the applicable Work Order. Upon Anterios’ request and at Anterios’ expense, Manufacturer will promptly provide Anterios with copies of such Records.  [*] after completion of a Work Order, all of the aforementioned records will be sent to Anterios or Anterios’ designee; provided, however, that Anterios may elect to have such records retained in Manufacturer’s archives for an additional period of time at a reasonable charge to Anterios.

 

(b)                                 Sample Retention. Manufacturer will take and retain under suitable storage conditions, for such period and in such quantities as may be required by cGMP (if applicable) and the applicable Quality Agreement, samples of Product from the Manufacturing Process produced under this Agreement. Further, Manufacturer will submit such samples to Anterios, upon Anterios’ written request. In any event, Manufacturer will retain samples for at least  [*] following completion of Services under a Work Order, with the exception of bioanalytical samples which will be retained for at least [*] following analysis.

 

5.5                            Regulatory Matters.

 

(a)                                 Regulatory Approvals. Anterios will be responsible for obtaining, at its expense, all regulatory and governmental approvals and permits necessary for Anterios’ use of any Product Developed and/or Manufactured under this Agreement, including, without limitation, IND submissions and any analogous submissions filed with the appropriate Authority of a country other than the United States. Manufacturer will be responsible for providing Anterios with all supporting data and information relating to the Development and/or Manufacture of Product necessary for obtaining such approvals, including, without limitation, all Records, raw data, reports, authorizations, certificates, methodologies, Batch Documentation, raw material specifications, SOPs, standard test methods, Certificates of Analysis, Certificates of Compliance and other documentation in

 

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the possession or under the control of Manufacturer relating to the Development and Manufacture of Product (or any component thereof).

 

(b)                           Regulatory Inspections. To the extent it relates in any material way to any Product, Manufacturer will permit Anterios or its agents to be present and participate in any visit or inspection by any Authority of the Facility or the Manufacturing Process. Manufacturer will give as much advance notice as possible to Anterios of any such scheduled visit or inspection and shall notify Anterios of all unscheduled visits or inspections as set forth in the Quality Agreement. Manufacturer will provide to Anterios a copy of any report or other written communication received from such Authority in connection with such visit or inspection, and any written communication received from any Authority relating to any Product, the Facility (if it relates to or affects the Development and/or Manufacture of Product) or the Manufacturing Process, within  [*] after receipt thereof, and will consult with Anterios before responding to each such communication. In such case; Anterios will make every effort to act expediently in approving draft correspondence so that Manufacture meets its deadline for response to any Authority. Manufacturer will provide Anterios with a copy of its final responses within  [*] after submission thereof.

 

5.6                               Waste Disposal.   The generation, collection, storage, handling, transportation, movement and release of hazardous materials and waste generated in connection with the Services will be the responsibility of Manufacturer at Manufacturer’s sole cost and expense. Without limiting other applicable requirements, Manufacturer will prepare, execute and maintain, as the generator of waste, all licenses, registrations, approvals, authorizations, notices, shipping documents and waste manifests required under Applicable Law.

 

5.7                               Safety Procedures.   Manufacturer will be solely responsible for implementing and maintaining health and safety procedures for the performance of Services and for the handling of any materials or hazardous waste used in or generated by the Services. Manufacturer, in consultation with Anterios, will develop safety and handling procedures for API/Drug Substance and Product; provided, however, that Anterios will have no responsibility for Manufacturer’s health and safety program. Notwithstanding anything to the contrary in this Agreement, Manufacturer may at its sole discretion, determine that an API/drug substance and/or Product cannot be safely handled and/or stored at its Facility and as a result may terminate this Agreement or a Work Order in accordance with the terms in Section 14 of this Agreement.

 

5.8                         Technology Transfer. If Anterios elects to Manufacture Product, or to have Product Manufactured by a third party, then Manufacturer will provide to Anterios, or its designee, all Manufacturing information, including, without limitation, documentation, technical assistance, materials and cooperation by appropriate employees of Manufacturer as Anterios or its designee may reasonably require in order to Manufacture Product. It is expressly understood and agreed to by Anterios that no third party, who in the sole opinion of Manufacturer operating in good faith, is considered to

 

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be a direct competitor of Manufacturer, shall be allowed to enter the Facility. The cost of routine reporting and transfer of documentation is included in charges specified in the Work Orders and no additional fees will apply and if no such fees are set forth in the applicable Work Order, Manufacturer’s then-prevailing standard fees and rates shall apply. In addition, to the extent not included as “routine”, the Manufacturer will provide Anterios one copy of all documentation of developed analytical methods and experimental data at no additional cost to Anterios. To the extent additional materials and services are requested by Anterios, Anterios will compensate Manufacturer for such assistance at the hourly-rate(s) set forth in the applicable Work Order, or such other reasonable rate(s) as the parties may agree to in writing.

 

6.                                   Testing and Acceptance Process.

 

6.1                               Testing by Manufacturer.  The Product to be Manufactured under this Agreement will be Manufactured in accordance with cGMP, unless otherwise stated in the Work Order, and the Manufacturing Process approved by Anterios. Each Batch of Product will be sampled and tested in accordance with the Specifications and the Quality Agreement.

 

6.2                               Provision of Records.   If, based upon such tests, a Batch of Product conforms to the Specifications and was Manufactured according to cGMP (if applicable) and the Manufacturing Process, then a Certificate of Compliance will be completed and approved by the quality assurance department of Manufacturer. This Certificate of Compliance, a Certificate of Analysis, the Specifications, and a complete and accurate copy of the Batch records (collectively, the “Batch Documentation”) for each Batch of Product will be delivered to Anterios by a reputable overnight courier or by registered or certified mail, postage prepaid, return receipt required to verify delivery date. Upon request, Manufacturer will also deliver to Anterios all raw data, reports, authorizations, certificates, methodologies, raw material specifications, SOPs, standard test methods, and other documentation in the possession or under the control of Manufacturer relating to the Manufacture of each Batch of Product. If Anterios has not received all such Batch Documentation at the time of receipt of the Batch, Anterios will notify Manufacturer in writing. If Anterios requires a reasonable number of additional copies of such Batch Documentation, these will be provided by Manufacturer to Anterios at cost.

 

6.3                               Review of Batch Documentation; Acceptance.   Anterios will review the Batch Documentation for each Batch of Product and may test samples of the Batch of Product against the Specifications. Anterios will notify Manufacturer in writing of its acceptance or rejection of such Batch within [*] of receipt of the complete Batch Documentation relating to such Batch. During this review period, the parties agree to respond promptly, but in any event within [*] , to any reasonable inquiry or request for a correction or change by the other party with respect to such Batch Documentation. Anterios has no obligation to accept a Batch if such Batch does not comply with the Specifications and/or was not Manufactured in compliance with cGMP (if applicable) or the Manufacturing Process.

 

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6.4                               Disputes.   In case of any disagreement between the parties as to whether Product conforms to the applicable Specifications or cGMP (if applicable), the quality assurance representatives of the parties will attempt in good faith to resolve any such disagreement and Anterios and Manufacturer will follow their respective SOPs to determine the conformity of the Product to the Specifications and cGMP (if applicable). If the foregoing discussions do not resolve the disagreement in a reasonable time (which will not exceed  [*] ), a representative sample of such Product will be submitted to an independent testing laboratory mutually agreed upon by the parties for tests and final determination of whether such Product conforms with such Specifications. The laboratory must meet cGMP (if applicable), be of recognized standing in the industry, and consent to the appointment of such laboratory will not be unreasonably withheld or delayed by either party. Such laboratory will use the test methods contained in the applicable Specifications.  Absent manifest error, the determination of conformance by such laboratory with respect to all or part of such Product will be final and binding on the parties. The fees and expenses of the laboratory incurred in making such determination will be paid by the party against whom the determination is made.

 

6.5                               Product Non-Compliance and Remedies. If a Batch of Product fails to conform to the Specifications due to the actions or omissions of Manufacturer, or was not Manufactured in compliance with cGMP (if applicable) or the Manufacturing Process, then Manufacturer will, at Anterios’ sole option:

 

(a)                                 refund in full the fees and expenses paid by Anterios for such Batch, including the costs of Anterios Materials used in the Manufacture of such Batch; or

 

(b)                                 at Manufacturer’s cost and expense, including the costs of Anterios Materials used in the Manufacture of such Batch, produce a new Batch of Product as soon as reasonably possible; or

 

(c)                                  Rework or Reprocess the Product, at Manufacturer’s cost and expense, so that the Batch can be deemed to have been Manufactured in compliance with cGMP (if applicable) and the Manufacturing Process, and to conform to Specifications.

 

Moreover, Manufacturer will promptly undertake an investigation and the parties will meet to discuss, evaluate and analyze the reasons for and implications of the failure to comply with cGMP (if applicable) and/or the Manufacturing Process and will decide whether to proceed with or to amend the applicable Work Order via a Change Order, or to terminate such Work Order.

 

6.6                               Disposition of Non-Conforming Product.  The ultimate disposition of non- conforming Product will be the responsibility of Manufacturer and at Manufacturer’s expense, provided that the non-conformance is due to the actions or omissions of Manufacturer.

 

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7.                                      Shipping and Delivery.

 

7.1                               Shipping; Delivery.   Manufacturer agrees not to ship Product to Anterios or its designee until it has received a written approval to release and ship from Anterios; provided however, Manufacturer may invoice Anterios for the applicable Product according to the terms of Section 8.3 of this Agreement whether or not such Product is stored by Manufacturer pursuant to this Section 7.1. Manufacturer agrees to store, under reasonable commercial storage conditions, Product intended for Phase I or Phase II clinical trials pursuant to the terms of the Work Order and Applicable Laws at no additional cost until the date on which Anterios requests that Manufacturer makes available for delivery such Product, or (ii) the second annual anniversary of the release; provided however, Manufacturer will not charge Anterios for any product being stored by Manufacturer for the purposes of stability testing or sample retention pursuant to a Work Order. Thereafter, if requested, Manufacturer will continue to store Product and charge Anterios the Manufacturer’s then-prevailing reasonable rates for storage. For Product intended for Phase III clinical trials or for commercial sale, Manufacturer will store such Product for [*] at no charge to Anterios and if requested, Manufacturer will continue to store Product for Anterios and charge Anterios the Manufacturer’s then-prevailing reasonable rates for storage. In instances of Manufacturer’s gross negligence, willful misconduct or breach of this Agreement, Manufacturer’s sole liability, if any, shall be limited to reimbursing, recompensing or indemnifying Anterios for an amount equal to the cost to Anterios of Manufacturer’s Services that were performed in connection with such destroyed, damaged or lost Product. In all other instances, Anterios shall bear the risk of loss for such Product while stored by Manufacturer. When notified to do so by Anterios, Manufacturer will deliver each Batch FCA (Incoterms 2000) Manufacturer’s Facility, (a) on the delivery date specified by Anterios in such notice and addressed to the destination designated by Anterios in writing, and (b) in accordance with the instructions for shipping and packaging specified by Anterios in the applicable Work Order, batch record, study protocol or as otherwise agreed to by the parties in writing. A bill of lading will be furnished to Anterios with respect to each shipment. Anterios will bear all costs of further transportation and all risk of delay, or damage in transit as well as the cost of all appropriate insurance. Anterios shall choose a suitable carrier for each shipment of Product beyond Manufacturer’s loading dock.

 

7.2                               Shipping Packaging and Shipping Conditions.   Responsibilities are defined in the Quality Agreement.

