SUBSCRIPTION AGREEMENT

in connection with

PLASTIC2OIL, INC.

12% Secured Promissory Notes

(together with Warrants to Purchase shares of Common Stock)

August 8 2016

SUBSCRIPTION AGREEMENT

This Subscription Agreement (the “Agreement”), is executed by the undersigned (the “Subscriber”) in connection with the offering (the “Offering”) by Plastic2Oil, Inc., a Nevada corporation (the “Company”), of five-year 12% Secured Promissory Notes (the “Notes”) and Warrants (the “Warrants”) to purchase shares of Common Stock, par value $.001 per share, of the Company (the “Shares”) (the Notes and the Warrants are collectively referred to as the “Offered Securities” and the Offered Securities and the Shares issuable upon the exercise of the Warrants are collectively referred to herein as the “Securities”). For every $100,000 principal amount of Notes purchased, the Subscriber shall receive Warrants to purchase 100,000 shares of Common Stock. The Notes shall be substantially in the form attached hereto as Exhibit A . The Warrants shall be substantially in the form attached hereto as Exhibit B . The obligations under the Note will be secured pursuant to a Security Agreement substantially in the form attached hereto as Exhibit C .

SECTION 1

SECTION 2

Section 2.1 Acceptance or Rejection .

SECTION 3

SECTION 4

The Company represents and warrants to the Subscriber as follows:

SECTION 5 (CANADIAN SECURITIES REQUIREMENTS)

If the Subscriber is a resident of Alberta, Ontario or British Columbia, such Subscriber’s subscription for Offered Securities is subject to the terms and conditions of this Section 5.

Section 5.1 Offering Exemption .

If the Subscriber is a resident of Alberta, Ontario or British Columbia, the sale of the Offered Securities by the Company to the Subscriber is conditional upon such sale being exempt from the requirements as to the filing of a prospectus and as to the preparation of an offering memorandum contained in any statute, regulation, instrument, rule or policy applicable to the sale of the Offered Securities or upon the issue of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or delivering an offering memorandum.

Section 5.2 Representations and Warranties .

By the Subscriber’s acceptance of this Agreement, the Subscriber represents and warrants to the Company (which representations and warranties shall survive the Closing) that:

(i) the Subscriber is purchasing as principal or is deemed to be purchasing as principal in accordance with applicable Canadian securities legislation and meets the definition of “accredited Subscriber” as such term is defined under NI 45-106 and has completed and signed the Representation Letter (for Accredited Investors) set forth on Annex A ; or

(ii) the Subscriber is purchasing as principal and has purchased that number of Offered Securities having an acquisition cost to the Subscriber of not less than $150,000 to be paid in cash on the date of Closing;

Section 5.3 Anti-Money Laundering .

The Subscriber represents and warrants that the funds representing the Purchase Price for the Offered Securities being subscribed for herein which will be advanced by the Subscriber to the Company hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada)(the “ PCMLTFA ”) and the Subscriber acknowledges that the Company may in the future be required by law to disclose the Subscriber’s name and other information relating to this Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to PCMLTFA. To the best of the Subscriber’s knowledge: (a) none of the subscription funds to be provided by the Subscriber (i) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada or the United States of America or any other jurisdiction, or (ii) are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and (b) it shall promptly notify the Company if the Subscriber discovers that any of such representations ceases to be true, and to provide the Company with appropriate information in connection therewith.

Section 5.4 Ontario Securities Commission Disclosure .

If the Subscriber is resident in Ontario, it acknowledges it has been notified by the Company: (i) of the delivery to the Ontario Securities Commission (the “OSC”) of the Subscriber’s personal information; (ii) that the Subscriber’s personal information is being collected indirectly by the OSC under the authority granted to it in the securities legislation; (iii) the Subscriber’s personal information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario; and (iv) the contact information of the public official in Ontario who can answer questions about the OSC’s indirect collection of personal information is, Administrative Assistant to the Director of Corporate Finance, Ontario Securities Commission, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario, M5H 3S8, telephone (416) 593-8086, facsimile (416) 593-8252.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) [ INSERT THE DISTRIBUTION DATE ], AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.

SECTION 6

SECTION 7

[Subscription signature pages follow]

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT AND SUCH STATE LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

12% SECURED PROMISSORY NOTE

DUE AUGUST 10, 2021

FOR VALUE RECEIVED, PLASTIC2OIL, INC., a Nevada corporation (herein called the “Company”), for value received hereby promises to pay on AUGUST 10, 2021, to LAWRENCE LEAHY , with an address at #206 Cowley Avenue, Ottawa Ontario, K1Y 0G0 (herein called the “Holder”), the principal sum of One Hundred Thousand Dollars ($100,000), together with interest upon the principal hereof at the rate of 12% per annum. Interest on this Note shall be compounded annually and shall accrue on the outstanding principal amount on this Note from the date of issuance until the date of repayment of the principal and payment of accrued interest in full. Interest shall be calculated on the basis of a 365 day year and shall be payable at maturity. Payments hereunder shall be made at such place as the holder hereof shall designate to the undersigned, in writing, in lawful money of the United States of America. Any payment which becomes due on a Saturday, Sunday or legal holiday shall be payable on the next business day.

This Note shall, (i) upon declaration by the Holder or (ii) automatically upon acceleration pursuant to clause (c) below, become immediately due and payable upon the occurrence of any of the following specified events of default:

Declaration of this Note being immediately due and payable by the Holder may only be made by written notice to the Company declaring the unpaid balance of the principal amount of this Note and accrued interest thereon to be due. Such declaration shall be deemed given upon the occurrence of any event specified in clause (c) above. In the event of a default, all costs of collection, including reasonable attorneys’ fees, shall be paid by the Company.

