KonaTel, Inc. (Form: 8-K, Received: 06/21/2022 16:02:40)

Execution Version

NOTE PURCHASE AGREEMENT

by and among

KONATEL, INC.

as Company,

CCUR HOLDINGS, INC.

as Collateral Agent

and

the Purchasers from time to time party hereto

Dated as of June 14, 2022

TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS

1.1

Definitions

ARTICLE 2 TERM LOANS

2.1

Purchase, Sale and Issuance of the Notes

2.2

Fees Payable

2.3

Closing

ARTICLE 3 INTEREST AND PAYMENTS

3.1

Interest

3.2

Redemption of Notes

3.3

Manner of Payment

ARTICLE 4 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS

4.1

Conditions to the Obligations of the Purchasers to Purchase the Notes on the

Closing Date 15

ARTICLE 5 CONDITIONS TO OBLIGATIONS OF THE LOAN PARTIES

5.1

Representations and Warranties

5.2

Compliance with this Agreement

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

6.1

Existence and Power

6.2

Corporate Authorization; No Contravention

6.3

Governmental Authorization; Third Party Consents

6.4

Binding Effect

6.5

Litigation

6.6

Compliance with Laws

6.7

No Default or Breach

6.8

Title to Properties

6.9

Absence of Certain Changes

6.10

Taxes

6.11

Financial Condition

6.12

Absence of Material Adverse Effect

6.13

[Reserved]

6.14

Investment Company/Government Regulations

6.15

Subsidiaries

6.16

Capitalization

6.17

Private Offering

6.18

Broker’s, Finder’s or Similar Fees

6.19

Labor Relations

6.20

Employee Benefit Plans

6.21

Intellectual Property

6.22

Potential Conflicts of Interest

6.23

Specified Licenses

6.24

Debt

6.25

Material Contracts

6.26

Insurance

6.27

Solvency

6.28

Licenses and Approvals

6.29

OFAC

6.30

Disclosure

6.31

No Default

6.32

Government Contracts

ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

7.1

Authorization; No Contravention

7.2

Binding Effect

7.3

No Legal Bar

7.4

Securities Laws

7.5

Governmental Authorization; Third Party Consent

ARTICLE 8 AFFIRMATIVE COVENANTS

8.1

Delivery of Financial and Other Information

8.2

Use of Proceeds

8.3

Notice of Default

8.4

Conduct of Business

8.5

Taxes and Claims

8.6

Insurance

8.7

Compliance with Laws

8.8

Maintenance of Properties

8.9

Audits and Inspection

8.10

Issue Taxes

8.11

Employee Benefit Plans.

8.12

Regulatory Compliance

8.13

Specified Licenses

8.14

Delivery of Information by Holders

8.15

Execution of Supplemental Documents

8.16

Minimum Working Capital Requirement

8.17

Post Closing Covenants

8.18

Further Assurances

ARTICLE 9 NEGATIVE COVENANTS

9.1

Limitations on Debt.

9.2

Liens.

9.3

Restricted Payments

9.4

Loans

9.5

Investments

9.6

Mergers, Consolidations, Sales

9.7

Subsidiaries

9.8

Amendment to Organizational Documents

9.9

Restrictive Agreements

9.10

Capital Expenditures

9.11

Transactions with Affiliates

9.12

Additional Negative Pledges

9.13

Use of Proceeds

9.14

Fiscal Year and Accounting Changes

9.15

Disposition of Assets

9.16

No Settlement

ARTICLE 10 AGENCY PROVISIONS

10.1

Appointment and Authority

10.2

Rights as a Holder

10.3

Exculpatory Provisions; Indemnification

10.4

Reliance

10.5

Delegation of Duties

10.6

Resignation of the Collateral Agent

10.7

Collateral Matters

10.8

Sharing of Collateral

10.9

Erroneous Payments

ARTICLE 11 EVENTS OF DEFAULT

11.1

Events of Default

11.2

Acceleration

11.3

Set-Off

11.4

Cumulative Remedies

ARTICLE 12 INDEMNIFICATION

12.1

Indemnification

12.2

Procedure; Notification

ARTICLE 13 MISCELLANEOUS

13.1

Survival of Representations and Warranties

13.2

Notices

13.3

Successors and Assigns

13.4

Amendment and Waiver

13.5

Signatures; Counterparts; Electronic Execution

13.6

Headings

13.7

GOVERNING LAW

13.8

JURISDICTION, JURY TRIAL WAIVER, ETC

13.9

Severability

13.10

Rules of Construction

13.11

Entire Agreement

13.12

Certain Expenses

iii

13.13

Publicity

13.14

Further Assurances

13.15

No Strict Construction

13.16

Confidentiality

Exhibits

Form of Note

Form of Budget and Compliance Certificate

NOTE PURCHASE AGREEMENT

NOTE PURCHASE AGREEMENT, dated as of June 14, 2022, by and among KONATEL, INC., a Delaware corporation (the “Company”), CCUR HOLDINGS, INC., a Delaware corporation as collateral agent (in such capacity, “Collateral Agent”) and CCUR HOLDINGS, INC. and SYMBOLIC LOGIC, INC. (each, a “Purchaser” and collectively, the “Purchasers”).

STATEMENT OF PURPOSE:

WHEREAS, the Company wishes to sell to the Purchasers, and the Purchasers wish to purchase on the terms and conditions set forth herein, senior secured promissory notes issued by the Company to the Purchasers in an aggregate principal amount of $3,150,000, substantially in the form of Exhibit A hereto; and

WHEREAS, the Company is willing to secure all of the Obligations by granting to the Collateral Agent, for the benefit of the Holders, a Lien upon substantially all of its assets subject to any limitations set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

1.1

Definitions. As used in this Agreement, the following terms have the meanings indicated:

“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation (a) with respect to any such Person that is an entity, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person and (b) with respect to any such Person that is an individual including, without limitation, such individual’s spouse, lineal ancestors, lineal blood or adopted descendants, and any trust or other estate planning vehicle for any of their benefit or any entity in which only such persons own equity interests. A Person shall be deemed to control another Person if the controlling Person owns ten percent (10%) or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise. None of the Collateral Agent, Purchaser, the Holders nor any of their respective Affiliates shall be, or be deemed to be, an Affiliate of any Loan Party.

“Agreement” means this Note Purchase Agreement, including the exhibits and schedules attached hereto, as the same may be amended, supplemented or modified in accordance with the terms hereof.

“Applicable Insolvency Laws” means the United States Bankruptcy Code (11 USC § 101, et seq.) and all other liquidation, bankruptcy, assignment for the benefit of creditors, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization or similar debtor relief laws of the

United States or any political subdivision thereof or other applicable jurisdictions in effect from time to time.

“Asset Disposition” means any sale, lease, license, transfer, assignment or other consensual disposition by any Loan Party or any Subsidiary of any asset in an amount in excess of $50,000 in the aggregate, but excluding (i) dispositions of inventory or used, obsolete, worn-out or surplus equipment, all in the ordinary course of the Loan Parties’ business, (ii) dispositions of Cash and Cash Equivalents, and (iii) sales, transfers and other dispositions of accounts receivable in connection with the compromise, settlement or collection thereof in the ordinary course of the Loan Parties’ business.

“Assignment of Claims Act” means, collectively, the Assignment of Claims Act of 1940, as amended, any applicable rules, regulations and interpretations issued pursuant thereto and any amendments to any of the foregoing.

“Board” means the board of directors of the Company.

“Budget” means revenue, income statement and cash flow budgets and projections for the Company and its Subsidiaries, in each case, (i) prepared by management of the Company in good faith based upon reasonable assumptions, (ii) consistent in scope with the Financial Statements referred to in Section 6.11 and (iii) in form and substance reasonably satisfactory to the Required Holders.

“Budget and Compliance Certificate” means a budget and compliance certificate in the form attached hereto as Exhibit B.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.

“Capital Expenditure” means any expenditure for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a balance sheet prepared in accordance with GAAP (including, without limitation, the capitalized portion of any software development costs), excluding (a) the cost of assets acquired pursuant to Capitalized Leases, (b) expenditures of insurance proceeds (or other similar recoveries) to rebuild or replace any asset after a casualty loss or cash awards of compensation arising from the taking of eminent domain or condemnation (c) leasehold improvement expenditures for which the Person is reimbursed promptly by the lessor.

“Capital Stock” means (a) any capital stock, partnership, membership, joint venture or other ownership or equity interest, participation or securities (whether voting or non-voting, whether preferred, common or otherwise), and (b) any option, warrant, security or other right (including Debt securities or other evidence of Debt) directly or indirectly convertible into or exercisable or exchangeable for, or otherwise to acquire directly or indirectly, any capital stock, partnership, membership, joint venture or other ownership or equity interest, participation or security described in clause (a) above.

“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.

“Capitalized Lease Obligations” of any Person shall mean the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP.

“Cash” means the currency of the United States of America.

“Cash Equivalents” means (a) short-term obligations of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof, (b) commercial paper rated A-1 or better by Standard & Poor’s or P-1 or better by Moody’s, (c) demand deposit accounts maintained in the ordinary course of business, and (d) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $100,000,000; provided in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

“Change of Control” means (i) the consummation of a merger, consolidation, reorganization, sale of Capital Stock by the Company or any holder of the Company’s Capital Stock, sale or other disposition of all or substantially all of the assets of the Company that results in (A) any change in the selection or composition of a majority of the Board as in effect on the Closing Date or (B) any person or “group” (within the meaning of Rules 13d-3 and 13d-5 of the Exchange Act) shall directly or indirectly own or control in excess of fifty percent (50%) of the economic or voting interests of the Company that does not, as of the Closing Date, directly or indirectly, own or control in excess of 50% of the voting interests of the Company or (ii) the failure of the Company to beneficially own and control, directly or directly, in the same manner it owns on the Closing Date all of the Capital Stock of its Subsidiaries (other than any Excluded Subsidiary that is dissolved in accordance with Section 8.4) on the Closing Date and the Specified License Subsidiaries.

“Claims Assignment” means an assignment in a form approved by the Required Holders, properly completed and signed by an officer of the Company.

“Closing” has the meaning assigned to that term in Section 2.3.

“Closing Date” has the meaning assigned to that term in Section 2.3.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute thereto.

“Collateral” has the meaning set forth in the Security Agreement.

“Collateral Documents” means the Security Agreement, the Intellectual Property Security Agreements, each deposit account control agreement and each other agreement or writing pursuant to which the Company or any Subsidiary thereof purports to pledge or grant a security interest in any property or assets securing the Obligations, or any such Person purports to guarantee the payment and/or performance of the Obligations, in each case, as amended, restated, supplemented or otherwise modified from time to time.

“Commission” means the U.S. Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

“Company” has the meaning given to that term in the preamble hereof and shall extend to all permitted successors and assigns of such Person.

“Confidential Information” means all information disclosed by a Loan Party that (a) relates to such Loan Party’s business, properties, liabilities (other than the Obligations), technology, Intellectual Property assets, trade secrets, inventions, know-how, software programs, software source

documents, financial or business plans, financial projections and affairs, employment arrangements, financial statements, internal management tools and systems, products and product development plans, marketing plans, customers, clients and contracts, and (b) to the extent such information is provided following the Closing Date (other than information provided as required by the terms of this Agreement, which shall be deemed to be Confidential Information), is designated by such Loan Party as confidential by means of appropriate markings. Confidential Information will not include any information or data (i) that has become publicly known through no wrongful act of the recipient of such information, (ii) has been received by the recipient from a third party not known by the recipient to be under any obligation of confidentiality to a Loan Party without breach by the recipient of this Agreement or any other agreement with any Loan Party, or (iii) has been approved for release by written authorization of such Loan Party.

“Contractual Obligations” means as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument or arrangement (whether in writing or otherwise), other than a Note Document, to which such Person is a party or by which it or any of such Person’s property is bound.

“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations issued, undertaken or assumed by such Person as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business on ordinary terms); (c) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments; (d) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (e) all Capitalized Lease Obligations of such Person; (f) all indebtedness of such Person referred to in clauses (a) through (e) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt (it being understood that if such Person has not assumed or otherwise become personally liable for any such Debt, the amount of the Debt of such Person in connection therewith shall be limited to the lesser of the face amount of such Debt or the fair market value of all property of such Person securing such Debt); and (g) all guaranties of such Person of any Debt of another Person.

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

“Default Rate” has the meaning given to that term in Section 3.1(c).

“Distributions” by a Person means (a) dividends or other distributions on any now or hereafter outstanding Capital Stock of such Person, (b) the redemption, repurchase, defeasance or acquisition of such Capital Stock or of warrants, rights or other options to purchase such Capital Stock, and (c) any loans or advances (other than salaries, bonuses or reimbursement of employee expenses in the ordinary course of business), to any stockholder(s), partner(s) or member(s) of such Person.

“EIDL Loan” means the obligations under that certain Loan Authorization and Agreement dated June 20, 2020, by and between the Company and the U.S. Small Business Administration and each other agreement or other document executed in connection therewith.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, Licenses, concessions, grants, franchises, agreements and other governmental restrictions relating to (a) the

protection of the environment, (b) the effect of the environment on human health, (c) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water, air or land, or (d) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof, including, without limitation, the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., the Solid Waste Disposal Act (as amended by the Resource Conservation and Recovery Act), 42 U.S.C. § 6901 et seq., and CERCLA.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means a corporation that is or was a member of a controlled group of corporations with the Company within the meaning of Section 4001(a) or (b) of ERISA or Section 414(b) of the Code, a trade or business (including a sole proprietorship, partnership, trust, estate or corporation) that is under common control with any Loan Party within the meaning of Section 414(m) of the Code, or a trade or business which together with any Loan Party is treated as a single employer under Section 414(o) of the Code.

“Erroneous Payment” has the meaning assigned to it in Section 10.9(a).

“Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 10.9(d)(i).

“Erroneous Payment Impacted Class” has the meaning assigned to it in Section 10.9(d)(i).

“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 10.9(d)(i).

“Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 10.9(e).

“Event of Default” has the meaning assigned to that term in Section 11.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Subsidiary” means Konatel, Inc., a Nevada corporation, for so long as it does not conduct any material activities or hold any material assets.

“Extraordinary Receipt” means any Cash received by or paid to or for the account of any Loan Party not in the ordinary course of business (and not consisting of proceeds described in any of Section 3.2(d)(ii), (iii), or (iv)).

“Final Maturity Date” has the meaning given that term in Section 3.2(a).

“Financial Statement” has the meaning given that term in Section 6.11(a).

“First Extension Option” has the meaning given that term in Section 3.2(a).

“First Extension Maturity Date” has the meaning given that term in Section 3.2(a).

“Fiscal Quarter” means in respect of a date as of which the applicable financial covenant is being calculated or financial report is being furnished, any fiscal quarter of a Fiscal Year (currently the three month periods ending on or about each March 31, June 30, September 30 and December 31 annually).

“Fiscal Year” means the fiscal year for financial accounting and reporting purposes of the Company (currently the fiscal year ending December 31).

“Funded Debt” means, as of any date of determination, all outstanding Debt of the types described in clauses (a), (b), (c), (d) and (f) of the definition of “Debt” as of such date.

“GAAP” means generally accepted accounting principles in effect within the United States from time to time, consistently applied, not giving effect to FASB ASC 842.

“Government” means the United States government or any agency, department or instrumentality thereof.

“Government Contract” means a Government Prime Contract or a Government Subcontract.

“Government Prime Contract” means any written agreement, commitment, contract or instrument or other binding arrangement between the Company and the Government where the Company is the prime contractor.

“Government Subcontract” means any written agreement, commitment, contract or instrument or other binding arrangement between the Company and any Person that is the prime contractor under a related contract with the Government where the Company is a subcontractor of such prime contractor.

“Governmental Authority” means the government of any nation, state, city, locality or other political subdivision of any thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, regulation or compliance, including, without limitation, any federal, state or local public utility commission, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Guarantor(s)” means each of the Company’s Subsidiaries (other than any Excluded Subsidiary) and each other Person, if any, that executes the Security Agreement, a guaranty or other similar agreement in favor of Collateral Agent, for ratable benefit of the Holders, in connection with the transactions contemplated by this Agreement and the other Note Documents.

“Hedging Agreement” means any rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging agreement.

“Holder” means each holder of a Note hereunder.

“Indemnified Party” has the meaning given to that term in Section 12.1.

“Initial Maturity Date” has the meaning given to that term in Section 3.2(a).

“Insolvency Proceeding” means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors (including any proceeding under the United States Bankruptcy Code or any Applicable Insolvency Law) or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of such Person’s creditors generally or any substantial portion of such creditors.

“Intellectual Property” has the meaning ascribed to such term in the Security Agreement.

“Interest Property License” has the meaning given to that term in Section 6.22(f).

“Intellectual Property Security Agreement” means each trademark security agreement, patent security agreement and copyright security agreement, between any Loan Party and the Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time.

“Interest Rate” has the meaning given to that term in Section 3.1(a).

“Liabilities” has the meaning given to that term in Section 12.1.

“Licenses” means all licenses, permits, authorizations, determinations, and registrations issued by any Governmental Authority to any Loan Party or any Subsidiary in connection with the conduct of its business.

“Lien” means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, license, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a capital lease, or any financing lease having substantially the same economic effect as any of the foregoing, but not including the interest of a lessor under an operating lease and including any exclusive or non-exclusive license of Intellectual Property).

“Loan Parties” means the Company and each Guarantor.

“Major Casualty Proceeds” means (i) the aggregate insurance proceeds received in Cash connection with one or more related events under any property insurance policy or business interruption insurance policy or (ii) any award or other compensation received in Cash with respect to any eminent domain, condemnation of property or similar proceedings (or any transfer or disposition of property in lieu of condemnation), if the amount of such aggregate insurance proceeds or award or other compensation exceeds $50,000, in each case, less (a) any out-of-pocket fees, costs and expenses reasonably incurred by the Company or any Subsidiary in connection therewith, (b) the amount of any Debt secured by a Permitted Lien on the related asset and discharged from the proceeds of such event, (c) any Taxes paid or reasonably estimated by the applicable Loan Party or Subsidiary to be payable by such Person as a consequence of such event (provided, that if the actual amount of Taxes actually paid is less than the estimated amount, the difference shall immediately constitute Major Casualty Proceeds) and (d) the amount of any reserve established in accordance with GAAP (provided that such reserved amounts shall be Major Casualty Proceeds to the extent and at the time of any reversal (without the satisfaction of any applicable liabilities in a corresponding amount) of any such reserve).

“Material Adverse Effect” means an effect that results in or causes (a) a material adverse change in, or a material adverse effect upon, the assets, liabilities, business, properties, operations, or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole, (b) a material adverse effect upon the legality, validity, binding effect or enforceability against the Company or any of its Subsidiaries of any Note Document or (c) material adverse effect upon the validity of any Specified License or any Intellectual Property of the Company or its Subsidiaries or any of the Company’s or its Subsidiaries’ rights or interests in respect thereof or thereto, including but not limited to as a result of an adverse order, determination or decision by a Governmental Authority.

“Material Contract” means each Material Carrier Contract, Material Revenue Contract and Specified License.

“Material Carrier Contract” means those certain carrier contracts set forth on Schedule 1.1(a).

“Material Revenue Contract” means as of any date of determination, any written contracts, agreements, commitments and other Contractual Obligations of any Loan Party that accounts for five percent (5%) or more of the revenue of the Loan Parties, taken as a whole, over the twelve-month trailing period ending on such date.

“Maturity Date” means the Initial Maturity Date, unless the Company has exercised the First Extension Option or Second Extension Option pursuant to Section 3.2(a), in which case it shall mean the First Extension Maturity Date or Second Extension Maturity Date, as applicable.

“Moody’s” means Moody’s Investors Service, Inc.

“Net Cash Proceeds” means, with respect to any transaction or event, an amount equal to the Cash proceeds received by any Loan Party (or any Subsidiary) from or in respect of such transaction or event (including Cash proceeds of any non-Cash proceeds of such transaction), less (i) any out-of-pocket expenses paid to a Person that are reasonably incurred by such Loan Party or Subsidiary in connection therewith, (ii) amount of any reserve established (provided that such reserved amounts shall be Net Cash Proceeds to the extent and at the time of any reversal (without the satisfaction of any applicable liabilities in a corresponding amount) of any such reserve) and (iii) taxes paid or payable or reasonably estimated to be paid or payable as a result thereof in that year or the next succeeding year.

“Notes” has the meaning given to that term in Section 2.1(a).

“Note Documents” means this Agreement, the Notes, the Collateral Documents and each other agreement, document or certificate delivered pursuant to this Agreement or the Notes, in each case, as amended, restated, supplemented or otherwise modified from time to time.

“Obligations” means all obligations of every nature of the Company or any other Loan Party, as applicable, from time to time owed to the Collateral Agent or any Holder under the Note Documents, whether for principal, interest, fees, expenses, indemnification or otherwise; provided, however, for the avoidance of doubt, no obligations owing by any Loan Party to any Holder or any Affiliate of any Holder, or their respective successors or assigns, in respect of or pursuant to any equity investment made by any Holder or any Affiliate of any Holder, or their respective successors and assigns, in the Company or any other Loan Party shall be included in the Obligations.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Organizational Documents” means the limited liability company agreement or bylaws (as applicable), certificate or articles of formation or certificate or articles of incorporation (as applicable), shareholders’ agreement, membership agreement or any other agreements among equity holders that are known to the Company, and other similar organizational and governing documents of the Company and its Subsidiaries.

“Origination Fee” has the meaning given to that term in Section 2.2(b).

“Payment Recipient” has the meaning assigned to it in Section 10.9(a).

“Permitted Liens” means those Liens permitted pursuant to Section 9.2.

“Person” means any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

“Premium” has the meaning given to that term in Section 3.2(d)(v).

“Pro Forma Balance Sheet” has the meaning set forth in Section 6.1.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

“Purchase Price” has the meaning given to that term in Section 2.1.

“Purchaser(s)” has the meaning given to that term in the preamble hereof.

“Related Person(s)” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other consultants and agents of or to such Person or any of its Affiliates.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event; provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“Required Holders” means the Holders of at least fifty-one percent (51%) of the outstanding principal balance of the Notes.

“Requirements of Law” means as to any Person, provisions of the Organizational Documents of such Person, or any law, treaty, code, rule, regulation, right, privilege, qualification, License or franchise or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to such Person or any of such Person’s property or to which such Person or any of such Person’s property is subject or pertaining to any or all of the transactions contemplated or referred to herein.

“Sanctioned Entity” means (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a Person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time as such program may be applicable to such agency, organization or person.

“Sanctioned Person” means a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/
enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

“Second Extension Option” has the meaning given that term in Section 3.2(a).

“Second Extension Maturity Date” has the meaning given that term in Section 3.2(a).

“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall be in effect at the time.

“Security Agreement” means the Guarantee and Security Agreement dated as of the date hereof, among the Loan Parties, the Collateral Agent, and the other parties thereto, as amended, restated, supplemented or otherwise modified from time to time.

“Solvent” means, with respect to any Person that (a) the assets and the property of such Person exceed the aggregate liabilities (including contingent and unliquidated liabilities) of such Person, (b) after giving effect to the transactions contemplated by this Agreement and the other Note Documents, such Person will not be left with unreasonably small capital, and (c) after giving effect to the transactions contemplated by this Agreement and the other Note Documents, such Person is able to both service and pay its liabilities as they mature. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that is likely to become an actual or matured liability.

“Specified License(s)” has the meaning set forth in Section 6.23.

“Specified License Subsidiary” has the meaning given to that term in Section 9.6.

“Standard and Poor’s” means Standard and Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

“Subsidiary” means, with respect to any Person, a corporation or other entity of which more than fifty percent (50%) of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

“Tax” means (a) any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on-minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto and (b) liability for the payment of any amounts of the type described in clause (a) as a transferee or successor, by contract, from any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person, or otherwise.

“Tax Return” means any return, declaration, report, or information return or statement relating to Taxes required to be filed with a Governmental Authority responsible for the administration of Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Transactions” means, collectively, (a) the issuance of the Notes and (b) the payment of all fees and expenses in connection therewith.

“Working Capital” means with respect to the Company and its Subsidiaries, as of any period of determination, (i) current assets (other than Cash and amounts due from related parties), plus unbilled revenue and deferred costs, less (ii) current liabilities (other than amounts due to related parties, lines of credit with related parties, notes payable and liabilities arising from the Obligations hereunder) and deferred revenue.

ARTICLE 2
TERM LOANS

2.1

Purchase, Sale and Issuance of the Notes. Subject to the terms and conditions herein set forth, on the Closing Date, the Company will issue to the Purchasers, and each Purchaser will acquire, severally and not jointly, from the Company senior secured promissory notes (the “Notes”) in the principal amount set forth to such Purchaser’s name on Schedule 2.1 hereto, in the aggregate principal amount of $3,150,000 (the “Purchase Price”).

2.2

Fees Payable.

(a)

Reimbursement of Expenses. At the Closing, the Company agrees to reimburse the Purchasers’ reasonable and documented fees and expenses (including, without limitation, fees, charges and disbursements of professionals and consultants, and other out-of-pocket expenses) incurred in connection with (i) the negotiation and execution and delivery of this Agreement and the Note Documents, (ii) Purchasers’ due diligence investigation, and (iii) the other transactions contemplated by this Agreement and the Note Documents (including filings or other actions required to perfect the security interests granted under the Collateral Documents), which, in the case of the Purchasers’ legal fees prior to the Closing Date, shall not exceed $50,000.

(b)

Origination Fee. At Closing, the Company shall pay to the Purchasers a fee in the amount set forth to such Purchaser’s name on Schedule 2.1 hereto and in the aggregate amount of ninety four thousand five hundred dollars ($94,500) (the “Origination Fee”), which shall be non-refundable and fully earned on the Closing Date, and the Company hereby authorizes Purchasers to withhold their respective portion of the Origination Fee from the delivery of their respective portion of the Purchase Price.