 

8.                                      Price and Payments.

 

8.1                               Price.   The price of Product and/or the fees for the performance of Services will be set forth in the applicable Work Order and will be based on the information provided by Anterios to Manufacturer at the time that Manufacture provides such price. Anterios understands and agrees that in the event that such information changes in any material manner, Manufacturer shall have the right to provide a new price (increase or decrease as the case may be) to Anterios and such new price, once agreed to in writing by Anterios, shall be incorporated into the applicable Work Order. If Anterios

 

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does not agree to any such proposed price increase, it shall be entitled to cancel the applicable Work Order.

 

8.2                               Purchase Price Adjustment

 

(a)                                 Manufacturer shall be entitled to immediately adjust the price of a Batch and/or unit price for a Product where any special, one-time increase in raw material and/or packaging component costs increases the total unit price for a Batch or Product by more than [*] percent [*]; provided however, that Manufacturer shall only be entitled to adjust the price to account for such increase in raw material and/or packaging component cost. Manufacturer shall provide sufficient documentation to support any unit price adjustment in accordance with this Section. Such one-time raw material and/or packaging component cost increases shall be excluded from the review and adjustment of unit prices set forth in Section 8.2(b), below.

 

(b)                                 During the Term of this Agreement, the unit price of each Product or Batch may be adjusted once during each calendar year (unless adjusted previously in accordance with Section 8.2(a) above) by the actual increase or decrease in the costs of raw materials, packaging components, labor, overhead, utilities or Equipment used for the Product or other appropriate economic factors agreed to by the Parties. Each party shall notify the other party in writing of any requested adjustment in the unit price for a Product and provide documentation supporting such request. Manufacturer and Anterios shall mutually agree upon such adjustment and neither party shall unreasonably withhold their consent to the price adjustment. Manufacturer shall provide sufficient documentation to support any unit price adjustment in accordance with this Section. Any adjustment in unit price shall become effective [*] following a party’s request for adjustment pursuant to this Section. If the parties are unable to agree as to the adjustment of the unit price within such [*], then the unit price of a Product or Batch may be adjusted by Manufacturer provided such adjustment does not exceed the Pharmaceutical Producers Price Index published by the United States Bureau of Labor Statistics (www.bls.gov; pcu# 325412325412) for the prior  [*] period. Notwithstanding anything to contrary herein, any adjustment made in accordance with this Section 8.2(b) shall only be based upon costs that were not previously used in adjustments made in accordance with Section 8.2(a).

 

8.3                            Invoice.

 

(a)                                 Batches: For the manufacture of all Batches (including, without limitation, training batches, placebo batches, cream batches, product batches for safety testing, and cGMP product batches), on receipt of a Work Order authorized by Anterios for a Batch,  [*] of the charge for each task to be initiated in the Work Order will be invoiced by Manufacturer at the time of each task’s initiation; the remaining charge will be invoiced on successful completion of the task covered in the Work Order. Payment of all undisputed charges will be made by Anterios within [*] of receiving an invoice from Manufacturer.

 

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(b)                                 Services other than Manufacturing:  Manufacturer will invoice Anterios on an “as-incurred basis” for all Services (including but not limited to all validation and stability testing work) other than the Manufacture of Product that are rendered pursuant to a mutually agreed-to Work Order. Payment of all undisputed charges will be made by Anterios within [*] of receiving an invoice from Manufacturer.

 

(c)                                  Volume Discounts:  Manufacturer and Anterios agree to negotiate in good faith discounts off of future work based on the aggregate dollar volume invoiced to Anterios by Manufacturer.

 

8.4                               Payments.   Anterios will make all payments pursuant to this Agreement by check or wire transfer to a bank account designated in writing by Manufacturer. All payments under this Agreement will be made in United States Dollars. Payment of undisputed invoices will be due [*] after receipt of the invoice by Anterios.

 

8.5                               Financial Records.  Manufacturer will keep accurate records of all Services performed and amounts invoiced, and, upon the request of Anterios, will permit Anterios or its duly authorized agents to examine such records during normal business hours for the purpose of verifying the correctness of all such calculations.

 

8.6                               Taxes.   Duty, sales, use, or excise taxes imposed by any governmental entity that apply to the provision of Services will be borne by Anterios (other than taxes based upon the income of Manufacturer).

 

9.                                      Intellectual Property Rights.

 

9.1                               Anterios Technology.   All rights to and interests in Anterios Technology will remain solely in Anterios and no right or interest therein is transferred or granted to Manufacturer. Manufacturer acknowledges and agrees that it does not acquire a license or any other right to Anterios Technology except for the limited purpose of carrying out its duties and obligations under this Agreement and that such limited, non-exclusive, license will expire upon the completion of such duties and obligations or the termination or expiration of this Agreement, whichever is the first to occur.

 

9.2                               Manufacturer Technology.   All rights to and interests in Manufacturer Technology will remain solely in Manufacturer and no right or interest therein is transferred or granted to Anterios. Anterios acknowledges and agrees that it will not acquire a license or any other right to Manufacturer Technology except as otherwise set forth in this Agreement.

 

9.3                               Improvements.    Manufacturer agrees that all Improvements (other than Improvements to Manufacturer Technology) will be the sole and exclusive property of Anterios and are hereby assigned to Anterios (or its designee) without additional compensation to Manufacturer. Manufacturer will take such steps as Anterios may reasonably request (at Anterios’ expense) to vest in Anterios (or its designee) ownership of the Improvements.

 

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9.4                               Non-Exclusive License.   Manufacturer hereby grants to Anterios a non-exclusive, perpetual, fully paid-up, worldwide license, with the right to sub-license, under the Manufacturer Technology used by Manufacturer hereunder, and under the Improvements to Manufacturer Technology, to Manufacture Product, or to have Product Manufactured by a third party.

 

9.5                               Patent Filings.   Anterios will have the exclusive right and option, but not the obligation, to prepare, file, prosecute, maintain and defend at its sole expense, any patents that claim and/or cover the Improvements. If Anterios declines to file and prosecute any patent applications, or maintain any patents relating to Improvements, it will give Manufacturer reasonable notice to this effect and, thereafter, Manufacturer may, upon written notice to Anterios, file and prosecute such patent applications and/or maintain such patents, in the name of Anterios and at Manufacturer’s sole expense.

 

10.                               Confidentiality.

 

10.1                        Definition. As used in this Agreement, “Confidential Information” means any scientific, technical, trade or business information which is given by one party to the other either prior to or after the Effective Date and which is treated by the disclosing party as confidential or proprietary or is developed by one party for the other under the terms of this Agreement. The disclosing party will, to the extent practical, use reasonable efforts to label or identify as confidential, at the time of disclosure all such Confidential Information that is disclosed in writing or other tangible form. Confidential Information of Manufacturer includes, but is not limited to, Manufacturer Technology, whether or not labeled confidential. Confidential Information of Anterios includes, but is not limited to, Anterios Technology and Improvements, whether or not labeled confidential.

 

10.2                        Obligations. Each party agrees (a) to keep confidential the Confidential Information of the other party, (b) not to disclose the other party’s Confidential Information to any third party without the prior written consent of such other party, and (c) to use such Confidential Information only as necessary to fulfill its obligations or in the reasonable exercise of rights granted to it under this Agreement; provided, however, that the foregoing obligations shall not apply to Confidential Information that is (i) in possession of the receiving party at the time of disclosure, as reasonably demonstrated by written records and without obligation of confidentiality, (ii) later becomes part of the public domain through no fault of the receiving party, (iii) received by the receiving party from a third party without obligation of confidentiality, or (iv) developed independently by the receiving party as evidenced in writing without use of, reference to, or reliance upon the disclosing party’s Confidential Information by individuals who did not have access to Confidential Information. Notwithstanding the foregoing, a party may disclose Confidential Information of the other party to its Affiliates, and to its and their directors, employees, consultants, and agents in each case who have a specific need to know such Confidential Information and who are bound by a like obligation of confidentiality and restriction on use, and disclose Confidential Information of the other party to the extent such disclosure is required to comply with Applicable Law or the rules of any stock

 

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exchange or listing entity, or to defend or prosecute litigation; provided, however, that the receiving party provides prior written notice of such disclosure to the disclosing party and takes reasonable and lawful actions to avoid or minimize the degree of such disclosure. Moreover, Anterios may disclose Confidential Information of Manufacturer relating to the Development and/or Manufacture of Product to entities with whom Anterios has (or may have) a marketing and/or development collaboration or to bona fide actual or prospective underwriters, investors, lenders or other financing sources or to potential acquirers of the business to which this Agreement relates, and who in each case have a specific need to know such Confidential Information and who are bound by a like obligation of confidentiality and restrictions on use.

 

10.3                        Public Statements. Except to the extent required by Applicable Law or the rules of any stock exchange or listing entity, neither party will make any public statements or releases concerning this Agreement or the transactions contemplated by this Agreement, or use the other party’s name in any form of advertising, promotion or publicity, without obtaining the prior written consent of the other party, which consent will not be unreasonably withheld or delayed.

 

11.                               Representations and Warranties.

 

11.1                      Manufacturer’s Representations and Warranties. Manufacturer represents and warrants to Anterios that:

 

(a)                                      it has the full power and right to enter into this Agreement and that there are no outstanding agreements, assignments, licenses, encumbrances or rights of any kind held by other parties, private or public, inconsistent with the provisions of this Agreement;

 

(b)                                      the Services will be performed with requisite care, skill and diligence, in accordance with Applicable Law and industry standards, and by individuals who are appropriately trained and qualified;

 

(c)                                       to the best of its knowledge, the Services will not infringe the intellectual property rights of any third party and it will promptly notify Anterios in writing should it become aware of any claims asserting such infringement;

 

(d)                                      at the time of delivery to Anterios, the Product Manufactured under this Agreement (i) will have been Manufactured in accordance with cGMP (if applicable) and all other Applicable Law, the Manufacturing Process, the applicable Quality Agreement, and Specifications, and (ii) will not be adulterated or misbranded under the FDCA or other Applicable Law; and

 

(e)                                       it has not been debarred, nor is it subject to a pending debarment, and that it will not knowingly use in any capacity in connection with the Services any person who has been debarred pursuant to section 306 of the FDCA, 21 U.S.C. § 335a, or who is the subject of a conviction described in such section. Manufacturer agrees to

 

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notify Anterios in writing immediately if Manufacturer or any person who is performing Services is debarred or is the subject of a conviction described in section 306, or if any action, suit, claim, investigation, or proceeding is pending, or to the best of Manufacturer’s knowledge, is threatened, relating to the debarment or conviction of Manufacturer or any person performing Services.

 

11.2                        Anterios Representations and Warranties.   Anterios represents and warrants to Manufacturer that:

 

(a)                                it has the full power and right to enter into this Agreement and that there are no outstanding agreements, assignments, licenses, encumbrances or rights held by other parties, private or public, inconsistent with the provisions of this Agreement, and

 

(b)                                to the best of its knowledge, the use of Anterios Technology as contemplated in the Services will not infringe the intellectual property rights of any third party and that it will promptly notify Manufacturer in writing should it become aware of any claims asserting such infringement.

 

(c)                                 The Specifications will, to the best of Anterios’ knowledge, conform to all Applicable Laws and will continue to so conform during the term of this Agreement,;

 

(d)                                All Product delivered to Anterios by Manufacturer will be held, used and/or disposed of by Anterios in material compliance with all Applicable Laws; and

 

(e)                                 Anterios will materially comply with all Applicable Laws in the performance of its obligations under this Agreement and its use of any materials or Product provided by Manufacturer under this Agreement.

