Document:

SENIOR SECURED CONVERTIBLE NOTE

 

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

 

DvineWave
Inc.

 

Senior
Secured Convertible Note

 

	Issuance Date:  May 16, 2013	Principal Amount: U.S. $[_________]

 

 

FOR VALUE RECEIVED,
DvineWave Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of [____________]
or its registered assigns (“Holder”) the amount set out above as the Principal Amount (the “Principal”)
when due, whether upon the Maturity Date (as defined below), acceleration, prepayment or otherwise (in each case in accordance
with the terms hereof) and to pay interest (“Interest”) on the outstanding Principal at the applicable Interest
Rate (as defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until
the same becomes due and payable, whether upon the Maturity Date or acceleration, conversion, prepayment or otherwise (in each
case in accordance with the terms hereof). This Senior Secured Convertible Note (including all Senior Secured Convertible Notes
issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of Senior Secured Convertible
Notes issued pursuant to the Securities Purchase Agreement (as defined below) on the Closing Date (as defined below) (collectively,
the “Notes” and such other Senior Secured Convertible Notes, the “Other Notes”). Certain
capitalized terms used herein are defined in Section 23.

 

1.          PREPAYMENT.
The Company may, at any time prior to the Maturity Date, prepay this Note in full, and in part, including all unpaid and accrued
interest thereon, upon the written consent of the Holder. In the event the Company wishes to prepay this Note, it shall notify
the Holder and the holders of the Other Notes to obtain their respective consents. A prepayment made pursuant to this Section 1
shall be made pro rata among all consenting Note holders. In addition, in the event of a Change of Control (as defined below),
to the extent not earlier converted into Common Stock pursuant to Section 3, upon notice to the Holder of at least ten (10)
Business Days prior to the consummation date of such Change of Control and without the consent of the Holder, the Company may,
but shall not be required to, prepay all, but not less than all, of the outstanding principal and unpaid accrued interest under
this Note upon the consummation of such Change in Control.

 

2.          INTEREST
RATE. So long as no Event of Default shall have occurred and be continuing, Interest on this Note shall accrue at a rate equal
to six percent (6%) simple interest per annum. If an Event of Default shall have occurred and be continuing, the Interest Rate
shall automatically be increased to twelve percent (12%) simple interest during the period of such Event of Default, until such
Event of Default is later cured; provided that if the only Event of Default then occurring and continuing is an Event of Default
under Section 4(a)(xii), such Interest Rate shall remain at six percent (6%). Interest due on this Note shall be computed on the
basis of a three hundred sixty-five (365)-day year.

 

    	 

    	 

    

 

3.  CONVERSION
OF NOTES. This Note shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (as defined
below), on the terms and conditions set forth in this Section 3.

 

(a)          Mandatory
Conversion - IPO. Upon consummation of the IPO (as defined below), this Note shall automatically convert, through no further
action on the part of the Company or the Holder, into that number of shares of Common Stock equal to the quotient of (A) the Conversion
Amount (as defined below) divided by (B) the Conversion Price. For the purpose of this Section
3(a), the “Conversion Price” shall be equal to fifty percent (50%) of the IPO Price to Public (as defined below)
(rounded to two decimal places, with $0.005 being rounded upward); provided; however, that in no event shall the Conversion Price
be greater than $1.04 or nor less than $0.52, in each case as adjusted for stock splits, stock dividends, stock combinations, recapitalizations,
or the like that occur after the Issuance Date in accordance with Section 5.

 

(b)          Mandatory
Conversion – Election of the Holders. At any time after the Issuance Date and until ten (10) calendar days prior to the
consummation of the IPO (as set forth in the IPO Notice), if the holders as a group of not less than a majority of the aggregate
principal amount of all Notes then outstanding (the “Required Note Holders”) notify the Company in writing of
their election to convert all of the Notes, then this Note shall automatically convert, through no further action on the part of
the Company or the Holder, into that number of shares of Common Stock equal to the quotient of (A) the Conversion Amount divided
by (B) the Conversion Price. For the purposes of this Section 3(b), the “Conversion Price” shall be equal to
$1.04 as adjusted for stock splits, stock dividends, stock combinations, recapitalizations, or the like that occur after the Issuance
Date in accordance with Section 5.

 

(c)          Optional
Conversion. At any time after the Issuance Date and until ten (10) calendar days prior to the consummation of the IPO (as set
forth in the IPO Notice), the Holder shall be entitled to convert this Note into that number of shares of Common Stock equal to
the quotient of (A) the Conversion Amount divided by (B) the Conversion Price. For the purposes of this Section 3(c), the “Conversion
Price” shall be equal to $1.04 as adjusted for stock splits, stock dividends, stock combinations, recapitalizations,
or the like that occur after the Issuance Date in accordance with Section 5.

 

(d)          Optional
Conversion - Financing. If the Holder has fully exercised its rights, if any, under Section 4(l) of the Securities Purchase
Agreement in connection with any Financing, for a period of up to ten (10) Business Days following the consummation of such Financing,
the Holder shall be entitled to convert up to the entire remaining Conversion Amount under this Note into that number of shares
of Common Stock equal to the quotient of (A) the Conversion Amount (as defined below) divided
by (B) the Conversion Price. For the purpose of this Section 3(d), the “Conversion Price” shall be equal to
fifty percent (50%) of the Financing Price (as defined below) (rounded to two decimal places, with $0.005 being rounded upward);
provided; however, that in no event shall the Conversion Price be greater than $1.04 or nor less than $0.52, in each case as adjusted
for stock splits, stock dividends, stock combinations, recapitalizations, or the like that occur after the Issuance Date in accordance
with Section 5.

 

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(e)          Optional
Conversion - Event of Default. Notwithstanding anything in this Note to the contrary, if a material Event of Default shall
have occurred and be continuing, the Holder shall be entitled to convert this Note into that number of shares of Common Stock equal
to the quotient of (A) the Conversion Amount divided by (B) the Conversion Price. For the purposes of this Section 3(e), the “Conversion
Price” shall be equal to $0.52 as adjusted for stock splits, stock dividends, stock combinations, recapitalizations,
or the like that occur after the Issuance Date in accordance with Section 5. 

 

(f)  Mechanics
of Conversion.

 

(i)          Conversion;
Issuance of Shares. To convert this Note pursuant to Sections 3(c), 3(d) or 3(e) above into shares of Common Stock on any date
(a “Conversion Date”), the Holder shall deliver (whether via facsimile or otherwise) a copy of a properly and
fully-completed and executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Company. On or before the second Business Day following the date of receipt of such Conversion Notice, the Company shall
transmit by facsimile or email (by attachment in PDF format) an acknowledgment of confirmation, in the form attached hereto as
Exhibit II, of receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer
Agent”). On or before the third Business Day following the date of receipt of a Conversion Notice but subject to the
surrender for cancellation by the Holder of the original Note (or, if applicable, a Lost Note Affidavit (defined below)), or the
triggering of a mandatory conversion pursuant to Section 3(a) or 3(b) above, the Company shall instruct the Transfer Agent to issue
and deliver (via reputable overnight courier) to the Holder a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled, with the legends required by the Securities Purchase
Agreement or applicable law. 

 

(ii)         Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the registered holders of each Note and the principal amount of the Notes held by such holders (the “Registered
Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company
and the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes
(including, without limitation, the right to receive payments of Principal and Interest hereunder and the right to receive shares
of Common Stock upon conversion hereof) notwithstanding notice to the contrary. A Registered Note may be assigned, transferred
or sold in whole or in part only by registration of such assignment or sale on the Register. Subject to the satisfaction of applicable
law and any restrictions that have been mutually agreed by the Company and the initial purchaser of this Note (which shall be binding
upon the Holder hereof), upon receipt by the Company of the registered Holder’s written request to assign, transfer or sell
all or part of any Registered Note by the holder thereof accompanied by this original Note for cancellation (or a Lost Note Affidavit,
if applicable), the Company shall record the information contained therein in the Register and issue one or more new Registered
Notes in the same aggregate principal amount as the unrepaid and unconverted principal amount of the surrendered Registered Note
to the designated assignee or transferee pursuant to Section 13, provided that if the Company does not so record an assignment,
transfer or sale (as the case may be) of all or part of any Registered Note within two (2) Business Days of its receipt of such
a proper request, then the Register shall be automatically updated to reflect such assignment, transfer or sale (as the case may
be). In furtherance of Section 25 hereof, if requested by the Holder in connection with conversion, the Holder and the Company
shall maintain records showing the Principal and Interest converted and/or paid (as the case may be) and the dates of such conversion
and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so
as not to require physical surrender of this Note upon conversion; provided that the Holder and each prior Holder shall execute
and deliver such documents as are reasonably requested by the Company to evidence the cancellation of this Note and in the event
that the Holder and each prior Holder has not so delivered such executed documents, the Company reserves the right to demand surrender
of physical surrender of the original Note upon conversion or a Lost Note Affidavit.

 

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(iii)        No
Fractional Shares; Transfer Taxes. The Company shall not issue any fraction of a share of Common Stock upon any conversion.
If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of
a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp, issuance and similar
taxes that may be payable with respect to the issuance and delivery of Common Stock upon any conversion.