2.3

Closing. The purchase and issuance of the Notes shall take place at the closing (the “Closing”) on the date hereof (the “Closing Date”). At the Closing, the Company shall deliver each Note to the applicable Purchaser, and such Purchaser shall deliver its respective portion of the Purchase Price, which is payable by wire transfer of immediately available funds.

ARTICLE 3
INTEREST AND PAYMENTS

3.1

Interest.

(a)

Interest Rate; Payments. Interest on the sum of the outstanding principal amount of the Notes shall accrue from the Closing Date until full and final repayment of the principal amount of such Note and the payment of all interest in full at the rate of fifteen percent (15%) per annum (the “Interest Rate”), payable in cash, monthly in arrears (on the dates provided in the immediately succeeding sentence) and computed on the basis of the actual number of days elapsed and a 360-day year. On the first Business Day of each calendar month in which any Note is outstanding, commencing with the calendar month beginning on July 1, 2022, the Company shall pay in arrears in cash by automatic bank draft or wire transfer of immediately available funds accrued interest on the outstanding principal amount of each such outstanding Note in an amount equal to the interest which is currently payable in cash hereunder as set forth above (each date upon which interest shall be so payable, an “Interest Payment Date”).

(b)

Default Rate of Interest. Notwithstanding the foregoing provisions of this Section 3.1, but subject to any applicable Requirement of Law, during the occurrence of any Event of Default, upon notice from the Required Holders (which notice shall not be required in connection with an Event of Default pursuant to Sections 11.1(a), (h) or (i)), the outstanding principal amount of the Note shall bear interest from the date such Event of Default occurred until such Event of Default is cured or waived at a rate equal to the sum of (i) the Interest Rate plus (ii) an additional five percent (5%) per annum (the “Default Rate”). The portion of the Default Rate in excess of the Interest Rate shall be payable in cash on demand.

(c)

No Usurious Interest. In the event that any interest rate(s) provided for in this Section 3.1, shall be determined to exceed any limitation on interest under any applicable Requirement of Law, such interest rate(s) shall be computed at the highest rate permitted by such Requirement of Law. Any payment by the Company of any interest amount in excess of that permitted by law shall be considered a mistake, with the excess being applied to the principal amount of the affected Notes without prepayment premium or penalty, provided that if no such principal amount is outstanding, such excess shall be returned to the Company.

3.2

Redemption of Notes.

(a)

Maturity Date. The Company shall redeem the Notes on June 14, 2023 (the “Initial Maturity Date”), by payment in Cash in full of the entire outstanding principal balance thereof, together with any unpaid interest accrued thereon to such date; provided, that, if no Event of Default has occurred and is continuing and Company has paid all accrued interest, the Company may elect to extend (the “First Extension Option”) the Initial Maturity Date by an additional six (6) months (the “First Extension Maturity Date”); provided, further that, if no Event of Default has occurred and is continuing and Company has paid all accrued interest, the Company may elect to extend (the “Second Extension Option” and together with the First Extension Option, each an “Extension Option”) the First Extension Maturity Date by an additional six (6) months (the “Second Extension Maturity Date”). Each Extension Option may be exercised by the Company by delivery of a notice to the Holders on or prior to the date

that is forty five (45) days prior to the Initial Maturity Date or the First Extension Maturity Date, as applicable, together with a payment in an amount equal to one and a half percent (1.50%) of the outstanding principal amount of the Notes as of the date of such notice (each, an “Extension Fee”) paid together with the delivery of such notice. Each Extension Fee shall be non-refundable and fully earned on the date paid.

(b)

Prepayment; Prepayment Premium. The Company may prepay or redeem the Notes, in whole or in part, subject to the payment of the Premium (if applicable).

(c)

Optional Redemption by the Holders. Upon the occurrence of (i) a Change of Control (and concurrent with the closing of any such transaction), (ii) [reserved] or (iii) a sale of all or substantially all of the Company and its Subsidiaries’ assets, each Holder may elect to sell to the Company and the Company shall be required to purchase all Notes held by such Holder in full by payment of an amount equal to (A) the unpaid principal balance thereof, plus (B) all unpaid interest accrued thereon through the date of redemption, plus (C) all outstanding and unpaid fees and expenses payable by the Company to such Holder through the date of redemption, plus (D) the Premium (if applicable).

(d)

Mandatory Prepayments. The Company shall prepay the Notes in the following amounts and at the following times, including the Premium (if applicable).

(i)

Casualty and Other Insurance Proceeds. Within five (5) Business Days after any Loan Party or any Subsidiary (or Collateral Agent as loss payee or assignee) receives any Major Casualty Proceeds, an amount equal to one hundred percent (100%) of such Major Casualty Proceeds.

(ii)

Asset Disposition Proceeds. Within five (5) Business Days after any Loan Party or any Subsidiary receives the proceeds of any Asset Disposition, the Company shall prepay the Notes in an amount equal to one hundred percent (100%) of the Net Cash Proceeds of such Asset Disposition.

(iii)

Debt Financing Proceeds. Within five (5) Business Days after any Loan Party or any Subsidiary receives the proceeds of any financings by the issuance of Debt, the Company shall prepay the Notes in an amount equal to one hundred percent (100%) of the Net Cash Proceeds of such financing.

(iv)

Extraordinary Receipts. Within five (5) Business Days of the receipt by any Loan Party or any Subsidiary of any Extraordinary Receipt, in an amount equal to the Net Cash Proceeds of such Extraordinary Receipt.

(v)

Premium. In the event that on or prior to March 14, 2023 (i) the Obligations are accelerated (whether pursuant to the terms of this Agreement, by operation of law, or otherwise), (ii) an Event of Default occurs under Section 11.1(h) or 11.1.(i) or (iii) any payment, prepayment or repayment of the principal amount of the Notes or any Obligations, or (iv) the Notes cease to be outstanding by prepayment or otherwise, then, on the effective date of such acceleration, Event of Default, payment, prepayment or repayment or on the date on which such Notes cease to be outstanding, the Company shall pay to the Holders, in addition to all other Obligations, a premium (the “Premium”) equal to the interest that would have accrued on the outstanding balance of the applicable Notes subject to such event, at the interest rate that is in effect pursuant to Section 3.1(a) (and, if an Event of Default shall have occurred and be continuing, the Default Rate) on that date for the period of time from the date of such

prepayment, repayment, refinancing, replacement, acceleration, sale or such Event of Default (or date of required prepayment, repayment, refinancing, replacement, acceleration, sale or such Event of Default) through March 14, 2023 less the amount of all accrued and unpaid interest on the applicable Notes as of such date. In no event shall the Premium be less than $0 or result in any payment by any Holder to the Company.

Any Premium payable in accordance with this Section 3.2 shall be presumed to be equal to the liquidated damages sustained by the Holders as the result of the occurrence of any event triggering the prepayment of such Premium and the Company agrees that it is reasonable under the circumstances currently existing. The parties hereto acknowledge that the Premium shall survive acceleration of the Obligations and/or the occurrence of any Insolvency Proceeding, and shall automatically accrue to the principal amount of the Notes and shall constitute part of the Obligations for all purposes herein. If the Notes are accelerated for any reason pursuant to the terms herein, the Premium shall be calculated as if the date of acceleration of the Notes was the date of prepayment of the Notes. THE COMPANY EXPRESSLY WAIVES THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREMIUM IN CONNECTION WITH ANY ACCELERATION. The Company expressly agrees that: (A) the Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Holders and the Company giving specific consideration in this transaction for such agreement to pay the Premium; (D) the Company shall be estopped hereafter from claiming differently than as agreed to in this paragraph; (E) the Company’s agreement to pay the Premium is a material inducement to Holders to purchase the Notes; and (F) the Premium represents a good faith, reasonable estimate and calculation of the lost profits or damages of Holders and that it would be impractical and extremely difficult to ascertain the actual amount of damages to the Holders or profits lost by the Holders as a result of such event triggering payment of the Premium.

(e)

Acceleration. In addition, the Notes shall be subject to acceleration as set forth in Section 11.2.

3.3

Manner of Payment.

(a)

All fees, interest, premium and principal payable in respect of any Note shall be paid by automatic bank draft or wire transfer of immediately available funds to an account at a bank designated in writing by the Holder of such Note. In the absence of any such written designation, any such payment shall be deemed made on the date a check in the applicable amount payable to the Holder thereof is received by such Holder at its last address as reflected in the Note Register (as defined in the Notes).

(b)

All payments made by the Company (pursuant to this Article 3 or otherwise) upon the Obligations relating to the Notes and all net proceeds from the enforcement of the Obligations shall be applied (i) first, to that portion of the Obligations constituting fees, indemnities and expenses (including attorney fees) payable to the Holders, (ii) second, to the payment of that portion of the Obligations constituting accrued and unpaid interest on the Notes, (iii) third, to the Premium (if applicable), (iv) fourth, to the payment of that portion of the Obligations constituting unpaid principal of the Notes, (v) last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Company or as otherwise required by any Requirements of Law.

(c)

Subject to Section 3.3(b), all payments made by the Company upon the Notes (including, without limitation, payments of principal if prepaid or upon earlier acceleration) shall be paid

proportionally among the Holders of the Notes, based upon the outstanding principal amounts of such Notes.

ARTICLE 4
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS

4.1

Conditions to the Obligations of the Purchasers to Purchase the Notes on the Closing Date. The obligation of each Purchaser to purchase its respective Note, fund its respective portion of the Purchase Price on the Closing Date and perform any obligations hereunder shall be subject to the reasonable satisfaction as determined by, or waived by, the Purchasers of the following conditions on or before the Closing Date; provided, that any waiver of a condition shall not be deemed a waiver of any breach of any representation, warranty, agreement, term or covenant, as specifically set forth elsewhere in this Agreement, or of any misrepresentation by the Company.

(a)

Representations and Warranties. The representations and warranties contained in Article 6 hereof shall be true and correct in all material respects at and as of the Closing Date after giving effect to the Transactions.

(b)

Compliance with this Agreement. The Company shall have performed and complied with all of its agreements and conditions set forth or contemplated herein and the other Note Documents in all material respects that are required to be performed or complied with by the Company on or before the Closing Date, and the Collateral Agent shall have received at the Closing a certificate to the foregoing effect, dated the Closing Date, and executed by the chief executive officer or chief financial officer on behalf of the Company.

(c)

Secretary’s Certificates. The Collateral Agent shall have received a certificate from each Loan Party, dated the Closing Date and signed by the secretary, an assistant secretary, the chief financial officer or the chief executive officer of such Loan Party, as applicable, certifying (i) that the attached copies of the Organizational Documents of such Loan Party and resolutions of the board of directors or similar governing body of such Loan Party approving the Note Documents to which it is a party and the Transactions are all true, complete and correct and remain unamended and in full force and effect and (ii) the incumbency and specimen signature of each officer of such Loan Party executing any Note Document to which it is a party or any other document delivered in connection herewith and therewith on behalf of such Loan Party.

(d)

Solvency Certificate. The Collateral Agent shall have received a certificate from the Company, dated the Closing Date and signed by the chief financial officer of the Company, certifying that each Loan Party is, individually, Solvent.

(e)

Documents. The Collateral Agent shall have received true, complete and correct copies of the Note Documents signed by each Loan Party party thereto.

(f)

Good Standing Certificates. The Company shall have delivered to the Collateral Agent as of a date not more than fifteen (15) days before the Closing Date, good standing certificates and/or certificates of existence, as the case may be, for each Loan Party for which such a certificate is issuable by a Governmental Authority for such Loan Party’s jurisdiction of incorporation or formation and all other jurisdictions where it does business.

(g)

Budget. The Loan Parties shall have delivered to the Collateral Agent as of the Closing Date a true and correct copy of a Budget for the 12-month period beginning on Closing Date, which such Budget shall be approved by the Required Holders.

(h)

No Litigation. No action, suit or proceeding before any court or any Governmental Authority shall have been commenced or threatened in writing, no investigation by any Governmental Authority shall have been commenced and no action, suit or proceeding by any Governmental Authority shall have been threatened in writing against any Purchaser or the Loan Parties seeking to restrain, prevent or change the transactions contemplated hereby or questioning the validity or legality of any of such transactions.

(i)

Fees, Etc. On the Closing Date, the Company shall have paid to the Purchasers and Collateral Agent all costs, fees and expenses (including, without limitation, reasonable legal fees and expenses) payable to the Purchasers and Collateral Agent subject to and in accordance with the terms of the Note Documents.

(j)

Consents. All consents, exemptions, authorizations, or other actions by, or notices to, or filings with, Governmental Authorities and other Persons in respect of all Requirements of Law and with respect to those Contractual Obligations of the Loan Parties reasonably necessary in connection with the execution, delivery or performance by the Loan Parties, or enforcement against the Loan Parties, of the Note Documents to which they are a party shall have been made or obtained and be in full force and effect, and the Collateral Agent shall have been furnished with appropriate evidence thereof.

(k)

EIDL Loan Payoff. The Collateral Agent shall received evidence, satisfactory in form and substance to the Required Holders in their reasonable discretion, of the payment in full of the EIDL Loan.

(l)

Additional Documents. The Collateral Agent shall have received each additional document, instrument, legal opinion or other item reasonably requested.

ARTICLE 5
CONDITIONS TO OBLIGATIONS OF THE LOAN PARTIES

The obligations of the applicable Loan Parties to issue the Notes and to perform their other obligations hereunder on the Closing Date shall be subject to the reasonable satisfaction as determined by, or waived by, the Company of the following conditions on or before the Closing Date:

5.1

Representations and Warranties. The representations and warranties of each Purchaser contained in Article 7 hereof shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such date (and if as of another date, then as of such other date).

5.2

Compliance with this Agreement. Each Purchaser shall have performed and complied in all material respects with all of the agreements and conditions set forth or contemplated herein that are required to be performed or complied with by it on or before the Closing Date.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

The following representations and warranties by the Company to the Purchasers are qualified by the Disclosure Schedules, which set forth certain disclosures concerning the Company and its business. The Company hereby represents and warrants to the Purchaser as of the date hereof as follows:

6.1

Existence and Power. Each Loan Party that is not a natural Person: (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or

formation, (b) has all requisite power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently, or is currently proposed to be, engaged, except to the extent that the failure to so own, operate, lease or conduct would not reasonably be expected to have a Material Adverse Effect, (c) is duly qualified as a foreign entity, licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify could not reasonably be expected to have a Material Adverse Effect and (d) has the power and authority to execute, deliver and perform its obligations under each Note Document to which it is or will be a party and to borrow hereunder. The jurisdictions in which each Loan Party is organized and qualified to do business as of the Closing Date are listed on Schedule 6.1.

6.2

Corporate Authorization; No Contravention. The execution, delivery and performance by each Loan Party that is not a natural Person of each Note Document to which it is or will be a party and the consummation of the Transactions: (a) has been duly authorized by all necessary action on the part of such Loan Party, (b) do not and will not contravene or violate the terms of the Organizational Documents of any Loan Party or any amendment thereto or any Requirement of Law applicable to any Loan Party or any Loan Party’s assets, business or properties, (c) do not and will not (i) conflict with, contravene, result in any violation or breach of or default under any Material Carrier Contract or any other material Contractual Obligation of any Loan Party (with or without the giving of notice or the lapse of time or both) other than any right to consent, which consents have been obtained, (ii) create in any other Person a right or claim of termination or amendment of any Material Carrier Contract or any other material Contractual Obligation of any Loan Party, or (iii) require modification, acceleration or cancellation of any Material Carrier Contract or any other material Contractual Obligation of any Loan Party which could result in a material adverse effect, and (d) do not and will not result in the creation of any Lien (or obligation to create a Lien) against any property, asset or business of any Loan Party (other than Liens securing the Notes and Permitted Liens).

6.3

Governmental Authorization; Third Party Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person in respect of any Requirement of Law, any Material Carrier Contract or any other material Contractual Obligation, and no lapse of a waiting period under a Requirement of Law, any Material Carrier Contract or any other material Contractual Obligation, is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party (other than any Loan Party that is a natural Person) of the Note Documents to which it is a party or the consummation of the Transactions, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created by the Note Documents and (iii) consents, approvals, exemptions, authorizations or other actions that are not material to any Loan Party.

6.4

Binding Effect. Each Loan Party has duly executed and delivered the Note Documents to which it is a party and such Note Documents constitute the legal, valid and binding obligations of such Loan Party enforceable against it in accordance with their respective terms, except as enforceability may be limited by Applicable Insolvency Laws and similar laws of general applicability relating to or affecting creditors’ rights and by general principles of equity.

6.5

Litigation. Except as set forth on Schedule 6.5, there are no legal actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Loan Party after diligent inquiry and investigation, threatened, at law, in equity, in arbitration or before any Governmental Authority against or affecting any Loan Party that could reasonably be expected to have individually or in the aggregate, a Material Adverse Effect. No injunction, writ, temporary restraining order, decree or any order or determination of any nature by any arbitrator, court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of the Note Documents or, to the knowledge of any

Loan Party after diligent inquiry and investigation, which relates to the assets or the business of the Loan Parties, is outstanding.

6.6

Compliance with Laws. Except as set forth on Schedule 6.6, each Loan Party is in compliance with all Requirements of Law, except for such noncompliance that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

6.7

No Default or Breach. No event has occurred and is continuing or would result from the incurring of Obligations by the Loan Parties under the Note Documents which constitutes or, with the giving of notice or lapse of time or both, would constitute an Event of Default. No Loan Party is in default under or with respect to any Material Carrier Contract or any other material Contractual Obligation.

6.8

Title to Properties. As of the Closing Date, (i) no Loan Party owns any real property, (ii) all real property leased by the Loan Parties is correctly set forth on Schedule 6.9 and (iii) except as set forth on Schedule 6.9, each Loan Party has a valid leasehold interest in all its leased real property. The Loan Parties have good title to, or a valid leasehold interest in, all other Property necessary to the conduct of its business and none of such Property is subject to any Lien, except for Liens permitted pursuant to Section 9.2.

6.9

Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in its Form 10-Q for the fiscal quarter ended March 31, 2022 and in its Form 10-K for the fiscal year ended December 31, 2021, there has been no material adverse change, and no other material adverse developments in the business, assets, liabilities, properties, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Significant Subsidiaries. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge after diligent inquiry and investigation or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge after diligent inquiry and investigation of any fact which would reasonably lead a creditor to do so.

6.10

Taxes.

(a)

Except as set forth on Schedule 6.10, each Loan Party has timely filed all federal, state and other material Tax Returns that it was required to file. All such Tax Returns were correct and complete in all material respects. All federal, state and other material Taxes due and payable by each Loan Party (whether or not shown on any Tax Return) have been paid or adequately reserved for in the Financial Statements. Except as set forth on Schedule 6.10, no Loan Party is currently the beneficiary of any extension of time within which to file any Tax Return. No Loan Party has ever received a written claim by a Governmental Authority in a jurisdiction where any Loan Party does not file Tax Returns that any Loan Party is or may be subject to taxation by that jurisdiction. There are no Liens on any of the assets of any Loan Party that arose in connection with any failure to timely pay any Tax.

(b)

Except as set forth on Schedule 6.10, there is no action, suit, proceeding, investigation, examination, audit, or claim now pending or, to the knowledge of any Loan Party after diligent inquiry and investigation, threatened by any Governmental Authority regarding any Taxes

relating to any Loan Party. No Loan Party has entered into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes of such Person. No Loan Party has incurred, or will incur, any material Tax liability in connection with the Transactions.

6.11

Financial Condition.

(a)

SEC Documents; Financial Statements. Since December 31, 2021, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with GAAP, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate). The Company is not currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the Commission. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.

(b)

Internal Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission, including, without limitation, controls and procedures designed to

ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Except as set forth in the SEC Documents, neither the Company nor any of its Subsidiaries has received any notice or correspondence from any accountant, Governmental Authority or other Person relating to any potential material weakness or significant deficiency in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.

6.12

Absence of Material Adverse Effect. Since December 31, 2021, there has been no development, event, circumstance or change which could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect as to the Loan Parties.

6.13

[Reserved].

6.14

Investment Company/Government Regulations. The Company is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, the Interstate Commerce Act, or any federal or state statute or regulation limiting its ability to incur Debt.

6.15

Subsidiaries. Except as set forth in Schedule 6.15, as of the Closing Date, the Company does not (a) have any other Subsidiaries or (b) own of record or beneficially, directly or indirectly, any (i) Capital Stock issued by any other Person or (ii) equity, voting or participating interest in any joint venture or other enterprise.

6.16

Capitalization. As of the Closing Date, after giving effect to the transactions contemplated under the Note Documents, the number of shares of issued and outstanding Capital Stock for each Subsidiary thereof shall be as set forth on Schedule 6.16, and such shares of Capital Stock are owned by the Persons in the respective amounts set forth on Schedule 6.16. All such outstanding Capital Stock has been duly authorized by all necessary action of the Company or such Subsidiary and has been validly issued and is free and clear of all Liens (other than Liens permitted under the Note Documents). The issuance of the foregoing Capital Stock is not and has not been subject to preemptive rights or any other similar rights or Liens (other than Liens permitted under the Note Documents) in favor of any Person other than such rights that have been waived and will not result in the issuance of any additional Capital Stock of the Company or any Subsidiary or the triggering of any anti-dilution or similar rights contained in any options, warrant, debentures or other securities or agreements of the Company or such Subsidiary. On the Closing Date, except for stock options offered to the Company’s board members as disclosed in the Company’s SEC Documents, there will be no outstanding securities convertible into or exchangeable for Capital Stock of the Company or any Subsidiary or options, warrants or other rights to purchase or subscribe to Capital Stock of the Company or any Subsidiary or contracts, commitments, agreements, understandings or arrangements of any kind to which any Loan Party is a party (other than the Organizational Documents of such Loan Party) relating to the issuance of any Capital Stock of such Loan Party, any such convertible or exchangeable securities or any such options, warrants or rights. Neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

6.17

Private Offering. No form of general solicitation or general advertising was used by any Loan Party or its representatives in connection with the offer or sale of the Notes to the Purchasers pursuant to this Agreement. Assuming the accuracy of the Purchasers’ representations and warranties contained in Article 7, no registration of the Notes pursuant to the provisions of the Securities Act or the

state securities or “blue sky” laws will be required for the offer, sale or issuance of the Notes by any Loan Party to the Purchasers pursuant to this Agreement.

6.18

Broker’s, Finder’s or Similar Fees. Except as set forth on Schedule 6.18, there are no brokerage commissions, finder’s fees or similar fees or commissions payable in connection with the Transactions based on any agreement, arrangement or understanding with any Loan Party or any action taken by any Loan Party.

6.19

Labor Relations. No Loan Party is a party to any collective bargaining agreement.

6.20

Employee Benefit Plans. Within the five-consecutive-year period immediately preceding the first day of the year in which the Closing Date occurs neither any Loan Party nor any ERISA Affiliate thereof has contributed to, or has any actual or contingent, direct or indirect, liability in respect of, any employee benefit plan (as defined in Section 3(3) of ERISA) or other employee benefit arrangement.

6.21

Intellectual Property.

(a)

Ownership and Use. Each Loan Party owns or has the right to use all Intellectual Property it currently uses in the operation of the business of the Company as presently conducted. Each item of Intellectual Property owned, licensed or used by any Loan Party immediately prior to the Closing will be owned, licensed or available for use by such Loan Party on substantially similar terms and conditions immediately following the Closing. To the knowledge of the Loan Parties after diligent inquiry and investigation, each item of Intellectual Property owned, licensed or used by such Loan Party is valid and enforceable and otherwise fully complies in all material respects with all laws applicable to the enforceability thereof.

(b)

No Violation or Infringement. To the knowledge of each Loan Party after diligent inquiry and investigation, no Loan Party has violated, misappropriated or infringed upon or otherwise come into conflict with any Intellectual Property of third parties, and no Loan Party has received any written notice alleging any such violation, infringement or other conflict. To the knowledge of each Loan Party after diligent inquiry and investigation, no third party has infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property of any Loan Party.

(c)

Intellectual Property Listing. Schedule 6.21(c) identifies each patent or registration (including copyright, trademark, service mark and domain name) owned by a Loan Party (which is active and in force) with respect to any of such Loan Party’s Intellectual Property, identifies each patent application or application for registration (including pending applications) that such Loan Party has made with respect to any of its Intellectual Property, and identifies each material license, agreement or other permission that such Loan Party has granted to any third party (whether active and in force) with respect to any of its Intellectual Property. Schedule 6.21(c) also identifies each trade name or unregistered trademark or service mark owned by each Loan Party. With respect to each item of Intellectual Property required to be identified in Schedule 6.21(c) and except as expressly set forth on Schedule 6.21(c): (i) each Loan Party possesses all right, title and interest in and to the item, free and clear of any Liens other than Permitted Liens; (ii) the item is not subject to any order, award, decision, injunction, judgment, ruling, decree, charge, writ, subpoena or verdict entered, issued, made or rendered by any Governmental Authority or arbitrator (each, an “Order”); (iii) no proceeding, charge, complaint, claim, demand, notice, action, suit, litigation, hearing, audit, investigation, arbitration or mediation (in each case, whether civil, criminal, administrative, investigative or informal) is pending before any Governmental Authority, arbitrator or mediator (each, a “Proceeding”) or, to the knowledge of each Loan Party after diligent inquiry and investigation, is threatened or anticipated that challenges the legality,

validity, enforceability, use or ownership of the item; and (iv) no Loan Party has agreed to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to the item.

(d)

Founder and Employees. All Intellectual Property related to the business of the Loan Parties and created by the Loan Parties’ founders, employees, contractors or other Persons for or on behalf of the Loan Parties has been irrevocably assigned to the Loan Parties.

The Loan Parties have taken commercially reasonable action to maintain and protect each item of Intellectual Property that each Loan Party owns, licenses or uses, and have maintained the confidentiality of all proprietary information held by the Loan Parties, or purported to be held by the Loan Party, as a trade secret, including any confidential information or trade secrets provided to the Loan Parties by any Person under an obligation of confidentiality, and no such proprietary information has been authorized to be disclosed or has actually been disclosed to any Person other than pursuant to a written confidentiality agreement restricting the disclosure and use of proprietary information.