 

11.3                        Disclaimer of Other Representations and Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

 

12.                               Indemnification.

 

12.1                        Indemnification by Manufacturer. Manufacturer will indemnify, defend and hold harmless Anterios, its Affiliates and their respective officers, directors, employees and agents (each a “Anterios Indemnitee”) from and against any and all losses, damages, liabilities or expenses (including reasonable attorneys fees and other costs of defense) (collectively, “Losses”) in connection with any and all actions, suits, claims or demands that may be brought or instituted against any Anterios Indemnitee by any third party based on, arising out of, or resulting from, any (a) breach by Manufacturer

 

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of its representations, warranties or covenants under this Agreement, or (b) negligent act or omission or the willful misconduct of any Manufacturer Indemnitees in performing obligations under this Agreement.

 

12.2                   Indemnification by Anterios. Anterios will indemnify, defend and hold harmless Manufacturer, its Affiliates and their respective officers, directors, employees and agents (each a “Manufacturer Indemnitee”) from and against any and all Losses in connection with any and all actions, suits, claims or demands that may be brought or instituted against any Manufacturer Indemnitee by any third party based on, or arising out of, or resulting from (a) the use of the Product, except to the extent that such Losses are within the scope of the indemnification obligation of Manufacturer under Section 12.1, (b) any breach by Anterios of its representations, warranties or covenants under this Agreement, or (c) any negligent act or omission or the willful misconduct of any Anterios Indemnitees in performing obligations under this Agreement.

 

12.3                   Procedures. Each party agrees to notify the other party within [*] of receipt of any claims made for which the other party might be liable under Section 12.1 or 12.2, as the case may be. Subject to Section 12.4, the indemnifying party will have the right to defend, negotiate, and settle such claims. The party seeking indemnification will provide the indemnifying party with such information and assistance as the indemnifying party may reasonably request, at the expense of the indemnifying party. The parties understand that no insurance deductible will be credited against losses for which a party is responsible under this Section 12.

 

12.4                   Settlement.  Neither party will be responsible or bound by any settlement of any claim or suit made without its prior written consent; provided, however, that the indemnified party will not unreasonably withhold or delay such consent. If a settlement contains an absolute waiver of liability for the indemnified party, and each party has acted in compliance with the requirements of Section 12.3, then the indemnified party’s consent will be deemed given. Notwithstanding the foregoing, Manufacturer will not agree to settle any claim on such terms or conditions as would impair Anterios’ ability or right to Manufacture, market, sell or otherwise use Product, or as would impair Manufacturer’s ability, right or obligation to perform its obligations under this Agreement.

 

12.5                   Limitation of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE; PROVIDED, HOWEVER, THAT THIS LIMITATION WILL NOT APPLY TO DAMAGES RESULTING FROM BREACHES BY A PARTY OF ITS DUTY OF CONFIDENTIALITY AND NON-USE IMPOSED UNDER SECTION 10 OR ITS INDEMNIFICATION OBLIGATIONS UNDER THIS SECTION 12.

 

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13.                               Insurance. Each party shall maintain during the term of this Agreement policies of insurance in the amounts and of the types reasonably appropriate for the conduct of their respective businesses. Each party shall, upon request, provide the other party with a certificate from an insurance carrier demonstrating that such appropriate insurance coverage is in place and setting forth the type and policy limits of such insurance policies.

 

14.                               Term and Termination.

 

14.1                        Term. This Agreement will take effect as of the Effective Date and, unless earlier terminated pursuant to this Section 14, will expire on the later of (a)  [*] from the Effective Date, or (b) the completion of Services under the last Work Order executed by the parties prior to the [*] anniversary of the Effective Date. The term of this Agreement may be extended continuously for additional [*] periods upon mutual written agreement at least [*] prior to the expiration of the then current term.

 

14.2                        Termination by Anterios.   Anterios will have the right, in its sole discretion, to terminate this Agreement and/or any Work Order (a) upon [*] prior written notice to Manufacturer, or (b) immediately upon written notice if (i) in Anterios’ reasonable judgment, Manufacturer (1) is or will be unable to perform the Services except for a force majeure pursuant to Section 14.3 (c) of this Agreement and/or Section 15.2 of this Agreement, or (2) does not perform the Services in accordance with the Quality Agreement, or (3) is unable to perform the Services in accordance with the agreed upon timeframe and/or budget set forth in the applicable Work Order.

 

14.3                        Termination by Manufacturer.   Manufacturer will have the right, in its sole discretion, to terminate this Agreement and/or any Work Order (a) upon [*] prior written notice to Anterios, or (b) immediately if Anterios (1) does not fully reimburse Manufacturer pursuant to Section 8.2 of this Agreement or (2) does not perform its obligations in accordance with the Quality Agreement, or (3) pursuant to section 5.7 of this Agreement.

 

14.4                        Termination by Either Party.   Either party will have the right to terminate this Agreement or any signed Work Orders that are pending by written notice to the other party, upon the occurrence of any of the following:

 

(a)                            the other party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment for the benefit of creditors, or becomes subject to involuntary proceedings under any bankruptcy or insolvency law (which proceedings remain undismissed for [*] );

 

(b)                            the other party fails to start and diligently pursue the cure of a material breach of this Agreement within [*] after receiving written notice from the other party of such breach; or

 

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(c)                                  a force majeure event that will, or continues to, prevent performance (in whole or substantial part) of this Agreement or any pending Work Order for a period of at least [*]. In the case of a force majeure event relating to a pending Work Order, the right to terminate will be limited to such Work Order.

 

(d)                                 Either party fails to obtain or maintain any material governmental licenses or approvals required in connection with the Services

 

(e)                                  Either party commits fraud or other crimes, or is cited by the FDA or other Authorities for violations of applicable regulations by either party or its employees, or materially violates the terms of this Agreement, including but not limited to specifically the Confidentiality and Non-Publicity provisions

 

14.5                   Effect of Termination. In addition to any other rights either party may have pursuant to this Agreement, at law or in equity upon termination of this Agreement for reasons other than a breach of this Agreement by Manufacturer, Anterios agrees that in the event that either party exercises any right to terminate this Agreement pursuant to this Section 14, that Anterios shall pay Manufacturer the price for all finished Product and Services, and in process Product and Services (it being understood that such price will reflect, on a pro-rata basis, work performed and non-cancelable out-of-pocket expenses incurred by Manufacturer with respect to the Manufacture of Product, performance of Services, and/or such in-process Product or Services) and reimburse Manufacturer for the costs of materials and components which were ordered good faith in order to comply with its obligations under this Agreement, plus a [*] administration fee. Manufacturer will, upon receipt of a termination notice from Anterios, promptly cease performance of the applicable Services and will take all reasonable steps to mitigate the out-of-pocket expenses incurred in connection therewith. In particular, Manufacturer will use reasonable commercial efforts to:

 

(a)                                 immediately cancel, to the greatest extent possible, any third party obligations;

 

(b)                                 promptly inform Anterios of any irrevocable commitments made in connection with any pending Work Order(s) prior to termination;

 

(c)                                  cooperate with Anterios to return inventory that are related to any pending Work Order where applicable and feasible, with freight and restocking fees to be at the expense of Anterios, provided that Anterios will have the option, but not the obligation, to take possession of any such materials;

 

(d)                                 promptly inform Anterios of the cost including any administration fees, of any remaining unused, unreturnable materials ordered pursuant to any pending Work Order(s), and either deliver such materials to Anterios (or its designee) or properly dispose of them, as instructed by Anterios; and

 

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(e)                                  perform only those services and activities mutually agreed upon by Anterios and Manufacturer as being necessary or advisable in connection with the closeout of any pending Work Order(s).

 

Anterios shall make payment to Manufacturer for all amounts described in this Section 14, subject to and in accordance with the terms hereof, within [*] from the date of invoice.

 

14.6                   Return of Materials/Confidential Information. Upon the expiration or termination of this Agreement, each party will promptly return all Confidential Information of the other party that it has received pursuant to this Agreement. Manufacturer will also promptly return all Anterios Materials, Anterios Equipment, retained samples, data, reports and other property, information and/or know-how in recorded form that was provided by Anterios, or developed in the performance of the Services, that are owned by or licensed to Anterios, except that each party may retain one copy of the Confidential Information in its legal files for the sole purpose of complying with or evidencing its obligations under this Agreement.

 

14.7                   Payment Reconciliation. Within [*] after the close-out of a Work Order, Manufacturer will provide to Anterios a written itemized statement of all work performed by it in connection with the terminated Work Order, an itemized breakdown of the costs associated with that work, and a final invoice for that Work Order.

 

In the event that Anterios elects to cancel a Task once it has commenced for reasons other than those listed in Section 14.2(b) related to that or another Task, and, in the event that such cancellation occurs prior to the point where the costs incurred and payment for services rendered is less than [*] of the entire cost of such cancelled Task, Manufacturer may elect to charge Anterios for an amount up to [*] of the entire cost of such Task which amount shall include payment for costs incurred and services rendered.

 

14.8                   Survival. Expiration or termination of this Agreement for any reason will not relieve either party of any obligation accruing prior to such expiration or termination. Further, the provisions of Sections 1, 2.3, 4, 5.2(c), 5.2(d), 5.4, 5.5, 5.6, 5.7, 5.8, 6, 9 through 13, 14.4, 14.5, 14.6, 14.7, 14.8 and 15, and the provisions of the applicable Quality Agreement will survive any termination or expiration of this Agreement.

 

15.                          Miscellaneous.

 

15.1                        Independent Contractor. All Services will be rendered by Manufacturer as an independent contractor and this Agreement does not create an employer-employee relationship between Anterios and Manufacturer. Manufacturer will not in any way represent itself to be a partner or joint venturer of or with Anterios.

 

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15.2                        Force Majeure.  Except as otherwise expressly set forth in this Agreement, neither party will have breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected party, including, without limitation, fire, floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), insurrections, riots, civil commotion, strikes, acts of God, or acts, omissions, or delays in acting, by any governmental authority, and the unavailability of materials due to shortages not resulting from an action or omission of Manufacturer (“force majeure”). The party affected by any event of force majeure will promptly notify the other party, explaining the nature, details and expected duration thereof. Such party will also notify the other party from time to time as to when the affected party reasonably expects to resume performance in whole or in part of its obligations under this Agreement, and to notify the other party of the cessation of any such event. A party affected by an event of force majeure will use its reasonable efforts to remedy, remove, or mitigate such event and the effects thereof with all reasonable dispatch. If a party anticipates that an event of force majeure may occur, such party will notify the other party of the nature, details and expected duration thereof. Upon termination of the event of force majeure, the performance of any suspended obligation or duty will promptly recommence.

 

15.3                        Notices. All notices must be written and sent to the address or facsimile number identified below or in a subsequent notice. All notices must be given (a) by personal delivery, with receipt acknowledged, (b) by facsimile followed by hard copy delivered by the methods under (c) or (d), (c) by prepaid certified or registered mail, return receipt requested, or (d) by prepaid recognized next business day delivery service. Notices will be effective upon receipt or at a later date stated in the notice.

 

If to Manufacturer, to:

 

QuaDPharma

11342 Main St.

Clarence, NY, 14031

Attn: CEO

(P:) 716-418-7273

 

If to Anterios, to:

 

Anterios, Inc.

142 West 57th St (Suite 4A)

New York, NY 10019

Attn: President and CEO

Phone: 212.303.1683

Fax: 212.752.3633

 

25

 

15.4                   Assignment. This Agreement may not be assigned or otherwise transferred by either party without the prior written consent of the other party; provided, however, that Anterios may, without such consent, but with notice to the Manufacturer, assign this Agreement, in whole or in part, (a) in connection with the transfer or sale of all or substantially all of its assets or the line of business or Product to which this Agreement relates, (b) to a successor entity or acquirer in the event of a merger, consolidation or change of control, or (c) to any Affiliate. Any purported assignment in violation of the preceding sentence will be void. Any permitted assignee will assume the rights and obligations of its assignor under this Agreement.