This Note may be prepaid by the Company in whole or in part at any time or from time to time without penalty or premium. This Note is not assignable by the holder hereof and any such purported assignment shall be null and void.

The Company for itself and its successors and assigns hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance or endorsement of this Note, and agrees that this Note shall be deemed to have been made under, and shall be interpreted and governed by reference to, the laws of the State of New York.

Except as expressly agreed in writing by the Holder, no extension of time for payment of this Note, or any installment hereof, and no alteration, amendment or waiver of any provision of this Note shall release, discharge, modify, change or affect the liability of the Company under this Note.

All of the covenants, stipulations, promises and agreements made by or contained in this Note on behalf of the undersigned shall bind its successors, whether so expressed or not.

No failure on the part of the Holder to exercise, and no delay in exercising, any right under this Note shall operate as a waiver thereof, nor shall any single or partial exercise of such rights preclude any other or further exercise thereof or the exercise of any other right.

It is the intention of the Company and the Holder that all payments due hereunder will be treated for accounting and tax purposes as indebtedness of the Company to the Holder. Each of the Company and the Holder agrees to report such payments due hereunder for the purposes of all taxes in a manner consistent with such intended characterization.

If any term or provision of this Note shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions herein shall in no way be affected thereby.

The Company’s obligations under this Note shall be secured pursuant to that certain Security Agreement, dated as of August 29, 2013 (the “Security Agreement”), by the Company and certain of its subsidiaries, each as grantor, in favor of the Collateral Agent for the benefit of the purchasers of 12% secured promissory notes of like tenor issued by the Company in the same offering, as well as the following purchasers of $4 million aggregate principal amount of similar 12% secured promissory notes which were sold in offerings in 2013 and 2014: Mr. Richard Heddle, personally, as purchaser of 12% secured promissory notes in August or September of 2013 in an aggregate principal amount of $3 million”, and Heddle Marine Services Inc., a corporation, as purchaser of 12% secured promissory note on November 19, 2014 in an aggregate principal amount of $1 million (this Note and such other notes are collectively, the “12% Company Notes. The Company’s obligations under this Note and the other 12% Company Notes are also secured by each of the following agreements made in favor of the holders of 12% Company Notes by the Company (and if requested by the Collateral Agent or the Holder, one or more of its subsidiaries) (the “Additional Collateral Documents”):

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its corporate name by its Chief Financial Officer as of the date hereinabove set forth.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IN ACCORDANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THAT ACT, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

WARRANT TO PURCHASE

SHARES OF COMMON STOCK OF

PLASTIC2OIL, INC.

This certifies that LAWRENCE LEAHY or any party to whom this Warrant is assigned in accordance with its terms is entitled to subscribe for and purchase 100,000 shares of the Common Stock of Plastic2Oil, Inc., a Nevada corporation, on the terms and conditions of this Warrant.

1. Definitions . As used in this Warrant, the term :

1.1 “Business Day” means any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York are authorized or obligated to be closed by law or by executive order.

1.2 “Common Stock” means the Common Stock, par value $.001 per share, of the Corporation.

1.3 “Corporation” means Plastic2Oil, Inc. a Nevada corporation, or its successor.

1.4 “Expiration Date” means AUGUS 10, 2021

1.5 “Holder” means LAWRENCE LEAHY or any party to whom this Warrant is assigned in accordance with its terms.

1.6 “1933 Act” means the Securities Act of 1933, as amended.

1.7 “Warrant” means this Warrant and any warrants delivered in substitution or exchange for this Warrant in accordance with the provisions of this Warrant.

1.8 “Warrant Price” means $0.12 per share of Common Stock, as such amount may be adjusted pursuant to Section 4 hereof.

2. Exercise of Warrant . At any time before the Expiration Date, the Holder may exercise the purchase rights represented by this Warrant, in whole or in part, by surrendering this Warrant (with a duly executed subscription in the form attached) at the Corporation’s principal corporate office (located on the date hereof in Niagara Falls, New York) and by paying the Corporation, by certified or cashier’s check, the aggregate Warrant Price for the shares of Common Stock being purchased.

2.1 Delivery of Certificates. Within thirty (30) days after each exercise of the purchase rights represented by this Warrant, the Corporation shall deliver a certificate for the shares of Common Stock so purchased to the Holder and, unless this Warrant has been fully exercised or expired, a new Warrant representing the balance of the shares of Common Stock subject to this Warrant.

2.2 Effect of Exercise. The person entitled to receive the shares of Common Stock issuable upon any exercise of the purchase rights represented by this Warrant shall be treated for all purposes as the holder of such shares of record as of the close of business on the date of exercise.

3. Stock Fully Paid; Reservation of Shares . The Corporation covenants and agrees that all securities that it may issue upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable and free from all taxes, liens and charges. The Corporation further covenants and agrees that, during the period within which the Holder may exercise the rights represented by this Warrant, the Corporation shall at all times have authorized and reserved for issuance enough shares of its Common Stock or other securities for the full exercise of the rights represented by this Warrant. The Corporation shall not, by an amendment to its Articles of Incorporation or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant.

4. Adjustments . The Warrant Price and the number of shares of Common Stock that the Corporation must issue upon exercise of this Warrant shall be subject to adjustment in accordance with Sections 4.1 through 4.3.

4.1 Adjustment to Warrant Price for Combinations or Subdivisions of Common Stock. If the Corporation at any time or from time to time after the date hereof (1) declares or pays, without consideration, any dividend on the Common Stock payable in Common Stock; (2) creates any right to acquire Common Stock for no consideration; (3) subdivides the outstanding shares of Common Stock (by stock split, reclassification or otherwise); or (4) combines or consolidates the outstanding shares of Common Stock, by reclassification or otherwise, into a lesser number of shares of Common Stock, the Corporation shall proportionately increase or decrease the Warrant Price, as appropriate.