(e)

Intellectual Property Licenses. Schedule 6.21(d) identifies each item of Intellectual Property other than off the shelf software that any Person other than any Loan Party owns and that such Loan Party uses pursuant to license, agreement or permission (an “Intellectual Property License”). With respect to each item of Intellectual Property required to be identified on Schedule 6.21(d) and except as expressly set forth on Schedule 6.21(d): (i) to the knowledge of each Loan Party after diligent inquiry and investigation, such item is not subject to any Order; (ii) to the knowledge of each Loan Party after diligent inquiry and investigation, no Proceeding is pending or is threatened or anticipated that challenges the legality, validity or enforceability of such item; and (iii) such Loan Party has not granted any sublicense or similar right with respect to the Intellectual Property License relating to such item.

6.22

Potential Conflicts of Interest. Other than as set forth on Schedule 6.22, no officer, director or manager (or equivalent Person), partner, stockholder or other security holder of the Company or any Subsidiary: (a) is an officer, director, manager, employee or consultant of, any Person that is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent or customer of, or lender to or borrower from, the Company or its Subsidiaries; (b) has been a party to any material transaction with the Company or any Subsidiary; (c) owns, directly or indirectly, in whole or in part, any tangible or intangible property that the Company or any Subsidiary uses or contemplates using in the conduct of business; or (d) has any cause of action or other claim whatsoever against, or owes or has advanced any amount to the Company or any Subsidiary, except for advances in the ordinary course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, reasonable and customary expense reimbursements, and similar matters and agreements existing on the date hereof.

6.23

Specified Licenses.

(a)

Each Loan Party holds such validly issued licenses and authorizations as are necessary to operate as they are currently operated (collectively, the “Specified Licenses”), and each such Specified License is in full force and effect. The Specified Licenses of each Loan Party as of the Closing Date are listed on Schedule 6.23, and each of such Specified Licenses has the expiration date indicated on Schedule 6.23.

(b)

No Loan Party has knowledge, after diligent inquiry and investigation, of any condition imposed by any Governmental Authority as part of any Specified License which is neither set forth on the face thereof as issued by such Governmental Authority nor contained in the rules and regulations of such Governmental Authority applicable generally to stations of the type, nature, class or location of the business of such Loan Party. Each Loan Party has been and is being operated in all

material respects in accordance with the terms and conditions of the Specified Licenses applicable to it and the law, rules and regulations applicable to it.

(c)

No proceedings are pending, or to the Loan Parties’ knowledge after diligent inquiry and investigation, are threatened, which may result in the revocation, modification, non-renewal or suspension of any of the Specified Licenses, the denial of any pending applications, the issuance of any cease and desist order or the imposition of any fines, forfeitures or other administrative actions by any Governmental Authority with respect to it or its operation, other than any matters which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(d)

All reports, applications and other documents required to be filed by the Loan Parties with any Governmental Authority with respect to its respective business or Specified License(s) have been timely filed, and all such reports, applications and documents are true, correct and complete in all respects, except where the failure to make such timely filing or any inaccuracy therein could not reasonably be expected to have a Material Adverse Effect, and no Loan Party has knowledge, after diligent inquiry and investigation, of any matters which could reasonably be expected to result in the suspension or revocation of or the refusal to renew any of the Specified Licenses or the imposition on any Loan Party of any material fines or forfeitures by any Governmental Authority, or which could reasonably be expected to result in the revocation, rescission, reversal or modification of such Loan Party’s authorization to operate as currently authorized under the law, rules and regulations applicable to it.

(e)

There are no unsatisfied or otherwise outstanding citations issued by any Governmental Authority with respect to any Loan Party or its operations. The Loan Parties have delivered to the Collateral Agent true and complete copies of all Specified Licenses (including any and all amendments and other modifications thereto), all pending applications relating thereto.

6.24

Debt. Schedule 6.24 lists (a) the amount of all Debt of the Loan Parties and their Subsidiaries (other than Debt under this Agreement and any Debt being repaid on the date hereof) as of the Closing, (b) the Liens that relate to such Debt and that encumber the assets of such Persons, (c) the name of each lender thereof, and (d) the amount of any unfunded commitments, if any, available to such Persons in connection with any such Debt facilities.

6.25

Material Contracts. Schedule 6.25 lists each Material Contract. Except as set forth on Schedule 6.25, each of the Material Contract is in full force and effect. Except as set forth on Schedule 6.25, each Loan Party has satisfied in full or provided for all of its liabilities and obligations under each Material Contract requiring performance prior to the date hereof in all material respects, and is not in default under any of them, nor does any condition exist that with notice or lapse of time or both would constitute such a default. To the knowledge of each Loan Party after diligent inquiry and investigation, no other party to any such Material Contract is in default thereunder, nor does any condition exist that with notice or lapse of time or both would constitute such a default. Except as set forth on Schedule 6.25, no approval or consent of any Person is needed for the Material Contracts to continue to be in full force and effect after giving effect to the Transactions.

6.26

Insurance. Schedule 6.26 accurately summarizes all of the insurance policies or programs of the Loan Parties in effect as of the date hereof, and indicates the insurer’s name, policy number, expiration date, amount of coverage, type of coverage, annual premiums, exclusions and deductibles, and also indicates any self-insurance program that is in effect. All such policies will remain in full force and effect and will not terminate or lapse by reason of any of the Transactions.

6.27

Solvency. As of the Closing Date, after giving effect to the Transactions and the other transactions contemplated hereby to be consummated on the Closing Date in accordance with the terms hereof, each Loan Party is and each of the Company’s Subsidiaries are, individually, Solvent.

6.28

Licenses and Approvals. Except as set forth on Schedule 6.28 hereto, no Loan Party is a party to and has no knowledge, after diligent inquiry and investigation, of any investigation, notice of apparent liability, violation, forfeiture or other order or complaint issued by or before any court or regulatory body or of any other proceedings which could be reasonably expected to materially and adversely affect the validity or continued effectiveness of the material Licenses of any Loan Party. No Loan Party has reason to believe that such material Licenses will not be renewed in the ordinary course. Each Loan Party has filed in a timely manner all material reports, applications, documents, instruments and information required to be filed by it pursuant to applicable rules and regulations or requests of every regulatory body having jurisdiction over any of its material Licenses.

6.29

OFAC. Neither any Loan Party nor any Affiliate of any Loan Party: (a) is a Sanctioned Person, (b) has any assets in Sanctioned Entities, or (c) derives any operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. The proceeds of the Notes will not be used and have not been used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

6.30

Disclosure. This Agreement, together with all exhibits and schedules hereto, the Note Documents, and the agreements, certificates and other documents furnished to the Collateral Agent or any Purchaser by any Loan Party at the Closing, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which they were made, not misleading.

6.31

No Default. No Default or Event of Default exists or would result from the incurring of the Obligations by any Loan Party or the grant or perfection of the Liens on the Collateral or the consummation of the Transactions.

6.32

Government Contracts. No Loan Party is party to any Government Contracts.

ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser hereby represents and warrants as follows:

7.1

Authorization; No Contravention. The execution, delivery and performance by such Purchaser of this Agreement: (a) is within its power and authority and has been duly authorized by all necessary action; and (b) does not contravene or violate the terms of its organizational documents or any amendment thereof.

7.2

Binding Effect. This Agreement has been duly executed and delivered by such Purchaser and this Agreement constitutes such Purchaser’s legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

7.3

No Legal Bar. The execution, delivery and performance of this Agreement by such Purchaser will not violate any Requirements of Law applicable to it.

7.4

Securities Laws.

(a)

The Notes are being or will be acquired by such Purchaser hereunder for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof in any transaction which would be in violation of state or federal securities laws or which would require the issuance and sale of the Notes hereunder to be registered under the Securities Act, subject, however, to the disposition of such Purchaser’s property being at all times within its control.

(b)

Such Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

(c)

Such Purchaser understands that (i) the Notes constitute “restricted securities” under the Securities Act, (ii) the offer and sale of the Notes hereunder is not registered under the Securities Act or under any “blue sky” laws in reliance upon certain exemptions from such registration and that the Company is relying on the representations made herein by such Purchaser in its determination of whether such specific exemptions are available, and (iii) the Notes may not be transferred except pursuant to an effective registration statement under the Securities Act, or under an extemption from such registration available under the Securities Act and under applicable “blue sky” laws or in a transaction exempt from such registration.

7.5

Governmental Authorization; Third Party Consent. No approval, consent, compliance, exemption or authorization of any Governmental Authority or any other Person in respect of any Requirements of Law, and no lapse of a waiting period under Requirements of Law, is necessary or required in connection with the execution, delivery or performance by it or enforcement against such Purchaser of this Agreement.

ARTICLE 8
AFFIRMATIVE COVENANTS

Until the payment in full in Cash of all of the Obligations, the Loan Parties hereby jointly and severally covenant and agree with the Holders as follows:

8.1

Delivery of Financial and Other Information. The Company shall deliver or cause to be delivere d to the Collateral Agent and each Holder the following:

(a)

Within one hundred twenty (120) days after the close of each fiscal year of the Company (or, for so long as the Company or any Subsidiary is required to file reports with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act, such longer period as the Company shall have in which to file its Form 10-K), an unqualified audit report certified by independent certified public accountants selected by Company and reasonably acceptable to the Required Holders, prepared in accordance with GAAP, including a consolidated balance sheet of the Company and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, retained earnings and cash flows for such Fiscal Year, all such financial statements to be prepared in accordance with GAAP and accompanied by any management letter prepared by said accountants and a narrative report containing management’s discussion and analysis of the financial position and financial performance for such fiscal year in reasonable form and detail.

(b)

[Reserved.]

(c)

For each month that is also the end of a fiscal quarter of the Company or the end of a fiscal year of the Company, within forty-five (45) days after the end of the Company’s fiscal quarter (or, for so long as the Company or any Subsidiary is required to file reports with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act, such longer period as the Company shall have in

which to file its Form 10-Q), an unaudited consolidated balance sheet of Company and its Subsidiaries and the related consolidated statements of income, retained earnings and cash flows for such fiscal quarter, and for the portion of the Company’s fiscal year ended at the end of such fiscal quarter (but excluding any fiscal quarters ending prior to the Closing Date), and commencing with the fiscal quarter ending June 30, 2022, setting forth in each case in comparative form, the figures for the corresponding fiscal quarter and the corresponding portion of the Company’s previous Fiscal Year, in reasonable detail and reasonably satisfactory in form to the Required Holders and all prepared in accordance with GAAP (subject to year-end adjustments and absence of footnotes) and certified by an officer of the Company and a narrative report containing management’s discussion and analysis of the financial position and financial performance for such fiscal quarter in reasonable form and detail.

(d)

Promptly and in any event no later than five (5) Business Days after the filing thereof, copies of the annual federal and state income Tax Returns (and any requests for extension with respect thereto) of the Company and each of its Subsidiaries for the immediately preceding year and, if requested by the Required Holders, copies of all material reports filed with any federal, state or local Governmental Authority.

(e)

Promptly upon receipt by any Loan Party or any Subsidiary, notice of any delinquency or default, given to any such Person by any other creditor for any payables or other obligations of the Company or any Subsidiary in excess of $50,000 individually or $150,000 in the aggregate.

(f)

Promptly upon obtaining knowledge thereof, written notice of (i) any default under or termination of any Material Contract and (ii) any claim, litigation, suit or administrative proceeding affecting any Loan Party or any Subsidiary, whether or not the claim is covered by insurance, and of any litigation, suit or administrative proceeding, which in any such case affects the Collateral or which would reasonably be expected to have a Material Adverse Effect.

(g)

If the Company or any Subsidiary shall be required to file reports with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act, promptly upon its becoming available, one copy of each financial statement, report, notice or proxy statement sent by any such Person to stockholders generally, and, a copy of each annual, periodic or current report filed by any such Person with the Commission pursuant to such Sections, and any registration statement, or prospectus in respect thereof, filed by any such Person with any securities exchange or with federal or state securities and exchange commissions or any successor agency; provided, however, that (i) nothing in this Section 8.1(g) shall require the Company or any of its Subsidiaries to make any filing under the Securities Act or the Exchange Act which the Company or its Subsidiaries are not otherwise obligated to make and (ii) the obligations in this Section 8.1(g) and in Sections 8.1(a) and (c) may be satisfied if such information is publicly available on the SEC’s EDGAR website (or any replacement thereof).

(h)

Promptly and in any event within seven (7) Business Days after receipt by any Loan Party or any Subsidiary, notice of any payment default, oral or written, given to such Loan Party or such Subsidiary by any lessor in connection with any lease by such Loan Party or such Subsidiary of real property.

(i)

Promptly and in any event within seven (7) Business Days following receipt by any Loan Party or any Subsidiary, written notice of any adverse ruling by any Governmental Authority with respect to any Intellectual Property of any Loan Party or any Subsidiary.

(j)

As soon as possible and in any event within five days after the receipt by any Loan Party from any Governmental Authority or filing or receipt thereof by any Loan Party, provide to

the Collateral Agent (i) any citation, notice of violation or order to show cause issued by such Governmental Authority with respect to any Loan Party which is available to any Loan Party, in each case which could reasonably be expected to have a Material Adverse Effect and (b) if applicable, a copy of any notice or application by any Loan Party requesting authority to or notifying any Governmental Authority of its intent to cease using any Specified License.

(k)

As soon as possible and in any event within five days after the receipt thereof by any Loan Party, such Loan Party will give the Collateral Agent notice of any lapse, termination or relinquishment of any Specified License, other license, permit or other authorization from any Governmental Authority held by such Loan Party or any failure of such Governmental Authority to renew or extend any such Specified License, other license, permit or other authorization for the usual period thereof and of any complaint or other matter filed with or communicated to such Governmental Authority, of which any Loan Party has knowledge and in any such case which could reasonably be expected to have a Material Adverse Effect.

(l)

As soon as available, but in any event no later than thirty (30) days after the beginning of each fiscal quarter of the Company, the Company shall deliver a Budget and Compliance Certificate attaching (i) a Budget for the next four fiscal quarter period beginning on such fiscal quarter, in form and substance reasonably satisfactory to the Required Holders, (ii) a description of the underlying assumptions applicable to such Budget and the principal assumptions on which such Budget is based and (iii) an updated Schedule 6.25 updated as of such date.

(m)

Such other information (including non-financial information) as the Collateral Agent or any Holder may from time to time reasonably request.

8.2

Use of Proceeds. The Company shall use the proceeds of the Notes hereunder only as follows: (i) first, for the payment of fees and expenses in connection with the transactions contemplated hereunder and in the other Note Documents, (ii) second, for the repayment in full in cash of the EIDL Loan and (iii) third, for general working capital purposes.

8.3

Notice of Default. Promptly, and in any event within five (5) Business Days of becoming aware, each Loan Party will give notice in writing to the Collateral Agent upon becoming aware of the following: (a) the occurrence of any Default or Event of Default under this Agreement and specify the nature and period of existence thereof and what action such Loan Party is taking (and proposes to take) with respect thereto and (b) any development or other information outside the ordinary course of business of such Loan Party or any of its Subsidiaries and excluding matters of a general economic, financial or political nature which could reasonably be expected to have a Material Adverse Effect.

8.4

Conduct of Business. The Company and its Subsidiaries will, and will cause each of its Subsidiaries to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a domestic corporation, partnership or limited liability company in its jurisdiction of incorporation or organization, as the case may be, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted to the extent that the failure to maintain such qualification would not reasonably be expected to have a Material Adverse Effect; provided that the Company may liquidate, wind-up or dissolve any Excluded Subsidiary so long as all assets of such Excluded Subsidiary are transferred to a Loan Party in connection with such transaction or merge a Excluded Subsidiary into a Loan Party, in each case upon written notice to the Collateral Agent.

8.5

Taxes and Claims. Each Loan Party will, and will cause each of its Subsidiaries to, timely file United States federal and state and other material Tax Returns required by law and which Tax Returns shall be complete and correct in all material respects and pay when due all Taxes of such Loan Party or such Subsidiary, except those which are being contested in good faith by appropriate proceedings and with respect to which it maintains adequate reserves in accordance with GAAP, which deferment of payment is permissible so long as no Lien other than a lien permitted hereunder has been entered and such Loan Party’s and its Subsidiaries’ title to, and its right to use, its Properties are not materially adversely affected thereby.

8.6

Insurance.

(a)

Each Loan Party will, and will cause each of its Subsidiaries to, maintain insurance in such form and with such companies as are reasonably satisfactory to the Required Holders (it being acknowledged that the Loan Parties’ and Subsidiaries’ insurance companies as of the Closing Date are satisfactory), on all its Property in such amounts and covering such risks as is consistent with sound business practice, and maintain such insurance as is required by the terms of any Collateral Document. Each Loan Party will, and will cause each of its Subsidiaries to, furnish to the Holders upon request full information as to the insurance carried by it.

(b)

Each Loan Party will, and will cause each of its Subsidiaries to, at all times keep its real and personal Property which is subject to the Lien of the Holders insured and cause such insurance relating to such Property or business to name the Collateral Agent, on behalf of the Holders, as an additional insured and loss payee, as appropriate. At or prior to the Closing, each Loan Party shall furnish certificates of insurance issued on applicable Acord Forms for such Loan Party.

(c)

If any Loan Party or any of its Subsidiaries shall fail to maintain all insurance in accordance with this Section 8.6 or Section 8.17 or to timely pay or cause to be paid the premium(s) on any such insurance, or if any Loan Party shall fail to deliver all certificates with respect thereto, the Collateral Agent shall have the right (but shall be under no obligation), upon prior written notice to such Loan Party or such Subsidiary, to procure such insurance or pay such premiums, and such Loan Party agrees to reimburse the Collateral Agent, on demand, for all costs and expenses relating thereto.

8.7

Compliance with Laws. Each Loan Party will, and will cause each of its Subsidiaries to, comply with any and all Requirements of Law to which it may be subject including, without limitation, all Environmental Laws and obtain any and all licenses, permits, franchises or other governmental authorizations necessary to the ownership of its Property or to the conduct of its businesses, except where failure to do so could not reasonably be expected to have a Material Adverse Effect. Each Loan Party will, and will cause each of its Subsidiaries to, timely satisfy all material assessments, fines, costs and penalties imposed (after exhaustion of all appeals, provided a stay has been put in effect during such appeal) by any Governmental Authority against such Person or any Property of such Person.

8.8

Maintenance of Properties. Each Loan Party will, and will cause each of its Subsidiaries to, do all things necessary to maintain, preserve, protect and keep its Property (other than Property that is obsolete, surplus, or no longer used or useful in the ordinary conduct of its business) in good repair, working order and condition, make all necessary and proper repairs, renewals and replacements such that its business can be carried on in connection therewith and be properly conducted at all times and pay and discharge when due the cost of repairs and maintenance to its Property, and pay all rentals when due for all real estate leased by such Person.

8.9

Audits and Inspection. After the date hereof, each Loan Party will, and will cause each of its Subsidiaries to, (i) permit any of the representatives of the Collateral Agent, at reasonable times during normal business hours and upon two (2) Business Days’ prior notice not more frequently than

once per Fiscal Quarter, to visit and inspect any of its Property, books of account, records and reports to examine, audit and make copies thereof and (ii) promptly upon reasonable request thereof, schedule and hold calls with the senior management of the Company, and to discuss its affairs, finances and accounts with, and to be advised as to the same by, its officers, employees and independent certified public accountants at such reasonable times and intervals as the Collateral Agent may designate, in each case, at such Loan Party’s expense, plus the Collateral Agent’s reasonable out-of-pocket expenses.

8.10

Issue Taxes. Each Loan Party shall pay all stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Note Document, excluding, for the avoidance of doubt, any income Tax.

8.11

Employee Benefit Plans. Each Loan Party shall, and shall cause each of its Subsidiaries to, (a) make contributions to all such Plans in a timely manner and in a sufficient amount to comply with the minimum funding standards of ERISA, (b) comply in all material respects with all applicable requirements of ERISA, (c) notify the Holders promptly upon receipt by such Loan Party or any Subsidiary of any notice concerning the imposition of any withdrawal liability or of the institution of any proceeding or other action which may result in the termination of any such Plans or the appointment of a trustee to administer such Plans, and (d) promptly advise the Holders of the occurrence of any Reportable Event with respect to any such Plans.

8.12

Regulatory Compliance. Each Loan Party shall, and shall cause each of their respective Subsidiaries to, comply in all material respects with all terms and conditions of all Specified Licenses, all federal, state and local laws, all rules, regulations and administrative orders of any Governmental Authority and all state and local commissions or authorities which are applicable to such Loan Party and/or their respective Subsidiaries or the use of the Specified Licenses.

8.13

Specified Licenses. Subject to the time period set forth in Section 8.17(d), the Loan Parties shall, and shall cause any Specified License or other FCC or government license, permit, or authorization material to the operation of the Loan Parties’ business to be held by a Specified License Subsidiary.

8.14

Delivery of Information by Holders. Each Holder is hereby authorized, to deliver a copy of any financial statement or other information made available by the Loan Parties or their Subsidiaries in connection herewith to any regulatory authority having jurisdiction over such Holder, pursuant to any request therefor by such regulatory authority, and may further divulge to any assignee or purchaser of any portion of the Notes or any prospective assignee or purchaser of any portion of the Notes, all information, and furnish to such Person copies of any reports, financial statements, certificates, and documents obtained under any provision of this Agreement, or related agreements and documents, provided that such prospective assignee or purchaser shall agree to maintain the confidentiality of such information.

8.15

Execution of Supplemental Documents. Each Loan Party will, and will cause each of its Subsidiaries to, execute and deliver to the Holders from time to time, upon demand, such supplemental agreements, statements, assignments and transfers, or instructions or documents relating to the Collateral, and such other instruments as the Collateral Agent or Required Holders may reasonably request, in order that the full intent of this Agreement or the Security Agreement, as applicable, may be carried into effect.

8.16

Minimum Working Capital Requirement. The Company shall cause the Working Capital of the Company and its Subsidiaries, taken as a whole, to exceed $1,000,000, measured at the end of each fiscal quarter of the Company and its Subsidiaries.

8.17

Post Closing Covenants.

(a)

Deposit Account Control Agreements. Within forty five (45) days (or such longer period as may be agreed to by the Required Holders acting in their sole discretion) of the Closing Date, each Loan Party agrees to deliver or to cause to be delivered to the Collateral Agent, in form and substance reasonably satisfactory to the Required Holders, a control agreement for each deposit account (excluding Excluded Deposit Accounts) (as defined in the Security Agreement).

(b)

Insurance Endorsements. Within thirty (30) days (or such longer period as may be agreed to by the Required Holders acting in their sole discretion) of the Closing Date, each Loan Party agrees to deliver or cause to be delivered to the Collateral Agent the insurance endorsements required by Section 8.6.

(c)

EIDL Loan Lien Release. Within forty five (45) days (or such longer period as may be agreed to by the Required Holders acting in their sole discretion) of the Closing Date, the Loan Parties shall deliver to the Collateral Agent evidence, satisfactory in form and substance to the Required Holders, of the release of any Lien or other security interest related to the EIDL Loan.

(d)

Specified Licenses Subsidiaries. Within ninety (90) days (or such longer period as may be agreed to by the Required Holders acting in their reasonable discretion) of the Closing Date, the Loan Parties shall cause all Specified Licenses to be transferred to and held by a Specified License Subsidiary.

8.18

Further Assurances. Each Loan Party will, and will cause each of its Subsidiaries to, take any action reasonably requested by the Collateral Agent or the Required Holders in order to effectuate the purposes and terms contained in this Agreement and any of the Note Documents.

ARTICLE 9
NEGATIVE COVENANTS

Until the payment in full in Cash of all of the Obligations, the Loan Parties hereby jointly and severally covenant and agree with the Holders as follows:

9.1

Limitations on Debt.

No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Debt, without the Required Holders’ prior written consent (which may be withheld in Required Holders’ sole discretion), except for (a) the Obligations, and (b) the Debt set forth on Schedule 6.24.

9.2

Liens.

No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

(a)

Liens for Taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves in accordance with GAAP;

(b)

Liens on assets arising out of pledge or deposits under workers’ compensation, unemployment insurance, pension, social security, retirement benefits or similar legislation in the ordinary course of business consistent with past practice;

(c)

capital leases to the extent permitted under Section 9.1;

(d)

Liens subordinated to the Liens securing the Obligations on terms and conditions acceptable to Required Holders in their sole discretion;

(e)

Liens securing the Obligations ;

(f)

deposits to secure the performance of bids, trade contracts and leases (other than Debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(g)

easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

(h)

Liens securing judgments for the payment of money not constituting an Event of Default under Section 11.1(j);

(i)

any interest of title of a lessor under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement;

(j)

Liens (including the right of set-off) in favor of a bank or other depository institution arising as a matter of law encumbering deposits;

(k)

Liens of a collecting bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection; and

(f)

Liens securing the EIDL Loan.

9.3

Restricted Payments. Except for dividends and distributions to the Company to the extent necessary to permit the Company to maintain its legal existence and to pay reasonable out-of-pocket general administrative costs and expenses incurred in connection therewith which are disclosed in writing to the Holders not later than five (5) Business Days prior to the payment thereof and except for stock options offered to the Company’s board members as disclosed in the Company’s SEC Documents, none of the Company nor any of its Subsidiaries shall (a) declare or pay any dividends on any of its Capital Stock, (b) purchase or redeem any Capital Stock, (c) make any other distribution to holders of its Capital Stock, (d) prepay, purchase or redeem any other Debt that is subordinated to the Obligations, or (e) set aside funds for any of the foregoing .

9.4

Loans. The Company shall not, nor shall the Company permit any of its Subsidiaries to, make any loans or pay any advances of any nature whatsoever to any Person, except advances in the ordinary course of business to (a) other Loan Parties, vendors, suppliers and contractors and (b) officers, managers and employees for travel and other business expenses in accordance with the policies of the Company or such Subsidiary as in effect on the date hereof.