 

4.  RIGHTS
UPON EVENT OF DEFAULT.

 

(a)          Event
of Default. Each of the following events shall constitute an “Event of Default”:

 

(i)          the
Company’s failure to convert this Note in strict compliance with Section 3, provided that there shall be no Event of Default
during any period of good faith disagreement regarding whether the Holder has satisfied all requirements to require conversion
of the Note pursuant to Section 3 but only if the Company has promptly responded to any assertion by the Holder that the Note has
converted into Common Stock pursuant to Section 3;

 

(ii)         the
Company’s failure to pay to the Holder any amount of Principal, Interest when and as due under this Note or any other agreement,
document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, including,
but not limited to, any Transaction Document (as defined in the Securities Purchase Agreement), except, in the case of a failure
to pay Principal or Interest when and as due, in which case only if such failure remains uncured for a period of at least five
(5) days;

 

(iii)        the
occurrence of any default under, redemption of or acceleration prior to maturity of any Indebtedness (as defined in the Securities
Purchase Agreement) of the Company, other than with respect to any Other Notes;

 

(iv)        bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or
against the Company and, if instituted against the Company by a third party, shall not be dismissed within sixty (60) days of their
initiation;

 

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(v)         the
commencement by the Company of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or the consent by it to the entry of a decree, order, judgment or other similar document in
respect of the Company in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign
law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence
of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts
generally as they become due, the taking of corporate action by the Company in furtherance of any such action;

 

(vi)        the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company of a voluntary or involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law;
or (ii) a decree, order, judgment or other similar document adjudging the Company as bankrupt or insolvent, or approving as properly
filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company under
any applicable federal, state or foreign law; or (iii) a decree, order, judgment or other similar document appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment or
other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period
of sixty (60) consecutive days;

 

(vii)       a
final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Company and which
judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay; 

 

(viii)      the
Company either (i) fails to pay, when due, or within any applicable grace period, any payment with respect to any Indebtedness
in excess of $250,000 due to any third party (other than, with respect to unsecured Indebtedness only, payments contested by the
Company in good faith by proper proceedings and with respect to which adequate reserves have been set aside for the payment thereof
in accordance with GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess
of $250,000, which breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due
thereunder, or (ii) suffer to exist any other circumstance or event that would, with or without the passage of time or the giving
of notice, result in a default or event of default under any agreement binding the Company, which default or event of default would
or would be reasonably expected to have a material adverse effect on the business, assets, operations (including results thereof),
liabilities, properties, or condition (including financial condition) of the Company, individually or in the aggregate (a “Material
Adverse Effect”);

 

(ix)         other
than as specifically set forth in another clause of this Section 4(a), the Company breaches any representation, warranty, covenant
or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition
that is curable, only if such breach remains uncured for a period of thirty (30) days after actual knowledge of the Company of
such breach; 

 

(x)          the
occurrence a Material Adverse Effect for a period of more than five (5) days; 

 

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(xi)         the
validity or enforceability of any provision of any Transaction Document (as defined in the Securities Purchase Agreement) shall
be contested by the Company, or a proceeding shall be commenced by the Company seeking to establish the invalidity or unenforceability
thereof;

 

(xii)        the
Security Documents shall for any reason fail or cease to create a separate valid and perfected and, except (A) to the extent permitted
by the terms hereof or thereof, first priority Lien on the Collateral (as defined in the Security Agreement) in favor of each of
the Secured Parties (as defined in the Security Agreement) or (B) as a result of the act or omission of Holder or the holder of
any Other Note and not materially related to the failure of the Company to satisfy or tender to satisfy its obligations under the
Security Documents, and such breach remains uncured for a period of three (3) Business Days after notice from Holder or the holder
of any Other Note of such failure or ceasing; 

 

(xiii)       any
material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days,
the cessation or substantial curtailment of revenue producing activities at any facility of the Company, if any such event or circumstance
could have a Material Adverse Effect; or

 

(xiv)      any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.

 

(b)          Notice
of an Event of Default. Upon the occurrence of an Event of Default with respect to this Note or any Other Note, the Company
shall within two (2) Business Days deliver written notice thereof via facsimile and overnight courier (with next day delivery specified)
(an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of
an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may, by notice to the Company (a “Holder
Default Notice”), declare this Note to be forthwith due and payable, whereupon the Principal and all accrued and unpaid
Interest thereon, plus all costs of enforcement and collection (including court costs and reasonable attorney’s fees), shall
immediately become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Company. This Note is intended to be entitled, if the Company’s assets are insufficient
to permit payment in full in cash of this Note and all the Other Notes, to proportional payment along with each of the Other Notes
to the extent payment is demanded by the Holder of this Note and the holders of any of the Other Notes in accordance with the Security
Documents. In the event that the Company reasonably believes that it does not have the immediate liquidity to repay in full in
cash this Note and all the Other Notes, the Company may, for a period of up to fifteen (15) Business Days, delay in payment of
this Note after acceleration in connection with a Holder Default Notice to attempt to facilitate proper allocation of payments
among the Holder of this Note and the holders of the Other Notes in accordance with the Security Documents and an opportunity for
the holders of the Other Notes to become aware of the Holder Default Notice and promptly to exercise their rights under the Other
Notes and the Security Documents. Nothing in this Section 4(b) will prevent the Holder from pursuing enforcement of its rights
under the Security Documents.

 

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5.  ADJUSTMENT
OF CONVERSION PRICE.

 

(a)          Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. If the Company subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment
pursuant to this Section 5(a) shall become effective immediately after the effective date of such subdivision or combination. 

 

(b)          Other
Events. In the event that the Company shall take any action to which the provisions of Section 5(a) are not strictly applicable,
or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the
provisions of this Section 5 but not expressly provided for by such provisions, then the Company’s Board of Directors shall
in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder,
provided that no such adjustment pursuant to this Section 5(b) will increase the Conversion Price as otherwise determined pursuant
to this Section 5, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests
hereunder against such dilution, then the Company’s Board of Directors and the Holder shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be
final and binding and whose fees and expenses shall be borne by the Company.

 

6.  NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will
at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights
of the Holder of this Note. Without limiting the generality of the foregoing, so long as any of the Notes remain outstanding, the
Company (i) shall not increase the par value of any shares of Common Stock receivable upon conversion of this Note above the
Conversion Price then in effect and (ii) shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the conversion of this Note, including
without limitation complying with Section 7(b) hereof.

 

7.  RESERVATION
OF AUTHORIZED SHARES.

 

(a)          Reservation.
The Company shall at all times reserve and keep available out of its authorized but unissued shares Common Stock, solely for the
purpose of effecting the conversion of the Note, no less than one hundred one percent (101%) of the maximum number of shares issuable
on conversion of the Note (the “Required Reserve Amount”). 

 

(b)          Insufficient
Authorized Shares. If, notwithstanding Section 7(a), and not in limitation thereof, at any time while any of the Notes remain
outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action within its power necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding,
including without limitation using its best efforts to secure necessary Board of Directors and stockholder approvals, as further
described below, to appropriately amend the Company’s Certificate of Incorporation to provide for such increase. Without
limiting the generality of the foregoing sentence, if not earlier approved by written consent of the stockholders, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than seventy (70) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number
of authorized shares of Common Stock; in connection with any such meeting, the Company shall provide each stockholders with a proxy
statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common
Stock and to cause its Board of Directors to recommend to the stockholders that they approve such proposal.

 

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8.  COVENANTS.
Until all of the Notes have been converted or otherwise satisfied in accordance with their terms:

 

(a)          Rank.
All payments due under this Note shall rank pari passu with all Other Notes.

 

(b)          New
Subsidiaries. Simultaneously with the acquisition or formation of each New Subsidiary, the Company shall cause such New Subsidiary
to execute, and deliver to each holder of Notes, all joinders to, or as applicable additional, Security Documents (as defined in
the Security Agreement) as requested by the Holder. The Company shall not, directly or indirectly, acquire or form any New Subsidiary
if such New Subsidiary would not be wholly-owned, directly or indirectly, by the Company.

 

(c)          Announcement
of Initial Public Offering. After such time as the Company determines that it will consummate an IPO, it shall send a notice
to the Holder (the “IPO Notice”) of the proposed consummation date of the IPO (the expected date of such consummation
is the “Announced IPO Date”), but such IPO Notice shall be dispatched in any event no later than ten (10) calendar
days prior to such Announced IPO Date. To the extent that the Announced IPO Date is subsequently advanced or delayed, the Company
shall send an amended IPO Notice of the revised proposed consummation date of the IPO to the Holder; provided, however, the Company
may not advance the Announced IPO Date to a date less than five (5) Business Days after the date of the latest amending IPO Notice.
If any Announced IPO Date is delayed, the amending IPO Notice will be deemed the establishment of a new Announced IPO Date and
any Conversion Notice given based on a previously Announced IPO Date will be deemed cancelled unless the Holder affirms in writing
the Conversion Notice as given. 

 

9.  SECURITY.
This Note and the Other Notes are secured to the extent and in the manner set forth in the Transaction Documents (including, without
limitation, the Security Agreement and the other Security Documents).

 

10.  DISTRIBUTION
PARTICIPATION. In addition to any adjustments pursuant to Section 5, if while this Note remains outstanding, the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution”), at any time after the issuance of this Note, then, in each such case, upon
conversion of this Note entirely into Common Stock pursuant to Section 3, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein as if the Holder had held, as of immediately before the date
on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution, the number of shares of Common Stock held immediately
after such conversion.

 

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11.  AMENDING
THE TERMS OF THIS NOTE. Provisions of this Note may be amended, modified, or a provision or requirement hereof waived only
(a) with the written consent of the Company and the Holder or, (b) if this Note and each Other Note then outstanding is similarly
amended, modified or waived, with the written consent of the Company and the Required Note Holders. If this Note (along with the
Other Notes then outstanding) is amended pursuant to clause (b) of this Section 11, such amendment shall be binding on the Holder
and each holder of each Other Note whether or not the Holder or such holder of such Other Note consents thereto.

 

12.  TRANSFER.
This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the
Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement
and any other restrictions that may be mutually agreed by the Company and the Holder hereof.

 

13.  REISSUANCE
OF THIS NOTE.

 

(a)          Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 13(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred,
a new Note (in accordance with Section 13(d)) to the Holder representing the outstanding Principal not being transferred. 

 

(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below (each a
“Lost Note Affidavit”) shall suffice as such evidence), and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form, and reasonably acceptable to the Company and, if the
note is converted in connection with the IPO, the Company’s managing underwriter, and, in the case of mutilation, upon surrender
and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 13(d))
representing the outstanding Principal.

 

(c)          Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 13(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.

 

(d)          Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 13(a) or Section 13(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest on the Principal of this Note, from the Issuance Date.

 

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14. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief); provided, the Holder or any Person claiming through
or by right of Holder shall not be entitled to any duplication or multiplication of damages; provided further that the Company
shall not be liable for incidental or consequential damages for any failure by the Company to comply with the terms of this Note
even if the Company has been advised of the possibility thereof. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as
expressly provided herein or in the other Transaction Documents, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and
that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any
such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security
being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note (including, without limitation,
compliance with Section 5).