4.2 Adjustments for Reclassification and Reorganization. If the Common Stock issuable upon exercise of this Warrant changes into shares of any other class or classes of security or into any other property for any reason other than a subdivision or combination of shares provided for in Section 4.1, including without limitation any reorganization, reclassification, merger or consolidation, the Corporation shall take all steps necessary to give the Holder the right, by exercising this Warrant, to purchase the kind and amount of securities or other property receivable upon any such change by the owner of the number of shares of Common Stock subject to this Warrant immediately before the change.

4.3 Spin Offs. If the Corporation spins off any subsidiary by distributing to the Corporation’s shareholders as a dividend or otherwise any stock or other securities of the subsidiary, the Corporation shall reserve until the Expiration Date enough of such shares or other securities for delivery to the Holders upon any exercise of the rights represented by this Warrant to the same extent as if the Holders owned of record all Common Stock or other securities subject to this Warrant on the record date for the distribution of the subsidiary’s shares or other securities.

4.4 Certificates as to Adjustments. Upon each adjustment or readjustment required by this Section 4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with this Section, cause independent public accountants selected by the Corporation to verify such computation and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.

5. Fractional Shares . The Corporation shall not issue any fractional shares in connection with any exercise of this Warrant.

6. Dissolution or Liquidation . If the Corporation dissolves, liquidates or winds up its business before the exercise or expiration of this Warrant, the Holder shall be entitled, upon exercising this Warrant, to receive in lieu of the shares of Common Stock or any other securities receivable upon such exercise, the same kind and amount of assets as would have been issued, distributed or paid to it upon any such dissolution, liquidation or winding up with respect to such shares of Common Stock or other securities, had the Holder been the holder of record on the record date for the determination of those entitled to receive any such liquidating distribution or, if no record is taken, upon the date of such liquidating distribution. If any such dissolution, liquidation or winding up results in a cash distribution or distribution of property which the Corporation’s Board of Directors determines in good faith to have a cash value in excess of the Warrant Price provided by this Warrant, then the Holder may, at its option, exercise this Warrant without paying the aggregate Warrant Price and, in such case, the Corporation shall, in making settlement to Holder, deduct from the amount payable to Holder an amount equal to such aggregate Warrant Price.

7. Transfer and Exchange .

7.1 Transfer. Subject to Section 7.3, the Holder may transfer all or part of this Warrant at any time on the books of the Corporation at its principal office upon surrender of this Warrant, properly endorsed. Upon such surrender, the Corporation shall issue and deliver to the transferee a new Warrant or Warrants representing the Warrants so transferred. Upon any partial transfer, the Corporation shall issue and deliver to the Holder a new Warrant or Warrants with respect to the Warrants not so transferred.

7.2 Exchange. The Holder may exchange this Warrant at any time at the principal office of the Corporation for Warrants in such denominations as the Holder may designate in writing. No such exchanges will increase the total number of shares of Common Stock or other securities that are subject to this Warrant.

7.3 Securities Act of 1933. By accepting this Warrant, the Holder agrees that this Warrant and the shares of the Common Stock issuable upon exercise of this Warrant may not be offered or sold except in compliance with the 1933 Act, and then only with the recipient’s agreement to comply with this Section 7 with respect to any resale or other disposition of such securities. The Corporation may make a notation on its records in order to implement such restriction on transferability.

8. Loss or Mutilation . Upon the Corporation’s receipt of reasonably satisfactory evidence of the ownership and the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) of a reasonably satisfactory indemnity or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Corporation shall execute and deliver a new Warrant to the Holder.

9. Successors . All the covenants and provisions of this Warrant shall bind and inure to the benefit of the Holder and the Corporation and their respective successors and assigns.

10. Notices . All notices and other communications given pursuant to this Warrant shall be in writing and shall be deemed to have been given when personally delivered or when mailed by prepaid registered, certified or express mail, return receipt requested. Notices should be addressed as follows:

(a) If to Holder, then to:

LAWRENCE LEAHY 

#206 COWLEY AVENUE, OTTAWA

ONTARIO, K1Y 0G0

(b) If to the Corporation, then to:

Plastic2Oil, Inc.

20 Iroquois Street

Niagara Falls, NY 14303

Attention: Chief Financial Officer

Such addresses for notices may be changed by any party by notice to the other party pursuant to this Section 10.

11. Amendment . This Warrant may be amended only by an instrument in writing signed by the Corporation and the Holder.

12. Construction of Warrant . This Warrant shall be construed as a whole and in accordance with its fair meaning. A reference in this Warrant to any section shall be deemed to include a reference to every section the number of which begins with the number of the section to which reference is made. This Warrant has been negotiated by both parties and its language shall not be construed for or against any party.

13. Law Governing . This Warrant is executed, delivered and to be performed in the State of New York and shall be construed and enforced in accordance with and governed by the New York law without regard to any conflicts of law or choice of forum provisions.

Dated as of AUGUST 8, 2016

SUBSCRIPTION FORM

(To be executed only upon exercise of Warrant)

The undersigned registered owner of this Warrant irrevocably exercises this Warrant and agrees to purchase _______ shares of Common Stock of Plastic2Oil, Inc., all at the price and on the terms and conditions specified in this Warrant.

The undersigned acknowledges that, by issuing shares of Common Stock to the undersigned upon exercise of the Warrant, the Company is relying on an exemption from the registration of such shares under the Securities Act of 1933, as amended, or other applicable law. In accordance therewith, the undersigned represents and warrants that the representations and warranties of the undersigned contained in the Subscription Agreement between the Company and the undersigned, pursuant to which the undersigned purchased the Warrant, along with the undersigned’s answers to the applicable investor questionnaires annexed thereto, are true and correct in all material respects as of the date hereof.