9.5

Investments. No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to, make or suffer to exist any investments or commitments therefor, without the prior written consent of the Required Holders, except (a) Cash Equivalents (b) extensions of credit in the nature of accounts receivable or notes receivable arising from the sales of goods or services to unaffiliated third parties in the ordinary course of business; (c) investments received in connection with any Insolvency

Proceedings in respect of any customers, suppliers or clients of the Company; (d) investments in the Subsidiaries existing on the date hereof; and (e) Capital Expenditures permitted by Section 9.11.

9.6

Mergers, Consolidations, Sales. No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to, without the prior written consent of the Required Holders, be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest in, any other Person, or, except in the ordinary course of its business, sell, transfer, convey or lease all or any substantial part of its assets, unless in connection with any such transaction all amounts owing under the Notes are paid in full. Notwithstanding the foregoing provisions of this Section 9.6, (a) any Subsidiary of the Company may be merged or consolidated with or into the Company and (b) any Subsidiary of the Company may sell, lease, transfer or otherwise dispose of its Property (upon voluntary liquidati on or otherwise) to the Company; provided, that the Company may transfer or cause the transfer of any Specified License owned by any Loan Party to another newly created Loan Party (any such Loan Party, a “Specified License Subsidiary”) so long as, after giving effect to such transfer and at all times thereafter until the Obligations are paid in full, such Loan Party shall not have any other material assets other than the transferred Specified Licenses and no obligations of any kind or nature except for Intellectual Property license agreement(s) between such Loan Party and another Loan Party.

9.7

Subsidiaries.

(a)

The Company will, on the Closing Date, cause each of its Subsidiaries (other than any Excluded Subsidiary) to (i) grant to the Collateral Agent, for the benefit of the Holders, a perfected security interest in, and Lien on, all Collateral owned by such Person by delivering to the Collateral Agent the Security Agreement, each other Collateral Document or such other document as the Collateral Agent shall deem appropriate for such purpose and comply with the terms of each Collateral Document, (ii) execute the Security Agreement as a Guarantor of the Obligations, (iii) deliver to the Collateral Agent such documents and certificates referred to in Section 4.1 as may be reasonably requested by the Required Holders or otherwise necessary or desirable to create or perfect Collateral Agent’s Lien on the Collateral, and (iv) deliver to the Collateral Agent and the Holders such other documents as may be reasonably requested by the Collateral Agent and the Required Holders, in each case, in form, content and scope reasonably satisfactory to the Required Holders.

(b)

Except for any Specified License Subsidiaries, the Company shall not create any Subsidiary or invest in or acquire minority interests in any other entity without the prior written consent of the Required Holders. Subject to the first sentence of this Section 9.7, if any Loan Party creates, forms or acquires any Subsidiary on or after the Closing Date, such Subsidiary shall become a Loan Party hereunder and agrees to assume all obligations of Company hereunder as if such Subsidiary was an issuer of the Note on the Closing Date. The Company will promptly thereafter (and in any event within three (3) days after such creation or acquisition), cause such Person to (i) grant to the Collateral Agent, for the benefit of the Holders, a perfected security interest in, and Lien on, all Collateral owned by such Person by delivering to the Collateral Agent a duly executed supplement to each Collateral Document or such other document as the Collateral Agent shall deem appropriate for such purpose and comply with the terms of each Collateral Document, (ii) deliver to the Collateral Agent such original Capital Stock or other certificates and stock or other transfer powers evidencing the Capital Stock of such Person (if such Capital Stock is certificated), (iii) if such Capital Stock is not certificated, deliver an irrevocable proxy and other documentation reasonably requested by the Collateral Agent to perfect the Collateral Agent’s security interest in such Capital Stock, in form and substance reasonably satisfactory to the Required Holders, (iv) execute a joinder to the Security Agreement joining such Subsidiary as a Guarantor of the Obligations, as if such Subsidiary had been a guarantor of the Obligations on the Closing Date, (v) deliver to the Collateral Agent such documents and certificates referred to in Section 4.1 as may be reasonably

requested by the Required Holders, (vi) deliver to the Collateral Agent and the Holders such updated schedules to the Note Documents as requested by the Required Holders with regard to such Person and (vii) deliver to the Collateral Agent and the Holders such other documents as may be reasonably requested by the Collateral Agent and the Required Holders, in each case, in form, content and scope reasonably satisfactory to the Required Holders.

9.8

Amendment to Organizational Documents. Except for an amendment and restatement of the Bylaws of the Company providing for customary updates and modernization, the Company will not, nor will it permit any of its Subsidiaries to amend, modify or waive any term or material provision of such Person’s Organizational Documents unless (a) required by law or (b) such amendment, modification or waiver would not be adverse to the Holders’ rights under the Note Documents or any Loan Party’s obligations under the Note Documents, and the Loan Parties provide the Holders not less than ten (10) days’ prior written notice of such amendment, modification or waiver.

9.9

Restrictive Agreements. No Loan Party will be or become, or cause or permit any Subsidiary to be or become, a party to any contract or agreement which at the time of becoming a party to such contract or agreement materially limits such Person’s ability to perform under this Agreement or under any other Note Document without the prior written consent of the Required Holders.

9.10

Capital Expenditures. No Loan Party shall make, or cause or permit any Subsidiary to make, any Capital Expenditure or enter into any Capitalized Lease if the aggregate amount of all Capital Expenditures (including the Capital Expenditure in question) made by the Loan Parties and their Subsidiaries, determined on a consolidated basis, during any Fiscal Year made or required to be made by the Loan Parties and their Subsidiaries, determined on a consolidated basis during such Fiscal Year would exceed $50,000.

9.11

Transactions with Affiliates. No Loan Party shall, nor permit any of its Subsidiaries to, directly or indirectly enter into or permit to exist any material transaction with any Affiliate of any Loan Party or any of its Subsidiaries except for the transactions set forth on Schedule 9.11, or other transactions that are in the ordinary course of any Loan Parties’ and its Subsidiaries’ business, upon fair and reasonable terms that are no less favorable to such Loan Party or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person.

9.12

Additional Negative Pledges. Create or otherwise cause or suffer to exist or become effective, directly or indirectly, (a) any prohibition or restriction (including any agreement to provide equal and ratable security to any other Person in the event a Lien is granted to the Collateral Agent or for the benefit of the Holders) on the creation or existence of any Lien upon the assets of the Company or any Subsidiary, other than Permitted Liens or (b) any Contractual Obligation which may restrict or inhibit the Collateral Agent’s or any Holder’s rights or ability to sell or otherwise dispose of the Collateral or any part thereof after the occurrence of an Event of Default.

9.13

Use of Proceeds. No Loan Party shall use any proceeds of the sale of the Notes hereunder to, directly or indirectly, purchase or carry any “margin stock” (as defined in Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any “margin stock” in violation of the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

9.14

Fiscal Year and Accounting Changes. No Loan Party shall change its fiscal year from December 31 or make any significant change (a) in accounting treatment and reporting practices except as required by GAAP or (b) in Tax reporting treatment except as required by law.

9.15

Disposition of Assets. The Loan Parties shall not sell, assign, lease, convey, transfer or otherwise dispose of all or any portion of any Property (including accounts receivable, with or without recourse) or enter into any agreement to do any of the foregoing other than in the ordinary course of business or as permitted by the Security Agreement.

9.16

No Settlement. The Company shall not settle any dispute, litigation or claim involving the Company (including the execution of any confession of judgment or similar instrument) other than out of court settlements of accounts receivable with its customers and accounts payables with its vendors in the ordinary course of business.

ARTICLE 10
AGENCY PROVISIONS

10.1

Appointment and Authority. Each Holder hereby irrevocably appoints CCUR Holdings, Inc. to act on its behalf as Collateral Agent hereunder and under all of the other Collateral Documents and 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 or thereof, together with such actions and powers as are reasonably incidental thereto. Except as specifically set forth in Section 10.4(b), the provisions of this Article 10 are solely for the benefit of the Collateral Agent and the Holders, and no other party shall have (a) obligations under this Article 10 or (b) rights as a third party beneficiary of any of such provisions.

10.2

Rights as a Holder. The Person serving as Collateral Agent hereunder shall have the same rights and powers in its capacity as a Holder as any other Holder and may exercise the same as though it were not Collateral Agent and the term “Holder” or “Holders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Collateral Agent hereunder in its individual capacity.

10.3

Exculpatory Provisions; Indemnification. The Collateral Agent shall not have any duties or obligations except those expressly set forth herein and in the other Note Documents. Without limiting the generality of the foregoing, the Collateral Agent:

(a)

shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b)

shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Note Documents that the Collateral Agent is required to exercise as directed in writing by the Required Holders (or such other number or percentage of Holders as shall be expressly provided for herein or in the other Note Documents), provided, however, that the Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Collateral Agent to liability or that is contrary to any Note Document or applicable Requirements of Law;

(c)

shall not, except as expressly set forth herein and in the other Note Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Loan Parties or any of its Affiliates that is communicated to or obtained by the Person serving as Collateral Agent or any of its Affiliates in any capacity;

(d)

shall not be liable to any Holder for any action taken or not taken by it the absence of its own gross negligence or willful misconduct;

(e)

shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Collateral Agent in its capacity as such by a Loan Party or a Holder; and

(f)

shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, the Security Agreement or any other Note Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Note Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in any Note Document, other than to confirm receipt of items expressly required to be delivered to the Collateral Agent in its capacity as such.

By accepting the benefits of this Agreement, each Holder severally agrees (A) to reimburse the Collateral Agent, on demand, in the amount of its ratable share from time to time (based on the principal amount of the Notes of such Holder) for any expenses referred to in this Agreement or in any document securing Obligations owed to such Holder and/or any other reasonable expenses incurred by the Collateral Agent in connection with the enforcement and protection of the rights of the Collateral Agent and the Holders which shall not have been paid or reimbursed by any Loan Party or paid from the proceeds of Collateral or as provided herein or therein and (B) to indemnify and hold harmless the Collateral Agent and its Affiliates and its and their respective directors, officers, employees, agents and attorneys on demand, in the amount of such ratable share, from and against any and all liabilities, Taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements referred to in this Agreement and/or incurred by the Collateral Agent in connection with this Agreement or in any document securing the Obligations or the enforcement and protection of the rights of Holders, to the extent the same shall not have been reimbursed by any Loan Party or paid from the proceeds of Collateral as provided herein; provided, however, in each case, that no Holder shall be liable to the Collateral Agent and its Affiliates and its and their respective directors, officers, employees, agents and attorneys for any portion of such expenses, liabilities, Taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of such Person.

10.4

Reliance.

(a)

The Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. The Collateral Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(b)

The Loan Parties shall be entitled to rely, and shall be fully protected in relying (without investigation or inquiry), upon the Collateral Agent in any instance where the Collateral Agent purports to be acting on behalf of one or more Holders or the Required Holders.

10.5

Delegation of Duties. The Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Note Document by or through any one or more sub agents appointed by the Collateral Agent. The Collateral Agent and any such sub-agent may

perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory provisions of this Article 10 shall apply to any such sub-agent and to the Affiliates of the Collateral Agent and any such sub-agent.

10.6

Resignation of the Collateral Agent. The Collateral Agent may at any time give notice of its resignation to each Holder, Holdings and the Company. Upon receipt of any such notice of resignation, the Required Holders shall have the right, in consultation with the Company, to appoint a successor. If no such successor shall have been so appointed by the Required Holders and shall have accepted such appointment within thirty (30) days after the retiring Collateral Agent gives notice of its resignation, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Note Documents and (b) all payments, communications and determinations provided to be made by, to or through the Collateral Agent shall instead be made by or to each Holder directly, until such time as the Required Holders appoint a successor Collateral Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the retiring Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Note Documents (if not already discharged therefrom as provided above in this paragraph). After the retiring Collateral Agent’s resignation hereunder and under the other Note Documents, the provisions of this Article 10 shall continue in effect for the benefit of such retiring Collateral Agent, its sub-agents and their respective Affiliates in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent.

10.7

Collateral Matters. The Holders irrevocably authorize the Collateral Agent, subject to the approval of the Required Holders, at its option and in its discretion:

(a)

to release any Lien on any Collateral granted to or held by the Collateral Agent, for the ratable benefit of itself and the Holders, under this Agreement or any other Note Document (A) upon repayment in full of the Obligations, (B) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Note Document, or (C) subject to the terms of this Agreement, if approved, authorized or ratified in writing by the Required Holders; and

(b)

to subordinate any Lien on any Collateral granted to or held by the Collateral Agent under any Note Document to the holder of any Lien on such Collateral that is permitted by Section 9.2 hereof.

Upon request by the Collateral Agent at any time, the Holders will confirm in writing the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property pursuant to this Section 10.7.

10.8

Sharing of Collateral. Until all of the Obligations are paid in full, all Collateral or proceeds thereof received by any Holder other than the Collateral Agent, in connection with the exercise of any right or remedy relating to the Collateral or otherwise shall be segregated and held in trust and forthwith paid over or delivered (a) to the Collateral Agent, for the ratable benefit of itself and the other Holders, in the same form as received together with any necessary endorsements, or (b) as a court of competent jurisdictions may otherwise direct.

10.9

Erroneous Payments.

(a)

If the Collateral Agent (x) notifies a Holder or any Person who has received funds on behalf of a Holder (any such Holder or other recipient (and each of their respective successors

and assigns), a “Payment Recipient”) that the Collateral Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds (as set forth in such notice from the Collateral Agent) received by such Payment Recipient from the Collateral Agent or any of its Affiliates were erroneously or mistakenly transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Holder Party or other Payment Recipient on its behalf) (any such funds, whether transmitted or received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and (y) demands in writing the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Collateral Agent pending its return or repayment as contemplated below in this Section 10.9 and held in trust for the benefit of the Collateral Agent, and such Holder shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than three (3) Business Days thereafter (or such later date as the Collateral Agent may, in its sole discretion, specify in writing), return to the Collateral Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received). A notice of the Collateral Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.

(b)

Without limiting immediately preceding clause (a), each Holder or any Person who has received funds on behalf of a Holder (and each of their respective successors and assigns), agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Collateral Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in this Agreement or in a notice of payment, prepayment or repayment sent by the Collateral Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Collateral Agent (or any of its Affiliates), or (z) that such Holder, or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), then in each such case:

(i)

it acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error and mistake shall be presumed to have been made (absent written confirmation from the Collateral Agent to the contrary) or (B) an error and mistake has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and

(ii)

such Holder shall use commercially reasonable efforts to (and shall use commercially reasonable efforts to cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within two Business Days of its knowledge of the occurrence of any of the circumstances described in immediately preceding clauses (x), (y) and (z)) notify the Collateral Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Collateral Agent pursuant to this Section 10.9(b).

For the avoidance of doubt, the failure to deliver a notice to the Collateral Agent pursuant to this Section 10.9(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 10.9(a) or on whether or not an Erroneous Payment has been made.

(c)

Each Holder hereby authorizes the Collateral Agent to set off, net and apply any and all amounts at any time owing to such Holder under any Note Document, or otherwise payable or distributable by the Collateral Agent to such holder under any Note Document with respect to any payment of principal, interest, fees or other amounts, against any amount that the Collateral Agent has demanded to be returned under immediately preceding clause (a).

(d)

(i) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Collateral Agent for any reason, after demand therefor in accordance with immediately preceding clause (a), from any Holder that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Collateral Agent’s notice to such Holder at any time, then effective immediately (with the consideration therefor being acknowledged by the parties hereto), (A) such Holder shall be deemed to have assigned its Notes (but not any commitments to purchase Notes) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Collateral Agent may specify) (such assignment of the Notes (but not commitments to purchase Notes) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) (on a cashless basis and such amount calculated at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Collateral Agent in such instance)), and is hereby (together with the Company) deemed to execute and deliver an assignment and assumption as to which the Collateral Agent and such parties are participants with respect to such Erroneous Payment Deficiency Assignment, and such Holder shall deliver any Notes to the Company or the Collateral Agent (but the failure of such Person to deliver any such Notes shall not affect the effectiveness of the foregoing assignment), (B) the Collateral Agent as the assignee Holder shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (C) upon such deemed acquisition, the Collateral Agent as the assignee Holder shall become a Holder, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Holder shall cease to be a Holder, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable commitments to purchase Notes which shall survive as to such assigning Holder, (D) the Collateral Agent and the Company shall each be deemed to have waived any consents required under this Agreement to any such Erroneous Payment Deficiency Assignment, and (E) the Collateral Agent will reflect in the register its ownership interest in the Notes subject to the Erroneous Payment Deficiency Assignment. For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the commitments of any Holder to purchase Notes and such commitments to purchase Notes shall remain available in accordance with the terms of this Agreement. (ii) Subject to Section 13.3 (but excluding, in all events, any assignment consent or approval requirements (whether from the Company or otherwise)), the Collateral Agent may, in its discretion, sell any Notes acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Holder shall be reduced by the net proceeds of the sale of such Note (or portion thereof), and the Collateral Agent shall retain all other rights, remedies and claims against such Holder (and/or against any recipient that receives funds on its respective behalf). In addition, an Erroneous Payment Return Deficiency owing by the applicable Holder (x) shall be reduced by the proceeds of prepayments or repayments of principal and interest, or other distribution in respect of principal and interest, received by the Collateral Agent on or with respect to any such Notes acquired from such Holder pursuant to an Erroneous Payment Deficiency Assignment (to the extent that any such Notes are then owned by the Collateral Agent) and (y) may, in the sole discretion of the Collateral Agent, be reduced by any amount specified by the Collateral Agent in writing to the applicable Holder from time to time.

(e)

The parties hereto agree that (x) irrespective of whether the Collateral Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Collateral Agent shall be subrogated to all the rights and interests of such Payment Recipient (and, in the case of any Payment Recipient who has received funds on behalf of a Holder, to the rights and interests of such Holder) under the Note Documents with respect to such amount (the “Erroneous Payment Subrogation Rights”) (provided that the Loan Parties’ Obligations under the Note Documents in respect of the Erroneous Payment Subrogation Rights shall not be duplicative of such Obligations in respect of Notes that have been assigned to the Collateral Agent under an Erroneous Payment Deficiency Assignment) and (y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Company or any other Loan Party; provided that this Section 10.9 shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the due date for), the Obligations of the Company relative to the amount (and/or timing for payment) of the Obligations that would have been payable had such Erroneous Payment not been made by the Collateral Agent; provided, further, that for the avoidance of doubt, immediately preceding clauses (x) and (y) shall not apply to the extent any such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Collateral Agent from the Company for the purpose of making such Erroneous Payment.

(f)

To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Collateral Agent for the return of any Erroneous Payment received, including, without limitation, any defense based on “discharge for value” or any similar doctrine.

(g)

Each party’s obligations, agreements and waivers under this Section 10.9 shall survive the resignation or replacement of the Collateral Agent, any transfer of rights or obligations by, or the replacement of, a Holder, and/or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Note Document.

ARTICLE 11
EVENTS OF DEFAULT

11.1

Events of Default. The occurrence of any one or more of the following events shall constitute an “Event of Default”:

(a)

Default in the payment, after such amounts become due, of the principal (including capitalized interest added to principal) of the Notes (whether at redemption, upon acceleration or otherwise) or any Premium, or, within three (3) Business Days after such amounts become due, of any interest accrued thereon, any fees payable in connection therewith;

(b)

Failure by the Company or any of its Subsidiaries to comply with Section 8.16 of this Agreement and such failure continues unremedied for a period of thirty (30) days (or such longer period as may be agreed to by the Required Holders);

(c)

Any representation or warranty made by or on behalf of any Loan Party in any of the Note Documents, or any document contemplated by the Note Documents, is incorrect in any material respect (or in any respect if such representation, warranty, or financial statement is by its terms already qualified as to materiality) when made (or deemed made);

(d)

Failure by the Company or any of its Subsidiaries to comply with any term, covenant or provision contained in Sections 8.1, 8.2, 8.3, 8.9, 8.12, 8.17 or Article 9 of this Agreement;

(e)

Failure by any Loan Party to comply with or to perform any other provision of this Agreement (and not constituting an Event of Default under any other provision of this Article 11) and such failure continues unremedied for a period of thirty (30) days (or such longer period as may be agreed to by the Required Holders) after the earlier of (i) written notice thereof is received by any Loan Party in accordance with Section 13.2 or (ii) a Loan Party obtains knowledge of such failure;

(f)

Failure of any Loan Party or any Subsidiary to pay within fifteen (15) days from the date due therefor (or after the expiration of any applicable grace periods) any payments under any payable or other obligation of the Company or its Subsidiaries exceeding $100,000; or the default by such Loan Party or any Subsidiary in the performance (beyond the applicable grace period with respect thereto, if any) of any term, provision or condition contained in any agreement pursuant to which any such payable or obligation was created or is governed (after the expiration of any applicable cure period, if any), or any other event shall occur or condition exist, the effect of which default or event is to cause, or to permit the holder or the applicable counterparty to cause, such payable or obligation to become due prior to its stated maturity;

(g)

After the passing of any notice and opportunity to cure provided in such agreement, default in the payment within fifteen (15) days from the date due therefor (or after the expiration of any applicable grace periods), or in the performance or observance of, any material obligation of, or condition agreed to by any Loan Party or any Subsidiary with respect to any material purchase or lease of goods or services of $100,000 or more;

(h)

Any Loan Party or any Subsidiary (i) ceases or fails to be Solvent, or generally fails to pay, or admits in writing its inability to pay, its debts as they become due; (ii) voluntarily ceases to conduct its business in the ordinary course; (iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes any action to effectuate or authorize any of the foregoing;

(i)

Any involuntary Insolvency Proceeding is commenced or filed against any Loan Party or any Subsidiary, or any writ, judgment, warrant of attachment, warrant of execution or similar process is issued or levied against a substantial part of any Loan Party’s or Subsidiary’s properties which is not stayed or dismissed within sixty (60) days; (ii) any Loan Party or any Subsidiary admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) any Loan Party or any Subsidiary acquiesces in the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor) or other similar Person for itself or a substantial portion of its property or business;

(j)

Other than as forth on Schedule 11.1(j), one or more judgments, orders, decrees or arbitration awards is entered against a Loan Party or any Subsidiary involving in the aggregate a liability (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), as to any single or related series of transactions, incidents or conditions, of $100,000 or more, and the same shall remain unvacated and unstayed pending appeal for a period of thirty (30) days after the entry thereof;

(k)

Any non-monetary judgment, order or decree is entered against a Loan Party or any Subsidiary which has or would reasonably be expected to have a Material Adverse Effect;

(l)

Any Loan Party shall fail to (i) maintain any Specified License or (ii) have all other required authorizations and licenses, in the case of clause (ii) solely to the extent the failure of which would have a Material Adverse Effect individually or in the aggregate.

(m)

Any Note Document shall cease to be in full force and effect; or any Loan Party or any Person by, through or on behalf of any Loan Party, shall contest in writing the validity or enforceability of any Note Document;

(n)

[reserved];

(o)

[reserved]; or

(p)

Subject to any Permitted Liens, the Security Agreement shall fail to secure a valid and perfected first priority lien on any Collateral (as defined in the Security Agreement), including, without limitation, one hundred percent (100%) of the Capital Stock of each Subsidiary of the Company (other than any Excluded Subsidiary) or such lesser amount of the Capital Stock of any Foreign Subsidiary (as defined in the Security Agreement) to the extent set forth in the Security Agreement).

11.2

Acceleration. If an Event of Default occurs under Section 11.1(h) or (i), then the outstanding principal of, and unpaid interest and Premium on the Notes shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are expressly waived. If any other Event of Default occurs and is continuing, the Required Holders, by written notice to the Company, may declare the principal of, and unpaid interest and Premium on the Notes to be due and payable immediately. Upon any such declaration of acceleration, such principal and interest shall become immediately due and payable, each holder of any Note shall be entitled to exercise all of its rights and remedies hereunder and under its Note whether at law or in equity.

11.3

Set-Off. Upon the occurrence and during the continuation of an Event of Default, in addition to all other rights and remedies that may then be available to any Holder of Notes, each such Holder is hereby authorized at any time and from time to time, without notice to the Company (any such notice being expressly waived by the Company) to set off and apply any and all indebtedness at any time owing by such Holder to or for the credit or the account of the Company or its Subsidiaries against all amounts which may be owed to such Holder by the Company or its Subsidiaries in connection with this Agreement, any Notes or any other Note Document. If any Holder of Notes shall obtain from any Company payment of any principal of or interest on any Note or payment of any other amount under this Agreement or any Note held by it or any other Note Document through the exercise of any right of set-off, and, as a result of such payment, such Holder shall have received a greater percentage of the principal, interest or other amounts then due hereunder by the Company to such Holder than the percentage received by any other Holders, it shall promptly make such adjustments with such other Holders from time to time as shall be equitable, to the end that all the Holders of Notes shall share the benefit of such excess payment (net of any expenses which may be incurred by such Holder in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal and/or interest on the Notes or other amounts (as the case may be) owing to each of the Holders of the Notes. To such end, all the Holders of the Notes shall make appropriate adjustments among themselves if such payment is rescinded or must otherwise be restored. Any Holder of any Note taking action under this Section 11.3 shall promptly provide notice to the Company of any such action taken; provided, that the failure of such Holder to provide such notice shall not prejudice its rights hereunder.

11.4

Cumulative Remedies. The enumeration of the rights and remedies of the Collateral Agent and the Holders set forth in this Agreement is not intended to be exhaustive and the exercise by the Collateral Agent and the Holders of any right or remedy shall not preclude the exercise of any other rights

or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Note Documents or that may now or hereafter exist at law or in equity or by suit or otherwise. No delay or failure to take action on the part of the Collateral Agent or the Holders in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default. No course of dealing between the Company, the Collateral Agent, the Holders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Note Documents or to constitute a waiver of any Event of Default.