 

15. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
of the debt evidenced hereby or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect
amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership
of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company
shall pay the reasonable costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys’ fees and disbursements.

 

16. CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note. Terms used in this Note but defined in the other Transaction Documents shall have the meanings
ascribed to such terms in such other Transaction Documents.

 

17. FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.

 

18. DISPUTE
RESOLUTION. If at any time before conversion of this Note, the Holder and the Company are unable to agree as to the arithmetic
calculation of the Conversion Price the Holder and the Company will confer in good faith to resolve such disagreement and the Company
shall promptly issue upon conversion of this Note at the number of shares of Common Stock that are uncontested. Thereafter, the
Company and Holder will confer in good faith to attempt to reach agreement regarding the Conversion Price with the Required Note
Holders; if the Required Note Holders and the Company agree in writing upon a Conversion Price, that agreement will be binding
on Holder and all holders of the Other Notes.

 

    	10

    	 

    

 

19. NOTICES;
PAYMENTS.

 

(a)          Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) promptly, but in any event within
ten (10) calendar days, upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record
with respect to any dividend or distribution upon the Common Stock.

 

(b)          Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth
herein, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company
and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address,
in the case of each of the Buyers (as defined in the Securities Purchase Agreement), which shall initially the address set forth
on the Schedule of Buyers attached to the Securities Purchase Agreement), provided that the Holder may elect to receive a payment
of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request
and the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on
any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. 

 

20. CANCELLATION.
After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically
be deemed canceled, shall be surrendered promptly, but in any event within ten (10) calendar days, to the Company by the Holder
for cancellation and shall not be reissued.

 

21. WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all
other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

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

 

    	11

    	 

    

 

23. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

 

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

 

(b)          “Change
in Control” means (x) the acquisition of the Company by another entity by means of any transaction (including, without
limitation, any stock acquisition, reorganization, merger or consolidation) that contemplates an enterprise value of the Company
of not less than $75 million, or (y) a sale of all or substantially all of the assets of the Company for an aggregate purchase
price of not less than $75 million (including, for purposes of this section, the sale or exclusive license of intellectual property
rights which, in the aggregate, constitutes substantially all of the corporation’s material intellectual property assets).

 

(c)          “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially
issued Notes pursuant to the terms of the Securities Purchase Agreement.

 

(d)          “Common
Stock” means (i) the Company’s shares of common stock, $0.00001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common
stock.

 

(e)          “Conversion
Amount” means the sum of the outstanding and unpaid Principal plus all accrued and unpaid Interest thereon plus, if any,
other unpaid amounts due under this Note.

 

(f)          “Financing”
means any debt or equity financing by the Company consummated prior to the IPO for the principal purpose of raising operating capital
or paying off or paying down the Notes or any other indebtedness or trade payables of the Company. “Financing”
shall not include the issuance of Common Stock or options to purchase Common Stock to employees, consultants, directors or other
service providers with the principal purpose of providing an incentive to provide or continue to provide services to the Company.

 

(g)          “Financing
Price” means for any Financing the purchase price of the securities being sold by the Company in such Financing (as adjusted
for stock splits, stock combinations, recapitalizations, or the like that occur after the Issuance Date in accordance with Section
5).

 

(h)          “GAAP”
means United States generally accepted accounting principles, consistently applied.

 

    	12

    	 

    

 

(i)          “IPO”
means a firm commitment underwritten initial public offering of the Company’s Common Stock pursuant to a registration statement
filed on Form S-1 (or any successor from thereto) and declared effective by the SEC that raises gross proceeds of at least $10
million, which is consummated prior to the Maturity Date.

 

(j)          “IPO
Price to Public” means the price to public specified in the IPO registration statement (as adjusted for stock splits,
stock combinations, recapitalizations, or the like that occur after the Issuance Date in accordance with Section 5).

 

(k)          “Interest
Rate” means six percent (6%) per annum, as may be adjusted from time to time in accordance with Section 2.

 

(l)          “Maturity
Date” shall mean [July] [___], 2014. 

 

(m)          “New
Subsidiary” means, as of any date of determination, any Person in which the Company after the Closing Date, directly
or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person
or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing,
collectively, “New Subsidiaries.” “New Subsidiary” shall not include any Person in which
the Company owns a non-controlling interest acquired as a result of a bona fide strategic partnership or other transaction that
is not related to the financing of such Person by the Company or its affiliates (i.e., not for the principal purpose of raising
operating capital for such Person) but only (A) if the Company does not have the right to designate one or more members of such
Person’s board of directors or board of managers or similar body and (B) if the capital stock or equity or similar interest
of such Person held directly or indirectly by the Company was not acquired directly or indirectly by the Company for cash.

 

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

 

(o)          “SEC”
means the United States Securities and Exchange Commission or the successor thereto.

 

(p)          “Securities
Purchase Agreement” means that certain securities purchase agreement, dated as of the Closing Date, by and among the
Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended from time to time.

 

(q)          “Security
Agreement” means that certain security agreement, dated as of the Closing Date, by and among the Company and the initial
holders of the Notes, as may be amended from time to time.

 

24. MAXIMUM
PAYMENTS. Nothing contained in this Note shall, or shall be deemed to, establish or require the payment of a rate of interest
or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid
or other charges under this Note exceeds the maximum permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Holder and thus refunded to the Company.

 

25. SURRENDER
OR ACKNOWLEDGEMENT AND CERTIFICATION: Upon payment in full or conversion of this Note, Holder shall surrender the original
physical copy of this Note for cancellation; alternatively, if the Holder promptly requests in connection with such payment or
conversion, the Holder may deliver to the Company a signed acknowledgement of payment in full and a certification that the Holder
has cancelled or destroyed the Note in a form reasonably acceptable to the Company.

 

[Signature page follows]

 

    	13

    	 

    

 

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

 

	 	DvineWave Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	 

    	 

    

 

EXHIBIT I

DVINEWAVE INC.

CONVERSION NOTICE

 

Reference is made to
the Senior Secured Convertible Note (the “Note”) issued to the undersigned by DvineWave Inc. (the “Company”).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of common stock, $0.00001 par value per share (the “Common Stock”),
of the Company, as of the date specified below.

 

	Date of Conversion:	 

 

	Aggregate Conversion Amount to be converted:  	 

 

	Conversion Price:  	 

 

	Number of shares of Common Stock to be issued:	 

 

Please issue the Common Stock into which the Note is being converted
in the following name and to the following address:

 

	Issue to:  	 
	 	 
	 	 
	 	 
	 	 

 

	Facsimile Number:	 

 

	Holder:	 

 

	By:	 

 

	Title:	 

 

	Dated:	 

 

    	 

    	 

    

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

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

 

	 	DvineWave Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:SECURITY AGREEMENT

 

This SECURITY AGREEMENT
(this “Agreement”), dated as of May 16, 2013, is made by and among DvineWave Inc., a Delaware corporation (the
“Grantor”), and the secured parties listed on the signature pages hereof (collectively, the “Secured
Parties” and each, individually, a “Secured Party”).

 

RECITALS

 

WHEREAS, pursuant
to that certain Securities Purchase Agreement, dated even date herewith (as may be amended, restated, supplemented, or otherwise
modified from time to time, including all schedules and exhibits thereto, collectively, the “Securities Purchase
Agreement”), by and among the Grantor and each of the Secured Parties, Grantor has agreed to sell, and each of the Secured
Parties have each agreed to purchase, severally and not jointly, certain Notes; and

 

WHEREAS, in
order to induce the Secured Parties to purchase, severally and not jointly, the Notes as provided for in the Securities Purchase
Agreement, Grantor has agreed to grant a continuing security interest in and to the Collateral in order to secure the prompt and
complete payment, observance and performance of the Secured Obligations (as defined below).

 

AGREEMENT

 

NOW, THEREFORE,
for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.           Defined
Terms. All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the
meanings ascribed thereto in the Notes. Any terms used in this Agreement that are defined in the Code shall be construed and defined
as set forth in the Code unless otherwise defined herein or in the Notes; provided, however, if the Code is used to define any
term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained
in Article 9 of the Code shall govern. In addition to those terms defined elsewhere in this Agreement, as used in this Agreement,
the following terms shall have the following meanings:

 

(a)          “Account”
means an account (as that term is defined in the Code).

 

(b)          “Account
Debtor” means an account debtor (as that term is defined in the Code).

 

(c)          “Bankruptcy
Code” means Title 11 of the United States Code, as in effect from time to time.

 

(d)          “Books”
means books and records (including, without limitation, the Grantor’s Records) indicating, summarizing, or evidencing the
Grantor’s assets (including the Collateral) or liabilities, the Grantor’s Records relating to its business operations
(including, without limitation, stock ledgers) or financial condition, and the Grantor’s goods or General Intangibles related
to such information.

 

    	 

    	 

    

 

(e)          “Chattel
Paper” means chattel paper (as that term is defined in the Code) and includes tangible chattel paper and electronic chattel
paper.

 

(f)          “Code”
means the New York Uniform Commercial Code, as in effect from time to time; provided, however, in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to any Secured Party’s
Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.

 

(g)          “Collateral”
has the meaning specified therefor in Section 2.

 

(h)          “Commencement
Notice” means a written notice, given by any Secured Party to the other Secured Parties in accordance with the notice
provisions set forth in the Securities Purchase Agreement, pursuant to which such Secured Party notifies the other Secured Parties
of the existence of one or more Events of Default and of such Secured Party’s intent to commence the exercise of one or more
of the remedies provided for under this Agreement with respect to all or any portion of the Collateral as a consequence thereof,
which notice shall incorporate a reasonably detailed description of each Event of Default then existing and of the remedial action
proposed to be taken.

 

(i)           “Commercial
Tort Claims” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims
listed on Schedule 1 attached hereto.

 

(j)           “Control
Agreement” means a control agreement, in form and substance satisfactory to the Secured Parties, executed and delivered
by Grantor, one or more Secured Parties, and the applicable securities intermediary (with respect to a Securities Account) or bank
(with respect to a Deposit Account), as may be amended, restated, supplemented, or otherwise modified from time to time.