Dated: __________________

ISSUE OF A NEW WARRANT

(To be executed only upon partial exercise,

exchange, or partial transfer of Warrant)

Please issue ______ Warrants, each representing the right to purchase ________ shares of Common Stock of Plastic2Oil, Inc. to the registered holder.

Dated: ________________

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned registered Holder of this Warrant sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the Warrant, with respect to the number of shares of Common Stock set forth below (the “Transfer”):

The undersigned irrevocably constitutes and appoints _______ as the undersigned’s attorney-in-fact, with full power of substitution, to make the transfer on the books of Plastic2Oil, Inc.

Dated: ________________

AMENDED AND RESTATED SECURITY AGREEMENT

This Amended and Restated Security Agreement (as amended, restated, supplemented and/or otherwise modified from time to time, this “ Agreement ”) is dated as of August 4, 2016 (the “Effective Date”) between the lenders executing this Agreement and listed on Schedule A attached hereto as amended from time to time (the “ Lenders ”), JBI, Inc., a corporation organized under the laws of the State of Nevada (the “ Debtor ”), Plastic2Oil of NY #1, LLC, a limited liability company organized under the laws of the State of New York (“ P2O#1 ”) and JBI RE #1, Inc., a corporation organized under the laws of the State of New York (“ RE#1 ”, and collectively with P2O#1 and the Debtor the “ Grantors ”), and Christiana Trust, a division of WSFS Bank, as collateral agent for the Lenders (the “ Collateral Agent ”). This Agreement amends and restates that certain Security Agreement, dated August 29, 2013, by and between the Lenders named therein, the Grantors and the Collateral Agent (the “ Original Agreement ”). The Lender parties to the Original Agreement are sometimes referred to herein as the “Original Lenders” and the Lender parties hereto thatwere not parties to the Original Agreement are sometimes referred to herein as the “ New Lenders .”

1.   Grant of Security . The Grantors, to secure the Secured Obligations (as defined below), pursuant to the Code (each term used in this granting paragraph that is defined in the Code shall have the meaning specified in the Code), each hereby collaterally assigns, pledges and grants to the Collateral Agent, for itself and as agent for the ratable interest of the Lenders, a continuing security interest, in all of each Grantor’s right, title and interest in and to the following property of such Grantor, now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the “ Collateral ”;

(a) all accounts, as extracted collateral, chattel paper, deposit accounts, securities accounts and commodity accounts, documents, equipment, general intangibles, instruments, inventory, investment property and any supporting obligations related thereto;

(b) the commercial tort claims described on Schedule 1 and on any supplement thereto received by the Collateral Agent;

(c) all books and records pertaining to the other property described in this Section 1;

(d) (A) the Equity Interests owned by such Grantor on the date hereof (including, but not limited to, those listed on Schedule 1) and any other Equity Interests obtained in the future by and any certificates representing all such Equity Interests (collectively, the “ Pledged Stock ”); provided that the Pledged Stock shall not include (i) more than 65% of the issued and outstanding voting Equity Interests in any “first tier” Foreign Subsidiary directly owned by such Grantor, or (ii) any issued and outstanding Equity Interest in any Foreign Subsidiary that is not a “first tier” Foreign Subsidiary, (B)(i) the debt obligations owed to such Grantor on the date hereof, (ii) any debt securities in the future issued to such Grantor, and (iii) the certificates, promissory notes and any other instruments, if any, evidencing such debt securities; (C) all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other proceeds received in respect of, the securities referred to in clauses (A) and (B) above; (D) all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (A), (B) and (C) above; and (E) all proceeds of any of the foregoing;

(e) all machinery, apparatus, equipment, motor vehicles, fittings, fixtures and other tangible personal property of every kind and description, together with all parts, accessories and special tools and all increases and accessions thereto and substitutions and replacements therefore;

(f) all patents and patent applications, tradenames, servicemarks, trademarks and trademark applications, trade secrets, know-how, copyrights and other intellectual property, including software license agreements with any other party (other than commercial off the shelf software), including without limitation those described on Schedule 1 ;

(g) all other goods and other personal property of such Grantor, whether tangible or intangible and wherever located; and

(h) to the extent not otherwise included in the foregoing, all proceeds of the foregoing.

2. Security for Obligations . This Agreement secures, and the Collateral is collateral security for (i) the prompt payment in full when due by the Debtor under the terms of those certain 12% Secured Promissory Notes due August 31, 2018 or November 30, 2019 by Debtor in favor of the Original Lenders in a private placement of $4 million aggregate principal amount, dated in August or September, 2013 or November 19, 2014 (as they may be amended, restated, supplemented, and/or otherwise modified from time to time, the “ First Offering Notes ”); (ii) the prompt payment in full when due by the Debtor under the terms of those certain 12% Secured Promissory Notes due August 31, 2021 by Debtor in favor of the New Lenders in a private placement of up to $1 million aggregate principal amount, each dated on or about August 2016 (as they may be amended, restated, supplemented, and/or otherwise modified from time to time, the “ Second Offering Notes” and collectively with the First Offering Notes, the “ Notes ” ); and (iii) all amounts owed to Collateral Agent hereunder including without limitation under Section 7(g) hereof (collectively, the “ Secured Obligations ”).

3. Rights of Collateral Agent .

(a) The Collateral Agent, at the direction of the Required Lenders, shall at all times be entitled to exercise, in respect of the Collateral, all of the rights available to a secured party under applicable law, including the Code or as in effect in any relevant jurisdiction and all legal, equitable, administrative and self-help rights and remedies. Upon the occurrence and during the continuance of an Event of Default (as defined in the Note), the Collateral Agent, at the direction of the Required Lenders, may exercise in respect of the Collateral, (i) all the rights and remedies of a secured party on default under the Code (whether or not the Code applies to the affected Collateral); (ii) all of the rights and remedies provided for in this Agreement; and (iii) such other rights and remedies as may be provided by law or otherwise (such rights and remedies of the Collateral Agent to be cumulative and non-exclusive).

