Exhibit 10.1

Execution Version  

SETTLEMENT AGREEMENT

This Settlement Agreement (this “ Agreement ”) is made as of September 28, 2017 (the “ Effective Date ”) by and between IOENGINE, LLC, a Delaware limited liability company (“ IOENGINE ”), GlassBridge Enterprises, Inc. f/k/a Imation Corp., a Delaware corporation (“ GlassBridge ”), and Scott F. McNulty (“ McNulty ” and together with IOENGINE and GlassBridge, each a “ Party ” and collectively, the “ Parties ”).

WHEREAS, on December 31, 2014 IOENGINE brought suit against GlassBridge for infringement of United States Patent No. 8,539,047 (the “ ’047 Patent ”) in the proceeding currently styled as IOENGINE, LLC v. GlassBridge Enterprises, Inc., f/k/a Imation Corp. , C.A. No. 14-01572-GMS (the “ Lawsuit ”), in the United States District Court for the District of Delaware (the “ Court ”);

WHEREAS, GlassBridge, as Counterclaim-Plaintiff, brought counterclaims against IOENGINE and McNulty, as Counterclaim-Defendants, in the Lawsuit;

WHEREAS, after a five-day jury trial held in February 2017, the jury returned a verdict finding that each accused GlassBridge product infringes the asserted claims of the ’047 Patent, that each asserted claim of the ’047 Patent was not shown to be invalid, and that no one other than McNulty was shown to be the inventor of the inventions claimed in the ’047 Patent;

WHEREAS, none of the Parties concedes the sufficiency or validity of any claims, counterclaims, or defenses that were asserted or could be asserted in the Lawsuit by any of the Parties or any other person; and

WHEREAS, the Parties now desire to settle the Lawsuit and enter into this Agreement providing for a full, final, complete, and global settlement of the subject matter of the Lawsuit and for certain releases and covenants, all on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the above premises and the mutual covenants and releases and the other good and valuable consideration contained herein, the sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

1.0        DEFINITIONS

1.1       “ IOENGINE Patents ” means U.S. Patent No. 8,539,047 (the “ ’047 Patent ”) and all patents in all jurisdictions worldwide that claim priority based upon or in common with the ’047 Patent, including any divisional, continuation, continuation-in-part, reissue, reexamination, foreign counterpart, or extension thereof.

1.2       “ GlassBridge Products ” means all products, services, devices, systems, or components that were designed, branded, made, used, sold, offered for sale, imported, exported, supplied or otherwise provided by or for GlassBridge, in all cases on or before February 1, 2016. For the avoidance of doubt, “ GlassBridge Products ” shall not include any product, service, device, system, or component, that was designed, branded, made, used, sold, offered for sale, imported, exported, supplied or otherwise provided by or for any third party, or by or for GlassBridge after February 1, 2016.

1.3       “ Release Conditions ” means each of the following: (1) the payment by GlassBridge to IOENGINE of the Upfront Payment Amount as specified in Section 3.1(a) ; (2) the issuance and delivery by GlassBridge to IOENGINE of the Settlement Note as specified in Section 3.1(b) ; and (3) the execution by GlassBridge and delivery to IOENGINE of the Pledge Agreement as specified in Section 3.1(b) .

2.1        Release by IOENGINE . Subject to the occurrence of the Release Conditions specified in Section 1.3 , IOENGINE, on behalf of itself and its successors and assigns hereby releases, acquits, and forever discharges GlassBridge from any and all actions, causes of action, claims, demands, liabilities, losses, defenses, counterclaims, damages, attorneys’ fees, court costs, or any other form of claim or compensation, whether known or unknown as of the Effective Date, arising out of the facts, circumstances, events, transactions or occurrences underlying or giving rise to or otherwise related to the allegations in the Lawsuit or the infringement of the IOENGINE Patents by the GlassBridge Products, provided that none of the foregoing shall be construed as releasing any third party.