ARTICLE 12
INDEMNIFICATION

12.1

Indemnification. In addition to all other sums due hereunder or provided for in this Agreement, the Company and its Subsidiaries, jointly and severally, shall indemnify and hold harmless the Collateral Agent, each Holder and their respective Affiliates and their respective officers, directors, agents, employees, Subsidiaries, partners, members, attorneys, accountants, controlling persons and representatives (each, an “Indemnified Party”) to the fullest extent permitted by law from and against any and all losses, claims, damages, expenses (including, without limitation, reasonable fees, disbursements and other charges of counsel and costs of investigation incurred by an Indemnified Party in any action or proceeding between the Company or any of its Subsidiaries and such Indemnified Party (or Indemnified Parties) or between an Indemnified Party (or Indemnified Parties) and any third party or otherwise) or other liabilities or losses (collectively, “Liabilities”), in each case resulting from or arising out of any breach of any representation or warranty, covenant or agreement of the Company or any of its Subsidiaries in this Agreement or any other Note Document, including, without limitation, the failure to make payment when due of amounts owing pursuant to this Agreement or any other Note Document, on the due date thereof (whether at the scheduled maturity, by acceleration or otherwise) or any legal, administrative or other actions (including, without limitation, actions brought by any holders of equity or Debt of the Company or any of its Subsidiaries or derivative actions brought by any Person claiming through or in the Company’s or any of its Subsidiaries’ name), proceedings or investigations (whether formal or informal), or written threats thereof, based upon, relating to or arising out of the Note Documents, the transactions contemplated thereby, or any Indemnified Party’s role therein or in the transactions contemplated thereby; provided, however, that the Company and its Subsidiaries shall not be liable under this Section 12.1 to an Indemnified Party to the extent such Liabilities resulted solely from the willful misconduct or gross negligence of such Indemnified Party, as determined by a final, non-appealable order of a court of competent jurisdiction; provided, further, that if and to the extent that such indemnification is unenforceable for any reason other than willful misconduct or gross negligence, the Company and its Subsidiaries, jointly and severally, shall make the maximum contribution to the payment and satisfaction of such Liabilities which shall be permissible under Requirements of Law. In connection with the obligation of the Company and its Subsidiaries to indemnify for expenses as set forth above, each of the Company and its Subsidiaries further agrees, upon presentation of invoices, to reimburse each Indemnified Party for all such expenses (including, without limitation, reasonable fees, disbursements and other charges of counsel and costs of investigation incurred by an Indemnified Party in connection with any Liabilities) as they are incurred by such Indemnified Party.

12.2

Procedure; Notification. Each Indemnified Party under this Article 12 will, after the receipt of notice of the commencement of any action, investigation, claim or other proceeding against such Indemnified Party in respect of which indemnity may be sought from the Company and its Subsidiaries under this Article 12, notify the Company in writing of the commencement thereof. The omission of any Indemnified Party to so notify the Company of any such action shall not relieve the Company or any of its Subsidiaries from any liability which it may have to such Indemnified Party unless

such omission substantially and irrevocably impairs the Company’s or any of its Subsidiaries’ ability to defend the action, claim or other proceeding. In case any such action, claim or other proceeding shall be brought against any Indemnified Party and it shall notify the Company of the commencement thereof, the Company shall be entitled to assume the defense thereof at its own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment; provided, that any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense. Notwithstanding the foregoing, in any action, claim or proceeding in which the Company or any of its Subsidiaries, on the one hand, and an Indemnified Party, on the other hand, is, or is reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel at the Company’s or such Subsidiary’s expense and to control its own defense of such action, claim or proceeding if, in the reasonable opinion of counsel to such Indemnified Party, a conflict or potential conflict exists between the Company or any of its Subsidiaries, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable. Each of the Company and its Subsidiaries agrees that it will not, without the prior written consent of the Required Holders, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless (i) such settlement, compromise or consent includes an unconditional release of the Collateral Agent and the Holders and each other Indemnified Party from all liability arising or that may arise out of such claim, action or proceeding (ii) the Company has provided reasonable prior notice thereof and (iii) t the Required Holders have provided its prior written consent to such settlement, compromise or consent, which consent will not be unreasonably withheld or delayed. The rights accorded to Indemnified Parties hereunder shall be in addition to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise.

ARTICLE 13
MISCELLANEOUS

13.1

Survival of Representations and Warranties. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement, any investigation by or on behalf of the Collateral Agent or the Holders, acceptance of the Notes and payment therefor, or termination of this Agreement.

13.2

Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier (with receipt confirmed), courier service, e-mail or personal delivery:

(a)

if to the Collateral Agent:

3800 N. Lamar Blvd.

Suite 200

Austin, TX 78756

Attention: Igor Volshteyn, Matthew Gerritsen

Email: igor.volshteyn@ccurholdings.com; matthew.gerritsen@ccurholdings.com

With a copy (which shall not constitute notice) to:

K&L Gates LLP

599 Lexington Avenue

New York, NY 10022

Facsimile: (212) 536-3901

Attention: Aaron S. Rothman, Esq.

Email: Aaron.Rothman@klgates.com

(b)

if to a Purchaser:

as set forth below its name on the signature pages hereto

(c)

if to the Company or any Subsidiary:

500 N. Central Expressway

Suite 202

Plano, TX 75074

Attention: Chuck Griffin, Todd Murcer, Sean McEwen

Email: cgriffin@konatel.com; tmurcer@konatel.com; sean@konatel.com

With a copy (which shall not constitute notice) to:

Kutak Rock LLP

1801 California Street, Suite 3000

Denver, CO 80202

Attention: Stephen J. Ismert

Email: Stephen.Ismert@kutakrock.com

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; if mailed, five (5) Business Days after being deposited in the mail, postage prepaid; or if telecopied or e-mailed, when receipt is acknowledged (including by delivery receipt).

13.3

Successors and Assigns.

(a)

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. Subject to applicable securities laws, the Holders may transfer any of its Notes in whole or in part and may assign its rights under the Note Documents at any time. The Holders may, without the consent of the Company, assign, bifurcate, syndicate, sell, securitize or grant a participation in all or any portion of the Obligations in a private transaction not constituting a public offering, and the Company hereby agrees to cooperate in any such transaction; provided that unless a Default or an Event of Default has occurred and is continuing, no assignee of any Holder shall be a competitor of any Loan Party (as identified by the Company, acting reasonably, in writing to the Collateral Agent and the other Holders from time to time); provided further, that each assignee shall affirm the representation and warranties contained in Article 7. Such transaction shall be negotiated, executed and performed at the transferring Holder’s cost and expense; provided that, the Company shall be responsible for its own legal fees in connection therewith.

(b)

The Company may not assign any of its rights, or delegate any of its obligations, under this Agreement without the prior written consent of the Required Holders, and any such purported assignment by the Company without the written consent of the Required Holders shall be void and of no effect. Except as provided in Article 12, no Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of any of the Note Documents.

13.4

Amendment and Waiver.

(a)

No failure or delay on the part of any of the parties hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for in this Agreement are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.

(b)

Any amendment, waiver, supplement or modification of or to any provision of this Agreement, and any consent to any departure by any party from the terms of any provision of this Agreement, shall be effective (i) only if it is made or given in writing and signed by the Company and the Required Holders (unless such provision specifically states that such approval is only required by the Collateral Agent) and (ii) only in the specific instance and for the specific purpose for which made or given.

(c)

Except where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances.

13.5

Signatures; Counterparts; Electronic Execution. Facsimile or other electronic transmissions (including via e-mailed .pdf) of any executed original document and/or retransmission of any executed facsimile or other electronic transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm facsimile or other electronic transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Any signature (including, without limitation, (x) any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record and (y) any facsimile or .pdf signature) hereto or to any other Note Document, certificate, agreement or document related to this transaction, and any contract formation or record-keeping, in each case, through electronic means, shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Uniform Commercial Code and the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act or any similar state law based on the Uniform Electronic Transactions Act, and the parties hereto hereby waive any objection to the contrary.

13.6

Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

13.7

GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.

13.8

JURISDICTION, JURY TRIAL WAIVER, ETC.

(a)

EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES, OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK

OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 13.2.

(b)

EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES, OR ANY OF THE OTHER NOTE DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH OF LOAN PARTIES AND THEIR SUBSIDIARIES (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE COLLATERAL AGENT OR ANY HOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT THE COLLATERAL AGENT AND THE HOLDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AND THE OTHER NOTE DOCUMENTS TO WHICH IT IS PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

13.9

Severability. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Agreement with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision.

13.10

Rules of Construction. Unless the context otherwise requires, “or” is not exclusive, and references to sections or subsections refer to sections or subsections of this Agreement.

13.11

Entire Agreement. This Agreement, together with the exhibits and schedules hereto and the other Note Documents, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained in this Agreement, the exhibits and schedules hereto and the other Note Documents. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits and schedules hereto, and the other Note Documents supersede all prior agreements and understandings between the parties with respect to such subject matter.

13.12

Certain Expenses. The Company will pay all expenses of the Collateral Agent and the Holders (including, without limitation, reasonable fees, charges and disbursements of counsel to the Collateral Agent and the Holders) in connection with (a) any enforcement, amendment, supplement, modification or waiver of or to any provision of this Agreement or any of the other Note Documents or any documents relating thereto (including, without limitation, a response to a request by the Company for the consent of the Required Holders or the Collateral Agent to any action otherwise prohibited hereunder or thereunder), (b) consent to any departure from, the terms of any provision of this Agreement or such

other documents, and (c) any redemption of the Notes or any equity or other interests in the Company or any Subsidiary of the Company owned by such Holder.

13.13

Publicity. Except as may be required by Requirements of Law (including filings by any Holder with the United States Securities Exchange Commission as required under the Securities Act or other applicable law), none of the parties hereto shall issue a publicity release or announcement or otherwise make any public disclosure concerning this Agreement or the transactions contemplated hereby, without prior approval by the other party hereto. If any announcement is required by law to be made by any party hereto, prior to making such announcement such party will deliver a draft of such announcement to the other parties and shall give the other parties an opportunity to comment thereon. Notwithstanding anything herein to the contrary, any party to this Agreement and the other Note Documents (and any employee, representative, or other agent of any such party) may disclose to any and all persons, without limitation of any kind, such party’s tax treatment and the tax structure of the Transactions and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure; provided, however, notwithstanding the above, any such information and materials shall be kept confidential to the extent necessary to comply with applicable securities laws. Notwithstanding anything herein to the contrary, the Company shall be permitted to disclose this Agreement and the Note Documents to any Governmental Authority in connection with any licensing or accreditation necessary or desirable to the conduct of the Company’s business (it being understood that the Company shall provide advance notice of such disclosure to the Holders, to the extent practicable).

13.14

Further Assurances. Each of the parties hereto shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be required or desirable to carry out or to perform the provisions of this Agreement, including without limitation, any post-closing assignment(s) by any Holder of a portion of the Notes to a Person not currently a party hereto, subject to the limitations set forth herein.

13.15

No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and the other Note Documents. In the event an ambiguity or question of intent or interpretation arises under any provision of this Agreement or any Note Document, this Agreement or such other Note Document shall be construed as if drafted jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement or any other Note Document. No knowledge of, or investigation, including without limitation, due diligence investigation, conducted by, or on behalf of, the Collateral Agent or any Holder shall limit, modify or affect the representations set forth in Article 6 of this Agreement or the right of any Holder to rely thereon.

13.16

Confidentiality. Each Holder agrees, so long as no Event of Default has occurred and is continuing, to use reasonable efforts to maintain, in accordance with its customary practices, the confidentiality of the Confidential Information, except that Confidential Information may be disclosed (a) to its and its Affiliates’ Related Persons, and such Holder’s or its Affiliates’ underlying investors, beneficial owners or prospective investors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners or the United States Small Business Administration), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process; provided that, other than in connection with routine regulatory examinations, prior notice shall have been

given to the Company, to the extent permitted by applicable laws or regulations, so that the Loan Parties may seek an appropriate protective order, and if, failing the entry of a protective order, any Holder is, in the opinion of its counsel, compelled to disclose Confidential Information, it may disclose that portion of the Confidential Information that its counsel advises that it is compelled to disclose and such Holder will exercise reasonable efforts to obtain assurance that confidential treatment will be accorded to that portion of the Confidential Information that is being disclosed, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Note Document or any action or proceeding relating to this Agreement or any other Note Document or the enforcement of rights hereunder or thereunder, or to the extent necessary to respond to public statements or disclosures by the Loan Parties or their Related Persons referring to a Holder or any of their Related Persons in violation of the terms of this Agreement, (f) subject to an agreement containing provisions substantially the same as those of this Section 13.16, to (i) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights and obligations under this Agreement, or (ii) any Holder’s financing sources or prospective financing sources, (g) with the prior written consent of the Company or (h) to the extent consisting of general portfolio information that does not identify the Loan Parties.

[signature pages follow]

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

Company:

KONATEL, INC., a Delaware corporation

By: /s/ Charles D. Griffin

Name: Charles D. Griffin

Title: President

[signature pages continue]

[Note Purchase Agreement]

Collateral Agent:

CCUR HOLDINGS, INC.

By: /s/ Igor Volshteyn

Name: Igor Volshteyn

Title: President and CEO

[Note Purchase Agreement]

Purchasers:

CCUR HOLDINGS, INC.

By: /s/ Igor Volshteyn

Name: Igor Volshteyn

Title: President and CEO

ADDRESS:

3800 N. Lamar Blvd.

Suite 200

Austin, TX 78756

Attention: Igor Volshteyn, Matthew Gerritsen

Email:

igor.volshteyn@ccurholdings.com; and matthew.gerritsen@ccurholdings.com

SYMBOLIC LOGIC, INC.

By: /s/Matthew Stecker

Name: Matthew Stecker

Title:

ADDRESS:

9800 Pyramid Court

Englewood CO 99112

Attention: Matthew Stecker, CEO

Email: matthew@symbl.com

[Note Purchase Agreement]

Schedule 1.1(a) – Material Carrier Contracts

1. TelispireMSA – Dated July 30, 2019 between Telispire PCS and Apeiron Systems Inc.

2. TelispireSPSA – Dated July 30, 2019 between Telispire PCS and Apeiron Systems inc.

3. ATT Mobile Services - Control Center – Dated 6/8/18 between AT&T and Apeiron Systems

4. ATT Master Reseller Agreement – Dated 8/1/17 between AT&T and Konatel, Inc.

5. Bandwidth MSA – Dated Dec 18, 2015 between Bandwidth.com and Apeiron Systems, Inc.

6. InteliquentMSA – 9/21/15 between Inteliquent and Apeiron Systems Inc.

7. PWG Reseller Agreement Apeiron – Dated 2/25/22 between Prepaid Wireless Wholesale(PWW)

and Apeiron Systems, Inc.

8. PWG Agreement Infiniti Mobile – Dated 11/30/17 between Prepaid Wireless Wholesale and IM

Telecom, Inc.

9. Verizon Business Wholesale - SIP gateway – Dated 12-13-10 between Verizon Business

Wholesale Services and Apeiron Systems

312 658115.4

Schedule 2.1

Commitments


Purchaser	Notes
CCUR HOLDINGS, INC.	$1,575,000
SYMBOLIC LOGIC, INC.	$1,575,000
Total	$3,150,000

Schedule 6.1 – Existence, Organizational Identification Numbers, Foreign Qualifications, Prior

Names

Loan Party

Entity Type

Jurisdiction

Tax ID #

Organizational

Prior Names

KonaTel, Inc.

Corporation

Delaware

80-0973608

SEC file

Dala Petroleum

number 001-

Corp.

10171

Apeiron

Corporation

Nevada

35-2480469

EO263952013-9 KonaTel

Systems, Inc.

Acquisition

Corp.

IM Telecom,

Limited

Oklahoma

45-4507493

3512345862

d/b/a Infiniti

LLC

Liability

Mobile

Company

312 658115.4

Schedule 6.5 – Litigation

None.

312 658115.4

Schedule 6.6 – Compliance with Laws

None.

312 658115.4

Schedule 6.9 – Real Property Interests

1. Atmore Alabama:

Physical Location of operations: 201 Brookwood Road, Atmore AL. Atmore AL is the site of

our customer service center for inbound / outbound customer service calls.

Landlord: CEO, Creek Indian Enterprises Development Authority, 100 Brookwood Road,

Atmore, AL (Contact: Tim Manning, COO, 251-368-0819). Customer Service Center site.

2. Johnstown Pennsylvania:

Physical Location of operations: 112 Lindberg Ave, Johnstown PA. This is tier 1 and tier 2

customer and technical support for Apeiron Systems

Landlord: Saint Clement Parish, 114 Lindberg Avenue, Johnstown, PA 15905. Month to month

lease, in process of securing a new location. Staff site.

3. Plano Texas:

Physical Location of operations: 500 N. Central Expressway, STE 202, Plano TX. This is the

headquarters and financial center for KonaTel, Apeiron and Infiniti Mobile.

Landlord: MB 500 NCX Holdings, LLC, 5710 LBJ Freeway, Suite 420, Dallas TX 75240

(Brock Robertson, Manager). Headquarters for Konatel.

4. Tulsa, Oklahoma:

Physical Location of operations: 3401 E. Admiral Pl, Tulsa OK – This is the fulfillment center

for Infiniti Mobile

Landlord: Tulsa Properties No. 2, LLC, 1611 South Utica Ave. #268, Tulsa OK 74104. (Richie

and Sherri Cox). Month to month lease has expired and currently looking for a new location

312 658115.4

Schedule – 6.10 Taxes

Pennsylvania Sales / Use Tax audit - Per 10Q:

In June of 2021, the Company received an audit determination and assessment from the State of Pennsylvania in respect of an audit of sales and use tax liability for the audit period of January 1, 2016, through September 30, 2019. The assessment is in the amount of $111,650, including interest and penalties calculated on sales made inside and outside Pennsylvania. The Company appealed this assessment in August 2021 and at the request of the state, has provided additional information to support its appeal. The Company's position is that Pennsylvania has no sales tax authority to levy and collect sales tax on sales made in states outside Pennsylvania, and that it will be successful on appeal for a minimum of 93% of the assessment amount. A potential liability in the amount of $7,000 has been recorded. The State of Pennsylvania rejected an appeal by the Company. In response, the Company has engaged representation to further discussions on this matter and maintains the position that Pennsylvania does not have sales tax authority to levy assessments for sales made outside of the state.

312 658115.4

Schedule 6.15 – Subsidiaries

Wholly owned subsidiaries of KonaTel, Inc.:

 KonaTel, Inc., a Nevada corporation

 Apeiron Systems, Inc., a Nevada corporation

 IM

Telecom,

LLC,

Oklahoma

limited

liability

company

312 658115.4

Schedule 6.16 – Capitalization

Percentage of

Outstanding

Entity

Equity Holder

Type of Interests

No. of units

Interests

KonaTel, Inc., a Nevada KonaTel, Inc., a

corporation

Delaware corporation

Common stock

50,000,000

41,615,406

(83.2%)

Apeiron Systems, Inc., a KonaTel, Inc., a

Membership

Nevada corporation

Delaware corporation

Interests

1,000,000

100% owned by

KonaTel, Inc.

100% of

membership

IM Telecom, LLC, an

KonaTel, Inc., a

Membership

Oklahoma LLC

Delaware corporation

interests

N/A

interests owned

by KonaTel,

Inc.

312 658115.4

Schedule 6.18 – Broker / Finders Fees

None.

312 658115.4

Schedule 6.21(c) – Intellectual Property

ApeironAOSS – Internal System proprietary software – No license. Owned by Apeiron Systems

Inc.

Back THAT up TM (www.routerbackup.com) No registration information – Owned by Apeiron

Systems, Inc.

312 658115.4

Schedule 6.21(d) – Intellectual Property Licenses

None.

312 658115.4

Schedule 6.22 – Potential Conflicts of Interest

None.

312 658115.4

Schedule 6.23 – Specified Licenses

1. IM compliance plan – National compliance plan authorized by the FCC / no expiration

2. IM National ETC license – National ETC designation authorized by the FCC / no expiration

3. IM 9 state ETC licenses (GA, KY, MD, NV, OK, SC, VT, WI, CA) – Each state PUC provides

ETC designation and authorized use in each state. No expiration dates

4. IM Wireless licenses – State jurisdictions are authorized by each state and do not expire

5. IM National ACP authorization – ACP is authorized by the FCC / no expiration

6. IM 498/499 filing status – Not a license. This is a filing status allowing for documentation of

telecommunications services by state

7. Apeiron 499 Filer Registration -Not a license. This is a filing status allowing for documentation

of telecommunications services by state

8. Konatel 214 License – Authorized by the FCC for international telecommunications services –

does not expire.

9. ApeironITSP certification – Not a license but allows for IP number plan ordering

10. Apeiron Wireless certifications - State jurisdictions are authorized by each state and do not expire

312 658115.4

Schedule 6.24 – Debt

Company has a SBA loan that will be paid as part of this closing. Proof of payment to be given

immediately upon payment receipt by the SBA.

312 658115.4

Schedule 6.25 – Material Contracts

See Schedule 1.1(a) for Material Carrier Contracts.

312 658115.4

Schedule 6.26 – Insurance

Insurer

Policy #

Named Insured

Policy Type

Expires/Renews

The Hartford

46 SBA AE4640

Konatel, Inc.

Business Owners

9/1/2022

(Property &

Liability)

The Hartford

46 WBC

Konatel, Inc.

Workers

9/1/2022

AG9XNT

Compensation

Forge

21BF11021540163 Konatel, Inc.

D&O Policy

12/14/2022

Liberty Mutual

999083425

Konatel, Inc.

ERISA (Bond for 12/21/2022

401K)

312 658115.4

Schedule 6.28 – Licenses and Approvals

None.

312 658115.4

Schedule 9.11 – Affiliate Transactions

None.

312 658115.4

Schedule 11.1(j) – Judgments

None.

312 658115.4

EXHIBIT A

THIS NOTE WAS ISSUED IN A PRIVATE PLACEMENT, WITHOUT

REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED

(THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT

BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN THE

ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE

ACT AND APPLICABLE STATE SECURITIES LAWS COVERING THE

TRANSFER OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE

REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S.

FEDERAL INCOME TAX PURPOSES. THIS TERM NOTE WAS ISSUED WITH

ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION

1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND

THIS LEGEND IS REQUIRED BY SECTION 1275(C) OF THE CODE. THE

HOLDER MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF

OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY

RELATING TO THE LOAN BY CONTACTING CHARLES D. GRIFFIN, THE

PRESIDENT OF THE COMPANY AT 500 N. CENTRAL EXPRESSWAY, SUITE

202, PLANO, TEXAS 75074.

SENIOR SECURED PROMISSORY NOTE

AMOUNT

NOTE DATE

INITIAL MATURITY DATE

$[___________]

June [__], 2022

June [__], 2023

On or before the Initial Maturity Date set forth above, or such later date as may be specified in the Purchase Agreement (as defined below) (the “Maturity Date”), FOR VALUE RECEIVED, the undersigned, Konatel, Inc., a Delaware corporation (“Company”), promises to pay [CCUR Holdings, Inc.] [Symbolic Logic, Inc.] (“Purchaser”), or its registered assigns (the “Holder”), the principal sum of [_____________] and [__]/100 ($_________), or so much of said sum as has been advanced and is then outstanding under this Note, together with interest thereon from time to time as provided herein.

Purchase Agreement. This Note is issued by the Company, on the date hereof, pursuant to that certain Note Purchase Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), dated as of the date hereof, by and among the Company, Purchaser and the other persons from time to time party thereto, and is subject to the terms thereof. The Holder is entitled to the benefits of this Note and the Purchase Agreement, as the Purchase Agreement relates to this Note, and may enforce the agreements of the Company contained herein and therein andexercise theremedies provided for hereby and thereby or otherwise available in respect hereto and thereto. Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Purchase Agreement.

Interest. The Company promises to pay interest on the sum of the principal amount of this Note

at the aggregate rates and in the manner and times set forth in the Purchase Agreement.

Repayment; Prepayment. The Company shall repay and may prepay the outstanding principal amount of this Note as set forth in the Purchase Agreement.

Amendment. Amendments and modifications of this Note may be made only in the manner

provided in the Purchase Agreement.

Suits for Enforcement.

a. Subject to the terms and conditions of the Purchase Agreement, upon the occurrence and

during the continuation of any one or more Events of Default, the Holder of this Note may proceed to protect and enforce its rights hereunder by suit in equity, action at law or by other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Note or in any other Note Document or in aid of the exercise of any power granted in this Note or any other Note Document, or may proceed to enforce the payment of this Note, or to enforce any other legal or equitable right of the Holder of this Note.

b. The Company shall pay all costs of enforcement of this Note to the extent and in the

manner set forth in the Purchase Agreement.

Remedies Cumulative. No remedy conferred upon the Holder herein or in any other

Note Document is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder, under the Note Documents or now or hereafter existing at law or in equity or by statute or otherwise.

Transfer.

a. This Note may be transferred or assigned, in whole or in part, by the Holder at any time

subject to the limitations set forth in the Purchase Agreement and herein. The term “Holder” as used herein shall also include any transferee of this Note whose name has been recorded by the Issuer in the Note Register (as defined below). Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act.

b. The Company shall maintain a register (the “Note Register”) in its principal office for the

purpose of registering this Note and any transfer or partial transfer thereof, which register shall reflect and

identify, at all times, the ownership of record of any interest in this Note. Upon the issuance of this Note,

the Company shall record the name and address of Purchaser in the Note Register as the first Holder. Upon the surrender for registration of transfer or exchange of this Note as permitted under the Purchase Agreement at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of the Holder or a transferee or transferees. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by written instrument of transfer duly executed by the Holder of such Note or the Holder’s attorney duly authorized in writing.

Replacement of Note. On receipt by the Company of an affidavit of an authorized representative

of the Holder stating the circumstances of the loss, theft, destruction or mutilation of this Note (and in the

case of any such mutilation, on surrender and cancellation of such Note), the Company will promptly

execute and deliver, in lieu thereof, a new Note of like tenor; provided, however, the Holder must provide

a reasonable indemnity agreement in connection with any such replacement.