(b) Without limiting the generality of the foregoing, the Collateral Agent may, at the direction of the Required Lenders, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon Grantors or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice and opportunity for a hearing on the Collateral Agent’s claim or action, may collect, receive, appropriate and realize upon any Collateral, and may sell, transfer or otherwise dispose, grant option or options to purchase and deliver any Collateral (enter into contracts to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of Collateral Agent or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Collateral Agent shall have the right, to be exercised at the direction of the Required Lenders, upon any such public sale or sales, and, to the extent permitted by the Code and other applicable law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released. 

(c) Following the receipt of any proceeds of Collateral by the Collateral Agent, such proceeds shall be distributed first, to the accrued but unpaid fees and expenses (to the extent outstanding and otherwise reimbursable by the Grantors hereunder) of the Collateral Agent in connection with the performance of its duties under this Agreement, including without limitation all reasonable and documented out-of-pocket expenses of retaking, holding, preparing for sale and selling the Collateral, all reasonable and documented attorneys’ fees, out-of-pocket travel and all other reasonable and documented out-of-pocket expenses which may be incurred by the Collateral Agent in realizing or attempting to realize upon the Collateral and/or to enforcing this Agreement or in the prosecution or defense of any action or proceeding related to the subject matter of this Agreement, in each case, until paid in full, and second, ratably among the Lenders. The Collateral Agent shall be entitled to rely upon the holdings referenced in Schedule A (or any amendments thereto which the Collateral Agent received by the date of such distribution) for purposes of making such ratable distribution.

(d) If at any time no Collateral Agent is designated under this Agreement (as a result of resignation or otherwise) or any designated Collateral Agent, after notice from the Required Lenders, fails to act in accordance with this Agreement or in accordance with the proper instructions of the Required Lenders, the Required Lenders may remove the Collateral Agent and, on behalf of all of the Lenders, directly exercise all rights granted to the Collateral Agent under this Agreement.

4. Representations and Warranties . Each Grantor represents and warrants that:

(a) this Agreement creates a valid security interest in the Collateral of Grantor;

(b) the office where it keeps its records is 20 Iroquois Street, Niagara Falls, NY 14303;

(c) the correct name and jurisdiction or organization of such Grantor is set forth in the first paragraph hereto, and such Grantor has not, during the immediately preceding five (5) years, been known under or used any other corporate name, other than “310 Holdings, Inc.” in the case of Debtor;

(d) Except for the Lien (as defined below) granted to the Collateral Agent pursuant to this Agreement, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others, other than Existing Liens. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or evidenced by certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien, other than Existing Liens.

(e) The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral Agent in all Collateral (i) in which a security interest may be perfected by filing a financing statement under the Code with the Secretary of State of Nevada, in case of the Debtor, and (ii) in which a security interest may be perfected by filing a financing statement under the Code with the Secretary of State of New York, in case of P2O#1 and RE#1 (which financing statements have been delivered to the Collateral Agent in completed and duly authorized form).

(f) All Pledged Stock and other Equity Interest owned by such Grantor hereunder (a) is listed on Schedule 1 and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on such Schedule 1 and (b) has been duly authorized, validly issued and is fully paid and non-assessable (other than Pledged Stock in respect of Equity Interests in limited liability companies and partnerships).

(g) Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent, at the direction of the Required Lenders, shall be entitled to exercise all of the rights of such Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of the applicable Equity Interests of such Person shall become a holder of such Pledged Stock to the same extent as such Grantor in such Person and be entitled to participate in the management of such Person and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.

(h) No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper that has not been delivered to the Collateral Agent, properly endorsed for transfer.

(i) Any intellectual property owned by such Grantor (or in which such Grantor has rights) is listed on Schedule 1 .

(j) The only commercial tort claims of such Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 1 , which sets forth such information separately for such Grantor.

5. Covenants of the Grantors . Each Grantor hereby covenants and agrees with the Collateral Agent that it shall (i) promptly give the Collateral Agent written notice of any change in such Grantor’s name or jurisdiction of formation; (ii) promptly give the Collateral Agent written notice of any change in such Grantor’s office where it keeps its records; (iii) preserve and maintain the lien created by this Agreement and will protect and defend its title to the Collateral of such Grantor; and (iv) maintain books and records pertaining to the Collateral of such Grantor in such detail, form and scope as the Collateral Agent may reasonably require. Not later than seven days after the Effective Date, Debtor will deliver to the Collateral Agent in suitable form for transfer all Pledged Stock consisting of instruments and Equity Interests evidenced by certificates.

6. Further Assurances . Each Grantor agrees that from time to time, it will promptly execute and deliver all further instruments and documents, and take all further action, that the Collateral Agent may reasonably request, in order to perfect, protect, evidence, renew and/or continue the security interest granted or purported to be granted hereby or to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral of such Grantor or otherwise effectuate the purposes and intents of this Agreement.

7.  The Collateral Agent . (a) Each of the Lenders hereby designates Christiana Trust to act on behalf of the Lenders as the Collateral Agent and appoints the Collateral Agent to hold the Collateral on behalf of and for the benefit and security of the Lenders pursuant to the terms of this Agreement, and the Collateral Agent hereby accepts such designation and appointment.   Each Lender authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. It is understood and agreed that the use of the term “Collateral Agent” herein is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. Notwithstanding any other provisions set forth herein, the Collateral Agent shall hold or dispose of the Collateral solely in accordance with the instructions of Lenders holding Notes the outstanding principal amount of which is greater than fifty percent (50%) of the aggregate outstanding principal amount of all the Notes, as set forth opposite each Lenders’ name on Schedule A as amended from time to time (the “ Required Lenders ”), which instructions the Collateral Agent shall be entitled to rely on conclusively. As to any matters not expressly provided for hereby, the enforcement or collection of any Secured Obligation or any matter requiring the Collateral Agent to exercise discretion, the Collateral Agent shall not be required to act, enforce or collect upon any such Secured Obligation or exercise any discretion, but shall only be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders; provided, however, that the Collateral Agent shall not be required to take any action that exposes the Collateral Agent to personal liability or that is contrary to this Agreement or applicable law. 