 

15.5                   Entire Agreement. This Agreement, including the attached Appendices and any fully-signed Work Orders, each of which are incorporated herein, constitute the entire agreement between the parties with respect to the specific subject matter hereof and all prior agreements with respect thereto are superseded including, but not limited to the Confidential Disclosure Agreement between the parties dated January 8, 2010, with respect thereto are superseded. Each party hereto confirms that it is not relying on any representations or warranties of the other party except as specifically set forth herein.

 

15.6                   No Modification. This Agreement and and/or any Work Order or Quality Agreement may be changed only by a writing signed by authorized representatives of both parties.

 

15.7                   Severability; Reformation.  Each provision in this Agreement is

 

independent and severable from the others, and no restriction will be rendered unenforceable because any other provision may be invalid or unenforceable in whole or in part. If the scope of any restrictive provision in this Agreement is too broad to permit enforcement to its full extent, then such restriction will be reformed to the maximum extent permitted by law.

 

15.8                   Governing Law. This Agreement will be construed and interpreted and its performance governed by the laws of the State of New York, U.S.A., without regard to any choice of law principle that would dictate the application of the law of another jurisdiction. The application of the 1980 United Nations Convention on Contracts for the International Sale of Goods is hereby specifically excluded.

 

15.9                   Waiver. No waiver of any term, provision or condition of this Agreement in any one or more instances will be deemed to be or construed as a further or continuing waiver of any other term, provision or condition of this Agreement. Any such waiver, extension or amendment will be evidenced by an instrument in writing executed by an officer authorized to execute waivers, extensions or amendments.

 

15.10            Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

 

26

 

15.11            Headings.  This Agreement contains headings only for convenience and the headings do not constitute or form a part of this Agreement, and should not be used in the construction of this Agreement.

 

15.12            No Benefit to Third Parties.  The representations, warranties, covenants and agreements set forth in this Agreement are for the sole benefit of the parties hereto and their successors and permitted assigns, and they will not be construed as conferring any rights on any other persons.

 

[Signature page follows]

 

27

 

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

 

	
ANTERIOS, INC.
    	
 
    	
       QuaDPharma
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Jon Edelson
    	
 
    	
By:
    	
/s/ Stephen A. Panaro
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Print
    	
 
    	
 
    	
Print
    	
 
    
	
Name:
    	
Jon Edelson, MD
    	
 
    	
Name:
    	
Stephen A. Panaro, Ph.D.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO and President
    	
 
    	
Title:
    	
President and CEO
    
	
 
    	
duly authorized
    	
 
    	
 
    	
duly authorized
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
08/22/2011
    	
 
    	
Date:
    	
08/17/2011
    

 

28CareView Communications, Inc. 10-K

Exhibit 10.140

 

 

AMENDED
AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

THIS
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the “Security
Agreement”) is entered into as of February 17, 2015 by and among CareView Communications, Inc., a Nevada corporation
(“CareView NV”), CareView Communications, Inc., a Texas corporation (“CareView TX”), CareView
Operations, LLC, a Texas limited liability company (“CareView LLC” and together with CareView NV and CareView
TX, collectively referred to herein as the “Grantor”), and HealthCor Partners Fund, L.P., a Delaware limited
partnership (“HealthCor Partners”), HealthCor Hybrid Offshore Master Fund L.P., a Cayman Islands limited partnership
(“HealthCor Offshore”) and the other parties listed on the signature pages hereto (collectively with HealthCor
Partners and HealthCor Offshore, the “Secured Parties”).

RECITALS

WHEREAS,
CareView NV, HealthCor Partners and HealthCor Offshore entered into that certain Note and Warrant Purchase Agreement dated as
of April 21, 2011 (as amended prior to the date hereof, the “Original Purchase Agreement”);

WHEREAS,
in connection with the purchase of Notes under the Original Purchase Agreement, the Grantor entered into that certain Pledge and
Security Agreement dated as of April 21, 2011 in favor of HealthCor Partners and HealthCor Offshore, as secured parties (the “Original
Security Agreement”);

WHEREAS,
as of the date hereof, certain of the Secured Parties are purchasing additional Notes in the aggregate amount pursuant to that
certain Fifth Amendment to Note and Warrant Agreement, which amends that certain Note and Warrant Purchase Agreement dated as
of April 21, 2011 (as amended, restated or otherwise modified from time to time, the “Purchase Agreement”)
by and among CareView NV and the Investors party thereto;

WHEREAS,
CareView NV is entering into this Security Agreement in order to induce the applicable Secured Parties to enter into, and to advance
the Purchase Price to CareView NV under, the Purchase Agreement and to secure all of the obligations of CareView NV to the Secured
Parties under the Purchase Agreement and the other Transaction Documents (the “Obligations”);

WHEREAS,
CareView TX and CareView LLC are entering into this Security Agreement as a result of the substantial direct and indirect financial
benefit they will derive from the Secured Parties’ purchase of the Notes from CareView NV and because the Secured Parties
have required them to be parties hereto as a condition precedent to the consummation of the transactions contemplated in the Purchase
Agreement; and

WHEREAS,
the Secured Parties desire to appoint HealthCor Partners as collateral agent hereunder (“Agent”).

NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and covenants set forth herein, the Grantor and the
Secured Parties hereby agree as follows:

ARTICLE
I

DEFINITIONS

1.1.           
Terms Defined in Purchase Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Purchase Agreement.

    	1

    	 

    

1.2.           
Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are used herein
as defined in the UCC.

1.3.           
Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the Preliminary
Statement, the following terms shall have the following meanings:

“Accounts”
shall have the meaning set forth in Article 9 of the UCC.

“Agent”
has the meaning set forth in the recitals hereto.

“Article”
means a numbered article of this Security Agreement, unless another document is specifically referenced.

“Charges”
means all federal, state, county, city, municipal, local, foreign or other governmental taxes, levies, assessments, charges or
claims, in each case then due and payable, upon or relating to (a) any property of the Grantor, (b) the Notes, (c) the
Grantor’s employees, payroll, income or gross receipts, (d) the Grantor’s ownership or use of any of its property,
or (e) any other aspect of the Grantor’s business.

“Chattel
Paper” shall have the meaning set forth in Article 9 of the UCC.

“Collateral”
shall have the meaning set forth in Article II.

“Commercial
Tort Claims” means “commercial tort claims” as set forth in Article 9 of the UCC and shall include, without
limitation, any existing commercial tort claims of the Grantor set forth in Exhibit C-2 attached hereto.

“Contracts”
means, collectively, all of the Grantor’s rights and remedies under, and all moneys and claims for money due or to become
due to the Grantor under all contracts and other agreements between the Grantor and any party (other than the Secured Parties)
and all amendments, supplements, extensions, and renewals thereof, including all rights and claims of the Grantor now or hereafter
existing: (a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with
any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with any of
the foregoing agreements; (c) to all other amounts from time to time paid or payable under or in connection with any of the foregoing
agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges under or in connection with any
of the foregoing agreements.

“Control”
shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Control
Agreement” means an agreement, in form and substance satisfactory to the Secured Parties, among (i) the Grantor, (ii)
a banking institution, securities broker or securities intermediary at which the Grantor maintains a Deposit Account or a securities
account, and (iii) the Secured Parties, providing for the Secured Parties to have Control over the funds or securities and other
financial assets held in such Deposit Account or securities account.

“Copyrights”
means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights,
rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all
renewals of any of the foregoing; (c) all income,
royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

    	2

    	 

    

“Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

“Deposit
Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Documents”
shall have the meaning set forth in Article 9 of the UCC.

“Equipment”
shall have the meaning set forth in Article 9 of the UCC.

“Event
of Default” shall have the meaning set forth in Section 5.1.

“Exhibit”
refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.

“Fixtures”
shall have the meaning set forth in Article 9 of the UCC.

“General
Intangibles” shall have the meaning set forth in Article 9 of the UCC.

“Goods”
shall have the meaning set forth in Article 9 of the UCC.

“Instruments”
shall have the meaning set forth in Article 9 of the UCC.

“Inventory”
shall have the meaning set forth in Article 9 of the UCC.

“Investment
Property” shall have the meaning set forth in Article 9 of the UCC.

“Letter-of-Credit
Rights” shall have the meaning set forth in Article 9 of the UCC.

“Licenses”
means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements
or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments
now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and
future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“Patents”
means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and
patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations,
renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter
due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements
thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of
the foregoing throughout the world.

    	3

    	 

    

“Permitted
Encumbrances” means (a) Liens in favor and for the benefit of the Secured Parties; (b) non-exclusive licenses
of the Grantor’s intellectual property granted to hospitals in the ordinary course of the Grantor’s business pursuant
to the Grantor’s hospital contracts; (c) non-exclusive licenses of the Grantor’s intellectual property granted to
subsidiaries of the Grantor in connection with existing joint venture transactions and future joint venture transactions entered
into by the Grantor to the extent involving new hospitals, new businesses or international
markets; (d) Liens in favor and for the benefit of joint venture partners arising from joint venture transactions entered into
by the Grantor to the extent involving new hospitals, new businesses or international markets; (e) Liens for Charges not delinquent
or being contested in good faith and by appropriate proceedings and with respect to which proper reserves have been established
by the Grantor on its financial statements in accordance with GAAP; (f) deposits or pledges to secure obligations under workers’
compensation, social security or similar laws, or with respect to unemployment insurance; (g) bonded and statutory Liens
of landlords, mechanics, workers, materialmens or other like Liens arising in the ordinary course of the business with respect
to obligations which are not delinquent; (h) Liens placed upon tangible assets hereafter acquired to secure payment of the
purchase price thereof, provided that any such Lien shall not encumber any other property of the Grantor; and (i) zoning
restrictions and easements, licenses, covenants and other restrictions that do not individually, or in the aggregate, materially
and adversely affect the use of the Grantor’s owned, leased or licensed real property for its intended purpose in connection
with the business.

“Pledged
Collateral” means all Instruments, Securities and other Investment Property of the Grantor, whether or not physically
delivered to the Secured Parties pursuant to this Security Agreement.

“Receivables”
means, with respect to the Grantor, all rights to payment, whether or not earned by performance, for goods or other property sold,
leased, licensed, assigned or otherwise disposed of, or services rendered, including, without limitation, all such rights constituting
or evidenced by an Account, Chattel Paper, Document, Investment Property, Instrument, or any other right or claim to receive money
which is a General Intangible or which is otherwise included as Collateral.

“Required
Secured Parties” means Secured Parties holding greater than [50]% of the principal value of Notes.

“Section”
means a numbered section of this Security Agreement, unless another document is specifically referenced.

“Security”
has the meaning set forth in Article 8 of the UCC.

“Stock
Rights” means all dividends, instruments or other distributions and any other right or property which the Grantor shall
receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for, or in exchange for
any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which
the Grantor now has or hereafter acquires any right, issued by an issuer of such Equity Interest.

“Supporting
Obligations” shall have the meaning set forth in Article 9 of the UCC.

“Trademarks”
means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks
(including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration
thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or
licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable
with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof;
(e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

“UCC”
means the Uniform Commercial Code, as in effect from time to time, of the State of Delaware or of any other state the laws of
which are required as a result thereof to be applied in connection with the attachment, perfection
or priority of, or remedies with respect to, the Secured Parties’ Lien on any Collateral.