 

(k)          “Copyrights”
means all copyrights and copyright registrations, and also includes (i) all reissues, continuations, extensions or renewals thereof,
(ii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions
thereof, (iii) the right to sue for past, present and future infringements and dilutions thereof, (iv) the goodwill of Grantor’s
business symbolized by the foregoing or connected therewith, and (v) all of Grantor’s rights corresponding thereto throughout
the world.

 

(l)           “Deposit
Account” means a deposit account (as that term is defined in the Code).

 

    	2

    	 

    

  

(m)         “Equipment”
means all equipment (as that term is defined in the Code) in all of its forms of the Grantor, wherever located, and including,
without limitation, all machinery, apparatus, installation facilities and other tangible personal property, and all parts thereof
and all accessions, additions, attachments, improvements, substitutions, replacements and proceeds thereto and therefor.

 

(n)          “Event
of Default” has the meaning specified therefor in the Notes.

 

(o)          “GAAP”
means United States generally accepted accounting principles, consistently applied.

 

(p)          “General
Intangibles” means general intangibles (as that term is defined in the Code) and, in any event, includes payment intangibles,
contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill,
programming materials, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment
under any royalty or licensing agreements (including Intellectual Property Licenses), infringement claims, commercial computer
programs, information contained on computer disks or tapes, software, literature, reports, catalogs, pension plan refunds, pension
plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability
company which do not constitute a security under Article 8 of the Code, and any other personal property other than Commercial Tort
Claims, money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related Property, Negotiable Collateral, and oil, gas,
or other minerals before extraction.

 

(q)          “Governmental
Authority” means any domestic or foreign federal, state, local, or other governmental or administrative body, instrumentality,
board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar
dispute-resolving panel or body.

 

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

 

(s)          “Intellectual
Property” means Patents, Copyrights, Trademarks, the goodwill associated with such Trademarks, trade secrets and customer
lists, and Intellectual Property Licenses.

 

(t)           “Intellectual
Property Licenses” means rights under or interests in any patent, trademark, copyright or other intellectual property,
including software license agreements with any other party, whether the applicable Grantor is a licensee or licensor under any
such license agreement, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

    	3

    	 

    

  

(u)          “Inventory”
means all inventory (as that term is defined in the Code) in all of its forms of the Grantor, wherever located, including, without
limitation, (i) all goods in which the Grantor has an interest in mass or a joint or other interest or right of any kind (including
goods in which the Grantor has an interest or right as consignee), and (ii) all goods which are returned to or repossessed by the
Grantor, and all accessions thereto, products thereof and documents therefor.

 

(v)          “Investment
Related Property” means (i) investment property (as that term is defined in the Code), and (ii) all of the following
(regardless of whether classified as investment property under the Code): all Pledged Interests, Pledged Operating Agreements,
and Pledged Partnership Agreements.

 

(w)         “Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or
charge of any kind.

 

(x)          “Negotiable
Collateral” means letters of credit, letter-of-credit rights, instruments, promissory notes, drafts, and documents.

 

(y)          “New
Subsidiary” has the meaning specified therefor in the Notes.

 

(z)          “Notes”
has the meaning specified therefor in the Securities Purchase Agreement.

 

(aa)        “Patents”
means all patents and patent applications, and also includes (i) all renewals thereof, (ii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements or dilutions thereof, (iii) the right to sue for
past, present and future infringements and dilutions thereof, and (iv) all of Grantor’s rights corresponding thereto throughout
the world.

 

(bb)       “Permitted
Liens” (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or delinquent or that is being contested in good faith
for which adequate reserves have been established in accordance with GAAP, (iii) any Lien created by operation of law, such as
materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect
to a liability that is not yet due or delinquent or that is being contested in good faith by appropriate proceedings, (iv) Liens
in favor of a landlord which (other than with respect to a security deposits) are not prior in right to the Liens of Secured Parties,
(iv) Liens on Equipment having a fair market value of not more than $500,000 in the aggregate,
but only if the lien constitutes a purchase money security interest incurred in connection with the purchase of such Equipment
or if the Equipment is leased to the Grantor pursuant to a capital lease, (v) judgment Liens that do not result in an “Event
of Default” under Section 4(a)(vii) of the Notes, and (vi) Liens securing the Company’s obligations under the Transaction
Documents.

 

    	4

    	 

    

  

(cc)        “Permitted
Secured Party” means, with respect to the exercise of any remedy provided for under this Agreement, (A) any Secured Party
that has delivered a Commencement Notice with respect to the exercise of such remedy to the other Secured Parties and has not received
a Veto Notice with respect thereto within the Veto Period or (B) any Significant Secured Party that has in connection with a Commencement
Notice delivered a Veto Notice to a Secured Party within the Veto Period; provided, however, there shall only be a single Permitted
Secured Party that may exercise any specific remedy at any one time (it being agreed that if a Commencement Notice is delivered
by more than one Secured Party with respect to any remedy provided for under this Agreement, then the first Secured Party to deliver
a Commencement Notice and not receive a Veto Notice within the Veto Period shall be the only Secured Party that may exercise such
remedy).

 

(dd)        “Permitted
Transfers” means (i) sales of Inventory in the ordinary course of business, (ii) licenses in the ordinary course of business
that either terminate on or prior to the Maturity Date or with the express written consent of MDB Capital Group LLC terminate subsequent
to the Maturity Date for the use of Intellectual Property (A) to manufacturers, distributors, OEMs, strategic partners and value
added re-sellers in connection with the manufacture and distribution of Grantor’s products, (B) in connection with the embedding
of Intellectual Property in the products of others, and (C) to end users; provided no such license could result in a legal transfer
of title of the licensed Intellectual Property, or (iii) dispositions of worn-out, obsolete or surplus Equipment at fair market
value in the ordinary course of business.

 

(ee)        “Person”
has the meaning specified therefor in the Securities Purchase Agreement.

 

(ff)         “Pledged
Companies” means each Person all or a portion of whose Stock is acquired or otherwise owned by the Grantor after the
date hereof.

 

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

 

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

 

    	5

    	 

    

  

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

 

(jj)   
      “Proceeds” has the meaning specified therefor in Section 2.

 

(kk)        “Real
Property” means any estates or interests in real property now owned or hereafter acquired by Grantor and the improvements
thereto.

 

(ll)      
   “Records” means information that is inscribed on a tangible medium or which is stored in
an electronic or other medium and is retrievable in perceivable form.

 

(mm)      “Secured
Obligations” mean all of the present and future payment and performance obligations of Grantor arising under this Agreement,
the Notes and the other Transaction Documents, including, without duplication, reasonable attorneys’ fees and expenses and
any interest, fees, or expenses that accrue after the filing of an Insolvency Proceeding, regardless of whether allowed or allowable
in whole or in part as a claim in any Insolvency Proceeding.

 

(nn)       “Securities
Account” means a securities account (as that term is defined in the Code).

 

(oo)       “Security
Documents” means, collectively, this Agreement, each Control Agreement and each other security agreement, pledge agreement,
assignment, mortgage, security deed, deed of trust, and other agreement or document executed and delivered by the Grantor as security
for any of the Secured Obligations, as may be amended, restated, supplemented, or otherwise modified from time to time.

 

(pp)       “Security
Interest” and “Security Interests” have the meanings specified therefor in Section 2.

 

(qq)       “Significant
Secured Party” means, on any date of determination, one or more Secured Parties holding alone or in the aggregate fifteen
percent (15%) or more of the aggregate principal amount of Notes outstanding on such date.

 

(rr)    
    “Stock” means all shares, options, warrants, interests (including, without
limitation, membership and partnership interests), participations, or other equivalents (regardless of how designated) of or
in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other “equity security”
(as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the United States Securities and
Exchange Commission and any successor thereto under the Securities Exchange Act of 1934, as in effect from time to time).

 

(ss)        “Supporting
Obligations” means supporting obligations (as such term is defined in the Code).

 

    	6

    	 

    

  

(tt)         “Trademarks”
means all trademarks, trade names, trademark applications, service marks, service mark applications, and also includes (i) all
renewals thereof, (ii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iii) the right to sue for past, present and future infringements and dilutions thereof, (iv) the goodwill
of Grantor’s business symbolized by the foregoing or connected therewith, and (v) all of Grantor’s rights corresponding
thereto throughout the world.

 

(uu)         “Transaction
Documents” has the meaning specified therefor in the Securities Purchase Agreement.

 

(vv)         “URL”
means “uniform resource locator,” an internet web address.

 

(ww)         “Veto
Notice” means, with respect to any Commencement Notice, a written notice given by any Significant Secured Party to the
other Secured Parties in accordance with the notice provisions set forth in the Securities Purchase Agreement pursuant to which
such Significant Secured Party notifies the other Secured Parties of its objection to the commencement of the remedial action specified
in such Commencement Notice and certifies that, to the best of its knowledge, it is a Significant Secured Party.

 

(xx)        “Veto
Period” means, with respect to any Commencement Notice, the period of ten (10) consecutive calendar days following the
delivery of such Commencement Notice to the Secured Parties.

 

2.           Grant
of Security. The Grantor hereby unconditionally grants, assigns, and pledges to each Secured Party a separate, continuing security
interest (each, a “Security Interest” and, collectively, the “Security Interests”) in all
assets of the Grantor whether now owned or hereafter acquired or arising and wherever located (collectively, the “Collateral”),
including, without limitation, the Grantor’s right, title, and interest in and to the following, whether now owned or hereafter
acquired or arising and wherever located:

 

(a)          all
of the Grantor’s Accounts;

 

(b)          all
of the Grantor’s Books;

 

(c)          all
of the Grantor’s Chattel Paper;

 

(d)          all
of the Grantor’s Deposit Accounts;

 

(e)          all
of the Grantor’s Equipment and fixtures;

 

(f)          all
of the Grantor’s General Intangibles;

 

(g)          all
of the Grantor’s Intellectual Property;

 

    	7

    	 

    

  

(h)          all
of the Grantor’s Inventory;

 

(i)          all
of the Grantor’s Investment Related Property;

 

(j)          all
of the Grantor’s Negotiable Collateral;

 

(k)          all
of the Grantor’s Real Property;

 

(l)          all
of the Grantor’s rights in respect of Supporting Obligations;

 

(m)          all
of the Grantor’s Commercial Tort Claims;

 

(n)          all
of the Grantor’s money, cash, cash equivalents, or other assets of the Grantor that now or hereafter come into the possession,
custody, or control of any Secured Party; and

 

(o)          all
of the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial
Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts,
Equipment, General Intangibles, Intellectual Property, Inventory, Investment Related Property, Negotiable Collateral, Real Estate,
Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection,
or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any
rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein,
and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured,
and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise
with respect to any of the foregoing (the “Proceeds”). Without limiting the generality of the foregoing, the
term “Proceeds” includes whatever is receivable or received when Investment Related Property or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of
any indemnity or guaranty payable to the Grantor or any Secured Party from time to time with respect to any of the Investment Related
Property.