(b) In acting hereunder, the Collateral Agent shall have only such duties as are specified herein and no implied duties shall be read into this Agreement, and the Collateral Agent shall not be liable for any act done, or omitted to be done, by it in the absence of its gross negligence or willful misconduct.

(c) The Collateral Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine, and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument and may assume that any Person purporting to give any writing, notice, advice or instruction in connection with the provisions hereof has been duly authorized to do so.

(d) The Collateral Agent shall be entitled to consult with legal counsel in the event that a question or dispute arises with regard to the construction of any of the provisions hereof, and shall incur no liability and shall be fully protected in acting in accordance with the advice or opinion of such counsel.

(e) The Collateral Agent shall not be required to use its own funds in the performance of any of its obligations or duties or the exercise of any of its rights or powers, and shall not be required to take any action which, in the Collateral Agent’s sole and absolute judgment, could involve it in expense or liability unless furnished with security and indemnity which it deems, in its sole and absolute discretion, to be satisfactory.

(f) Debtor shall pay to the Collateral Agent compensation for its services hereunder in accordance with the terms of a separate fee agreement between the Debtor and the Collateral Agent. In the event the Collateral Agent renders any extraordinary services in connection its role as Collateral Agent at the request of the parties, the Collateral Agent shall be entitled to additional compensation therefor. The terms of this paragraph shall survive termination of this Agreement.

(g) Grantors hereby agree, jointly and severally, to indemnify the Collateral Agent, its directors, officers, employees, agents, affiliates and their respective successors and assigns (collectively, the “ Indemnified Parties ”), and reimburse and hold the Indemnified Parties harmless from any and against all damages, claims, penalties, liabilities, losses, actions, suits, judgments, or proceedings at law or in equity, and any other expenses, fees, costs or charges of any character or nature, including, without limitation, attorney’s fees and expenses, which an Indemnified Party may incur or with which it may be threatened by reason of acting as or on behalf of the Collateral Agent under this Agreement, except to the extent the same shall be caused by the Collateral Agent’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable decision (such indemnification obligations, the “Indemnification Obligations”). All Indemnification Obligations shall be due on demand. The terms of this paragraph shall survive termination of this Agreement and the resignation or removal of the Collateral Agent. If and to the extent that the obligations of a Grantor under this clause (g) are unenforceable for any reason, such Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

(h) In the event the Collateral Agent receives conflicting instructions hereunder, the Collateral Agent shall be fully protected in refraining from acting until such conflict is resolved to the satisfaction of the Collateral Agent.

(i) The Collateral Agent may resign as the Collateral Agent, and, upon its resignation, shall thereupon be discharged from any and all further duties and obligations under this Agreement by giving notice in writing of such resignation to Grantors and Lenders, which notice shall specify a date upon which such resignation shall take effect. Upon the resignation of the Collateral Agent, Grantors and Lenders shall, within thirty (30) business days after receiving the foregoing notice from the Collateral Agent, designate a substitute collateral agent (the “ Substitute Collateral Agent ”), which Substitute Collateral Agent shall, upon its designation (and acceptance of such designation) and notice of such designation to the Collateral Agent, succeed to all of the rights, duties and obligations of the Collateral Agent hereunder. In the event Grantors and Lenders shall not have delivered to the Collateral Agent a written designation of Substitute Collateral Agent within the aforementioned thirty (30) day period, together with the consent to such designation by the Substitute Collateral Agent, the Collateral Agent may (i) appoint a financial institution to act as the Substitute Collateral Agent hereunder, subject to the reasonable satisfaction of the Required Lenders and Grantors, in which case, the Collateral Agent’s resignation shall become effective upon the acceptance, in writing, of such Substitute Collateral Agent by the Required Lenders and Grantors and such Substitute Collateral Agent’s acceptance of such appointment and the documentation thereof or (ii) apply to a court of competent jurisdiction to appoint a Substitute Collateral Agent, and the costs of obtaining such appointment shall be reimbursable from Grantors and Lenders and from the Collateral. After any resigning Collateral Agent’s resignation hereunder as the Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent hereunder.