2.2         Release by GlassBridge . Subject to the satisfaction of the conditions on the Release by IOENGINE specified in Section 2.1 , GlassBridge, on behalf of itself and its successors and assigns hereby releases, acquits, and forever discharges IOENGINE and McNulty from any and all actions, causes of action, claims, demands, liabilities, losses, defenses, counterclaims, damages, attorneys’ fees, court costs, or any other form of claim or compensation, whether known or unknown as of the Effective Date, arising out of the facts, circumstances, events, transactions or occurrences underlying or giving rise to or otherwise related to the allegations in the Lawsuit or the ownership, validity, or enforceability of the IOENGINE Patents, provided that none of the foregoing shall be construed as releasing any third party.

2.3        Dismissal . Within three (3) business days of the occurrence of the Release Conditions, IOENGINE, GlassBridge and McNulty shall file with the Court a joint stipulation substantially in the form attached hereto as Exhibit A , or in such other form as required for approval by the Court, to effectuate the dismissal with prejudice of all claims, defenses, and counterclaims brought in the Lawsuit.

2.4        Covenant by IOENGINE . Subject to the occurrence of the Release Conditions specified in Section 1.3 , IOENGINE, on behalf of itself and its successors and assigns, hereby covenants and agrees not to sue or threaten to sue GlassBridge for direct, indirect, contributory, or induced infringement arising out of the facts, circumstances, events, transactions or occurrences underlying or giving rise to or otherwise related to the allegations in the Lawsuit of any IOENGINE Patent by any products, services, devices, systems, or components designed, branded, made, used, sold, offered for sale, imported, exported, supplied or otherwise provided by or for GlassBridge, including by way of litigation, arbitration, claim, counterclaim, or any other allegation or proceeding in any court or patent office, anywhere in the world.

2.5        Covenant by GlassBridge . Subject to the satisfaction of the conditions on the Covenant by IOENGINE specified in Section 2.4 , GlassBridge, on behalf of itself and its successors and assigns, hereby covenants and agrees not to contest or challenge, directly or indirectly, the validity or enforceability of any IOENGINE Patent or its ownership by IOENGINE, including by way of litigation, arbitration, claim, counterclaim, or any other allegation or proceeding in any court or patent office, anywhere in the world, or to aid, abet, assist, or cooperate with, directly or indirectly, any third party in contesting or challenging the validity or enforceability of any IOENGINE Patent, or its ownership by IOENGINE.

2.6       The releases, dismissals and covenants in this Section 2 are personal to the Parties and shall not confer or extend any benefit or protection to any third party.

2.7 To the extent that the Parties do not have the right to grant fully the releases, covenants, and other rights set out in this Agreement, each party grants the broadest such rights that it is entitled to grant consistent with the terms set out herein.

3.1       In consideration for the releases, dismissals and covenants granted by IOENGINE herein, GlassBridge shall pay to IOENGINE the sum of seven million, seven hundred and fifty thousand United States dollars ($7,750,000) (the “ Settlement Amount ”), payable as follows:

a.       A cash payment of three million, seven hundred and fifty thousand United States dollars ($3,750,000), payable in cash on or before October 5, 2017 (the “ Upfront Payment Amount ”); and

b.       The issuance and delivery by GlassBridge to IOENGINE of that certain Secured Promissory Note in the principal amount of four million dollars ($4,000,000) attached hereto as Exhibit B (the “ Settlement Note ”), secured by the grant of collateral pursuant to the terms and conditions of that certain Pledge Agreement (the “ Pledge Agreement ”) attached hereto as Exhibit C .

3.2.        All payments made under this Agreement and the Settlement Note shall be made by electronic transfer of funds to Simpson Thacher and Bartlett LLP’s client trust fund bank account, on behalf of IOENGINE, as follows:

3.3       Payment of the Settlement Amount shall be made by GlassBridge without any deduction, set off, or withholding for, or on account of, any tax, claim for reimbursement, or other charge.

4.1       GlassBridge represents and warrants to IOENGINE that: (a) it is a validly existing business in good standing under the laws of the State of Delaware and has the full power and authority to enter into this Agreement and to perform its obligations hereunder and consummate the transactions contemplated herein; and (b) there are no licenses liens, conveyances, mortgages, assignments, encumbrances, or other agreements that would prevent or impair the full and complete exercise of the terms of this Agreement.