The
foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

    	4

    	 

    

ARTICLE
II

GRANT OF SECURITY INTEREST

2.1.           
Grant of Security Interest. The Grantor hereby pledges, assigns and grants to the Agent, for the ratable benefit of the
Secured Parties a security interest in all of its right, title and interest in, to and under all personal property and other tangible
and intangible assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of the Grantor (including
under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, the Grantor, and
wherever located (all of which will be collectively referred to as the “Collateral”), including, without limitation:

(i)                
all Accounts;

(ii)              
all Chattel Paper;

(iii)            
all Copyrights, Patents and Trademarks;

(iv)            
all Documents;

(v)              
all Equipment;

(vi)            
all Fixtures;

(vii)          
all General Intangibles;

(viii)        
all Goods;

(ix)            
all Instruments;

(x)              
all Inventory;

(xi)            
all Investment Property;

(xii)          
all cash or cash equivalents;

(xiii)        
all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(xiv)        
all Deposit Accounts with any bank or other financial institution;

(xv)          
all Commercial Tort Claims;

(xvi)        
all Contracts; and

(xvii)      
all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the
foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer
materials and records
related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing.

    	5

    	 

    

Any
of the foregoing to the contrary notwithstanding (a) the “Collateral” shall not include, and the security interest
granted herein shall not attach to, any asset subject to a rule of law, statute or regulation (including a permit, license or
franchise), where the grant of such security interest would invalidate or constitute a breach or violation of any such rule of
law, statute or regulation, provided that the limitation set forth in this sentence shall (i) exist only for so long as such rule
of law, statute or regulation, continues to be effective (and, upon the cessation, termination, expiration of such rule of law,
statute or regulation, or if any such rule of law, statue or regulation is no longer applicable, the security interest granted
herein shall be deemed to have automatically attached to such asset), and (ii) not apply with respect to any asset if and to the
extent that the security interest in and to such asset granted in this Security Agreement is permitted under Section 9-406, 9-407,
9-408, or 9-409 of the UCC, and (b) in the case of a Subsidiary that is a foreign entity, in no event shall the "Collateral"
include more than sixty-five percent (65%) of the equity interests in such Subsidiary.

2.2.           
Security for Obligations. This Security Agreement, including the Guarantors’ guaranty hereunder, secures, and the
Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations.

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

The
Grantor represents and warrants to the Agent and the Secured Parties that:

3.1.           
Title, Perfection and Priority. The Grantor has good and valid rights in, or the power to transfer rights in, the Collateral
and, to the extent applicable, title to the Collateral with respect to which it has purported to grant a security interest hereunder,
free and clear of all Liens, except for Permitted Encumbrances, and has full power and authority to grant to the Secured Parties
the security interest in such Collateral pursuant hereto. When financing statements have been filed in the appropriate offices
against the Grantor in the locations listed on Exhibit G, the Agent, on behalf of the Secured Parties will have a fully
perfected security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, and having
priority over all other Liens on such Collateral except in the case of (a) Permitted Encumbrances, to the extent any such Permitted
Encumbrances would have priority over the Liens in favor of the Secured Parties pursuant to any applicable law or agreement, and
(b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Agent has not
obtained or does not maintain possession of such Collateral, in which case such Lien in favor of the Agent shall not be perfected
until such possession is obtained.

3.2.           
Type and Jurisdiction of Organization, Organizational and Identification Number. The type of entity of the Grantor, its
state of organization, the organizational number issued to it by its state of organization and its federal employer identification
number are set forth on Exhibit A. 

3.3.           
Principal Location. The Grantor’s mailing address and the location of its place of business (if it has only one)
or its chief executive office (if it has more than one place of business), is disclosed in Exhibit A; the Grantor has no
other places of business except those set forth in Exhibit A.

3.4.           
Collateral Locations. All of the Grantor’s locations where Collateral is located are listed on Exhibit A.
All of said locations are owned by the Grantor except for locations (i) which are leased by the Grantor as lessee and designated
in Part VII(b) of Exhibit A and (ii) at which Inventory is held in a public
warehouse or is otherwise held by a bailee or on consignment as designated in Part VII(c) of Exhibit A.

    	6

    	 

    

3.5.           
Deposit Accounts. All of the Grantor’s Deposit Accounts are listed in Part VIII of Exhibit A.

3.6.           
Exact Names. The Grantor’s name in which it has executed this Security Agreement is the exact name as it appears
in the Grantor’s organizational documents, as amended, as filed with the Grantor’s jurisdiction of organization. Other
than as set forth on Exhibit B, the Grantor has not, during the past five years, been known by or used any other corporate
or fictitious name, or been a party to any merger or consolidation, or been a party to any acquisition.

3.7.           
Letter-of-Credit Rights and Chattel Paper. Exhibit C-1 lists all Letter-of-Credit Rights and Chattel Paper of the
Grantor having a value in excess of $25,000, individually. All action by the Grantor necessary or desirable to protect and perfect
the Secured Parties’ Lien on each item listed on Exhibit C-1 (including the delivery of all originals and the placement
of a legend on all Chattel Paper as required hereunder) has been duly taken. The Secured Parties will have a fully perfected first
priority security interest in the Collateral listed on Exhibit C-1.

3.8.           
Intellectual Property. The Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except
as set forth in Exhibit D. 

3.9.           
Filing Requirements. None of the Grantor’s Equipment is covered by any certificate of title. None of the Collateral
owned by the Grantor is of a type for which security interests or Liens may be perfected by filing under any federal statute except
for Patents, Trademarks and Copyrights held by the Grantor and described in Exhibit D. The legal description, county and
street address of each property on which any Fixtures are located is set forth in Exhibit E together with the name and
address of the record owner of each such property.

3.10.       
No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion
of the Collateral which has not lapsed or been terminated naming the Grantor as debtor has been filed or is of record in any jurisdiction
except (a) for financing statements or security agreements naming Agent and/or the Secured Parties as the secured party and (b)
to perfect Permitted Encumbrances.

3.11.       
Pledged Collateral.

(a)               
Exhibit F sets forth a complete and accurate list of the Pledged Collateral. The Grantor is the record and beneficial owner
of the Pledged Collateral listed on Exhibit F as being owned by the Grantor, free and clear of any Liens, except for the
security interest granted to the Agent for the ratable benefit of the Secured Parties hereunder and Permitted Encumbrances. The
Grantor further represents and warrants that (i) with respect to any certificates delivered to Agent representing Equity Interests,
either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise or,
if such certificates are not Securities, the Grantor has so informed the Agent so that the Agent may take steps to perfect the
security interest therein as a General Intangible, (ii) all Pledged Collateral held by a securities intermediary is covered by
a Control Agreement among the Grantor, the securities intermediary and Agent on behalf of the Secured Parties, or otherwise held
under terms, pursuant to which the Agent has Control, (iii) none of the Pledged Collateral owned by the Grantor 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, (iv) there are existing no options, warrants, calls or commitments of any character
whatsoever relating to such Pledged Collateral, and (v) no consent, approval,
authorization, or other action by, and no giving of notice or filing with, any governmental authority or any other Person is required
for the pledge by the Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and
performance of this Security Agreement by the Grantor, or for the exercise by Agent of the voting or other rights provided for
in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except
as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.

    	7

    	 

    

(b)              
Except as set forth in Exhibit F, the Grantor owns 100% of the issued and outstanding Equity Interests which constitute
Pledged Collateral owned by it and none of the Pledged Collateral which represents indebtedness owed to the Grantor is subordinated
in right of payment to other indebtedness or subject to the terms of an indenture.

ARTICLE
IV

COVENANTS

From
the date of this Security Agreement, and thereafter until this Security Agreement is terminated, the Grantor agrees that:

4.1.           
General.

(a)               
Collateral Records. The Grantor will maintain complete and accurate books and records with respect to the Collateral owned
by it, and will furnish Agent with updates with respect to Exhibits A, B, C-1, C-2, D, E, F and G hereto in accordance
with Section 4.1(c) and such other such reports relating to such Collateral as Agent shall from time to time request.

(b)              
Authorization to File Financing Statements; Ratification. The Grantor hereby authorizes Agent to file, and if requested
will deliver to Agent, all financing statements and other documents and to take such other actions as may from time to time be
requested by the Secured Parties in order to maintain a perfected security interest in and, if applicable, Control of, the Collateral
owned by the Grantor subject only to Permitted Encumbrances. Any financing statement filed by Agent may be filed in any filing
office in any UCC jurisdiction and may (i) indicate the Grantor’s Collateral (1) as all assets of the Grantor or words of
similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of
the UCC or such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this
Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing
office acceptance of any financing statement or amendment, including (A) whether the Grantor is an organization, the type of organization
and any organization identification number issued to the Grantor and (B) in the case of a financing statement filed as a fixture
filing, a sufficient description of real property to which the Collateral relates. The Grantor also agrees to furnish any such
information to Agent promptly upon request. The Grantor also ratifies its authorization for Agent to have filed in any UCC jurisdiction
any initial financing statements or amendments thereto if filed prior to the date hereof.

(c)               
Further Assurances. The Grantor will, if reasonably requested by Agent, furnish to Agent statements and schedules further
identifying and describing the Collateral owned by it and such other reports and information in connection with its Collateral
as the Agent may reasonably request, all in such detail as Agent may reasonably specify. The Grantor also agrees to take any and
all actions necessary to defend title to the Collateral against all persons and to defend the security interest of Agent in its
Collateral and the priority thereof against any Lien not expressly permitted hereunder, in each case as reasonably requested by
Agent. The Grantor shall also supplement the information set forth in Exhibits A, B, C-1, C-2, D, E, F and G attached
hereto within thirty (30) days after obtaining knowledge of information which would require a material correction or addition
of any such Exhibit.

    	8

    	 

    

(d)              
Disposition of Collateral. The Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for
dispositions in the ordinary course of business consistent with past practice or as permitted under the Purchase Agreement.

(e)               
Liens. The Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security
interest created by this Security Agreement and (ii) Permitted Encumbrances. 

(f)               
Other Financing Statements. The Grantor will not authorize the filing of any financing statement naming it as debtor covering
all or any portion of the Collateral owned by it, except in connection with Permitted Encumbrances. The Grantor acknowledges that
it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement
without the prior written consent of Agent, subject to the Grantor’s rights under Section 9-509(d)(2) of the UCC.

(g)               
Locations. Other than to the extent permitted by the Purchase Agreement, the Grantor will not (i) maintain any Collateral
owned by it at any location other than those locations listed on Exhibit A, (ii) otherwise change or add to such locations
without Agent’s prior written consent, which shall not be unreasonably withheld (provided that if Agent gives such consent,
the Grantor will concurrently therewith obtain a landlord waiver for each such location), or (iii) change its principal place
of business or chief executive office from the location identified on Exhibit A.

(h)              
Compliance with Terms. The Grantor will perform and comply in all material respects with all obligations in respect of
the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral.

4.2.           
Equipment. The Grantor shall not permit any Equipment to become a fixture with respect to real property or to become an
accession with respect to other personal property with respect to which real or personal property Agent does not have a Lien.
The Grantor will not, without Agent’s prior written consent, alter or remove any identifying symbol or number on any of
the Grantor’s Equipment constituting Collateral.

4.3.           
Delivery of Instruments, Securities, Chattel Paper and Documents. The Grantor will (a) deliver to Agent immediately upon
execution of this Security Agreement the originals of all Chattel Paper, Securities (to the extent certificated) and Instruments
constituting Collateral owned by it (if any then exist), (b) hold in trust for Agent upon receipt and immediately thereafter deliver
to Agent any such Chattel Paper, Securities and Instruments constituting Collateral, and (c) upon Agent’s request, deliver
to Agent (and thereafter hold in trust for Agent upon receipt and immediately deliver to Agent) any Document evidencing or constituting
Collateral.