10.

Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and

agreements in this Note contained by or on behalf of the Company shall bind its successors and assigns,

whether so expressed or not.

11.

Notices. All notices, demands and other communications provided for or permitted hereunder

shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier (with receipt confirmed), courier service or personal delivery at the addresses specified in Section 13.2 of the Purchase Agreement.

12.

GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.

13.

Severability. If any one or more of the provisions contained herein, or the application thereof in

any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity,

legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

14.

Headings. The headings in this Note are for convenience of reference only and shall not limit or

otherwise affect the meaning hereof.

[Signature Page Follows]

This Senior Secured Promissory Note is dated and shall be effective as of the date set forth above.

KONATEL, INC., as the Company

By:

Name:

Title:

[Signature Page to Senior Secured Promissory Note]

EXHIBIT B

FORM OF BUDGET AND COMPLIANCE CERTIFICATE

[ • ], 202[●]

The undersigned, in [his/her/their] capacity as the duly appointed [Title] of Konatel, Inc., a

Delaware corporation (the “Company”) delivers this certificate to the Collateral Agent in

accordance with the terms of Section 8.1(l) of that certain Note Purchase Agreement, dated as of

June [ • ], 2022 (as amended, restated, amended and restated, supplemented or otherwise

modified from time to time, the “Purchase Agreement”), by and among the Company, the

Purchasers from time to time party thereto, and CCUR Holdings, Inc., as Collateral Agent (in

such capacity, together with its successors and assigns, “Collateral Agent”). Capitalized terms

used herein but not otherwise defined shall have the meaning ascribed to such terms in the

Purchase Agreement. The undersigned hereby certifies, in [his/her/their] capacity as the duly

appointed [Title] of the Company, and not in [his/her/their] individual capacity, on behalf of the

Loan Parties that:

The Budget attached as Annex A (the “Budget”) hereto fairly presents, in all

material respects, the revenue, income statement and cash flow budgets and projections of

Company and its Subsidiaries for the four fiscal quarter period beginning on __________, 20__.

The Budget has been prepared by management of the Company in good faith based upon

reasonable assumptions consistent with GAAP and the Company’s customary practices, in

accordance with the Purchase Agreement.

As of the last day of the fiscal quarter ended _________. 20__. Working Capital

for the Loan Parties, on a consolidated basis, is ___________. The Loan Parties [are / are not] in

compliance with the applicable covenants contained in Section 8.16 of the Purchase Agreement,

as demonstrated on Annex B hereof.

Attached hereto as Annex C is a schedule of the Material Contracts of the Loan

Parties pursuant to Section 6.25 of the Purchase Agreement, as of the last day of the fiscal

quarter ended ___________, 20__.¹

No Default or Event of Default has occurred prior to the date hereof, other than:

_________ [if none, so state].

Revised Schedule 6.25 to indicate new contracts and any contracts that were removed from the prior

iteration.

KONATEL, INC.

By:

Name:

Title:

[Signature Page – Budget and Compliance Certificate]

ANNEX A TO

BUDGET AND COMPLIANCE CERTIFICATE

BUDGET

FOR THE FOUR FISCAL QUARTER PERIOD BEGINNING [mm/dd/yy].

See attached.

ANNEX A

ANNEX B TO

BUDGET AND COMPLIANCE CERTIFICATE

WORKING CAPITAL CALCULATION

FOR THE FISCAL QUARTER ENDED [mm/dd/yy].

Working Capital (with respect to the Loan Parties) is defined as follows:

1. The sum of:

(A) current assets (other than Cash and amounts due from

related parties), plus

$______________

(B) unbilled revenue and deferred costs; less

$______________

lines of credit with related parties, notes payable and liabilities

arising from the Obligations under the Purchase Agreement), less $______________

(D) deferred revenue.

$______________

2. Sum of Lines 1(A) through 1(D):

$______________

ANNEX B

ANNEX C TO

BUDGET AND COMPLIANCE CERTIFICATE

MATERIAL CONTRACTS

[To be provided]

ANNEX C

Execution Version

GUARANTEE AND SECURITY AGREEMENT

dated as of June 14, 2022

KONATEL, INC., as a Grantor and Company,

and

APEIRON SYSTEMS, INC., as a Grantor,

and

IM TELECOM, LLC, as a Grantor,

in favor of

CCUR HOLDINGS, INC.,

as Collateral Agent

Table of Contents

Page

ARTICLE 1

DEFINED TERMS

4

SECTION 1.1.

Terms Defined in the Uniform Commercial Code

4

SECTION 1.2.

Definitions

4

SECTION 1.3.

Other Definitional Provisions

8

ARTICLE 2

GUARANTEE

8

SECTION 2.1.

Guarantee

8

SECTION 2.2.

Limitation of Guarantee

9

SECTION 2.3.

Contribution

9

SECTION 2.4.

Authorization; Other Agreements

9

SECTION 2.5.

Guarantee Absolute and Unconditional

10

SECTION 2.6.

Waivers

10

SECTION 2.7.

Reliance

11

ARTICLE 3

SECURITY INTEREST

11

SECTION 3.1.

Grant of Security Interest

11

SECTION 3.2.

Partnership/LLC Interests

13

SECTION 3.3.

Grantor Remains Liable

13

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

13

SECTION 4.1.

Existence

13

SECTION 4.2.

Authorization of Agreement; No Conflict

14

SECTION 4.3.

Consents

14

SECTION 4.4.

Perfected Liens

14

SECTION 4.5.

Title, No Other Liens

14

SECTION 4.6.

State of Organization; Location of Inventory, Equipment and Fixtures; Other Information

15

SECTION 4.7.

Accounts

15

SECTION 4.8.

Other Collateral

15

SECTION 4.9.

Deposit Accounts

15

SECTION 4.10.

Intellectual Property

16

SECTION 4.11.

Inventory

16

SECTION 4.12.

Investment Property; Partnership/LLC Interests; Capital Stock

16

SECTION 4.13.

Government Contracts

17

SECTION 4.14.

Vehicles

17

ARTICLE 5

COVENANTS

SECTION 5.1.

Maintenance of Perfected Security Interest; Further Information

17

SECTION 5.2.

Maintenance of Insurance

17

SECTION 5.3.

Changes in Locations; Changes in Name or Structure

17

SECTION 5.4.

Required Notifications

18

SECTION 5.5

Delivery Covenants

18

SECTION 5.6

Control Covenants

18

SECTION 5.7.

Filing Covenants

19

SECTION 5.8.

Accounts

20

SECTION 5.9.

Intellectual Property

20

SECTION 5.10.

Investment Property; Partnership/LLC Interests

21

SECTION 5.11.

Equipment

21

SECTION 5.12.

Government Contracts

21

SECTION 5.13.

Vehicles

22

SECTION 5.14.

Further Assurances

22

SECTION 5.15.

Commercial Tort Claims

22

SECTION 5.16.

[Reserved]

22

ARTICLE 6

REMEDIAL PROVISIONS

22

SECTION 6.1.

General Remedies

22

SECTION 6.2.

Voting Rights

23

SECTION 6.3.

Specific Remedies

23

SECTION 6.4.

Application of Proceeds

25

SECTION 6.5.

Waiver, Deficiency

26

ARTICLE 7

THE COLLATERAL AGENT

26

SECTION 7.1.

Collateral Agent's Appointment as Attorney-In-Fact

26

SECTION 7.2.

Duty of Collateral Agent With Respect to the Collateral

27

SECTION 7.3.

Authority of Collateral Agent

28

ARTICLE 8

MISCELLANEOUS

28

SECTION 8.1.

Amendments in Writing

28

SECTION 8.2.

Notices

28

SECTION 8.3.

No Waiver by Course of Conduct, Cumulative Remedies

28

SECTION 8.4.

Enforcement Expenses, Indemnification

28

SECTION 8.5.

Set-Off

29

SECTION 8.6.

Successors and Assigns

29

SECTION 8.7.

Signatures; Counterparts

29

SECTION 8.8.

Severability

30

SECTION 8.9.

Heading

30

SECTION 8.10.

Entire Agreement

30

SECTION 8.11.

Governing Law

30

SECTION 8.12.

JURISDICTION, JURY TRIAL WAIVER, ETC

30

SECTION 8.13.

Acknowledgements

31

SECTION 8.14.

Additional Grantors

31

SECTION 8.15.

Releases

31

SECTION 8.16.

All Powers Coupled with Interest

32

SCHEDULES

Schedule 4.6

Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification Number; Organization Number; Mailing Address; Chief Executive Office and other Locations

Schedule 4.8

Other Collateral

Schedule 4.9

Deposit Accounts and Securities Accounts

Schedule 4.10

Intellectual Property

Schedule 4.12

Investment Property and Partnership/LLC Interests

Schedule 4.14

Vehicles

iii

This GUARANTEE AND SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), dated as of June 14, 2022, by and among KONATEL, INC., a Delaware corporation (the “Company”), APEIRON SYSTEMS, INC., a Nevada corporation (“ASI”), IM TELECOM, LLC, an Oklahoma limited liability company (d/b/a Infiniti Mobile) (“IMT”) and any Additional Grantor (as defined below) who may become party to this Agreement (such Additional Grantors, together with the Company, ASI and IMT, the “Grantors”), in favor of CCUR HOLDINGS, INC., a Delaware corporation, as collateral agent (in such capacity, the “Collateral Agent”) for the ratable benefit of itself and the other Holders from time to time party to the Note Purchase Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”) by and among the Company, the Collateral Agent and the purchasers party thereto (collectively, the “Purchasers”).

STATEMENT OF PURPOSE

WHEREAS, pursuant to the terms of the Purchase Agreement, the Purchasers have agreed to purchase the Notes from the Company upon the terms and subject to the conditions set forth therein.

WHEREAS, it is a condition precedent to the obligation of the Purchasers to purchase the Notes from the Company under the Purchase Agreement that (i) each Guarantor guarantee the Company’s obligations under the Purchase Agreement and the other Note Documents, and (ii) the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of itself and the other Holders and granted the Liens to the Collateral required herein and the other Note Documents.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and to induce the Collateral Agent to enter into the Purchase Agreement, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the other Holders, as follows:

ARTICLE 1

DEFINED TERMS

SECTION 1.1. Terms Defined in the Uniform Commercial Code.

(a)

The following terms when used in this Agreement shall have the meanings assigned to them in the UCC (as defined below) as in effect from time to time: “Accession”, “Account”, “Account Debtor”, “Authenticate”, “Certificated Security”, “Chattel Paper”; “Commercial Tort Claim”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixture”, “General Intangible”, “Goods”, “Instrument”, “Inventory”, “Investment Company Security”, “Investment Property”, “Letter of Credit Rights”, “Proceeds”, “Record”, “Registered Organization”, “Security”, “Securities Account”, “Securities Entitlement”, “Securities Intermediary”, “Supporting Obligation”, “Tangible Chattel Paper”, and “Uncertificated Security.”

(b)

Terms defined in the UCC and not otherwise defined herein or in the Purchase Agreement shall have the meaning assigned in the UCC as in effect from time to time.

SECTION 1.2. Definitions. The following terms when used in this Agreement shall have the meanings assigned to them below:

“Additional Grantor” means each Subsidiary (other than the Excluded Subsidiary) of any Loan Party which hereafter becomes a Grantor pursuant to Section 8.14.

“Agreement” has the meaning set forth in the Preamble of this Agreement.

“ASI” has the meaning set forth in the Preamble of this Agreement.

“Collateral” has the meaning assigned thereto in Section 3.1.

“Collateral Account” means any collateral account established by the Collateral Agent as provided in Section 6.3(b)(iii).

“Collateral Agent” has the meaning set forth in the Preamble of this Agreement.

“Company” has the meaning set forth in the Preamble of this Agreement.

“Control” means the manner in which “control” is achieved under the UCC with respect to any Collateral for which the UCC specifies a method of achieving “control.”

“Controlled Depository” has the meaning assigned thereto in Section 5.6.

“Controlled Intermediary” has the meaning assigned thereto in Section 5.6.

“Copyrights” means, collectively, all of the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations and copyright applications anywhere in the world, including, without limitation, those listed on Schedule 4.10 hereto, (b) all reissues, extensions, continuations (in whole or in part) and renewals of any of the foregoing, (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payments for past, present or future infringements of any of the foregoing, (d) the right to sue for past, present and future infringements of any of the foregoing and (e) all rights corresponding to any of the foregoing throughout the world.

“Copyright Licenses” means any agreement now or hereafter in existence naming any Grantor as licensor or licensee, including, without limitation, those listed in Schedule 4.10, granting any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

“Effective Endorsement and Assignment” means, with respect to any specific type of Collateral, all such endorsements, assignments and other instruments of transfer reasonably requested by the Collateral Agent with respect to the Security Interests granted in such Collateral, and in each case, in form and substance satisfactory to the Collateral Agent.

“Excluded Deposit Account” means, collectively, Deposit Accounts established solely for the purpose of funding payroll and other compensation and benefits to employees.

“Grantors” has the meaning set forth in the Preamble of this Agreement.

“Guarantee” means the guarantee of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.

“Guaranteed Obligations” has the meaning set forth in Section 2.1 of this Agreement.

“Guarantor” means each Grantor other than the Company.

“IMT” has the meaning set forth in the Preamble of this Agreement.

“Intellectual Property” means, collectively, all of the following: (a) all systems software, applications software and internet rights, including, without limitation, screen displays and formats, internet domain names, web sites (including web links), program structures, sequence and organization, all documentation for such software, including, without limitation, user manuals, flowcharts, programmer’s notes, functional specifications, and operations manuals, all formulas, processes, ideas and know-how embodied in any of the foregoing, and all program materials, flowcharts, notes and outlines created in connection with any of the foregoing, whether or not patentable or copyrightable, (b) concepts, discoveries, improvements and ideas, (c) any useful information relating to the items described in clause (a) or (b), including know-how, technology, engineering drawings, reports, design information, trade secrets, practices, laboratory notebooks, specifications, test procedures, maintenance manuals, research, development, manufacturing, marketing, merchandising, selling, purchasing and accounting, (d) Patents and Patent Licenses, Copyrights and Copyright Licenses, Trademarks and Trademark Licenses, Trade Secrets and Trade Secret Licenses, and (e) other licenses to use any of the items described in the foregoing clauses (a), (b), (c) and (d) or any other similar items of such Grantor necessary for the conduct of its business.

“Issuer” means any issuer of any Investment Property or Partnership/LLC Interests (including, without limitation, any Issuer as defined in the UCC).

“Obligations” has the meaning assigned thereto in the Purchase Agreement.

“Partnership/LLC Interests” means, with respect to any Grantor, the entire partnership interest, membership interest or limited liability company interest, as applicable, of such Grantor in each partnership, limited partnership or limited liability company owned thereby and all rights, powers and benefits as a partner or member thereof, whether under any limited liability company agreement, operating agreement, membership agreement, partnership agreement or similar agreement relating to any Partnership/LLC Interests or under any Requirements of Law, including, without limitation, such Grantor’s capital account, its interest as a partner or member, as applicable, in the net cash flow, net profit and net loss, and items of income, gain, loss, deduction and credit of any such partnership, limited partnership or limited liability company, as applicable, such Grantor’s interest in all distributions made or to be made by any such partnership, limited partnership or limited liability company, as applicable, to such Grantor and all of the other economic rights, titles and interests of such Grantor as a partner or member, as applicable, of any such partnership, limited partnership or limited liability company, as applicable, whether set forth in the partnership agreement or membership agreement, as applicable, of such partnership, limited partnership or limited liability company, as applicable, by separate agreement or otherwise.

“Partnership/LLC Agreement” has the meaning set forth in Section 3.2(a).

“Patent License” means all agreements now or hereafter in existence, whether written, implied, or oral, providing for the granting of any right in or to Patents, including without limitation the right to manufacture, use or sell any invention covered in whole or in part by a Patent (whether Grantor is licensee or licensor thereunder), including, but not limited to, each agreement referred to on Schedule 4.10.

“Patents” means all United States and foreign issued patents and certificates of invention for issued patents, or similar industrial property rights, and applications for any of the foregoing, including:

(a) each issued patent and applications for issued patents referred to on Schedule 4.10; (a) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof; (b) all inventions and improvements described therein; (c) all rights to sue for past, present and future infringements thereof; (d) all licenses, claims, damages, and proceeds of suit arising therefrom; (e) all products and proceeds of the foregoing, including any income, royalties, awards and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, for past, present, or future infringement of any Patent or any Patent licensed under any Patent License; and (f) all rights corresponding thereto throughout the world.

“Purchase Agreement” has the meaning set forth in the Preamble of this Agreement.

“Purchaser(s)” has the meaning set forth in the Preamble of this Agreement.

“Security Interests” means the security interests granted pursuant to Article 3, as well as all other security interests now or hereafter created or assigned as additional security for the Obligations pursuant to the provisions of the Purchase Agreement or any other Note Document.

“Trade Secret License” means any and all agreements now or hereafter in existence, whether written, implied, or oral, providing for the granting of any right in or to Trade Secrets (whether Grantor is licensee or licensor thereunder), including, but not limited to, each agreement referred to on Schedule 4.10.

“Trade Secrets” means all trade secrets and all other confidential or proprietary information of any Grantor, including, without limitation, technology, know-how and processes, manufacturing and production procedures and techniques, inventions, designs, research and development information, methods, plans, formulae, descriptions, compositions, drawings, specifications, databases and data, including, without limitation, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and proposals and customer and supplier lists and information, whether or not such Trade Secret has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such Trade Secret, including: (a) the right to sue for past, present and future misappropriation or other violation of any Trade Secret; (b) all products and proceeds of the foregoing, including any income, royalties, awards and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payment for past, present, or future infringement of any Trade Secrets or any Trade Secrets licensed under any Trade Secret License; and (c) all rights corresponding thereto throughout the world.

“Trademark License” means any and all agreements now or hereafter in existence, whether written, implied or oral, providing for the granting of any right in or to Trademarks (whether Grantor is licensee or licensor thereunder), including, but not limited to, each agreement referred to on Schedule 4.10.

“Trademarks” means all United States and foreign trademarks, trade names, corporate names, company names, business names, fictitious business names, service marks, logos, other source or business identifiers, registered internet domain names, designs and general intangibles of a like nature, all registrations and applications for any of the foregoing, and all applications in connection therewith (other than each application to register any trademark or service mark prior to the filing under any legal requirements of a verified statement of use for such trademark or service mark) including: (a) the registrations and applications referred to on Schedule 4.10; (a) all extensions or renewals of any of the foregoing; (b) all of the goodwill of the business connected with the use of and symbolized by the foregoing; (c) the right to sue for past, present and future infringement or dilution of any of the foregoing

or for any injury to goodwill; and (d) all products and proceeds of the foregoing, including any income, royalties, awards and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payment for past, present, or future infringement of any Trademark or any Trademark licensed under any Trademark License.

“UCC” means the Uniform Commercial Code as in effect in the State of New York, as amended or modified from time to time.

“Vehicles” means all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title under the laws of any state, all tires and all other appurtenances to any of the foregoing.

SECTION 1.3. Other Definitional Provisions. Capitalized terms defined in the Purchase Agreement and not otherwise defined herein shall have the meaning assigned thereto in the Purchase Agreement. With reference to this Agreement and each other Note Document, unless otherwise specified herein or in such other Note Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (d) the word “will” shall be construed to have the same meaning and effect as the word “shall,” (e) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document, as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (f) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns, (g) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (h) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (i) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (j) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (k) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; and the words “to” and “until” each mean “to but excluding”; (l) Section headings herein and in the other Note Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Note Document and (m) where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

ARTICLE 2

GUARANTEE

SECTION 2.1. Guarantee. To induce the Purchasers to purchase the Notes, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Note Document, of all the Obligations of the Company, whether existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This Guarantee by each Guarantor hereunder constitutes a guarantee of payment and not of collection.

SECTION 2.2. Limitation of Guarantee. Any term or provision of this Guarantee or any other Note Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such Guarantor can be liable without rendering this Guarantee or any other Note Document, as it relates to such Guarantor, subject to avoidance under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of this Guarantee for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 2.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guarantee.

SECTION 2.3. Contribution. Without limiting any right under applicable law for contribution, to the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Notes and other Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Company) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Note Documents and no Guarantor shall exercise such rights of contribution until all Obligations have been paid in full.

SECTION 2.4. Authorization; Other Agreements. The Holders are hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following:

(a)

(i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Note Document;

(b)

apply to the Guaranteed Obligations any sums by whomever paid or however realized in such order as provided in the Note Documents;

(c)

refund at any time any payment received by any Holder in respect of any Guaranteed Obligation;

(d)

(i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with the Company and any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and

(e)

settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.

SECTION 2.5. Guarantee Absolute and Unconditional. Each Guarantor hereby waives and agrees not to assert any defense (other than the performance in full and payment in full of the Guaranteed Obligations), whether arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guarantee are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guarantee, in each case except as otherwise agreed in writing by the Collateral Agent):

(a)

the invalidity or unenforceability of any obligation of the Company or any other Guarantor under any Note Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof;

(b)

the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from the Company or any other Guarantor or other action to enforce the same or (ii) any action to enforce any Note Document or any Lien thereunder;

(c)

the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;

(d)

any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Company, any other Guarantor or any of the Company’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;

(e)

any foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral or any election following the occurrence of an Event of Default by the Collateral Agent or any Person to proceed separately against any Collateral in accordance with such Person’s rights under any applicable Requirement of Law; or

(f)

any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Company, any other Guarantor or any of the Company’s other Subsidiaries, in each case other than the performance in full and payment in full of the Guaranteed Obligations.

SECTION 2.6. Waivers. To the fullest extent permitted by applicable law, each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense (other than performance in full and the payment in full of the Guaranteed Obligations), setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (a) any demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of the Company or any other Guarantor. To the fullest extent permitted by applicable law, each Guarantor further unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Company or any other Guarantor by reason of any Note Document or any payment made thereunder except upon payment and performance in full of the Guaranteed Obligations or as specifically set forth herein or (y) assert any claim, defense,

setoff or counterclaim it may have against any other Loan Party or set off any of its obligations to such other Loan Party against obligations of such Loan Party to such Guarantor, until the Guaranteed Obligations have been paid in full. No obligation of any Guarantor hereunder shall be discharged other than by complete performance. Each Guarantor further waives any right such Guarantor may have under any applicable Requirement of Law to require the Collateral Agent or any Holder to seek recourse first against the Company or any other Person, or to realize upon any Collateral for any of the Obligations, as a condition precedent to enforcing such Guarantor’s liability and obligations under this Guarantee.

SECTION 2.7. Reliance. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Company, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor hereby agrees that neither the Collateral Agent nor any Holder shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event the Collateral Agent or any Holder, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, the Collateral Agent or such Holder shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that the Collateral Agent or such Holder, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.

ARTICLE 3
SECURITY INTEREST

SECTION 3.1. Grant of Security Interest. Each Grantor hereby grants, pledges and collaterally assigns to the Collateral Agent, for the ratable benefit of the Collateral Agent and the other Holders, a security interest in, all of such Grantor’s right, title and interest in the following property, 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 interest, and wherever located or deemed located (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations:

(a)

all Accounts;

(b)

all cash and currency;

(c)

all Chattel Paper;

(d)

all Commercial Tort Claims identified on Schedule 4.8;

(e)

all Deposit Accounts;

(f)

all Documents;

(g)

all Equipment;

(h)

all Fixtures;

(i)

all General Intangibles;

(j)

all Instruments;

(k)

all Intellectual Property;

(l)

all Inventory;

(m)

all Investment Property;

(n)

all Letter of Credit Rights;

(o)

Partnership/LLC Interests;

(p)

all Vehicles;

(q)

all other Goods not otherwise described above;

(r)

all books and records pertaining to the Collateral; and

(s)

to the extent not otherwise included, all Proceeds and products of any and all of the foregoing, all Accessions to any and all of the foregoing and all collateral security and Supporting Obligations (as now or hereafter defined in the UCC) given by any Person with respect to any of the foregoing; provided, that (i) any Security Interest on any Capital Stock or other ownership interests issued by any Subsidiary of the Company or any other Grantor organized under laws other than the laws of any political subdivision of the United States (such Subsidiary or Grantor, a “Foreign Subsidiary”), shall be limited to sixty-five percent (65%) of all issued and outstanding shares of all classes of voting Capital Stock of such Foreign Subsidiary and one hundred percent (100%) of all issued and outstanding shares of all classes of non-voting Capital Stock of such Foreign Subsidiary, (ii) the Security Interests granted herein shall not extend to, and the term “Collateral” shall not include (A) any obligation or property of any kind due from, owed by or belonging to any Sanctioned Person or (B) any rights under any lease, license, instrument, contract or agreement of any Grantor to the extent that the granting of a security interest therein would, under the express terms of such lease, license, instrument, contract or agreement (I) be prohibited or restricted or (II) constitute a default under or result in a termination of any such lease, instrument, contract or agreement governing such right, unless (x) such prohibition or restriction is not enforceable or is otherwise ineffective under any Requirements of Law (including, without limitation, Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity) or (y) consent to such security interest has been obtained from any applicable third party. Notwithstanding any of the foregoing, such proviso shall not affect, limit, restrict or impair the grant by any Grantor of a Security Interest in any Account or any money or other amounts due and payable to such Grantor or to become due and payable to such Grantor under, or Proceeds of, such lease, license instrument, contract or agreement unless such security interest in such Account, money or other amount due and payable, or Proceeds thereof, is also specifically prohibited or restricted by the terms of such lease, license, instrument, contract or other agreement or such security interest in such Account, money or other amount due and payable or Proceeds thereof would expressly constitute a default under or would expressly grant a party a termination right under any such lease, instrument, contract or agreement governing such right unless, in each case, (x) such prohibition is not enforceable or is otherwise ineffective under any Requirements of Law or (y) consent to such security interest has been obtained from any applicable third party; provided further, that notwithstanding anything to the contrary contained in the foregoing proviso, the Security Interests granted herein shall immediately and automatically attach to and the term “Collateral” shall immediately and automatically include the

rights under any such lease, license, instrument, contract or agreement and in such Account, money, or other amounts due and payable to any Grantor, or any Proceeds thereof, at such time as such prohibition, restriction, event of default or termination right terminates or is waived or consented to by such applicable third party or is no longer enforceable or effective under applicable Requirements of Law.