4.2       IOENGINE represents and warrants to GlassBridge that: (a) it is a validly existing business in good standing under the laws of the respective jurisdictions in which it has activities, and has the full power and authority to enter into this Agreement and to perform its obligations hereunder and consummate the transactions contemplated herein; (b) it owns the IOENGINE Patents as of the Effective Date, and no third party owns any right to enforce or recover for infringement of the IOENGINE Patents by GlassBridge on or before the Effective Date; and (c) there are no licenses liens, conveyances, mortgages, assignments, encumbrances, or other agreements that would prevent or impair the full and complete exercise of the terms of this Agreement.

4.3      Except for those representations and warranties set forth in this Section 4 , neither Party makes any other representations or warranties herein.

5.1       This Agreement shall not be binding on the Parties until it has been signed below by all Parties, at which time it shall be deemed effective as of its Effective Date.

5.2       This Agreement may only be terminated by mutual written agreement of the Parties.

None of the Parties may transfer, grant, or assign any rights or delegate any duties or obligations under this Agreement to any third party without the prior written consent of the other Parties, and any attempted assignment without such consent shall be null and void. Notwithstanding the foregoing, IOENGINE may assign its rights under this Agreement to an Approved Assignee provided that such Approved Assignee unconditionally assumes all of IOENGINE’s obligations arising under this Agreement.  For purposes of this Section 6.0 , “ Approved Assignee ” means: (a) an acquirer of all or substantially all of the equity or assets of IOENGINE’s business to which this Agreement relates, or (b) the surviving entity in any merger, consolidation, equity exchange, or reorganization of IOENGINE’s business to which this Agreement relates; or (c) any entity with respect to which GlassBridge expressly approves in a prior writing, such consent not to be unreasonably withheld. All covenants contained herein shall run with the IOENGINE Patents and shall be binding on any permitted successors-in-interest or assigns thereof. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties and their permitted successors and assigns. Nothing in this Agreement precludes IOENGINE from assigning, selling, or exclusively licensing the IOENGINE Patents to any third party, provided the assignment, sale, or exclusive license does not conflict with the terms of this Agreement.

7.1                General Confidentiality Provisions . The terms and conditions of this Agreement, the Settlement Note and the Pledge Agreement (collectively, the “ Settlement Agreements ”) and all correspondence relating to the Settlement Agreements are confidential. The Parties and their successors, assigns and affiliates, shall keep the terms and conditions of the Settlement Agreements strictly confidential and no Party or any successor, assignee or affiliate shall now or hereafter disclose such terms and conditions to any third party for so long as such terms and conditions remain confidential except: (i) with the prior written consent of the other Parties, which consent shall not be unreasonably withheld, (ii) as may be required by applicable law, regulation, or order of a governmental authority of competent jurisdiction other than as contemplated by Section 7.2 below, (iii) as contemplated in Section 7.2 and Section 7.3 below, (iv) during the course of litigation, provided that any such disclosure is subject to the same restrictions as is the confidential information of the other litigating parties and such restrictions are embodied in a court-entered protective order limiting disclosure to outside counsel, or (v) in confidence to the professional legal and financial counsel representing such Party. With respect to the foregoing (ii) and (iv), such disclosing Party shall, to the extent legally permissible, provide the other Parties with prior written notice of such applicable law, regulation, or order and, at the request of such other Parties, use reasonable efforts to limit the disclosure to the minimum necessary terms and conditions of this Agreement, and, in the disclosing Party’s sole and absolute discretion, to obtain a protective order or other confidential treatment. Notwithstanding the foregoing, and subject to Section 7.3 , IOENGINE may disclose the terms of the Settlement Agreements to third parties in licensing discussions that are subject to non-disclosure or confidentiality obligations.