 

3.           Security
for Obligations. This Agreement and the Security Interests created hereby secure the payment and performance of the Secured
Obligations, whether now existing or arising hereafter.

 

    	8

    	 

    

 

4.           Grantor
Remains Liable. Anything herein to the contrary notwithstanding, (a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform
all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by
Secured Parties, or any of them, of any of the rights hereunder shall not release the Grantor from any of its duties or obligations
under such contracts and agreements included in the Collateral, and (c) no Secured Party shall have any obligation or liability
under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any Secured Party be obligated
to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. Until an Event of Default shall occur and be continuing, except as otherwise provided in this Agreement
or any other Transaction Document, the Grantor shall have the right to possession and enjoyment of the Collateral for the purpose
of conducting the ordinary course of its businesses, subject to and upon the terms hereof and the other Transaction Documents.
Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership
of the Pledged Interests, including all voting, consensual, and dividend rights, shall remain in the Grantor until the occurrence
of an Event of Default and until any Secured Party shall notify the Grantor of such Secured Party’s exercise of voting, consensual,
or dividend rights with respect to the Pledged Interests pursuant to Section 15 hereof.

 

5.           Representations
and Warranties. The Grantor hereby represents and warrants as follows:

 

(a)          The
exact legal name of the Grantor is set forth in the preamble this Agreement.

 

(b)          Schedule
2 attached hereto sets forth (i) all Real Property owned or leased by the Grantor, together with all other locations of
Collateral, as of the date hereof, and (ii) the chief executive office of the Grantor as of the date hereof.

 

(c)          This
Agreement creates a valid security interest in all of the Collateral of the Grantor, to the extent a security interest therein
can be created under the Code, securing the payment of the Secured Obligations. Except to the extent a security interest in the
Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing
statements listing the Grantor, as a debtor, and Secured Parties, as secured parties, in the jurisdictions listed on Schedule
3 attached hereto. Upon the making of such filings, Secured Parties shall each have a first priority perfected security
interest in all of the Collateral of the Grantor to the extent such security interest can be perfected by the filing of a financing
statement. All action by the Grantor necessary to protect and perfect such security interest on each item of Collateral has been
duly taken.

 

(d)          Except
for the Security Interests created hereby, no Collateral is subject to any Lien as of the date hereof other than Permitted Liens.

 

(e)          No
consent, approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority
or any other Person is required (i) for the grant of a Security Interest by the Grantor in and to the Collateral pursuant to this
Agreement or for the execution, delivery, or performance of this Agreement by the Grantor, or (ii) for the exercise by any Secured
Party of the voting or other rights provided in this Agreement with respect to Investment Related Property pledged hereunder or
the remedies in respect of the Collateral pursuant to this Agreement, except as may be required in connection with such disposition
of Investment Related Property by laws affecting the offering and sale of securities generally.

 

    	9

    	 

    

 

 

(f)          Schedule
4 contains a complete and accurate list of all of the Grantor’s Deposit Accounts and Securities Accounts, including,
without limitation, with respect to each bank or securities intermediary (a) the name and address of such Person and (b) the account
numbers of such accounts maintained with such Person.

 

6.           Covenants.
The Grantor covenants and agrees with each Secured Party that from and after the date of this Agreement and until the date of termination
of this Agreement in accordance with Section 24 hereof:

 

(a)          Possession
of Collateral. In the event that any Collateral with a value in excess of $25,000 individually or $100,000 in the aggregate,
including proceeds, is evidenced by or consists of Negotiable Collateral, Investment Related Property, or Chattel Paper, and if
and to the extent that perfection or priority of Secured Parties’ respective Security Interests is dependent on or enhanced
by possession, the Grantor, immediately upon the request of any Secured Party, shall execute such other documents and instruments
as shall be requested by such Secured Party or, if applicable, endorse and deliver physical possession of such Negotiable Collateral,
Investment Related Property, or Chattel Paper to such Secured Party, together with such undated powers endorsed in blank as shall
be requested by such Secured Party, and do such other acts or things deemed reasonably necessary or desirable by such Secured Party
to protect the Secured Party’s Security Interests therein.

 

(b)          Chattel
Paper.

 

(i)          Subject
to the materiality threshold set forth in Section 6(a), the Grantor shall take all steps reasonably necessary to grant each Secured
Party control of all Chattel Paper in accordance with the Code and with respect to any such electronic Chattel Paper all “transferable
records” as that term is defined in Section 16 of the Uniform Electronic Purchase Act and Section 201 of the federal Electronic
Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction; and

 

(ii)         If
the Grantor retains possession of any Chattel Paper or instruments (which retention of possession shall be subject to the extent
permitted hereby and by the Securities Purchase Agreement), promptly upon the request of any Secured Party, such Chattel Paper
and instruments shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby
are subject to the Security Interests of [names of Secured Parties].”

 

    	10

    	 

    

 

(c)          Control
Agreements. The Grantor shall not establish or maintain any Deposit Account or Securities Account (or any other similar account)
unless (i) except with respect to Certificates of Deposit of the bank with which Grantor maintains its primary banking relationship,
the Grantor shall have provided each Secured Party with ten (10) days’ advance written notice of each such account except
for payroll accounts and other accounts that shall in the case of other accounts at no time hold in excess of $25,000 individually
or $100,000 in the aggregate, and (ii) if an Event of Default has occurred and is then continuing, the Secured Parties shall have
received a Control Agreement in respect of such account concurrently with the opening thereof. From and after the occurrence of
any Event of Default, the Grantor shall ensure that all of its Account Debtors forward payment of the amounts owed by them directly
to a Deposit Account that is subject to a Control Agreement and deposit or cause to be deposited promptly, and in any event no
later than the first (1st) Business Day after the date of receipt thereof, all of their collections (including those
sent directly by their Account Debtors to the Grantor) into a Deposit Account subject to a Control Agreement. Upon the request
of any Secured Party from and after the occurrence of any Event of Default, the Grantor shall promptly (but in no event later than
five (5) Business Days after such request therefor) cause each of its Deposit Accounts and Securities Accounts to be subject to
a Control Agreement in favor of the Secured Parties.

 

(d)          Letter-of-Credit
Rights. In the event that the Grantor is or becomes the beneficiary of one or more letters of credit with a face amount of
greater than $25,000 individually or $100,000 in the aggregate, the Grantor shall promptly (and in any event within five (5) Business
Days after becoming a beneficiary) notify the Secured Parties thereof and, upon the request by any Secured Party, enter into a
multi-party agreement with the Secured Parties and the issuing or confirming bank with respect to letter-of-credit rights assigning
such letter-of-credit rights to the Secured Parties and directing all payments thereunder to the Secured Parties, all in form and
substance satisfactory to the Secured Parties.

 

(e)          Commercial
Tort Claims. The Grantor shall promptly (and in any event within five (5) Business Days of receipt thereof) notify the Secured
Parties in writing upon incurring or otherwise obtaining a Commercial Tort Claim after the date hereof and, upon request of any
Secured Party, promptly amend Schedule 1 to this Agreement to describe such after-acquired Commercial Tort Claim
in a manner that reasonably identifies such Commercial Tort Claim, and hereby authorizes the filing of additional financing statements
or amendments to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things
deemed necessary or desirable by any Secured Party to give the Secured Parties a first priority, perfected security interest in
any such Commercial Tort Claim.

 

(f)          Government
Contracts. If any Account or Chattel Paper arises out of a contract or contracts with the United States of America or any department,
agency, or instrumentality thereof, the Grantor shall promptly (and in any event within five (5) Business Days of the creation
thereof) notify the Secured Parties thereof in writing and execute any instruments or take any steps reasonably required by any
Secured Party in order that all moneys due or to become due under such contract or contracts shall be assigned to the Secured Parties,
and shall provide written notice thereof and take all other appropriate actions under the Assignment of Claims Act or other applicable
law to provide each Secured Party a first-priority perfected security interest in such contract.

 

    	11

    	 

    

  

(g)          Investment
Related Property.

 

(i)          If
the Grantor shall receive or become entitled to receive any Pledged Interests after the date hereof, it shall promptly (and in
any event within two (2) Business Days of receipt thereof) identify such Pledged Interests in a written notice to the Secured Parties;

 

(ii)         During
the existence of an Event of Default all sums of money and property paid or distributed in respect of the Investment Related Property
pledged hereunder which are received by the Grantor shall be held by the Grantor in trust for the benefit of the Secured Parties
segregated from the Grantor’s other property, and the Grantor shall deliver it forthwith to the Secured Parties in the exact
form received;

 

(iii)        The
Grantor shall promptly deliver to the Secured Parties a copy of each notice or other communication received by it in respect of
any Pledged Interests;

 

(iv)        The
Grantor shall not make or consent to any material amendment or other modification or waiver with respect to any Pledged Interests,
Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with
respect to any Pledged Interests;

 

(v)         The
Grantor agrees that it will cooperate with the Secured Parties in obtaining all necessary approvals and making all necessary filings
under federal, state, local, or foreign law in connection with the Security Interests on the Investment Related Property pledged
hereunder or any sale or transfer thereof; and

 

(vi)        As
to all limited liability company or partnership interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
the Grantor hereby represents, warrants and covenants that the Pledged Interests issued pursuant to such agreement (A) shall not
be dealt in or traded on securities exchanges or in securities markets, (B) will not constitute investment company securities,
and (C)  will not be held by the Grantor in a securities account. In addition, none of the Pledged Operating Agreements, the
Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating
Agreement or Pledged Partnership Agreement, shall provide that such Pledged Interests are securities governed by Article 8 of the
Uniform Commercial Code as in effect in any relevant jurisdiction.