4.4.           
Uncertificated Pledged Collateral. The Grantor will permit Agent from time to time to cause the appropriate issuers (and,
if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral
owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated
securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to
reflect the Lien of Agent granted pursuant to this Security Agreement. With respect to any Pledged Collateral owned by it, the
Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and
(b) any securities intermediary which is the holder
of any such Pledged Collateral, to cause Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing,
the Grantor will, with respect to any such Pledged Collateral held with a securities intermediary, cause such securities intermediary
to enter into a Control Agreement with Agent, in form and substance satisfactory to Agent, giving Agent Control over such Pledged
Collateral.

    	9

    	 

    

4.5.           
Pledged Collateral.

(a)               
Changes in Capital Structure of Issuers. Except as permitted under the Purchase Agreement, the Grantor will not (i) permit
or suffer any issuer of Equity Interests constituting Pledged Collateral owned by it to dissolve, merge, liquidate, retire any
of its Equity Interests or other Instruments or Securities evidencing ownership, reduce its capital, sell or encumber all or substantially
all of its assets (except for Permitted Encumbrances and sales of assets permitted pursuant to Section 4.1(d)) or merge
or consolidate with any other entity, or (ii) vote any such Pledged Collateral in favor of any of the foregoing.

(b)              
Issuance of Additional Securities. If any issuer of Equity Interests constituting Pledged Collateral issues additional
Equity Interests to the Grantor, the Grantor shall promptly notify Agent of such issuance of Equity Interests and such Equity
Interests shall promptly be deposited with and pledged to Agent in accordance with Section 4.4 and 4.5 hereof, subject, in each
case, to the limitation set forth in Section 2.1.

(c)               
Registration of Pledged Collateral. After the occurrence and during the continuance of an Event of Default, the Grantor
will permit any registrable Pledged Collateral owned by it to be registered in the name of Agent or its nominee at any time at
Agent’s option.

(d)              
Exercise of Rights in Pledged Collateral.

(i)                
Without in any way limiting the foregoing and subject to clause (ii) below, the Grantor shall have the right to exercise all voting
rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement,
the Purchase Agreement or any other Transaction Document; provided however, that no vote or other right shall be exercised
or action taken which would have the effect of impairing the rights of Agent in respect of such Pledged Collateral.

(ii)              
The Grantor will permit Agent or their nominee at any time after the occurrence and during the continuance of an Event of Default,
without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without
limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interests or Investment
Property constituting such Pledged Collateral as if they were the absolute owner thereof.

(iii)            
So long as no Event of Default shall have occurred and be continuing, the Grantor shall be entitled to collect and receive for
its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation
of the Purchase Agreement; provided however, that until actually paid, all rights to such distributions shall remain subject
to the Lien created by this Security Agreement.

    	10

    	 

    

4.6.           
Intellectual Property.

(a)               
The Grantor will use commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment
to or benefit of Agent of any material License held by the Grantor and to enforce the security interests granted hereunder.

(b)              
In no event shall the Grantor, either directly or through any agent, employee, licensee or designee, file an application for the
registration of any material Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency without giving Agent prior written notice thereof, and, upon Agent’s request,
the Grantor shall execute and deliver any and all security agreements as Agent may request to evidence Agent’s first priority
security interest on such Patent, Trademark or Copyright, and the General Intangibles of the Grantor relating thereto or represented
thereby.

(c)               
The Grantor shall take all actions necessary or reasonably requested by Agent to maintain and pursue each application, to obtain
the relevant registration and to maintain the registration of each of its material Patents, Trademarks and Copyrights registered
with, or applied to be registered with, the United Stated Patent and Trademark Office or the United States Copyright Office, as
applicable (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability
and opposition and interference and cancellation proceedings, unless the Grantor shall determine in good faith that such Patent,
Trademark or Copyright is not material to the conduct of the Grantor’s business.

(d)              
The Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is not material to the conduct
of its business or operations, promptly sue for any material infringement, misappropriation or dilution and to recover any and
all damages for such infringement, misappropriation or dilution, and shall take such other actions as Agent shall deem reasonably
appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that the Grantor institutes suit
because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted
by a third party, the Grantor shall comply with Section 4.7.

4.7.           
Commercial Tort Claims. The Grantor shall promptly, and in any event within two Business Days after the same is acquired
by it, notify Agent of any commercial tort claim (as defined in the UCC) acquired by it having a value in excess of $25,000 and,
unless Agent otherwise consents, the Grantor shall enter into an amendment to this Security Agreement, in form and substance reasonably
satisfactory to Agent, granting Agent a first priority security interest in such commercial tort claim. 

4.8.           
Letter-of-Credit Rights. If the Grantor is or becomes the beneficiary of a letter of credit having a value in excess of
$25,000, it shall promptly, and in any event within five (5) Business Days after becoming a beneficiary, notify Agent thereof
and use its commercially reasonable efforts to cause the issuer and/or confirmation bank to (i) consent to the assignment of any
Letter-of-Credit Rights to Agent and (ii) agree to direct all payments thereunder to a Deposit Account subject to a Control Agreement
for application to the Obligations, all in form and substance reasonably satisfactory to Agent.

4.9.           
Federal, State or Municipal Claims. The Grantor will, within five (5) Business Days, notify Agent of any Collateral which
constitutes a claim against the United States government or any state or local government or any instrumentality or agency thereof
(other than Accounts owing from the United States government which have been or will be identified by the Grantor) having a value
in excess of $25,000, the assignment of which claim is restricted by federal, state or municipal law.

    	11

    	 

    

4.10.       
No Interference. The Grantor agrees that it will not interfere with any right, power and remedy of Agent provided for in
this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning
of the exercise by Agent of any one or more of such rights, powers or remedies.

4.11.       
Insurance. 

(a)               
All insurance policies required hereunder and under Section 5.10 of the Purchase Agreement shall name Agent as additional insured
or as loss payee, as applicable, and shall contain loss payable clauses through endorsements in form and substance satisfactory
to Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to Agent for the ratable
benefit of the Secured Parties; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the
property described in such policy; and (iii) such policy and loss payable clauses may be canceled, amended, or terminated only
upon at least thirty (30) days prior written notice given to Agent.

(b)              
All premiums on any such insurance shall be paid when due by the Grantor, and copies of the policies delivered to Agent, upon
the request of Agent. If the Grantor fails to obtain any insurance as required by this Section, Agent may obtain such insurance
at the expense of the Grantor. 

4.12.       
Landlord Waivers. The Grantor shall obtain landlord waivers from the lessor of each location of real property leased by
the Grantor, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or converter facility
or other location where Collateral is stored or located, which landlord waivers shall be reasonably satisfactory in form and substance
to Agent. The Grantor shall timely and fully pay and perform in all material respects its obligations under all leases and other
agreements with respect to each leased location or third party warehouse where any Collateral is or may be located. 

4.13.       
Control Agreements. The Grantor will provide to Agent upon Agent’s request in accordance with the Purchase Agreement,
a Control Agreement duly executed on behalf of each financial institution, securities broker or securities intermediary where
the Grantor maintains a deposit account or securities account.

4.14.       
Change of Name or Location; Change of Fiscal Year. The Grantor shall not (a) change its name as it appears in official
filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business,
mailing address or corporate offices, or the location of its records concerning the Collateral as set forth in the Security Agreement,
(c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation
or other organization, or (e) change its state of incorporation or organization, in each case, unless Agent shall have received
at least thirty (30) days prior written notice of such change and Agent shall have acknowledged in writing that either (1) such
change will not adversely affect the validity, perfection or priority of Agent’s security interest in the Collateral, or
(2) any reasonable action requested by Agent in connection therewith has been completed or taken (including any action to continue
the perfection of any Liens in favor of Agent, in any Collateral), provided that, any new location shall be located in
the continental U.S. to the extent the prior location was located in the continental U.S. The Grantor shall not store any Collateral
at any new warehouse or new leased location unless the Grantor shall have provided Agent with at least five (5) Business Days
prior written notice. The Grantor shall not change its fiscal year which currently ends on December 31.

    	12

    	 

    

ARTICLE
V

 EVENTS
OF DEFAULT AND REMEDIES

5.1.           
Events of Default. 

The
occurrence of any “Event of Default” under, and as defined in, the Notes shall constitute an Event of Default hereunder.

5.2.           
Remedies.

(a)               
If an Event of Default has occurred and for so long as such Event of Default is continuing, Agent (upon the instruction of the
Required Secured Parties) may exercise any or all of the following rights and remedies:

(i)                
those rights and remedies provided in this Security Agreement, the Notes, or any other Transaction Document; provided that,
this Section 5.2(a) shall not be understood to limit any rights or remedies available to Agent prior to an Event of Default;

(ii)              
those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral)
or under any other applicable law when a debtor is in default under a security agreement;

(iii)            
give notice of sole control or any other instruction under any Control Agreement and take any action therein with respect to such
Collateral;

(iv)            
without notice (except as specifically provided in Section 8.2 or elsewhere herein), demand or advertisement of any kind to the
Grantor or any other Person, enter the premises of the Grantor where any Collateral is located (through self-help and without
judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase
or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private
sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at the Grantor’s
premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other
terms as Agent may deem commercially reasonable; and

(v)              
concurrently with written notice to the Grantor, transfer and register in their name or in the name of their nominee(s) the whole
or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect
thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise
act with respect to the Pledged Collateral as though Agent were the outright owners thereof.

(b)              
Agent may comply with any applicable state or federal law in connection with a disposition of the Collateral and such compliance
will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(c)               
Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale
or sales, to purchase for the benefit of Agent the whole or any part of the Collateral so sold, free of any right of equity redemption,
which equity redemption the Grantor hereby expressly releases.

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(d)              
Until Agent is able to effect a sale, lease, or other disposition of Collateral, Agent shall have the right to hold or use Collateral,
or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any
other purpose deemed appropriate by Agent. Agent may, if the Required Secured Parties so elect, seek the appointment of a receiver
or keeper to take possession of Collateral and to enforce any of Agent’s remedies with respect to such appointment without
prior notice or hearing as to such appointment.

(e)               
Notwithstanding the foregoing, Agent and the Secured Parties shall not be required to (i) make any demand upon, or pursue or exhaust
any of their rights or remedies against, the Grantor, any other obligor, guarantor, pledgor or any other Person with respect to
the payment of the Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor
or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the
Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

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

5.3.           
Grantor’s Obligations Upon an Event of Default. Upon the request of Agent after the occurrence and during the continuance
of an Event of Default, the Grantor will:

(a)               
assemble and make available to Agent the Collateral and all books and records relating thereto at any place or places specified
by Agent, whether at the Grantor’s premises or elsewhere;

(b)              
permit Agent, by its representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral,
or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the
books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto,
or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy; and

(c)               
at its own expense, cause the Grantor’s accountants to prepare and deliver to Agent’s and the Secured Parties, at
any time, and from time to time, promptly upon Agent’s or any Secured Parties’ request, the following reports with
respect to the Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a
test verification of such Accounts.