SECTION 3.2. Partnership/LLC Interests.

(a)

Each limited liability agreement, operating agreement, membership agreement, partnership agreement or similar agreement relating to any Partnership/LLC Interests (as amended, restated, supplemented or otherwise modified from time to time, a “Partnership/LLC Agreement”) shall permit each member, manager and partner that is a Grantor to pledge all of the Partnership/LLC Interests in which such Grantor has rights to and grant and collaterally assign to the Collateral Agent a lien and security interest in all of the Partnership/LLC Interests in which such Grantor has rights without any further consent, approval or action by any other party, including, without limitation, any other party to any Partnership/LLC Agreement or otherwise.

(b)

Upon the occurrence and during the continuance of an Event of Default, (i) the Collateral Agent or its respective designees shall have the right (but not the obligation) to be substituted for the applicable Grantor as a member, manager or partner under the applicable Partnership/LLC Agreement and (ii) the Collateral Agent shall have all rights, powers and benefits of such Grantor as a member, manager or partner, as applicable, under such Partnership/LLC Agreement. For the avoidance of doubt, such rights, powers and benefits of a substituted member shall include all voting and other rights and not merely the rights of an economic interest holder. So long as this Agreement remains in effect, no further consent, approval or action by any other party including, without limitation, any other party to the Partnership/LLC Agreement or otherwise shall be necessary to permit the Collateral Agent to be substituted as a member, manager or partner pursuant to this paragraph. The rights, powers and benefits granted pursuant to this paragraph shall inure to the benefit of the Collateral Agent and its respective successors, assigns and designated agents, as intended third party beneficiaries.

SECTION 3.3. Grantor Remains Liable. Anything herein to the contrary notwithstanding: (a) each Grantor shall remain liable to perform all of its duties and obligations under the contracts and agreements included in the Collateral to the same extent as if this Agreement had not been executed, (b) the exercise by the Collateral Agent of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, (c) neither the Collateral Agent nor any other Holder shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall the Collateral Agent or any other Holder be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder, and (d) neither the Collateral Agent nor any other Holder shall have any liability in contract or tort for any Grantor’s acts or omissions.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and the Purchasers to enter into the Purchase Agreement, each Grantor hereby represents and warrants to the Collateral Agent, the Purchasers and each Holder, as applicable, that:

SECTION 4.1. Existence. Such Grantor is (a) duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation (as applicable), (b) has the requisite power and authority to own, lease and operate its properties and to conduct the business in which

it is currently, or is currently proposed to be, engaged, and (c) is duly qualified as a foreign entity, licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not be reasonably expected to result in a Material Adverse Effect.

SECTION 4.2. Authorization of Agreement; No Conflict. Such Grantor has the right, power and authority and has taken all necessary company and other action to authorize the execution, delivery and performance of, this Agreement. This Agreement has been duly executed and delivered by the duly authorized officer of such Grantor or any Issuer and this Agreement constitutes the legal, valid and binding obligation of such Grantor enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies. The execution, delivery and performance by such Grantor of this Agreement will not, by the passage of time, the giving of notice or otherwise, violate any material provision of such Grantor’s Organizational Documents, any material Contractual Obligations or any Requirements of Law applicable to such Grantor and will not result in the creation or imposition of any Lien (or obligation to create a Lien), other than the Security Interests, upon or with respect to any property, asset or business of such Grantor.

SECTION 4.3. Consents. No approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against such Grantor or any Issuer of Investment Property constituting Collateral of this Agreement, except (a) as may be required by laws affecting the offering and sale of securities generally, (b) such as have been obtained or made and are in full force and effect, (c) filings with the United States Copyright Office and/or the United States Patent and Trademark Office, or (d) filings under the UCC and/or other Requirements of Law.

SECTION 4.4. Perfected Liens. Each financing statement naming such Grantor as a debtor is in appropriate form for filing in the appropriate filing offices of the states specified on Schedule 4.6. The Security Interests granted pursuant to this Agreement (a) constitute valid and enforceable perfected security interests in all of the Collateral in favor of the Collateral Agent, for the ratable benefit of itself and the other Holders, as collateral security for the Obligations, and (b): (1) when UCC financing statements containing an adequate description of the Collateral shall have been filed in the offices specified in Schedule 4.6, the Security Interests will constitute perfected security interests in all right, title and interest of such Grantor in the Collateral to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all other Liens and rights of others therein except for Permitted Liens; (2) when each Intellectual Property Security Agreement has been filed with the applicable Governmental Authority, the Security Interests will constitute perfected security interests in all right, title and interest of such Grantor in the Intellectual Property therein described, prior to all other Liens and rights of others therein except for Permitted Liens; and (3) when each control agreement has been executed and delivered to the Collateral Agent, the Security Interests will constitute perfected security interests in all right, title and interest of such Grantor in the Deposit Accounts and Securities Accounts, as applicable, subject thereto, prior to all other Liens and rights of others therein and subject to no adverse claims except for Permitted Liens.

SECTION 4.5. Title, No Other Liens. Except for the Security Interests, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims other than Permitted Liens. No Grantor has authenticated any agreement authorizing any secured party thereunder to file a financing statement under the UCC of any state which names such Grantor as debtor or other public notice with respect to all or any part of the Collateral and no such financing statement or public notice is on file or of

record in any public office, except such as have been filed in favor of the Collateral Agent, for the ratable benefit of itself and the other Holders, pursuant to this Agreement or in connection with Permitted Liens.

SECTION 4.6. State of Organization; Location of Inventory, Equipment and Fixtures; Other Information.

(a)

The exact legal name of such Grantor is set forth on Schedule 4.6 (as such schedule may be updated from time to time pursuant to Section 5.3).

(b)

Such Grantor is a registered organization organized under the laws of the state identified on Schedule 4.6 across from such Grantor’s name (as such schedule may be updated from time to time pursuant to Section 5.3). The taxpayer identification number and, to the extent applicable, registered organization number of such Grantor is set forth on Schedule 4.6 under such Grantor’s name (as such schedule may be updated from time to time pursuant to Section 5.3).

(c)

All Collateral consisting of Inventory, Equipment and Fixtures (whether now owned or hereafter acquired) is (or will be) located at the locations specified on Schedule 4.6, except as otherwise permitted hereunder or in the Purchase Agreement.

(d)

The mailing address, chief place of business, chief executive office and office where such Grantor keeps its books and records relating to the Collateral is located at the locations specified on Schedule 4.6 under such Grantor’s name. Such Grantor has no other places of business except those separately set forth on Schedule 4.6 under such Grantor’s name. Such Grantor does no business nor has such Grantor done business during the past five (5) years under any trade name or fictitious business name except as disclosed on Schedule 4.6 under such Grantor’s name. Except as disclosed on Schedule 4.6 under such Grantor’s name, no Grantor has acquired assets from any Person, other than assets acquired in the ordinary course of such Grantor's business from a Person engaged in the business of selling goods of such kind, during the past five (5) years.

SECTION 4.7. Accounts. Each existing Account constitutes, and each hereafter arising Account will constitute, the legally valid and binding obligation of the applicable Account Debtor. The amount represented by such Grantor to the Collateral Agent as owing by each Account Debtor is, or will be, the correct amount actually and unconditionally owing, except for ordinary course cash discounts and allowances where applicable. No Account Debtor has any defense, set-off, claim or counterclaim against such Grantor that can be asserted against the Collateral Agent, whether in any proceeding to enforce Collateral Agent’s rights in the Collateral or otherwise except defenses, setoffs, claims or counterclaims that are not, in the aggregate, material to the value of the Accounts. None of the Accounts is, nor will any hereafter arising Account be, evidenced by a promissory note or other Instrument (other than a check) that has not been pledged to the Collateral Agent in accordance with the terms hereof.

SECTION 4.8. Other Collateral. Other than as set forth on Schedule 4.8 (and in the case of clause (b), as such schedule may be amended in accordance with Section 5.15), as of the date hereof, such Grantor does not hold (a) any Chattel Paper in the ordinary course of its business, (b) any Commercial Tort Claims, or (c) any Instruments or is named a payee of any promissory note or other evidence of indebtedness.

SECTION 4.9. Deposit Accounts. As of the date hereof, all Deposit Accounts (excluding Excluded Deposit Accounts but including, without limitation, cash management accounts that are Deposit Accounts), securities accounts and lockboxes including the: (a) owner of the account, (b) name and address of financial institution or securities broker where such accounts are located, (c) account numbers and (d) the general purpose or use of such account owned by such Grantor are listed on Schedule 4.9.

SECTION 4.10. Intellectual Property.

(a)

Schedule 4.10 sets forth, as of the date hereof (as such schedule may be updated from time to time pursuant to Section 5.3), a list of all Copyright registrations, Copyright applications, issued Patents, Patent applications, Trademark registrations, Trademark applications, Trade Secret Licenses and domain names owned or registered by such Grantor or subject to applications for registration by such Grantor in its own name.

(b)

Except as set forth in Schedule 4.10 on the date hereof (as such schedule may be updated from time to time pursuant to Section 5.3), none of the Intellectual Property owned by such Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

(c)

To the knowledge of each Grantor, (A) none of the Trade Secrets of such Grantor that is used in the operation of such Grantor’s business has been used, divulged, disclosed or appropriated to the detriment of such Grantor for the benefit of any other Person other than such Grantor; (B) no employee, independent contractor or agent of such Grantor has misappropriated any material Trade Secrets of any other Person in the course of the performance of his or her duties as an employee, independent contractor or agent of such Grantor; and (C) no employee, independent contractor or agent of such Grantor is in material default or material breach of any term of any employment agreement, non-disclosure agreement, assignment of inventions agreement or similar agreement or contract relating to the protection or ownership, of such Grantor’s Intellectual Property Collateral.

SECTION 4.11. Inventory. To the knowledge of such Grantor, Collateral consisting of Inventory is of good and merchantable quality, free from any material defects. To the knowledge of such Grantor, none of such Inventory is subject to any licensing, Patent, Trademark, trade name or Copyright with any Person that restricts such Grantor’s ability to manufacture and/or sell such Inventory. The completion of the manufacturing process of such Inventory by a Person other than such Grantor would be permitted under any contract to which such Grantor is a party or to which the Inventory is subject.

SECTION 4.12. Investment Property; Partnership/LLC Interests; Capital Stock.

(a)

As of the date hereof, all Investment Property (including, without limitation, Securities Accounts and cash management accounts that are Investment Property) and all Partnership/LLC Interests owned by such Grantor are listed on Schedule 4.12 (as such schedule may be updated from time to time pursuant to Section 5.3).

(b)

All Investment Property and all Partnership/LLC Interests issued by any Issuer to such Grantor (i) have been duly and validly issued and, if applicable, are fully paid and nonassessable, (ii) are beneficially owned of record by such Grantor and (iii) constitute all the issued and outstanding shares of all classes of the Capital Stock of such Issuer issued to such Grantor.

(c)

None of the Partnership/LLC Interests (i) are dealt in or traded on a Securities exchange or in Securities markets, (ii) by their terms expressly provide that they are Securities governed by Article 8 of the UCC, (iii) are Investment Company Securities or (iv) are held in a Securities Account.

(d)

No Organizational Document of any Issuer or Grantor prohibits the Grantor from pledging any Investment Property or Partnership/LLC Interests, as applicable, to, and granting and collaterally assigning to, the Collateral Agent, a lien and security interest in such Grantor’s Investment Property or Partnership/LLC Interests, as applicable, and no further consent, approval or action by any

other party, including without limitation, any other party to any Organizational Document or otherwise, is required.

(e)

So long as this Agreement remains in effect, no further consent, approval or action by any other party including, without limitation, any other party to any Organizational Document of any Issuer, shall be necessary to permit the Collateral Agent or its designee to be substituted as the equity holder of such Issuer pursuant to the terms of this Agreement.

SECTION 4.13. Government Contracts. As of the date hereof, no Grantor is party to any Government Contract.

SECTION 4.14. Vehicles. As of the date hereof, all Vehicles owned by any Grantor are listed on Schedule 4.14.

ARTICLE 5
COVENANTS

Until the Obligations shall have been paid in full in cash and the Purchase Agreement and all commitments thereunder have been terminated, unless consent has been obtained in the manner provided for in Section 8.1, each Grantor covenants and agrees that:

SECTION 5.1. Maintenance of Perfected Security Interest; Further Information.

(a)

Such Grantor shall maintain the Security Interests created by this Agreement as a first priority perfected Security Interest (subject only to Permitted Liens) and shall defend such Security Interests against the claims and demands of all Persons whomsoever (other than the holders of Permitted Liens).

(b)

Such Grantor will from time to time furnish to the Collateral Agent, upon the Collateral Agent’s reasonable request, statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as the Collateral Agent may reasonably request, all in reasonable detail.

SECTION 5.2. Maintenance of Insurance.

(a)

Such Grantor will maintain insurance on its Property in accordance with Section 8.6 of the Purchase Agreement.

(b)

All insurance referred to in Section 5.2(a) shall (i) name the Collateral Agent for the ratable benefit of itself and the other Holders as loss payee (to the extent covering risk of loss or damage to tangible property) and as an additional named insured as its interests may appear (to the extent covering any other risk), (ii) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days after receipt by the Collateral Agent of written notice thereof and (iii) be reasonably satisfactory in all other respects to the Collateral Agent.

(c)

Upon the reasonable request of the Collateral Agent from time to time, such Grantor shall deliver to the Collateral Agent evidence of the insurance coverage referred to in this Section 5.2.

SECTION 5.3. Changes in Locations; Changes in Name or Structure. Such Grantor will not, except upon thirty (30) days’ prior written notice to the Collateral Agent and, subsequent to such

notice, delivery to the Collateral Agent of (a) all additional financing statements (executed if necessary for any particular filing jurisdiction) and other instruments and other documents, in each case, as reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the Security Interests provided for herein and (b) if applicable, a written supplement to the schedules hereto:

(i)

permit any Deposit Account (other than Excluded Deposit Accounts) to be held by or at a depository bank other than (A) the depository bank that held such Deposit Account as of the date hereof as set forth on Schedule 4.9 or (B) upon thirty (30) days’ prior written notice to the Collateral Agent, any other depository bank (provided that such Grantor shall comply with, and shall cause such depository bank to comply with, the terms and conditions of Section 5.6(a));

(ii)

permit any Investment Property (other than Certificated Securities delivered to the Collateral Agent pursuant to Section 5.5) to be held by a Securities Intermediary other than the Securities Intermediary that holds such Investment Property as of the date hereof as set forth on Schedule 4.12;

(iii)

change its jurisdiction of incorporation or formation, as applicable, or the location of its chief executive office (or the location where such Grantor maintains its books and records relating to Accounts, Documents, General Intangibles, Instruments and Investment Property in which it has any interest) from that identified on Schedule 4.6; or

(iv)

change its name, identity or corporate or organizational structure to such an extent that any financing statement filed by the Collateral Agent in connection with this Agreement would become misleading under the UCC or any applicable Requirements of Law.

SECTION 5.4. Required Notifications. Such Grantor shall promptly notify the Collateral Agent upon obtaining knowledge thereof, in writing, of: (a) any Lien (other than the Security Interests or Permitted Liens) on any of the Collateral which would adversely affect the ability of the Collateral Agent to exercise any of its remedies hereunder, (b) the occurrence of any other event which could reasonably be expected to have a Material Adverse Effect on the aggregate value of the Collateral or on the Security Interests, (c) any Collateral which, to the knowledge of such Grantor, constitutes a Government Contract, and (d) the acquisition or ownership by such Grantor of any (i) Commercial Tort Claim, (ii) Deposit Account (other than Excluded Deposit Accounts), or (iii) Investment Property after the date hereof.

SECTION 5.5. Delivery Covenants. Such Grantor will deliver and pledge to the Collateral Agent, for the ratable benefit of itself and the other Holders, all Certificated Securities, Partnership/LLC Interests evidenced by a certificate, negotiable Documents, Instruments, and Tangible Chattel Paper owned or held by such Grantor, in each case, together with an Effective Endorsement and Assignment and all Supporting Obligations, as applicable, unless such delivery and pledge has been waived in writing by the Collateral Agent. If any of the Partnership/LLC Interests constituting Collateral and consisting of membership interests in a limited liability company or general or limited partnership interests in a limited partnership or limited liability partnership is hereafter designated by the relevant Grantor as a “security” under (and as defined in) Article 8 of the UCC, such Grantor shall cause such Partnership/LLC Interests to be certificated and shall deliver all certificates or other documents evidencing or representing the Partnership/LLC Interests to the Collateral Agent, accompanied by Partnership/LLC Interests powers, all in form and substance reasonably satisfactory to the Collateral Agent.

SECTION 5.6. Control Covenants.

(a)

Such Grantor shall instruct (and otherwise use its commercially reasonable efforts to cause) (i) each depository bank holding a Deposit Account (other than Excluded Deposit Accounts)

owned by such Grantor and (ii) each Securities Intermediary holding any Investment Property owned by such Grantor, to execute and deliver a control agreement, sufficient to provide the Collateral Agent with Control of such Deposit Account or Investment Property and otherwise in form and substance satisfactory to the Collateral Agent (any such depository bank executing and delivering any such control agreement, a “Controlled Depository”, and any such Securities Intermediary executing and delivering any such control agreement, a “Controlled Intermediary”). In the event any such depository bank or Securities Intermediary refuses to execute and deliver such control agreement, the Collateral Agent, in its sole discretion, may require the applicable Deposit Account (other than Excluded Deposit Accounts) and Investment Property to be transferred to a Controlled Depository or Controlled Intermediary, as applicable. Within sixty (60) days of the Closing Date (or such later date as consented to by the Collateral Agent in its reasonable discretion), all Deposit Accounts (other than Excluded Deposit Accounts) and all Investment Property will be maintained with a Controlled Depository or a Controlled Intermediary, as applicable, unless otherwise permitted by the Collateral Agent.

(b)

Upon the request of the Collateral Agent, such Grantor will take such actions and deliver all such agreements as are requested by the Collateral Agent to provide the Collateral Agent with Control of all Letter of Credit Rights and Electronic Chattel Paper owned or held by such Grantor, including, without limitation, with respect to any such Electronic Chattel Paper, by having the Collateral Agent identified as the assignee of the Record(s) pertaining to the single authoritative copy thereof.

(c)

If any Collateral (other than Collateral specifically subject to the provisions of Section 5.6(a) and Section 5.6(b)) with a value in excess of $50,000 in the aggregate (such Collateral exceeding such amount, the “Excess Collateral”) is at any time in the possession or control of any consignee, warehouseman, bailee (other than a carrier transporting Inventory to a purchaser in the ordinary course of business), processor, or any other third party, such Grantor shall notify in writing such Person of the Security Interests created hereby, shall use its commercially reasonable efforts to obtain such Person’s acknowledgment in writing to hold all such Collateral for the benefit of the Collateral Agent subject to the Collateral Agent’s instructions, and shall cause such Person to issue and deliver to the Collateral Agent warehouse receipts, bills of lading or any similar documents relating to such Collateral to the Collateral Agent together with an Effective Endorsement and Assignment; provided that if such Grantor is not able to obtain such agreement and cause the delivery of such items, the Collateral Agent, subject to approval of the Required Holders, not to be unreasonably withheld, may require such Excess Collateral to be moved to another location specified thereby. Further, such Grantor shall perfect and protect such Grantor’s ownership interests in all Inventory stored with a consignee against creditors of the consignee by filing and maintaining financing statements against the consignee reflecting the consignment arrangement filed in all appropriate filing offices, providing any written notices required by the UCC or any Requirements of Law to notify any prior creditors of the consignee of the consignment arrangement, and taking such other actions as may be appropriate to perfect and protect such Grantor’s interests in such Inventory under Section 2-326, Section 9-103, Section 9-324 and Section 9-505 of the UCC or otherwise under any Requirements of Law. All such financing statements filed pursuant to this Section 5.6(c) shall be assigned to the Collateral Agent, for the ratable benefit of itself and the other Holders.

SECTION 5.7. Filing Covenants. Pursuant to Section 9-509 of the UCC and any other Requirements of Law, such Grantor authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral in such form and in such offices as the Collateral Agent determines appropriate to perfect the Security Interests of the Collateral Agent under this Agreement. 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 Collateral Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the Security Interest in the Collateral granted herein, including, without limitation, describing such property as “all assets” or “all personal property.”

Further, a photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Such Grantor hereby authorizes, ratifies and confirms all financing statements and other filing or recording documents or instruments filed by Collateral Agent prior to the date of this Agreement.

SECTION 5.8. Accounts.

(a)

Other than in the ordinary course of business consistent with its past practice, such Grantor will not (i) grant any extension of the time of payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release, wholly or partially, any Account Debtor, (iv) allow any credit or discount whatsoever on any Account or (v) amend, supplement or modify any Account in any manner that could reasonably be likely to adversely affect the value thereof.

(b)

Such Grantor will deliver to the Collateral Agent a copy of each material demand, notice or document received by it that questions, contests or calls into doubt the validity or enforceability of any material Account.

(c)

At any time and from time to time upon the Collateral Agent’s request and at the expense of such Grantor, such Grantor shall cause independent public accountants or others satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts.

SECTION 5.9. Intellectual Property.

(a)

Such Grantor (either itself or through licensees) (i) will use each registered Trademark (owned by such Grantor) and Trademark for which an application (owned by such Grantor) is pending, to the extent reasonably necessary to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) will maintain products and services offered under such Trademark at a level substantially consistent with the quality of such products and services as of the date hereof, (iii) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark could reasonably be expected to become invalidated or impaired in any way, (iv) will not do any act, or knowingly omit to do any act, whereby any issued Patent owned by such Grantor would reasonably be expected to become forfeited, abandoned or dedicated to the public, (v) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any registered Copyright owned by such Grantor or Copyright for which an application is pending (owned by such Grantor) could reasonably be expected to become invalidated or otherwise impaired and (vi) will not (either itself or through licensees) do any act whereby any material portion of the Copyrights may fall into the public domain.

(b)

Such Grantor will notify the Collateral Agent promptly if it knows, or has reason to know, that any application or registration relating to any material Intellectual Property owned by such Grantor may become forfeited, abandoned, dedicated to the public or fallen into the public domain, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding such Grantor’s ownership of, or the validity of, any material Intellectual Property owned by such Grantor or such Grantor’s right to register the same or to own and maintain the same.

(c)

Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any

other country or any political subdivision thereof, such Grantor shall notify the Collateral Agent of such filing within five (5) Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request of the Collateral Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Holders’ security interest in any material Copyright, Patent or Trademark and the goodwill and General Intangibles of such Grantor relating thereto or represented thereby.

(d)

Such Grantor will take all reasonable and necessary steps, at such Grantor’s sole cost and expense, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of such Grantor’s material Intellectual Property, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability.

(e)

In the event that any material Intellectual Property owned by such Grantor is infringed, misappropriated or otherwise violated by a third party, such Grantor shall (i) at such Grantor’s sole cost and expense, take such actions as such Grantor shall reasonably deem necessary and appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify the Collateral Agent after it learns of such infringement, misappropriation or violation.

SECTION 5.10. Investment Property; Partnership/LLC Interests.

(a)

Without the prior written consent of the Collateral Agent, no Grantor shall (i) vote to enable, or take any other action to permit, any applicable Issuer to issue any Investment Property or Partnership/LLC Interests, except for such additional Investment Property or Partnership/LLC Interests that will be subject to the Security Interest granted herein in favor of the Collateral Agent or (ii) enter into any agreement or undertaking restricting the right or ability of such Grantor, the Collateral Agent or any other Holder to sell, assign or transfer any Investment Property or Partnership/LLC Interests or Proceeds thereof. Such Grantor will take all actions to defend such Security Interest of the Collateral Agent in and to any Investment Property and Partnership/LLC Interests against the claims and demands of all Persons whomsoever.

(b)

If such Grantor shall become entitled to receive or shall receive (i) any Certificated Securities (including, without limitation, any certificate representing a dividend or distribution paid in equity or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the ownership interests of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any Investment Property, or otherwise in respect thereof, or (ii) any sums paid upon or in respect of any Investment Property upon the liquidation or dissolution of any Issuer, such Grantor shall accept the same as the agent of the Collateral Agent and the other Holders, hold the same in trust for the Collateral Agent and the other Holders, segregated from other funds of such Grantor, and promptly deliver the same to the Collateral Agent in accordance with the terms hereof.

SECTION 5.11. Equipment. Except as permitted by the Purchase Agreement, such Grantor will maintain each item of Equipment in good working order and condition (reasonable wear and tear and obsolescence excepted).

SECTION 5.12. Government Contracts. Such Grantor shall promptly notify the Collateral Agent, in writing, if such Grantor enters into any contract with a Governmental Authority under which

such Governmental Authority, as account debtor, owes a monetary obligation to any Grantor under any Account.

SECTION 5.13. Vehicles. To the extent requested by the Collateral Agent, the Grantors agree to provide to the Collateral Agent a revised and updated Schedule 4.14 on an annual basis or more frequent basis as reasonably requested. Upon the request of the Collateral Agent upon the occurrence and during the continuance of an Event of Default, all applications for certificates of title or ownership indicating the Collateral Agent’s first priority Lien on the Vehicle (subject to any Permitted Liens) covered by such certificate, and any other necessary documentation, shall be filed in each office in each jurisdiction which the Collateral Agent shall deem reasonably advisable to perfect its Liens on the Vehicles.