 

(h)          Transfers
and Other Liens. The Grantor shall not (i) sell, lease, license, assign (by operation of law or otherwise), transfer or otherwise
dispose of, or grant any option with respect to, any of the Collateral, except for Permitted Transfers or as expressly permitted
by this Agreement and the other Transaction Documents, or (ii) except for Permitted Liens, create or permit to exist any Lien upon
or with respect to any of the Collateral without the consent of Secured Parties holding at least a majority of the aggregate principal
amount of the then outstanding Notes. The inclusion of Proceeds in the Collateral shall not be deemed to constitute consent by
any Secured Party to any sale or other disposition of any of the Collateral except as expressly permitted in this Agreement or
the other Transaction Documents. Notwithstanding anything contained in this Agreement to the contrary, Permitted Liens shall not
be permitted with respect to any Pledged Interests.

 

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(i)          Preservation
of Existence.  The Grantor shall maintain and preserve its existence, rights and privileges, and become or remain
duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification necessary.

 

(j)          Maintenance
of Properties. The Grantor shall maintain and preserve all of its properties which are necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply at all times with the
provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture
thereof or thereunder.

 

(k)          Maintenance
of Insurance. The Grantor shall maintain insurance with responsible and reputable insurance companies or associations
(including, without limitation, comprehensive general liability, property, hazard, rent and business interruption insurance) with
respect to all of its assets and properties (including, without limitation, all real properties leased or owned by it and any and
all Inventory and Equipment) and business, in such amounts and covering such risks as is required by any governmental authority
having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in
similar businesses similarly situated, in each case, reasonably acceptable to the Secured Parties.

 

(l)          Other
Actions as to Any and All Collateral. The Grantor shall promptly (and in any event within five (5) Business Days of acquiring
or obtaining such Collateral) notify the Secured Parties in writing upon (i) acquiring or otherwise obtaining any Collateral after
the date hereof consisting of Investment Related Property, Chattel Paper (electronic, tangible or otherwise), documents (as defined
in Article 9 of the Code), promissory notes (as defined in the Code) or instruments (as defined in the Code) or (ii) any amount
payable under or in connection with any of the Collateral being or becoming evidenced after the date hereof by any Chattel Paper,
documents, promissory notes, or instruments.

 

7.          Relation
to Other Transaction Documents. In the event of any conflict between any provision in this Agreement and any provision in the
Securities Purchase Agreement or Notes, such provision of the Securities Purchase Agreement or Notes shall control, except to the
extent the applicable provision in this Agreement is more restrictive with respect to the rights of the Grantor or imposes more
burdensome or additional obligations on the Grantor, in which event the applicable provision in this Agreement shall control.

 

    	13

    	 

    

  

8.           Further
Assurances.

 

(a)          The
Grantor agrees that from time to time, at its own expense, it will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or that any Secured Party may reasonably request, in order to perfect and protect
the Security Interests granted or purported to be granted hereby or to enable any Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any of the Collateral.

 

(b)          The
Grantor authorizes the filing by any Secured Party of financing or continuation statements, or amendments thereto, including, but
limited to, the recordation of the security interests granted hereunder in Patents, Trademarks and Copyrights in the United States
Patent and Trademark Office and the United States Copyright Office, and Grantor will execute and deliver to such Secured Party
such other instruments or notices, as may be necessary or as such Secured Party may reasonably request, in order to perfect and
preserve the Security Interests granted or purported to be granted hereby. Upon the Satisfaction in Full of the Secured Obligations,
each Secured Party shall (at Grantor’ expense) file a termination statement and/or other necessary documents terminating
and releasing any and all financing statements or Liens on the Collateral pursuant to Section 24 within five (5) Business Days
following a written request therefor from Grantor.

 

(c)          The
Grantor authorizes any Secured Party at any time and from time to time to file, transmit, or communicate, as applicable, financing
statements and amendments (i) describing the Collateral as “all real and personal property of debtor” or “all
assets of debtor” or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater
detail, or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance. The Grantor also hereby ratifies any and all financing statements or amendments previously filed by any Secured Party
in any jurisdiction.

 

(d)          The
Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect
to any financing statement filed in connection with this Agreement without the prior written consent of each Secured Party affected
thereby, subject to the Grantor’s rights under Section 9-509(d)(2) of the Code.

 

(e)          Upon
one (1) Business Day’s advance notice, the Grantor shall permit each Secured Party or its employees, accountants, attorneys
or agents, access to examine and inspect any Collateral or any other property of the Grantor at any time during ordinary business
hours.

 

9.           Secured
Parties’ Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence and during the continuance of an Event
of Default, any Secured Party (a) may proceed to perform any and all of the obligations of the Grantor contained in any contract,
lease, or other agreement and exercise any and all rights of the Grantor therein contained as fully as the Grantor itself could,
(b) shall have the right to use the Grantor’s rights under Intellectual Property Licenses in connection with the enforcement
of the Secured Party’s rights hereunder, including the right to prepare for sale and sell any and all Inventory and Equipment
now or hereafter owned by the Grantor and now or hereafter covered by such licenses, and (c) shall have the right to request that
any Stock that is pledged hereunder be registered in the name of such Secured Party or any of its nominees.

 

    	14

    	 

    

  

10.         Secured
Parties Appointed Attorney-in-Fact. The Grantor, on behalf of itself and each New Subsidiary of the Grantor, hereby irrevocably
appoints each Secured Party as the attorney-in-fact of the Grantor and each such New Subsidiary, upon the occurrence and during
the continuance of an Event of Default, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this
Agreement. In the event the Grantor or any New Subsidiary fails to execute or deliver in a timely manner any Transaction Document
or other agreement, document, certificate or instrument which the Grantor or New Subsidiary now or at any time hereafter is required
to execute or deliver pursuant to the terms of the Securities Purchase Agreement or any other Transaction Document, upon the occurrence
and during the continuance of an Event of Default, each Secured Party shall have full authority in the place and stead of the Grantor
or New Subsidiary, and in the name of the Grantor, such New Subsidiary or otherwise, to execute and deliver each of the foregoing.
Without limitation of the foregoing, upon the occurrence and during the continuance of an Event of Default, each Secured Party
shall have full authority in the place and stead of the Grantor and each New Subsidiary, and in the name of any the Grantor, any
such New Subsidiary or otherwise, to take any action and to execute any instrument which such Secured Party may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:

 

(a)          to
ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due
under or in connection with any Collateral of the Grantor or New Subsidiary;

 

(b)          to
receive and open all mail addressed to the Grantor or New Subsidiary and to notify postal authorities to change the address for
the delivery of mail to the Grantor or New Subsidiary to that of such Secured Party (provided such Secured Party shall promptly
provide a copy of all such mail to the Grantor);

 

(c)          to
receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;

 

(d)          to
file any claims or take any action or institute any proceedings which such Secured Party may deem necessary or desirable for the
collection of any of the Collateral of the Grantor or New Subsidiary or otherwise to enforce the rights of any Secured Party with
respect to any of the Collateral; and

 

(e)          to
use any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, customer lists, advertising
matter or other industrial or intellectual property rights, in advertising for the exclusive purpose of sale and selling Inventory
and other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of the Grantor or New Subsidiary.

 

    	15

    	 

    

  

To the extent permitted
by law, the Grantor hereby ratifies, for itself and each New Subsidiary, all that such attorney-in-fact shall lawfully do or cause
to be done by virtue hereof. Such power-of-attorney granted pursuant to this Section 10 is coupled with an interest and shall be
irrevocable until this Agreement is terminated.

 

11.         Secured
Parties May Perform. If the Grantor fails to perform any agreement contained herein, upon the occurrence and during the continuance
of an Event of Default any Secured Party may itself perform, or cause performance of, such agreement, and the reasonable expenses
of such Secured Party incurred in connection therewith shall be payable by the Grantor.

 

12.         Secured
Parties’ Duties; Bailee for Perfection. The powers conferred on Secured Parties hereunder are solely to protect the Secured
Parties’ respective interests in the Collateral and shall not impose any duty upon any Secured Party in favor of the Grantor
or any other Secured Party to exercise any such powers. Except for the safe custody of any Collateral in its actual possession
and the accounting for moneys actually received by it hereunder and except as provided in the Code, no Secured Party shall have
any duty to the Grantor or any other Secured Party as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral. A Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment
substantially equal to that which such Secured Party accords its own property. Each Secured Party agrees that, with respect to
any Collateral at any time or times in its possession and in which any other Secured Party has a Lien, the Secured Party in possession
of any such Collateral shall be the bailee of each other Secured Party solely for purposes of perfecting (to the extent not otherwise
perfected) each other Secured Party’s Lien in such Collateral, provided that no Secured Party shall be obligated to obtain
or retain possession of any such Collateral. Without limiting the generality of the foregoing, the Secured Parties and the Grantor
hereby agree that any Secured Party that is in possession of any Collateral at such time as the Secured Obligations owing to such
Secured Party have been paid in full may re-deliver such Collateral to the Grantor or, if requested by any Secured Party prior
to such re-delivery, may deliver such Collateral (unless otherwise restricted by applicable law or court order and subject in all
events to the receipt of an indemnification of all liabilities arising from such delivery) to the requesting Secured Party, without
recourse to or representation or warranty by the Secured Party in such possession.

 

13.         Collection
of Accounts, General Intangibles and Negotiable Collateral. At any time upon the occurrence and during the continuation of
an Event of Default, any Secured Party may (a) notify Account Debtors of the Grantor that the Accounts, General Intangibles, Chattel
Paper or Negotiable Collateral have been assigned to such Secured Party or that such Secured Party has a security interest therein,
and (b) collect the Accounts, General Intangibles and Negotiable Collateral directly, and any collection costs and expenses shall
constitute part of the Secured Obligations.