5.4.           
Grant of Intellectual Property License. For the purpose of enabling Agent to exercise the rights and remedies under this
Article V at such time as Agent shall be lawfully entitled to exercise such rights and remedies, the Grantor hereby (a)
grants to Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantor)
to use, license or sublicense any Intellectual Property Rights now owned or hereafter acquired by the Grantor, and wherever the
same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that Agent may
sell any of the Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased
the Grantor’s Inventory from the Grantor and in connection with any such sale or other enforcement of Agent’s rights
under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to the Grantor and any Inventory
that is covered by any Copyright owned by or licensed to the Grantor and Agent may finish any work in process and affix any Trademark
owned by or licensed to the Grantor and sell such Inventory as provided herein.

    	14

    	 

    

ARTICLE
VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

6.1.           
Account Verification. Agent may at any time, in its own name, in the name of its nominee(s), or in the name of the Grantor,
communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of the Grantor, parties to contracts with the
Grantor and obligors in respect of Instruments of the Grantor to verify with such Persons, to Agent’s satisfaction, the
existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or
other Receivables.

6.2.           
Authorization for Secured Parties to Take Certain Action.

(a)               
The Grantor irrevocably authorizes Agent at any time and from time to time in Agent's sole discretion, and appoints Agent as its
attorney in fact, (i) to execute on behalf of the Grantor as debtor and to file financing statements necessary or desirable in
Agent’s sole discretion to perfect and to maintain the perfection and priority of Agent’s security interest in the
Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction
of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any
other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices
as Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of Agent’s
security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated
securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable
to give Agent Control over such Pledged Collateral, (v) to discharge past due taxes, assessments, charges, fees or Liens on the
Collateral (except for (i) such Liens as are specifically permitted hereunder if the Grantor shall have failed to do so after
request by Agent, (vi) to contact Account Debtors for any reason, (vii) to demand payment or enforce payment of the Receivables
in the name of Agent or the Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money
relating to the Receivables, (viii) to sign the Grantor’s name on any invoice or bill of lading relating to the Receivables,
drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (ix) to exercise all of the Grantor’s
rights and remedies with respect to the collection of the Receivables and any other Collateral, (x) to settle, adjust, compromise,
extend or renew the Receivables, (xi) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xii)
to prepare, file and sign the Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor
of the Grantor, (xiii) to prepare, file and sign the Grantor’s name on any notice of Lien, assignment or satisfaction of
Lien or similar document in connection with the Receivables, (xiv) to change the address for delivery of mail addressed to the
Grantor to such address as Agent may designate and to receive, open and dispose of all mail addressed to the Grantor, and (xv)
to do all other acts and things necessary to carry out this Security Agreement (other than the acts and things described in clauses
(vi) through (xiv) above) to the extent not performed by the Grantor hereunder when due; and the Grantor agrees to reimburse Agent
on demand for any payment made or any expense incurred by Agent in connection with any of the foregoing; provided that,
this authorization shall not relieve the Grantor of any of its obligations under this Security Agreement or under the Purchase
Agreement.

(b)              
All acts of said attorney or designee are hereby ratified and approved. The powers conferred on Agent under this Section 6.2 are
solely to protect Agent’s and the Secured Parties’ interests in the
Collateral and shall not impose any duty upon Agent or the Secured Parties to exercise any such powers. Agent and the Secured
Parties agree that, except for the powers granted in Section 6.2(a)(i)-(v) and Section 6.2(a)(xv), they shall not exercise any
power or authority granted to them unless an Event of Default has occurred and is continuing.

    	15

    	 

    

6.3.           
Proxy. THE GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET
FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH
FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF AGENT AS
ITS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH
A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING
SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY
OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON
(INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE
OF AN EVENT OF DEFAULT.

6.4.           
Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS
COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE
WITH SECTION 8.15. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER AGENT NOR ANY OF ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE
SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE
SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED
THAT, IN NO EVENT SHALL IT BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE
VII

DEPOSIT ACCOUNTS

7.1.           
Control Agreements. Before opening or replacing any Deposit Account, the Grantor shall (a) obtain Agent’s consent
(not to be unreasonably withheld or delayed) in writing to the opening of such Deposit Account, and (b) to the extent then applicable,
cause each bank or financial institution in which it seeks to open a Deposit Account, to enter into a Control Agreement with Agent
in order to give Agent Control of such Deposit Account. 

7.2.           
Application of Proceeds. Notwithstanding anything to the contrary set forth herein, if an Event of Default shall have occurred
and be continuing, Agent shall have, in addition to all other rights and remedies provided herein and in the other Transaction
Documents, the right to direct each banking institution, securities broker or securities intermediary at which the Grantor maintains
a Deposit Account or securities account, to follow all instructions given to such banking institution, securities broker or securities
intermediary by Agent, including, without limitation, instructions regarding the liquidation of securities and the transfer of
funds held in such accounts, and the Grantor shall remain liable for any deficiency if such funds and proceeds are insufficient
to pay all Obligations, including any attorneys’ fees and other expenses incurred by Agent to collect such deficiency.

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ARTICLE
VIII

GENERAL PROVISIONS

8.1.           
Guaranty, Etc. CareView TX and CareView LLC (the “Guarantors”), in consideration of the Secured Parties
entering into the Purchase Agreement and the other Transaction Documents to which they are a party and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and for the purpose of inducing the Secured Parties
to enter into the Transaction Documents, hereby jointly and severally, irrevocably and unconditionally guarantee to Agent and
the Secured Parties (a) the full, punctual and prompt payment of all Obligations, whether at maturity or by acceleration or otherwise,
in immediately available funds; (b) the performance of all of CareView NV’s Obligations; and (c) all other obligations of
every kind and description now existing or hereafter arising, direct or indirect, absolute or contingent, secured or unsecured,
matured or unmatured, primary or secondary, of CareView NV to Agent and the Secured Parties. The Guarantors hereby acknowledge
that this guaranty is a guarantee of (i) performance by CareView NV of the Obligations; and (ii) payment and not of collection,
and that the liability of Guarantors hereunder is present, absolute, unconditional, continuing, primary, direct and independent
of the obligations of CareView NV. Agent and the Secured Parties shall not be required to pursue any other remedies before invoking
the benefits of this guaranty, including, without limitation, its remedies under the Transaction Documents. The Guarantors hereby
waive notice of the acceptance of this guaranty, presentment, demand, protest and notice of protest, nonpayment, default or dishonor
of the Obligations or any renewal or extension thereof and any and all other rights and remedies now or hereafter accorded to
guarantors by applicable law. In addition, the Guarantors hereby unconditionally and irrevocably agree that they will not at any
time exert or exercise against CareView NV, and do hereby subordinate any right of or claim to subrogation, reimbursement, indemnity,
contribution or payment for or with respect to any amounts which the Guarantors may pay or be obligated to pay to Agent and/or
the Secured Parties.

8.2.           
Waivers. The Grantor hereby waives notice of the time and place of any public sale or the time after which any private
sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under
applicable law, any notice made shall be deemed reasonable if sent to the Grantor, addressed as set forth in Article IX, at least
ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition
may be made. To the maximum extent permitted by applicable law, the Grantor waives all claims, damages, and demands against Agent
and the Secured Parties arising out of the repossession, retention or sale of the Collateral, except such as arise solely out
of the gross negligence or willful misconduct of Agent or the Secured Parties as finally determined by a court of competent jurisdiction.
To the extent it may lawfully do so, the Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage
of, and covenants not to assert against Agent or the Secured Parties, any valuation, stay, appraisal, extension, moratorium, redemption
or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision,
might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the
power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, the Grantor
hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection
with this Security Agreement or any Collateral.

    	17

    	 

    

8.3.            Limitation
on Agent’s Duty with Respect to the Collateral. Agent shall have no obligation to clean-up or otherwise prepare the
Collateral for sale. Agent shall use reasonable care with respect to the Collateral in its possession or under its control.
Agent shall have no other duty as to any Collateral in its possession or control or in the possession or control of any agent
or nominee of Agent, or any income thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on Agent to exercise remedies in a commercially
reasonable manner, the Grantor acknowledges and agrees that it is commercially reasonable for Agent (i) to fail to incur
expenses deemed significant by 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 the 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 Agent against risks of loss, collection or disposition of Collateral or
to provide to Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to
assist Agent in the collection or disposition of any of the Collateral. The Grantor acknowledges that the purpose of this
Section 8.3 is to provide non-exhaustive indications of what actions or omissions by Agent would be commercially reasonable
in Agent’s exercise of remedies against the Collateral and that other actions or omissions by Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section 8.3. Without limitation upon the
foregoing, nothing contained in this Section 8.3 shall be construed to grant any rights to the Grantor or to impose any
duties on Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of
this Section 8.3.

8.4.           
Compromises and Collection of Collateral. The Grantor and Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed
the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, the Grantor
agrees that Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with
the obligor on any Receivable, accept in full payment of any Receivable such amount as Agent in their sole discretion shall determine
or abandon any Receivable, and any such action by Agent shall be commercially reasonable so long as Agent acts in good faith based
on information known to them at the time they take any such action.

8.5.           
Agent’s Performance of Grantor Obligations. Without having any obligation to do so, Agent may perform or pay any
obligation which the Grantor has agreed to perform or pay in this Security Agreement, but has failed to perform or pay when due,
and the Grantor shall reimburse Agent for any amounts paid by Agent pursuant to this Section 8.5. The Grantor’s obligation
to reimburse Agent pursuant to the preceding sentence shall be an Obligation payable on demand.

    	18

    	 

    

8.6.            Specific
Performance of Certain Covenants. The Grantor acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1(d), Sections 4.1(e), 4.3, 4.4, 4.5, 4.11, 4.12, 4.13, 4.14, 5.3, or 8.8 or in Article VII will cause
irreparable injury to Agent and the Secured Parties and that Agent and the Secured Parties have no adequate remedy at law in
respect of such breaches and therefore agrees, without limiting the right of Agent and the Secured Parties to seek and obtain
specific performance of other obligations of the Grantor contained in this Security Agreement, that the covenants of the
Grantor contained in the Sections referred to in this Section 8.6 shall be specifically enforceable against the
Grantor.

8.7.           
Dispositions Not Authorized. The Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth
in Section 4.1(d) and notwithstanding any course of dealing between the Grantor and Agent or other conduct of Agent, no authorization
to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d)) shall be binding upon Agent unless such
authorization is in writing signed by Agent.

8.8.           
No Waiver; Amendments; Cumulative Remedies. No delay or omission of Agent to exercise any right or remedy granted under
this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein,
and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the
exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this
Security Agreement whatsoever shall be valid unless in writing signed by Agent and the Secured Parties and then only to the extent
in such writing specifically set forth. All rights and remedies contained in this Security Agreement or by law afforded shall
be cumulative and all shall be available to Agent and the Secured Parties until the Obligations have been paid in full.

8.9.           
Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may
be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions
of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and
to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled
to be recorded or registered, in whole or in part. Any provision in this Security Agreement that is held to be inoperative, unenforceable,
or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction,
and to this end the provisions of this Security Agreement are declared to be severable.

8.10.       
Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition
be filed by or against the Grantor for liquidation or reorganization, should the Grantor become insolvent or make an assignment
for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of the
Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance
of the Obligations, or any part thereof, is, pursuant to applicable Law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,”
or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof,
is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

8.11.       
Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit
of the Grantor, Agent, the Secured Parties and their respective successors and assigns (including all persons who become bound
as a debtor to this Security Agreement), except that the Grantor shall not have the right to assign its rights or delegate its
obligations under this Security Agreement or any interest herein, without the prior written consent of Agent and the Secured Parties.
No sales of participations, assignments, transfers, or other dispositions of any agreement governing
the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to Agent for the benefit
of the Secured Parties, hereunder.

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8.12.       
Survival of Representations. All representations and warranties of the Grantor contained in this Security Agreement shall
survive the execution and delivery of this Security Agreement.