(j) The Collateral Agent may execute any of its duties under this Agreement by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Collateral Agent shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the opinion or advice of any such counsel, consultants or experts selected by the Collateral Agent in good faith. Notwithstanding any other provision of this Agreement to the contrary, at any time or times, in the event that the Collateral Agent or Required Lenders shall deem it necessary or prudent in order to conform to the legal requirements of any jurisdiction in which any part of the Collateral may at such time or times be located to make any claim or bring any suit with respect to the Collateral or any Loan Document, or the Collateral Agent or Required Lenders shall be advised by counsel satisfactory to it that it is so necessary or prudent, the Collateral Agent shall execute and deliver an agreement supplemental hereto and all other instruments and agreements, in each case, reasonably acceptable to Collateral Agent, and shall take all other action necessary or proper to constitute one or more persons, who need not meet any requirements of the Collateral Agent contained herein (and the Collateral Agent may appoint one or more of its officers), either as co-collateral agent or co-collateral agents jointly with the Collateral Agent of all or any part of the Collateral, or as separate collateral agent or separate collateral agents of all or any part of the Collateral (each, a “ Supplemental Collateral Agent ”), and to vest in such persons, in such capacity, such title to the Collateral or any part thereof and such rights powers, privileges or duties as may be necessary or desirable, all for such period and under such terms and conditions as are satisfactory to the Collateral Agent and Required Lenders. In case any Supplemental Collateral Agent shall die, become incapable of acting, resign or be removed, the title to the Collateral and all rights powers, privileges and duties of such Supplemental Collateral Agent, so far as permitted by law, vest in and be exercised by the Collateral Agent, without the appointment of a successor to such Supplemental Collateral Agent. Should any instrument in writing from any Grantor be required by any Supplemental Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest in and confirm to such Supplemental Collateral Agent such rights, powers, privileges and duties, the Grantors shall execute, acknowledge and deliver any and all such instruments promptly upon request by the Collateral Agent. No Collateral Agent shall be responsible for the negligence (or gross negligence), misconduct or any liability of any agent, attorney-in-fact or Supplemental Collateral Agent that it selects in accordance with the foregoing provisions of this Section 7(j) in the absence of such Collateral Agent’s gross negligence or willful misconduct.

(k) Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, including without limitation, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Collateral Agent in good faith.

(l) The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral (whether impaired by operation of law, by reason of any of any action or omission to act on its part hereunder or otherwise, except to the extent such action or omission by Collateral Agent constitutes gross negligence, bad faith or willful misconduct on the part of the Collateral Agent), for the accuracy of any of the Grantors’ representations or warranties, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of any Grantor to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Collateral Agent shall be under no duty or responsibility to any Lender to ascertain or to inquire into the performance or observance by any Grantor of any of the provisions of this Agreement. 

(m) In any circumstance where the Collateral Agent exercises discretion (though it shall have no obligation to do so), approves documentation or distributes proceeds, the Collateral Agent may, at its option, seek to obtain instructions or directions from the Required Lenders with respect to such action. If the Collateral Agent so elects, then it may refrain from taking such action until such directions or instructions are received and shall have no liability to anyone for so refraining.

(n) NEITHER CHRISTIANA TRUST NOR THE COLLATERAL AGENT (I) WILL MAKE AN INSPECTION OF THE COLLATERAL OR ANY PART THEREOF, (II) MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR ANY PARTICULAR PURPOSE OF THE COLLATERAL OR ANY PART THEREOF, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP WITH RESPECT TO THE COLLATERAL OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR AS TO TITLE OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE COLLATERAL OR ANY PART THEREOF, OR (III) MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH THE COLLATERAL AGENT IS A PARTY, OR ANY OTHER DOCUMENT OR INSTRUMENT, OR AS TO THE CORRECTNESS OF ANY STATEMENT CONTAINED IN ANY THEREOF.

(o) Except as otherwise expressly provided herein, monies received by the Collateral Agent hereunder need not be segregated in any manner, except to the extent required by law, and may be deposited under such general conditions as may be prescribed by law, and neither Christiana Trust nor the Collateral Agent shall be liable for any interest thereon, except as may be expressly agreed to by Christiana Trust or the Collateral Agent in writing.

(p) Action upon Instructions. (i) The Required Lenders may by joint written instruction direct the Collateral Agent in the administration of the Collateral and any matter affecting the Collateral.

(ii) Notwithstanding the foregoing, the Collateral Agent shall not be required to take any action hereunder or under any other related document at the request of the Required Lenders or otherwise if the Collateral Agent shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Collateral Agent or is contrary to the terms hereof or of any other document relating to the Notes or is otherwise contrary to law; provided, however, that the Collateral Agent shall have no obligation to make any such determination. 

(iii) Whenever the Collateral Agent is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or under any other related document, or in the event that the Collateral Agent is unsure as to the application of any provision of this Agreement or any other related document, or believes any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement or any other related document permits any determination or discretion by the Collateral Agent or is silent or is incomplete as to the course of action that the Collateral Agent is required to take with respect to a particular set of facts, the Collateral Agent shall promptly give notice (in such form as shall be appropriate under the circumstances) to each Lender requesting instruction as to the course of action to be adopted, and to the extent the Collateral Agent acts in good faith in accordance with any written instructions received from the Required Lenders, the Collateral Agent shall not be liable on account of such action to any Person. If the Collateral Agent shall not have received appropriate instruction within 10 days of such notice (or such shorter period as reasonably may be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action as it shall deem to be in the best interests of the Lenders; and the Collateral Agent shall have no liability to any Person for such action or inaction.

(q) Notwithstanding anything contained herein or elsewhere to the contrary, neither Christiana Trust nor the Collateral Agent shall be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will, even after the appointment of a Supplemental Collateral Agent, (i) require Christiana Trust in its individual capacity to obtain the consent, approval, authorization or order of or the giving of notice to, or the registration with, or taking of any action in respect of, any state or other governmental authority or agency other than the State of Delaware; (ii) result in any fee, tax or other governmental charge under the laws of any jurisdiction other than the State of Delaware becoming payable by Christiana Trust in its individual capacity, or (iii) subject Christiana Trust in its individual capacity to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by the Collateral Agent contemplated hereby.

(r) The Collateral Agent shall be under no obligation to exercise any right or power vested in it or duty imposed upon it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement, either at the request, order or direction of the Required Lenders or otherwise, unless the Required Lenders shall have offered the Collateral Agent security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Collateral Agent therein or thereby. The right of the Collateral Agent to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Collateral Agent shall not be answerable to any Lender or other Person for other than its gross negligence, bad faith or willful misconduct in the performance of any such act as determined by a court of competent jurisdiction in a final and non-appealable decision. 

(s) In no event shall the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

(t) Christiana Trust, in its individual capacity, and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with any Grantor and any of their respective subsidiaries as though Christiana Trust were not the Collateral Agent hereunder.