 

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14.         Disposition
of Pledged Interests by Secured Party. None of the Pledged Interests hereafter acquired on the date of acquisition thereof
will be registered or qualified under the various federal, state or other securities laws of the United States or any other jurisdiction,
and disposition thereof after an Event of Default may be restricted to one or more private (instead of public) sales in view of
the lack of such registration. The Grantor understands that in connection with such disposition, any Secured Party may approach
only a restricted number of potential purchasers and further understands that a sale under such circumstances may yield a lower
price for the Pledged Interests than if the Pledged Interests were registered and qualified pursuant to federal, state and other
securities laws and sold on the open market. The Grantor, therefore, agrees that: (a) if a Secured Party shall, pursuant to the
terms of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a private sale, such Secured
Party shall have the right to rely upon the advice and opinion of any nationally recognized brokerage or investment firm (but shall
not be obligated to seek such advice and the failure to do so shall not be considered in determining the commercial reasonableness
of such action) as to the best manner in which to offer the Pledged Interest or any portion thereof for sale and as to the best
price reasonably obtainable at the private sale thereof; and (b) such reliance shall be conclusive evidence that such Secured Party
has handled the disposition in a commercially reasonable manner.

 

15.         Voting
Rights.

 

(a)          Upon
the occurrence and during the continuation of an Event of Default, (i) any Secured Party may, at its option, and with two (2) Business
Days prior notice to the Grantor, and in addition to all rights and remedies available to the Secured Parties under any other agreement,
at law, in equity, or otherwise, exercise all voting rights, and all other ownership or consensual rights in respect of the Pledged
Interests, but under no circumstances is any Secured Party obligated by the terms of this Agreement to exercise such rights, and
(ii) if such Secured Party duly exercises its right to vote any of such Pledged Interests, the Grantor hereby appoints such Secured
Party as the Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner
that such Secured Party deems advisable for or against all matters submitted or which may be submitted to a vote of shareholders,
partners or members, as the case may be. Such power-of-attorney granted pursuant to this Section 15 is coupled with an interest
and shall be irrevocable until this Agreement is terminated.

 

(b)          For
so long as the Grantor shall have the right to vote the Pledged Interests, it covenants and agrees that it will not, without the
prior written consent of the Secured Parties, vote or take any consensual action with respect to such Pledged Interests which would
materially or adversely affect the rights of the Secured Parties exercising the voting rights owned by the Grantor or the value
of the Pledged Interests.

 

    	17

    	 

    

 

16.         Remedies.
Upon the occurrence and during the continuance of an Event of Default:

 

(a)          Any
Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other
Transaction Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or
any other applicable law. Without limiting the generality of the foregoing, the Grantor expressly agrees that, in any such event,
any Secured Party without any demand, advertisement, or notice of any kind (except a notice specified below of time and place of
public or private sale) to or upon the Grantor or any other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code or by any other applicable law), may take immediate possession
of all or any portion of the Collateral and (i) require the Grantor to, and the Grantor hereby agrees that it will at its own expense
and upon request of such Secured Party forthwith, assemble all or part of the Collateral as directed by such Secured Party and
make it available to such Secured Party at one or more locations where the Grantor regularly maintains Inventory, and (ii) without
notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at
any of such Secured Party’s offices or elsewhere, for cash, on credit, and upon such other terms as such Secured Party may
deem commercially reasonable. The Grantor agrees that, to the extent notice of sale shall be required by law, at least 10 days’
notice of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable
notification and specifically such notice shall constitute a reasonable “authenticated notification of disposition”
within the meaning of Section 9-611 of the Code. No Secured Party shall be obligated to make any sale of Collateral regardless
of notice of sale having been given. Any Secured Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was
so adjourned.

 

(b)          Each
Secured Party is hereby granted a non-exclusive license or other right to use, without liability for royalties or any other charge,
the Grantor’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade names, Trademarks, service marks
and advertising matter, URLs, domain names, industrial designs, other industrial or intellectual property or any property of a
similar nature, whether owned by the Grantor or with respect to which the Grantor has rights under license, sublicense, or other
agreements (but only to the extent (i) such license, sublicense or agreement does not prohibit such use by such Secured Party,
and (ii) the Grantor will not be in default under such license, sublicense, or other agreement as a result of such use by such
Secured Party), as it pertains to the Collateral, for the exclusive purpose of preparing for sale, advertising for sale and effectuating
the sale of any Collateral, and the Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit
of such Secured Party.

 

(c)          Any
cash held by any Secured Party as Collateral and all proceeds received by any Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall be applied against the Secured Obligations in the order
set forth in Section 17 hereof. In the event the proceeds of Collateral are insufficient for the Satisfaction in Full of the Secured
Obligations (as defined below), the Grantor shall remain jointly and severally liable for any such deficiency.

 

    	18

    	 

    

 

(d)          The
Grantor hereby acknowledges that the Secured Obligations arose out of a commercial transaction, and agrees that if an Event of
Default shall occur and be continuing any Secured Party shall have the right to an immediate writ of possession without notice
of a hearing. Each Secured Party shall have the right to the appointment of a receiver for the properties and assets of the Grantor,
and the Grantor hereby consents to such rights and such appointment and hereby waives any objection it may have thereto or the
right to have a bond or other security posted by any Secured Party.

 

(e)          Notwithstanding
anything in this Agreement to the contrary, each Secured Party agrees that it will not exercise any remedy provided for under this
Agreement with respect to all or any portion of the Collateral unless such Secured Party is a Permitted Secured Party (provided
that the foregoing shall not prevent any Secured Party from commencing or participating in any Insolvency Proceeding or taking
any action (other than with respect to the Collateral) to enforce the payment or performance of the Grantor’s obligations
under any of the Notes or other Transaction Documents). This Section 16(e) is not intended to confer any rights or benefits upon
the Grantor or any other Person except Secured Parties, and no Person (including the Grantor) other than the Secured Parties shall
have any right to enforce any of the provisions of this Section 16(e). As between the Grantor and any Secured Party, any action
that such Secured Party may take under this Agreement shall be conclusively presumed to have been authorized and approved by the
other Secured Parties.

 

(f)          Each
Secured Party may, in addition to other rights and remedies provided for herein, in the other Transaction Documents, or otherwise
available to it under applicable law and without the requirement of notice to or upon the Grantor or any other Person (which notice
is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to the Grantor’s
Deposit Accounts in which any such Secured Party’s Liens are perfected by control under Section 9-104 of the Code, instruct
the bank maintaining such Deposit Account for the Grantor to pay the balance of such Deposit Account to or for the benefit of such
Secured Party, and (ii) with respect to the Grantor’s Securities Accounts in which such Secured Party’s Liens are perfected
by control under Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the Grantor
to (A) transfer any cash in such Securities Account to or for the benefit of such Secured Party, or (B) liquidate any financial
assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or
for the benefit of such Secured Party.

 

17.         Priority
of Liens; Application of Proceeds of Collateral. Each Secured Party hereby acknowledges and agrees that, notwithstanding the
time or order of the filing of any financing statement or other registration or document with respect to the Collateral and the
Security Interests, or any provision of this Agreement, any other Security Document, the Code or other applicable law, solely as
amongst the Secured Parties, the separate Security Interests of the Secured Parties shall have the same rank and priority; provided,
that, the foregoing shall not apply to any Security Interest of a Secured Party that is void or voidable as a matter of law. In
furtherance thereof, all proceeds of Collateral received by any Secured Party shall be applied as follows:

 

    	19

    	 

    

 

(a)          first,
ratably to pay any expenses due to any of the Secured Parties (including, without limitation, the reasonable costs and expenses
paid or incurred by any Secured Party to correct any default under or enforce any provision of the Transaction Documents, or after
the occurrence of any Event of Default in gaining possession of, maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated)
or indemnities then due to any of the Secured Parties under the Transaction Documents, until paid in full;

 

(b)          second,
ratably to pay any fees or premiums then due to any of the Secured Parties under the Transaction Documents, until paid in full;

 

(c)          third,
ratably to pay interest due in respect of the Secured Obligations then due to any of the Secured Parties, until paid in full;

 

(d)          fourth,
ratably to pay the principal amount of all Secured Obligations then due to any of the Secured Parties, until paid in full;

 

(e)          fifth,
ratably to pay any other Secured Obligations then due to any of the Secured Parties; and

 

(f)          sixth,
to Grantor or such other Person entitled thereto under applicable law.

 

18.         Remedies
Cumulative. Each right, power, and remedy of any Secured Party as provided for in this Agreement or in any other Transaction
Document or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power, or remedy provided for in this Agreement or in the other Transaction Documents or now
or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by any Secured
Party, of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by such Secured
Party of any or all such other rights, powers, or remedies. The Grantor acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to each Secured Party and that the remedy at law for any such breach may be inadequate. The Grantor
therefore agrees that, in the event of any breach or any threatened breach, each Secured Party shall be entitled, in addition to
all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required.

 

19.         Marshaling.
No Secured Party shall be required to marshal any present or future collateral security (including but not limited to the Collateral)
for, or other assurances of payment of, the Secured Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security
and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.
To the extent that it lawfully may, the Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral
which might cause delay in or impede the enforcement of any Secured Party’s rights and remedies under this Agreement or under
any other instrument creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully
may, the Grantor hereby irrevocably waives the benefits of all such laws.