SECTION 5.14. Further Assurances. Upon the request of the Collateral Agent and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (a) the assignment of any material Contractual Obligation, (b) with respect to Government Contracts, assignment agreements and notices of assignment, in form and substance satisfactory to the Collateral Agent, duly executed by such Grantor party to such Government Contract in compliance with any Requirements of Law, and (c) all applications, certificates, instruments, registration statements, and all other documents and papers the Collateral Agent may reasonably request and as may be required by law in connection with the obtaining of any consent, approval, registration, qualification, or authorization of any Person deemed necessary or appropriate for the effective exercise of any rights under this Agreement.

SECTION 5.15. Commercial Tort Claims. Each Grantor shall provide Collateral Agent with written notice of all commercial tort claims promptly upon the occurrence of any events giving rise to any such claim(s) (regardless of whether legal proceedings have yet been commenced), such notice to contain a brief description of the claim(s), the events out of which such claim(s) arose and the parties against which such claims may be asserted and, if applicable in any case where legal proceedings regarding such claim(s) have been commenced, the case title together with the applicable court and docket number. Upon delivery of each such notice, such Grantor shall be deemed to thereby grant to Collateral Agent a security interest in and lien on such commercial tort claims described therein and all proceeds thereof, and Grantor shall deliver to the Collateral Agent a revised Schedule 4.8 consistent with such notice and description.

SECTION 5.16. [Reserved].

ARTICLE 6
REMEDIAL PROVISIONS

SECTION 6.1. General Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent, subject to the approval of the Required Holders, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the UCC or any other Requirements of Law. Without limiting the generality of the foregoing, the Collateral Agent, 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 any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances, subject to the approval of the Required Holders, forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may, subject to the approval of the Required

Holders, forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract 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 the Collateral Agent or any other Holder 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 may disclaim all warranties in connection with any sale or other disposition of the Collateral, including, without limitation, all warranties of title, possession, quiet enjoyment and the like. The Collateral Agent and each other Holder shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees that, during the existence and continuance of an Event of Default, and at the Collateral Agent’s request, to assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. To the extent permitted by any Requirements of Law, such Grantor waives all claims, damages and demands it may acquire against the Collateral Agent or any other Holder arising out of the exercise by them of any rights hereunder except to the extent any such claims, damages, or demands result solely from the gross negligence or willful misconduct of the Collateral Agent or any Holder, in each case against whom such claim is asserted. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition.

SECTION 6.2. Voting Rights. Subject to the remaining provisions of this Section 6.2, each of the Grantors shall have the right to vote all or any portion of its pledged Investment Property and Partnership/LLC Interests on all limited liability company or corporate questions for all purposes not inconsistent with the terms of this Agreement or the other Note Documents. To that end, if the Collateral Agent transfers all or any portion of the pledged Collateral into its name or the name of its nominee, to the extent authorized to do so under this Agreement or any of the other Note Documents, the Collateral Agent shall, upon the request of such Grantor, unless an Event of Default exists, execute and deliver or cause to be executed and delivered to such Grantor, proxies with respect to the pledged Collateral pledged by such Grantor. Each of the Grantors hereby grants to the Collateral Agent an irrevocable proxy such that from and after written notice to such Grantor, after the occurrence and during the continuance of an Event of Default, of an intent to exercise such rights, the Collateral Agent shall be entitled to exercise all voting powers pertaining to such Grantor’s pledged Collateral at all times during the existence of an Event of Default, including the power to call and attend all meetings of the shareholders or members of the applicable Issuer to be held from time to time with full power to act and vote in the name, place and stead of such Grantor (whether or not the pledged Investment Property and Partnership/LLC Interests shall have been transferred into its name or the name of its nominee or nominees), give all consents, waivers and ratifications in respect of the pledged Collateral and otherwise act with respect thereto as though it were the owner thereof, and any and all proxies theretofore executed by the Grantors shall terminate and thereafter be null and void and of no effect whatsoever.

SECTION 6.3. Specific Remedies.

(a)

The Collateral Agent hereby authorizes each Grantor to collect such Grantor’s Accounts, under the Collateral Agent’s direction and control; provided, however, that, the Collateral Agent may curtail or terminate such authority at any time after the occurrence and during the continuance of an Event of Default.

(b)

Upon the occurrence and during the continuance of an Event of Default:

(i)

the Collateral Agent may communicate with Account Debtors of any Account subject to a Security Interest and upon the request of the Collateral Agent, each Grantor shall notify (such notice to be in form and substance reasonably satisfactory to the Collateral Agent) its Account Debtors and parties to the material Contractual Obligations subject to a Security Interest that such Accounts and material Contractual Obligations have been assigned to the Collateral Agent, for the ratable benefit of itself and the Holders;

(ii)

each Grantor shall forward to the Collateral Agent, on the last Business Day of each week, deposit slips related to all cash, money, checks or any other similar items of payment received by the Grantor during such week, and, if requested by the Collateral Agent, copies of such checks or any other similar items of payment, together with a statement showing the application of all payments on the Collateral during such week and a collection report with regard thereto, in form and substance reasonably satisfactory to the Collateral Agent;

(iii)

whenever any Grantor shall receive any cash, money, checks or any other similar items of payment relating to any Collateral (including any Proceeds of any Collateral), subject to the terms of any Permitted Liens, such Grantor agrees that it will, within one (1) Business Day of such receipt, deposit all such items of payment into the cash collateral account controlled by the Collateral Agent (the “Collateral Account”) or in a Deposit Account at a Controlled Depository, and until such Grantor shall deposit such cash, money, checks or any other similar items of payment in the Collateral Account or in a Deposit Account at a Controlled Depository, such Grantor shall hold such cash, money, checks or any other similar items of payment in trust for the Collateral Agent, for the ratable benefit of itself and the other Holders as property of the Collateral Agent and the other Holders, separate from the other funds of such Grantor, and the Collateral Agent shall have the right to transfer or direct the transfer of the balance of each Deposit Account to the Collateral Account. All such Collateral and Proceeds of Collateral received by the Collateral Agent hereunder shall be held by the Collateral Agent in the Collateral Account as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 6.4;

(iv)

the Collateral Agent shall have the right to receive any and all cash dividends, payments or distributions made in respect of any Investment Property or Partnership/LLC Interests or other Proceeds paid in respect of any Investment Property or Partnership/LLC Interests, and any or all of any Investment Property or Partnership/LLC Interests shall be registered in the name of the Collateral Agent or its nominee, and the Collateral Agent or its nominee may exercise (A) all voting, corporate and other rights pertaining to such Investment Property or Partnership/LLC Interests at any meeting of shareholders, partners or members of the relevant Issuers or otherwise and (B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property or Partnership/LLC Interests as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property or Partnership/LLC Interests upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate, partnership or limited liability company structure of any Issuer or upon the exercise by any Grantor or the Collateral Agent of any right, privilege or option pertaining to such Investment Property or Partnership/LLC Interests, and in connection therewith, the right to deposit and deliver any and all of the Investment Property or Partnership/LLC Interests with any committee, depository, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it; but the Collateral Agent shall have no duty to any Grantor to exercise any such right, privilege or option and the Collateral Agent and the other Holders shall not be responsible for any failure to do so or delay in so doing. In furtherance thereof, each

Grantor hereby authorizes and instructs each Issuer with respect to any Collateral consisting of Investment Property or Partnership/LLC Interests to (i) comply with any instruction received by it from the Collateral Agent in writing that (A) states that an Event of Default has occurred and is continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying following receipt of such notice and prior to notice that such Event of Default is no longer continuing, and (ii) except as otherwise expressly permitted hereby, pay any dividends, distributions or other payments with respect to any Investment Property or Partnership/LLC Interests directly to the Collateral Agent;

(v)

subject to the approval of the Required Holders, the Collateral Agent shall be entitled to (but shall not be required to): (A) proceed to perform any and all obligations of the applicable Grantor under any material Contractual Obligation and exercise all rights of such Grantor thereunder as fully as such Grantor itself could, (B) do all other acts which the Collateral Agent may deem necessary or proper to protect its Security Interest granted hereunder, provided such acts are not inconsistent with or in violation of the terms of the Purchase Agreement, of the other Note Documents or any Requirements of Law, and (C) sell, assign or otherwise transfer any material Contractual Obligation in accordance with the Purchase Agreement, the other Note Documents and any Requirements of Law, subject, however, to the prior approval of each other party to such material Contractual Obligation, to the extent required under such material Contractual Obligation; and

(vi)

the Agent may appoint or direct the appointment of a receiver for the properties and assets of the Grantors, both to operate and to sell such properties and assets, and each Grantor, for itself and on behalf of its Subsidiaries, hereby consents to such right and such appointment and hereby waives any objection such Grantor or any Subsidiary may have thereto or the right to have a bond or other security posted by the Agent on behalf of the Lenders, in connection therewith.

(c)

Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Sections 6.1, 6.2 and 6.3(b), each Grantor shall be permitted to receive all cash dividends, payments or other distributions made in respect of any Investment Property and any Partnership/LLC Interests, in each case paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Purchase Agreement and the other Note Documents, and to exercise all voting and other corporate, partnership and limited liability company rights with respect to any Investment Property and any Partnership/LLC Interests; provided, however, that, no vote shall be cast or other corporate, partnership and limited liability company right exercised or other action taken which would knowingly impair the Collateral in any material respect or which would result in a Default or Event of Default under any provision of the Purchase Agreement, this Agreement or any other Note Document.

SECTION 6.4. Application of Proceeds. If an Event of Default shall have occurred and be continuing, at any time at the Collateral Agent’s election, the Collateral Agent may, subject to the approval of the Required Holders, apply all or any part of the Collateral or any Proceeds of the Collateral in payment in whole or in part of the Obligations (after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and the other Holders hereunder, including, without limitation, reasonable documented attorneys’ fees and disbursements) in accordance with the Purchase Agreement. Only after (i) the payment by the Collateral Agent of any other amount required by any provision of law, including, without limitation, Section 9-610

and Section 9-615 of the UCC and (ii) the payment in full in cash of the Obligations, shall the Collateral Agent account for the surplus, if any, to any Grantor, or to whomever may be lawfully entitled to receive the same (if such Person is not a Grantor).

SECTION 6.5. Waiver, Deficiency. Each Grantor hereby waives, to the extent permitted by any Requirements of Law, all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any Requirements of Law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Collateral Agent to collect such deficiency.

ARTICLE 7
THE COLLATERAL AGENT

SECTION 7.1. Collateral Agent’s Appointment as Attorney-In-Fact.

(a)

Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, 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, and without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following upon the occurrence and during the continuation of an Event of Default, unless prohibited by any Requirement of Law:

(i)

in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Account or material Contractual Obligation subject to a Security Interest or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed reasonably necessary and appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Account or material Contractual Obligation subject to a Security Interest or with respect to any other Collateral whenever payable;

(ii)

in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Collateral Agent may request to evidence the Collateral Agent’s security interest in such Grantor’s Intellectual Property and the goodwill and General Intangibles of such Grantor relating thereto or represented thereby;

(iii)

pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

(iv)

execute, in connection with any sale provided for in this Agreement, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

(v)

(A) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (F) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate; (G) license or assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral and the Collateral Agent’s and the other Holders’ Security Interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

(b)

If any Grantor fails to perform or comply with any of its agreements contained in this Agreement, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement in accordance with the provisions of Section 7.1(a).

(c)

The expenses of the Collateral Agent or any other Holder incurred in connection with actions taken pursuant to the terms of this Agreement, together with interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on any category of past due Obligations under the Purchase Agreement, from, and including, the date of payment by the Collateral Agent or such Holder to, and including, the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent or such Holder on demand.

(d)

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof in accordance with Section 7.1(a). All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the Security Interests created hereby are released.

SECTION 7.2. Duty of Collateral Agent With Respect to the Collateral. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. Neither the Collateral Agent, any Holder nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof, except for their own gross negligence or willful misconduct. The powers conferred on the Collateral Agent and the Holders hereunder are solely to protect the Collateral Agent’s and the other Holders’ interests in the Collateral and shall not impose any duty upon the Collateral Agent or any Holder to exercise any such

powers. The Collateral Agent and the Holders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

SECTION 7.3. Authority of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the Holders, be governed by the Purchase Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Holders with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement to make any inquiry respecting such authority.

ARTICLE 8

MISCELLANEOUS

SECTION 8.1. Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 13.4 of the Purchase Agreement.

SECTION 8.2. Notices. All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 13.2 of the Purchase Agreement.

SECTION 8.3. No Waiver by Course of Conduct, Cumulative Remedies. Neither the Collateral Agent nor any Holder shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising on the part of the Collateral Agent or any Holder, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any Holder of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Collateral Agent or such Holder would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

SECTION 8.4. Enforcement Expenses, Indemnification.

(a)

The Grantors, jointly and severally, shall pay all reasonable expenses incurred by the Collateral Agent and the other Holders to the extent any Loan Party would be required to do so pursuant to Section 13.12 of the Purchase Agreement.

(b)

The Grantors, jointly and severally, shall indemnify and hold harmless each Indemnified Party to the extent any Loan Party would be required to do so pursuant to Article 12 of the Purchase Agreement.

(c)

To the fullest extent permitted by Requirements of Law, each Grantor shall not assert, and hereby waives, any claim against any Indemnified Party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Note Document or any agreement or instrument contemplated hereby or the transactions contemplated hereby or thereby. No Indemnified Party referred to in this Section 8.4 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Note Documents or the transactions contemplated hereby or thereby.

(d)

Notwithstanding the termination of this Agreement, the indemnities to which the Collateral Agent and the other Holders are entitled under the provisions of this Section 8.4 and any other provision of this Agreement and the other Note Documents shall continue in full force and effect and shall protect the Collateral Agent and the other Holders against events arising after termination of this Agreement as well as before.

(e)

All amounts due under this Section 8.4 shall be payable promptly after demand therefor.

SECTION 8.5. Set-Off. Upon the occurrence and during the continuation of an Event of Default, in addition to all other rights and remedies that may then be available to any Holder of the Note, each such Holder is hereby authorized at any time and from time to time, without prior notice to any Grantor (any such notice being expressly waived by each Grantor) to setoff and apply any and all indebtedness at any time owing by such Holder to or for the credit or the account of any Grantor against all amounts which may be owed to such Holder by such Grantor in connection with this Agreement or any other Note Document to the same extent such Holder would be permitted to setoff and apply indebtedness owing by such Holder to or for the credit of any Loan Party pursuant to Section 11.3 of the Purchase Agreement.

SECTION 8.6. Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Grantor (and shall bind all Persons who become bound as a Grantor to this Agreement), the Collateral Agent and the other Holders and their respective successors and assigns; provided, however, that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent and the Required Holders (given in accordance with Section 8.1).

SECTION 8.7. Signatures; Counterparts. Facsimile or other electronic transmissions (including via e-mailed .pdf) of any executed original document and/or retransmission of any executed facsimile or other electronic transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm facsimile or other electronic transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Any signature (including, without limitation, (x) any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record and (y) any facsimile or .pdf signature) hereto, certificate, agreement or document related to this transaction, and any contract formation or record-keeping, in each case, through electronic means, shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Uniform Commercial Code and the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic

Signatures and Records Act or any similar state law based on the Uniform Electronic Transactions Act, and the parties hereto hereby waive any objection to the contrary.

SECTION 8.8. Severability. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Agreement with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision.

SECTION 8.9. Heading. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 8.10. Entire Agreement. This Agreement, together with the exhibits and schedules hereto and the other Note Documents, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained in this Agreement, the exhibits and schedules hereto and the other Note Documents. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits and schedules hereto, and the other Note Documents supersede all prior agreements and understandings between the parties with respect to such subject matter.

SECTION 8.11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.

SECTION 8.12. JURISDICTION, JURY TRIAL WAIVER, ETC.

(a)

EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OTHER NOTE DOCUMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 13.2 OF THE PURCHASE AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING.

(b)

EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER NOTE DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH GRANTOR (i) CERTIFIES THAT NO

REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY TO THIS AGREEMENT (OR ANY HOLDER) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT THE OTHER PARTIES TO THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AND THE OTHER NOTE DOCUMENTS TO WHICH THEY ARE PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

SECTION 8.13. Acknowledgements.

(a)

Each Grantor hereby acknowledges that:

(i)

it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Note Documents to which it is a party;

(ii)

it has received a copy of the Purchase Agreement and has reviewed and understands the same;

(iii)

neither the Collateral Agent nor any other Holder has any fiduciary relationship with or duty to such Grantor arising out of or in connection with this Agreement or any of the other Note Documents, and the relationship between such Grantor, on the one hand, and the Collateral Agent and the other Holders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(iv)

no joint venture is created hereby or by the other Note Documents or otherwise exists by virtue of the transactions contemplated hereby or thereby among the Holders or among such Grantor and the Holders.

(b)

Each Grantor party to this Agreement acknowledges receipt of a copy of this Agreement and agrees to be bound hereby and to comply with the terms hereof insofar as such terms are applicable to it. Each Grantor agrees to provide such notices to the Collateral Agent as may be necessary to give full effect to the provisions of this Agreement.

SECTION 8.14. Additional Grantors. Each Subsidiary of the Loan Parties that is required to become a party to this Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of a joinder agreement in form and substance reasonably satisfactory to the Collateral Agent.

SECTION 8.15. Releases.

(a)

At such time as the Obligations shall have been paid in full in cash and the Purchase Agreement has been terminated, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent, the other Holders and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral held by the Collateral Agent hereunder, and, at the request of any Grantor, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

(b)

If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Purchase Agreement or otherwise permitted by the Collateral Agent, then the Collateral Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable to evidence the release of such Liens created hereby on such Collateral. In the event that all the Capital Stock of any Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Purchase Agreement, then, at the request of the Company and at the expense of such Grantor, such Grantor shall be released from its obligations hereunder; provided, however, that the Loan Parties shall have delivered to the Collateral Agent, at least ten (10) Business Days prior to the date of the proposed release, a written request for release identifying the relevant Grantor and a description of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by such Grantor stating that such transaction is in compliance with the Purchase Agreement and the other Note Documents.

(c)

In furtherance of this Section 8.15, the Collateral Agent shall immediately release any Lien covering any asset that has been disposed of in accordance with the provisions of the Note Documents. In connection therewith, the Collateral Agent agrees to execute and deliver to any Grantor upon such release such UCC termination statements or amendments, any certificates for terminating the Liens, and such other documentation as may be necessary or desirable to effect the termination and release of the Liens on the Collateral.

SECTION 8.16. All Powers Coupled With Interest. All powers of attorney and other authorizations granted to the Collateral Agent and any Persons designated by the Collateral Agent to any provisions of this Agreement or any of the other Note Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied or the Purchase Agreement has not been terminated.

[signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Guarantee and Security Agreement to be executed under seal by their duly authorized officers, all as of the day and year first written above.

KONATEL, INC., as Grantor and the Company

By: /s/ Charles D. Griffin

Name: Charles D. Griffin

Title: President

APEIRON SYSTEMS, INC., as Grantor

By: /s/ Joshua Ploude

Name: Joshua Ploude

Title: President and Chief Executive Officer

IM TELECOM, LLC., as Grantor

By: KONATEL, INC., a Delaware corporation, sole member and manager

By: /s/ Charles D. Griffin

Name: Charles D. Griffin

Title: President

[signature pages continue]

[Signature Page to Guarantee and Security Agreement]

CCUR HOLDINGS, INC., as the Collateral Agent

By: /s/ Igor Volshteyn

Name: Igor Volshteyn

Title: President and CEO

[Signature Page to Guarantee and Security Agreement]

Schedule 4.6 - Locations

1. Aperion Systems, Inc., a Nevada corporation

Tax ID No.: 35-2480469

Nevada Business Number: EO263952013-9

500 N. Central Expressway

STE 202

Plano, TX 75074

2. IM TELECOM, LLC, an Oklahoma limited liability company

Tax ID No.: 45-4507493

Filing Number: 3512345862

500 N. Central Expressway

STE 202

Plano, TX 75074

3. KonaTel, Inc., a Delaware corporation

Tax ID No.: 80-0973608

SEC File Number: 001-10171

500 N. Central Expressway

STE 202

Plano, TX 75074

312663427.4

Locations of Collateral:

KonaTel, Infiniti Mobile, Apeiron Systems

500 N. Central Expressway

STE 202

Plano, TX 75074

Apeiron Systems Operations Center

112 Lindberg Ave,

Johnstown, PA

Infiniti Mobile Fulfillment Center

3401 E Admiral Pl

Tulsa, OK 74115

Infiniti Mobile Customer Care Center

201 Brookwood Road

Atmore, AL

312663427.4

Schedule 4.8 – Other Collateral

None.

312663427.4

Schedule 4.9 – Deposit Accounts and Securities Accounts

Bank of Texas

777 Main Street, STE 3500

Fort Worth Texas 76102

KonaTel Inc. Acct Number. #8097312585

Apeiron Systems Inc. Acct # 8096581168

IM Telecom LLC Acct # 8096580079

312663427.4

Schedule 4.10 – Intellectual Property

Apeiron AOSS – Internal System proprietary software – No license or copyright registration.

Owned by Apeiron Systems Inc.

Back THAT up TM (www.routerbackup.com) No registration information – Owned by Apeiron

Systems, Inc.

312663427.4

Schedule 4.12 – Investment Property and Partnership/LLC Interests

IM Telecom LLC, an Oklahoma limited liability company – 100% owned subsidiary of KonaTel

Inc., a Delaware corporation

Apeiron Systems Inc., a Nevada corporation – 100% owned subsidiary of KonaTel Inc., a

Delaware corporation

312663427.4

Schedule 4.14 – Vehicles

None.

312663427.4

	KonaTel, Inc.

Date: June 21, 2022	By:	/s/ D. Sean McEwen
		D. Sean McEwen
		Chairman and Chief Executive Officer

		Page
ARTICLE 1	DEFINED TERMS	4
SECTION 1.1.	Terms Defined in the Uniform Commercial Code	4
SECTION 1.2.	Definitions	4
SECTION 1.3.	Other Definitional Provisions	8

ARTICLE 2	GUARANTEE	8
SECTION 2.1.	Guarantee	8
SECTION 2.2.	Limitation of Guarantee	9
SECTION 2.3.	Contribution	9
SECTION 2.4.	Authorization; Other Agreements	9
SECTION 2.5.	Guarantee Absolute and Unconditional	10
SECTION 2.6.	Waivers	10
SECTION 2.7.	Reliance	11

ARTICLE 3	SECURITY INTEREST	11
SECTION 3.1.	Grant of Security Interest	11
SECTION 3.2.	Partnership/LLC Interests	13
SECTION 3.3.	Grantor Remains Liable	13

ARTICLE 4	REPRESENTATIONS AND WARRANTIES	13
SECTION 4.1.	Existence	13
SECTION 4.2.	Authorization of Agreement; No Conflict	14
SECTION 4.3.	Consents	14
SECTION 4.4.	Perfected Liens	14
SECTION 4.5.	Title, No Other Liens	14
SECTION 4.6.	State of Organization; Location of Inventory, Equipment and Fixtures; Other Information	15
SECTION 4.7.	Accounts	15
SECTION 4.8.	Other Collateral	15
SECTION 4.9.	Deposit Accounts	15
SECTION 4.10.	Intellectual Property	16
SECTION 4.11.	Inventory	16
SECTION 4.12.	Investment Property; Partnership/LLC Interests; Capital Stock	16
SECTION 4.13.	Government Contracts	17
SECTION 4.14.	Vehicles	17

ARTICLE 5	COVENANTS
SECTION 5.1.	Maintenance of Perfected Security Interest; Further Information	17
SECTION 5.2.	Maintenance of Insurance	17
SECTION 5.3.	Changes in Locations; Changes in Name or Structure	17
SECTION 5.4.	Required Notifications	18
SECTION 5.5	Delivery Covenants	18
SECTION 5.6	Control Covenants	18
SECTION 5.7.	Filing Covenants	19
SECTION 5.8.	Accounts	20


SECTION 5.9.	Intellectual Property	20
SECTION 5.10.	Investment Property; Partnership/LLC Interests	21
SECTION 5.11.	Equipment	21
SECTION 5.12.	Government Contracts	21
SECTION 5.13.	Vehicles	22
SECTION 5.14.	Further Assurances	22
SECTION 5.15.	Commercial Tort Claims	22
SECTION 5.16.	[Reserved]	22

ARTICLE 6	REMEDIAL PROVISIONS	22
SECTION 6.1.	General Remedies	22
SECTION 6.2.	Voting Rights	23
SECTION 6.3.	Specific Remedies	23
SECTION 6.4.	Application of Proceeds	25
SECTION 6.5.	Waiver, Deficiency	26

ARTICLE 7	THE COLLATERAL AGENT	26
SECTION 7.1.	Collateral Agent's Appointment as Attorney-In-Fact	26
SECTION 7.2.	Duty of Collateral Agent With Respect to the Collateral	27
SECTION 7.3.	Authority of Collateral Agent	28

ARTICLE 8	MISCELLANEOUS	28
SECTION 8.1.	Amendments in Writing	28
SECTION 8.2.	Notices	28
SECTION 8.3.	No Waiver by Course of Conduct, Cumulative Remedies	28
SECTION 8.4.	Enforcement Expenses, Indemnification	28
SECTION 8.5.	Set-Off	29
SECTION 8.6.	Successors and Assigns	29
SECTION 8.7.	Signatures; Counterparts	29
SECTION 8.8.	Severability	30
SECTION 8.9.	Heading	30
SECTION 8.10.	Entire Agreement	30
SECTION 8.11.	Governing Law	30
SECTION 8.12.	JURISDICTION, JURY TRIAL WAIVER, ETC	30
SECTION 8.13.	Acknowledgements	31
SECTION 8.14.	Additional Grantors	31
SECTION 8.15.	Releases	31
SECTION 8.16.	All Powers Coupled with Interest	32


Schedule 4.6	Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification Number; Organization Number; Mailing Address; Chief Executive Office and other Locations
Schedule 4.8	Other Collateral
Schedule 4.9	Deposit Accounts and Securities Accounts
Schedule 4.10	Intellectual Property
Schedule 4.12	Investment Property and Partnership/LLC Interests
Schedule 4.14	Vehicles