8.13.       
Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect
of this Security Agreement shall be paid by the Grantor, together with interest and penalties, if any. The Grantor shall reimburse
Agent for any and all reasonable out-of-pocket expenses paid or incurred by Agent in connection with the preparation,
execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit, analysis, administration,
collection, preservation or sale of the Collateral (including the reasonable fees, charges and disbursements of counsel for Agent),
all as more fully described in, and subject to the limitations and conditions set forth in, Section 7.2 of the Purchase Agreement.
Any and all costs and expenses incurred by the Grantor in the performance of actions required pursuant to the terms hereof shall
be borne solely by the Grantor.

8.14.       
Headings. The title of and section headings in this Security Agreement are for convenience of reference only, and shall
not govern the interpretation of any of the terms and provisions of this Security Agreement.

8.15.       
Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may
be no Obligations outstanding) until (i) the Purchase Agreement has terminated pursuant to its express terms and (ii) all of the
Obligations have been indefeasibly paid and performed in full and no commitments of Agent and/or the Secured Parties which would
give rise to any Obligations are outstanding.

8.16.       
Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantor, Agent and
the Secured Parties relating to the Collateral and supersedes all prior agreements and understandings between the Grantor, Agent
and the Secured Parties relating to the Collateral.

8.17.       
CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF DELAWARE (REGARDLESS OF THE CHOICE OR CONFLICTS OF LAWS PRINCIPLES OF THAT JURISDICTION).

8.18.       
CONSENT TO JURISDICTION. THE GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL
OR STATE COURT SITTING IN THE STATE OF DELAWARE IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT
OR ANY OTHER OPERATIVE DOCUMENT AND THE GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE SECURED PARTIES TO BRING PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE GRANTOR AGAINST AGENT OR THE SECURED PARTIES OR ANY AFFILIATE OF THE SECURED PARTIES OR AGENT INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS SECURITY AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN THE STATE OF DELAWARE.

    	20

    	 

    

8.19.       
WAIVER OF JURY TRIAL. THE GRANTOR, AGENT AND THE SECURED PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

8.20.       
Indemnity. The Grantor hereby agrees to indemnify Agent and the Secured Parties, and their successors, assigns, agents
and employees (each such Person being called an “Indemnitee”), from and against any and all liabilities, damages,
penalties, suits, costs, and expenses of any kind and nature (including, without limitation, all expenses of litigation or preparation
therefor whether or not Agent or any of the Secured Parties is a party thereto) imposed on, incurred by or asserted against Agent,
the Secured Parties, or their respective successors, assigns, agents and employees, in any way relating to or arising out of this
Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether
or not discoverable by Agent or the Secured Parties or the Grantor, and any claim for Patent, Trademark or Copyright infringement);
provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, damages, penalties,
suits, costs and expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.

8.21.       
Agent. The Secured Parties hereby appoint HealthCor Partners as Agent hereunder. The Agent may be removed and replaced
upon the affirmative vote of the Required Secured Parties. Any action, approval or consent of the “Secured Parties”
required hereunder shall require the action, approval or consent of the Required Secured Parties. Each Secured Party shall indemnify
and hold harmless Agent for acting in its capacity as Agent hereunder, except in cases of Agent’s gross negligence or willful
misconduct. 

8.22.       
Restatement. This Security Agreement amends and restates in its entirety the original Security Agreement.

8.23.       
Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart.

ARTICLE
IX

NOTICES

9.1.           
Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be sent by United States
mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when
received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (b) when sent, if
sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given
at the opening of business on the next Business Day for the recipient), in each case addressed to the Grantor at the notice address
set forth on Exhibit A, and to the Secured Parties at the respective addresses set forth on the signature page hereto.

    	21

    	 

    

9.2.           
Change in Address for Notices. Each of the Grantor, Agent and the Secured Parties may change the address for service of
notice upon it by a notice in writing to the other parties.

 

    	22

    	 

    

 

IN
WITNESS WHEREOF, the Grantor and the Secured Parties have executed this Security Agreement as of the date first above written.

	 	GRANTOR:
	 	 
	Address of Grantor:	CAREVIEW COMMUNICATIONS, INC., a Nevada corporation
	 	 
	405 State Highway 121	By:_/s/ Steven Johnson_______________
	Suite B-240	Name: Steven Johnson
	Lewisville, TX 75067	Title: President & CEO
	Attn: Steven Johnson	 

 

 

		CAREVIEW COMMUNICATIONS, INC., a Texas corporation
	 	 
	405 State Highway 121	By:_/s/ Steven Johnson_______________
	Suite B-240	Name: Steven Johnson
	Lewisville, TX 75067	Title: President & CEO
	Attn: Steven Johnson	 

 

 

		CAREVIEW OPERATIONS, LLC
	 	 
	405 State Highway 121	By:_/s/ Steven Johnson_______________
	Suite B-240	Name: Steven Johnson
	Lewisville, TX 75067	Title: President & CEO
	Attn: Steven Johnson	 

 

 

	 	SECURED PARTIES:
	 	 
	Address of Secured Party:	HEALTHCOR PARTNERS FUND, L.P.
	 	 
	 	By: HealthCor Partners Management, L.P., as Manager
	 	 
	 	By: HealthCor Partners Management, G.P., LLC, as General Partner
	 	 
	HealthCor Partners	 
	Carnegie Hall Towers	By:_/s/ Jeffrey C. Lightcap_______________
	152 West 57th Street	Name: Jeffrey C. Lightcap
	New York, NY 10019	Title: Senior Managing Director

 

 

    	 

    	 

    

 

	Address of Secured Party:	HEALTHCOR HYBRID OFFSHORE MASTER FUND, L.P.

		 	 	 	
	 	By: HealthCor Hybrid Offshore G.P., LLC, as General Partner
	 	 
	HealthCor Partners	 
	Carnegie Hall Towers	By:__/s/ Joseph Healey_________________
	152 West 57th Street	Name: Joseph Healey
	New York, NY 10019	Title: Co-CEO

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Allen Wheeler	 
	 	 	Allen Wheeler	 
	 	 	 	 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Steven Johnson 	 
	 	 	Steven Johnson	 
	 	 	 	 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Jason Thompson	 
	 	 	Jason Thompson	 
	 	 	 	 
	 	 	 	 

 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

	Address of Secured Party:	 	 	 

	 	Signed:	 /s/ Steven B. Epstein	 
	 	 	Steven B. Epstein	 
	 	 	 	 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	/s/ James R. Higgins	 
	 	 	Dr. James R. Higgins	 
	 	 	 	 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Irwin Lieber	 
	 	 	Irwin Lieber	 
	 	 	 	 
	 	 	 	 

 

 

 

	 	 		 
	Address of Secured Party:	 	 	 
	 	SJ2,  	LLC	 
	 	 	 	 
	 	 By:  	 /s/ Michael Mashaal	 
	 	 	Name: Michael Mashaal	 
	 	 	Authorized Signatory	 

 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

 

	Address of Secured
                                         Party:	 	 	 
	 	Signed:	 /s/ Deborah L. Epstein	 
	 	 	Deborah L. Epstein	 
	 	 	 	 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Stephen Berkley	 
	 	 	Stephen Berkley	 
	 	 	 	 
	 	 Signed:	 /s/ Alexandra Berkley 	 
	 	 	Alexandra Berkley	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Jason Peter Epstein	 
	 	 	Jason Peter Epstein	 
	 	 	 	 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Gregory Harris Epstein	 
	 	 	Gregory Harris Epstein	 
	 	 		 
	 	 	 	 

 

 

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ David Epstein	 
	 	 	David Epstein	 
	 	 		 
	 	 	 	 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Juliann Martin	 
	 	 	Juliann Martin	 
	 	 	 	 
	 	 	 	 

 

 

 

	 	Thompson Family Investments, LLC

	Address of Secured Party:	 	 	 
	 	Signed:	 /s/ Jason Thompson	 
	 	 	Name: Jason Thompson	 
	 	 	Title: Manager	 
	 	 	 	 

 

 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

	Address of Secured Party:	 	Raymond James & Assoc. Inc, not in its corporate capacity but solely as Custodian of the Individual Retirement Account of Sandra K McRee. Further, all representations, warranties and covenants (including indemnities) set forth herein are being made by Sandra K. McRee, not Raymond James & Assoc. Inc	 
	 	 	 	 	 
	 	 	By:	/s/ Robert Blain	 
	 	 	 	Name: Robert Blain	 
	 	 	 	Title: Custodian	 
	 	 	 	 	 
	 	 	 	/s/ Sandra K. McRee	 
	 	 	 	Sandra K. McRee	 
	 	 	 	Beneficial Owner	 

 

 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

	Address of Secured Party:	 	Morgan Stanley Smith Barney LLC, not in its corporate capacity but solely as Custodian of the Individual Retirement Account of Jeffrey C. Lightcap. Further, all representations, warranties and covenants (including indemnities) set forth herein are being made by Jeffrey C. Lightcap, not Morgan Stanley Smith Barney LLC	 
	 	 	 	 	 
	 		By:	 /s/ Gregory Williams	 
	 	 	 	Name: Gregory Williams for Morgan Stanley	 
	 	 	 	Title: Authorized Signatory	 
	 	 	 	 	 
	 	 	 	/s/ Jeffrey C. Lightcap	 
	 	 	 	Jeffrey C. Lightcap	 
	 	 	 	Beneficial Owner	 

 

 

	Address of Secured Party:	 	Jeffrey Lightcap & Jane Lightcap Minor’s Present Interest Trust dated
    March 20th, 1997 F/B/O Bradford C. Lightcap	 
	 	 	 	 	 
	 		By:	 /s/ Ira L. Schwartz	 
	 	 	 	Ira Schwartz, Trustee	 

 

 

	Address of Secured Party:	 	Jeffrey Lightcap & Jane Lightcap Minor’s Present Interest Trust dated March 20th, 1997 F/B/O Brian R. Lightcap	 
	 	 	 	 	 
	 		By:	 /s/ Ira L. Schwartz	 
	 	 	 	Ira Schwartz, Trustee	 

 

 

	Address of Secured Party:	 	Jeffrey Lightcap & Jane Lightcap Minor’s Present Interest Trust dated March 20th, 1997 F/B/O Megan M. Lightcap	 
	 	 	 	 	 
	 		By:	 /s/ Ira L. Schwartz	 
	 	 	 	Ira Schwartz, Trustee	 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

	Address of Secured Party:	 	 	 	 
	 		Signed:	 /s/ Joseph P. Healey	 
	 	 	 	Joseph P. Healey	 

 

 

	Address of Secured Party:	 	The Joseph P. Healy 2011 Family Trust	 
	 	 	 	 	 
	 		By:	 /s/ Joseph Dowling	 
	 	 	 	Joseph Dowling, Trustee	 

 

 

	Address of Secured Party:	 	 	 	 
	 		Signed:	 /s/ Arthur B. Cohen	 
	 	 	 	Arthur B. Cohen	 

 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

    	 

    

 

 

 

	 	AGENT:
	 	 
	Address of Agent:	HEALTHCOR PARTNERS FUND, L.P.
	 	 
	 	By: HealthCor Partners Management L.P., as Manager
	 	 
	 	By: HealthCor Partners Management, G.P., LLC, as General Partner
	 	 
	HealthCor Partners	 
	Carnegie Hall Towers	By:	/s/ Jeffrey C. Lightcap	 
	152 West 57th Street	Name:	 Jeffrey C. Lightcap
	New York, NY 10019	Title:	 Senior Managing Director

 

 

 

    	[signature page to Amended and Restated Pledge and Security Agreement]

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