(u) The Collateral Agent shall be entitled to assume that no Event of Default exists unless the officers of the Collateral Agent immediately responsible for matters concerning this Agreement shall have been notified in writing by any Grantor or the Required Lenders that it considers that an Event of Default exists and specifying the general nature thereof.

(v) The Collateral Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation: acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; act of terrorism, epidemics; riots; interruptions, loss or malfunctions of utilities, computer hardware, software or communications service; accidents; labor disputes; or acts of civil or military authority or governmental actions; it being understood that the Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

(w) Any corporation or other entity into which the Collateral Agent may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Collateral Agent shall be a party, or any corporation or other entity to which substantially all the corporate trust business of the Collateral Agent may be transferred, shall be the collateral agent under this Agreement without further act.

(x) Each Lender, upon its execution of a counterpart to this Agreement, agrees to be bound by the terms and provisions herein and shall promptly provide the Collateral Agent with a copy of such executed counterpart.

8. Governing Law . This Agreement shall be governed by the internal laws of the State of New York, without reference to principles of conflicts of law.

9. Amendments; Etc . No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent, Grantors and Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. This agreement represents the entire understanding of the parties with respect to the subject matter described herein and supersedes any and all prior agreements and understandings with respect to such matters. Notwithstanding the foregoing, from time to time as necessary to update Lender information and other relevant information, the Debtor shall have the authority to amend Schedule A . The Debtor shall provide the Collateral Agent with any such amendments on a timely basis and the Collateral Agent shall conclusively rely on the most recent version of Schedule A provided to it by the Debtor.

10. Successors and Assigns . This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. For the avoidance of doubt, the Collateral Agent may assign its rights or delegate its duties or obligations as Collateral Agent hereunder to any other Lender.

11. Severability . The provisions of this Agreement are severable. If any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision or part thereof in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction or any other clause or provision in this Agreement in any jurisdiction.

12. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one document.

13. Authorization .  Without obligating Collateral Agent to make any of such filings, each Grantor hereby authorizes the Collateral Agent to file financing and/or continuation statements, intellectual property security agreements and amendments to any of the foregoing, in any jurisdictions and with any filing offices, in each case, in the United States as the Required Lenders may determine, in their sole discretion, are necessary or advisable to perfect or otherwise protect the security interest granted to the Collateral Agent herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Required Lenders may determine, in their sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Collateral Agent herein, including, without limitation, describing such property as “all assets, whether now owned or hereafter acquired, developed or created” or words of similar effect. Each Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail.

14. Grantors’ Duties . It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Grantor shall remain liable to perform all of its obligations, if any, assumed by it with respect to the Collateral and neither the Collateral Agent nor any Lender shall have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement or otherwise, except as set forth herein, nor shall the Collateral Agent nor any Lender be required or obligated in any manner to perform or fulfill any of the obligations of any Grantor under or with respect to any Collateral.

15.   Release; Termination .

(a) Upon the payment in full in cash of the Secured Obligations, the pledge and security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantor. Upon any such termination, the Collateral Agent will, at the applicable Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination provided that (i) the Collateral Agent has received written instructions from the Required Lenders notifying the Collateral Agent that all Secured Obligations have been paid in full in cash and directing Collateral Agent to so execute and deliver such documents (which instructions the Collateral Agent shall be entitled to rely on conclusively) and (ii) such documents are in form and substance reasonably satisfactory to Collateral Agent.

(b) Upon any sale, lease, transfer or other disposition of any item of Collateral of any Grantor (other than sales of inventory in the ordinary course of business, which Liens will be deemed to be released automatically in connection with such sale with no further action required by the Collateral Agent), the Collateral Agent will, upon receipt of written instructions from the Required Lenders and at such Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted hereby provided that such documents are in form and substance reasonably satisfactory to Collateral Agent.

16.   Additional Definitions .

(b) Each of the following terms has at any time the meaning given it at such time for purposes of the Code: account, as-extracted collateral, chattel paper, commercial tort claim, commodity account, deposit account, document, equipment, financing statement, fixtures, general intangible, goods, instrument, inventory, investment property, issuer, letter-of-credit right, proceeds, products, record, securities account, security, software, supporting obligation, uncertificated security.

(c) As used in this Agreement, the following terms shall have the meanings specified in this Section 16 unless the context otherwise requires.

(i) “ Code ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, 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 hereof relating to such perfection, priority or remedies.

(ii) “ Equity Interests ” in any Person means any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interests in (however designated) equity in such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest. 

(iii) “ Existing Liens ” shall have the meaning set forth on Schedule 2 attached hereto.

(iv) “ Foreign Subsidiary ” means any subsidiary that is incorporated or organized under the laws of the jurisdiction other than the United States of America, any State thereof or the District of Columbia.

(v) “ Lien ” means with respect to any asset, any mortgage, lien, pledge, adverse claim, charge, security interest or other encumbrance, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset.

(vi) “ Loan Document ” means each any of this Agreement, the Note, or the Subscription Agreement pursuant to which the Lender acquired the Note,

(vii) “ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed and delivered this Amended and Restated Security Agreement as of the date first above written.

The undersigned hereby consent (pursuant to Section 9 of the Original Agreement) to this Amended and Restated Security Agreement as of the date first above written:

PLASTIC2OIL, INC.

SECURITY AGREEMENT

LENDER SIGNATURE PAGE

Acknowledged and agreed to as of the date first above written:

SCHEDULE 1

PLEDGED STOCK

JBI, Inc. is the registered owner of 100% of the outstanding equity interests of the following companies:

INTELLECTUAL PROPERTY

COMMERCIAL TORT CLAIMS

None.

SCHEDULE 2

EXISTING LIENS