7.2               GlassBridge Form 8-K . The Parties acknowledge that GlassBridge may, in GlassBridge’s sole and absolute discretion: (a) disclose the terms and conditions of the Settlement Agreements as a “Material Definitive Agreement” on a Current Report on Form 8-K in substantially the form attached hereto as Exhibit C (the “ Form 8-K ”) promulgated by the U.S. Securities and Exchange Commission (the “ SEC ”) under the Securities Exchange Act of 1934, as amended, (b) file each of the Settlement Agreements as exhibits to the Form 8-K and (c) make reference to the Form 8-K disclosures in filings with the SEC subsequent to the Form 8-K. GlassBridge shall not criticize, disparage, or otherwise denigrate IOENGINE or the IOENGINE Patents in the Form 8-K. Subject to the obligations of the Parties set forth in Section 7.3 , any Party shall be permitted to disclose (but not publicize) or refer to any terms or conditions of the Settlement Agreements that are made or become non-confidential pursuant to GlassBridge’s filing of a Form 8-K.

7.3        Public Statements . No Party shall be permitted to facilitate the publication of press releases, announcements or other public statements with respect to the settlement of the Lawsuit (collectively, each a “ Public Statement ”). The Parties shall maintain the confidentiality of the material terms of the Settlement Agreements and the transactions contemplated by the Settlement Agreements to the extent they remain confidential, and further provided that neither Party shall criticize, disparage, or otherwise denigrate the other Parties or the IOENGINE Patents. If any Public Statement is required by law, the disclosing Party agrees to provide the non-disclosing Parties prior notice and an opportunity to comment on the proposed Public Statement. Nothing contained in this Section 7.3 shall have the effect of limiting the rights of GlassBridge set forth in Section 7.2 above.

In the event of any dispute arising under this Agreement between the Parties, the dispute shall be settled by binding arbitration in the manner described below:

8.1.        Arbitration Request . If a Party intends to begin an arbitration to resolve a dispute arising under this Agreement, such Party shall provide written notice (the “ Arbitration Request ”) to the other Parties of such intention and the issues for resolution.

8.2        Additional Issues . Within ten (10) business days after the receipt of the Arbitration Request, the other Parties may, by written notice, add additional issues for resolution.

8.3         Arbitration Procedure . The arbitration shall be held in Wilmington, Delaware, under the rules of the American Arbitration Association (“ AAA ”). Discovery shall be under the U.S. Federal Rules of Civil Procedure then in effect in the District Court for the District of Delaware. The arbitration shall be conducted by three (3) arbitrators who are knowledgeable in the subject matter at issue in the dispute. One (1) arbitrator will be selected by IOENGINE, one (1) arbitrator will be selected by GlassBridge, and the third arbitrator will be selected by mutual agreement of the two (2) arbitrators selected by the Parties. The arbitrators may proceed to an award, notwithstanding the failure of any Party to participate in the proceedings. The arbitrators shall, within fifteen (15) days after the conclusion of the arbitration hearing, issue a written award and statement of decision describing the essential findings and conclusions on which the award is based, including the calculation of any damages awarded. The arbitrators shall be authorized to award compensatory damages, but shall not be authorized to award non-economic damages or punitive damages, to reform, modify, or materially change this Agreement or any other agreements contemplated hereunder, or to adjudge the validity, enforceability, or ownership of any IOENGINE Patent. The arbitrators also shall be authorized to grant any temporary, preliminary, or permanent equitable remedy or relief the arbitrators deem just and equitable and within the scope of this Agreement, including, without limitation, an injunction or order for specific performance. The arbitrators’ award shall be the sole and exclusive remedy of the Parties. Judgment on the award rendered by the arbitrators may be enforced in any court having competent jurisdiction thereof, subject only to revocation on grounds of fraud or clear bias on the part of the arbitrators. Notwithstanding anything contained in this Section 8 to the contrary, each Party shall have the right to institute judicial proceedings against the other Parties or anyone acting by, through, or under such other Parties, in order to enforce the instituting Party’s rights hereunder through specific performance, injunction, or similar equitable relief.

8.4        Costs; Satisfaction . Each Party shall bear its own attorneys’ fees, costs, and disbursements arising out of any arbitration, and IOENGINE and McNulty on the one hand, and GlassBridge on the other hand, shall pay an equal share of the fees and costs of the arbitrators. Absent the filing of an application to correct or vacate the arbitration award as permitted by applicable law, each Party shall fully perform and satisfy the arbitration award within fifteen (15) days of the service of the award.