 

    	20

    	 

    

  

20.         Acknowledgment.

 

(a)          Each
Secured Party hereby agrees and acknowledges that no other Secured Party has agreed to act for it as an administrative or collateral
agent, and each Secured Party is and shall remain solely responsible for the attachment, perfection and priority of all Liens created
by this Agreement or any other Security Document in favor of such Secured Party. No Secured Party shall have by reason of this Agreement
or any other Transaction Document an agency or fiduciary relationship with any other Secured Party. No Secured Party (which term,
as used in this sentence, shall include reference to each Secured Party’s officers, directors, employees, attorneys, agents
and affiliates and to the officers, directors, employees, attorneys and agents of such Secured Party’s affiliates) shall:
(i) have any duties or responsibilities except those expressly set forth in this Agreement and the other Security Documents
or (ii) be required to take, initiate or conduct any enforcement action (including any litigation, foreclosure or collection
proceedings hereunder or under any of the other Security Documents). Without limiting the foregoing, no Secured Party shall have
any right of action whatsoever against any other Secured Party as a result of such Secured Party acting or refraining from acting
hereunder or under any of the Security Documents except as a result and to the extent of losses caused by such Secured Party’s
actual gross negligence or willful misconduct (it being understood and agreed by each Secured Party that the delivery by any
Significant Secured Party of one or more Veto Notices shall not be deemed to be or construed as gross negligence or willful misconduct
on the part of the Secured Party delivering any such Veto Notice). No Secured Party assumes any responsibility for any failure
or delay in performance or breach by the Grantor or any other Secured Party of its obligations under this Agreement or any other
Transaction Document. No Secured Party makes to any other Secured Party any express or implied warranty, representation or
guarantee with respect to any Secured Obligations, Collateral, Transaction Document or the Grantor. No Secured Party nor any of
its officers, directors, employees, attorneys or agents shall be responsible to any other Secured Party or any of its officers,
directors, employees, attorneys or agents for: (i) any recitals, statements, information, representations or warranties contained
in any of the Transaction Documents or in any certificate or other document furnished pursuant to the terms hereof; (ii) the
execution, validity, genuineness, effectiveness or enforceability of any of the Transaction Documents; (iii) the validity,
genuineness, enforceability, collectability, value, sufficiency or existence of any Collateral, or the attachment, perfection or
priority of any Lien therein; or (iv) the assets, liabilities, financial condition, results of operations, business, creditworthiness
or legal status of the Grantor or any Account Debtor. No Secured Party nor any of its officers, directors, employees, attorneys
or agents shall have any obligation to any other Secured Party to ascertain or inquire into the existence of any default or Event
of Default, the observance or performance by the Grantor of any of its duties or agreements under any of the Transaction Documents
or the satisfaction of any conditions precedent contained in any of the Transaction Documents.

 

    	21

    	 

    

  

(b)          Each
Secured Party hereby acknowledges and represents that it has, independently and without reliance upon any other Secured Party,
and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of the Grantor
and its own decision to enter into the Transaction Documents and to purchase the Notes, and each Secured Party has made such
inquiries concerning the Transaction Documents, the Collateral and the Grantor as such Secured Party feels necessary and appropriate,
and has taken such care on its own behalf as would have been the case had it entered into the Transaction Documents without any
other Secured Party. Each Secured Party hereby further acknowledges and represents that the other Secured Parties have not made
any representations or warranties to it concerning the Grantor, any of the Collateral or the legality, validity, sufficiency or
enforceability of any of the Transaction Documents. Each Secured Party also hereby acknowledges that it will, independently and
without reliance upon the other Secured Parties, and based upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions in taking or refraining to take any other
action under this Agreement or the Transaction Documents. No Secured Party shall have any duty or responsibility to provide any
other Secured Party with any notices, reports or certificates furnished to such Secured Party by the Grantor or any credit or other
information concerning the affairs, financial condition, business or assets of the Grantor (or any of its affiliates) which may
come into possession of such Secured Party.

 

21.         Indemnity
and Expenses.

 

(a)          Without
limiting any obligations of the Grantor under the Securities Purchase Agreement, the Grantor agrees to indemnify all Secured Parties
from and against all claims, lawsuits and liabilities (including reasonable attorneys’ fees) arising out of or resulting
from this Agreement (including enforcement of this Agreement) or any other Transaction Document, except claims, losses or liabilities
resulting from the gross negligence or willful misconduct of the party seeking indemnification as determined by a final non-appealable
order of a court of competent jurisdiction. This provision shall survive the termination of this Agreement and the Transaction
Documents and the Satisfaction in Full of the Secured Obligations.

 

(b)          The
Grantor shall, upon demand, pay to each Secured Party all of the reasonable costs and expenses which such Secured Party may incur
in connection with (i) the custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection from,
or other realization upon, any of the Collateral in accordance with this Agreement and the other Transaction Documents, (ii) the
exercise or enforcement of any of the rights of such Secured Party hereunder or (iii) the failure by the Grantor to perform or
observe any of the provisions hereof.

 

    	22

    	 

    

 

22.         Merger,
Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES SOLELY WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No provision of this Agreement
may be amended other than by an instrument in writing signed by the Grantor and Secured Parties holding at least a majority of
the aggregate principal amount of the then outstanding Notes, and any amendment to any provision of this Agreement made in conformity
with the provisions of this Section 22 shall be binding on all Secured Parties, provided that no such amendment shall be effective
to the extent that it (a) applies to less than all of the Secured Parties or (b) imposes any obligation or liability on any Secured
Party without such Secured Party’s prior written consent (which may be granted or withheld in such Secured Party’s
sole discretion). No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving
party, provided that all of the single Significant Secured Parties (in a writing signed by all such Significant Secured Parties)
may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions
of this Section 22 shall be binding on all Secured Parties, provided that no such waiver shall be effective to the extent that
it (i) applies to less than all the Secured Parties (unless a party gives a waiver as to itself only) or (ii) imposes any obligation
or liability on any Secured Party without such Secured Party’s prior written consent (which may be granted or withheld in
such Secured Party’s sole discretion).

 

23.         Addresses
for Notices. All notices and other communications provided for hereunder (a) shall be given in the form and manner set forth
in the Securities Purchase Agreement and (b) shall be delivered, (i) in the case of notice to the Grantor, by delivery of such
notice to the Grantor’s address specified in the Securities Purchase Agreement or at such other address as shall be designated
by the Grantor in a written notice to each of the Secured Parties in accordance with the provisions thereof, and (ii) in the case
of notice to any Secured Party, by delivery of such notice to such Secured Party at its address specified in the Securities Purchase
Agreement or at such other address as shall be designated by such Secured Party in a written notice to the Grantor and each other
Secured Party in accordance with the provisions thereof.

 

24.         Separate,
Continuing Security Interests; Assignments under Transaction Documents. This Agreement shall create a separate, continuing
security interest in the Collateral in favor of each Secured Party and shall (a) remain in full force and effect until Satisfaction
in Full of the Secured Obligations, (b) be binding upon the Grantor, and its permitted successors and permitted assigns, and (c)
inure to the benefit of, and be enforceable by, the Secured Parties and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Secured Party may, in accordance with the provisions of the Transaction
Documents, assign or otherwise transfer all or any portion of its rights and obligations under the Transaction Documents to any
other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Secured
Party herein or otherwise. Upon Satisfaction in Full of the Secured Obligations, the Security Interests granted hereby shall terminate
and all rights to the Collateral shall revert to the Grantor or any other Person entitled thereto. At such time, each Secured Party
will authorize the filing of appropriate termination statements to terminate such Security Interests. No transfer or renewal, extension,
assignment, or termination of this Agreement or any other Transaction Document, or any other instrument or document executed and
delivered by the Grantor to any Secured Party nor any additional loans made by any Secured Party to the Grantor, nor the taking
of further security, nor the retaking or re-delivery of the Collateral to the Grantor, or any of them, by any Secured Party, nor
any other act of the Secured Parties, or any of them, shall release the Grantor from any obligation, except a release or discharge
executed in writing by all Secured Parties. No Secured Party shall by any act, delay, omission or otherwise, be deemed to have
waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by such Secured Party and then only
to the extent therein set forth. A waiver by any Secured Party of any right or remedy on any occasion shall not be construed as
a bar to the exercise of any such right or remedy which such Secured Party would otherwise have had on any other occasion.

 

    	23

    	 

    

  

25.         Governing
Law; Jurisdiction; Service of Process; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper; provided, however, any suit seeking enforcement against any Collateral or other property may be brought, at any Secured
Party’s option, in the courts of any jurisdiction where such Secured Party elects to bring such action or where such Collateral
or other property may be found. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

26.         Miscellaneous.

 

(a)          This
Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any
signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed
signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof. Any party delivering
an executed counterpart of this Agreement by facsimile or other electronic method of transmission also shall deliver an original
executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Security Document mutatis mutandis.

 

    	24

    	 

    

  

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

 

(c)          Headings
used in this Agreement are for convenience only and shall not be used in connection with the interpretation of any provision hereof.

 

(d)          The
pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction
of sentences shall conform thereto.

 

(e)          The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. For clarification purposes, the Recitals are part of this Agreement.

 

(f)          Unless
the context of this Agreement or any other Transaction Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes” and “including” are not limiting,
and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement or any other Transaction Document refer to this Agreement or such other Transaction Document, as the case may be, as
a whole and not to any particular provision of this Agreement or such other Transaction Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in
this Agreement or in any other Transaction Document to any agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). “Satisfaction in Full of the Secured Obligations” shall mean the
indefeasible payment in full in cash and discharge, or other satisfaction in accordance with the terms of the Transaction Documents
and discharge, of all Secured Obligations in full. Any reference herein to any Person shall be construed to include such Person’s
permitted successors and permitted assigns. Any requirement of a writing contained herein or in any other Transaction Document
shall be satisfied by the transmission of a Record and any Record so transmitted shall constitute a representation and warranty
as to the accuracy and completeness of the information contained therein.

 

    	25

    	 

    

 

(g)          All
dollar amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated
in other currencies shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date
of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S.
Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in The Wall Street Journal on the relevant date
of calculation.

 

[Signature pages follow]

 

    	26

    	 

    

 

IN WITNESS WHEREOF,
the undersigned parties hereto have executed this Agreement by and through their duly authorized officers, as of the day and year
first above written.

 

	GRANTOR:	DVINEWAVE INC., a Delaware corporation
	 	 	 
	 	By:	 
	 	 	Michael Leabman, President

 

SECURITY AGREEMENT 

 

    	 

    	 

    

 

	SECURED PARTIES:	[________________________]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

SECURITY AGREEMENT

 

    	 

    	 

    

 

SCHEDULE 1

 

COMMERCIAL TORT CLAIMS

 

None.

 

    	 

    	 

    

 

SCHEDULE 2

 

REAL PROPERTY

 

Owned Real Property

 

None

 

Leased Real Property

 

Grantor anticipates that
in the coming months it will begin to lease the following property:

 

303 Ray Street 

Pleasanton, CA 93308

 

    	 

    	 

    

 

SCHEDULE 3

 

LIST OF UNIFORM COMMERCIAL
CODE FILING JURISDICTIONS

 

Delaware Secretary of State

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