8.5       Waiver . By agreeing to this binding arbitration provision, the Parties understand that they are waiving certain rights and protections which may otherwise be available if a dispute between the Parties were determined by litigation in court, including, without limitation, the right to seek or obtain certain types of damages precluded by this provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence.

9.1       All notices required or permitted to be given hereunder shall be in writing and shall be deemed delivered (i) upon receipt if delivered by hand, (ii) the next business day after being sent by prepaid, nationally-recognized, overnight air courier, (iii) five (5) business days after being sent by registered or certified airmail, return receipt required, postage prepaid, or (iv) upon transmittal when transmitted by confirmed telecopy (provided that such notice is followed notice pursuant to any of (i) – (iii) above).

9.2       All notices shall be addressed as follows:

If to IOENGINE , to :

IOENGINE, LLC

22 Ensign Road

Norwalk, CT 06853

Attn: Scott McNulty, CEO

with a copy to :

Simpson Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

Attn: Noah M. Leibowitz, Esq. & Greg Chuebon, Esq.

If to McNulty , to :

Scott McNulty

22 Ensign Road

Norwalk, CT 06853

with a copy to :

Simpson Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

Attn: Noah M. Leibowitz, Esq. & Greg Chuebon, Esq.

If to GlassBridge , to :

GlassBridge Enterprises, Inc.

1099 Helmo Avenue, Suite 250

Oakdale, MN 55128

Attn: Danny Zheng, Chief Financial Officer

with a copy to :

GlassBridge Enterprises, Inc.

1099 Helmo Avenue, Suite 250

Oakdale, MN 55128

Attn: Tavis J. Morello, General Counsel

and to :

Quinn Emanuel Urquhart & Sullivan, LLP

50 California Street, 22nd Floor

San Francisco, California 94111

Attn: Charles K. Verhoeven, Esq. & Carl G. Anderson, Esq.

10.1       This Agreement represents the settlement of disputed claims asserted by each Party. Nothing contained herein is or is to be construed as an admission or evidence of fault, liability or wrongdoing of any kind by any Party.

10.2       IOENGINE has no obligation hereunder to institute any action or suit against any third party for infringement of any IOENGINE Patent, or to defend against any action challenging the validity or enforceability of any IOENGINE Patent. GlassBridge has no right to institute any action against any third party for infringement of any IOENGINE Patent.

10.3       Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employer-employee, or joint venture relationship between the Parties. No Party shall incur any debts or make any commitments for any other Party under this Agreement. There is no fiduciary duty or special relationship of any kind arising between the Parties due to this Agreement. Each Party expressly disclaims any reliance on any act, word, or deed of the other Parties in entering into this Agreement.

10.4       Nothing contained in this Agreement shall be construed as conferring any right to a license or to otherwise use any intellectual property, including without limitation any patent, patent application, trademark, service name, service mark, trade dress, trade secret or any other intellectual property belonging to IOENGINE or McNulty, including the IOENGINE Patents.

10.5       This Agreement is solely for the benefit of the Parties, there are no intended third-party beneficiaries of this Agreement, and no provision hereof shall be deemed to confer upon any third party, including without limitation Kingston Technology Corporation and any affiliates or subsidiaries thereof, any remedy, defense, release, reimbursement, or other right, or any covenant, consent, waiver, or acquiescence with respect to such third party’s conduct.

10.6       If any portion of this Agreement is found to be invalid, illegal, or unenforceable for any reason, the remainder of the Agreement shall continue in force and, if needed, the Parties or a court of competent jurisdiction shall substitute suitable provisions having like economic effect and intent.

10.7       This Agreement, together with the attached Exhibits, constitutes the full, complete and entire understanding of the Parties with respect to the subject matter of this Agreement, the Lawsuit, and the IOENGINE Patents, and replaces any prior oral or written communications, discussions, or agreements between them. This Agreement cannot be modified, terminated, or amended in any respect orally or by conduct of the Parties. Any termination, modification, or amendment of this Agreement may be made only by a writing signed by all Parties. No waiver of any provision of this Agreement shall be binding in any event unless executed in writing by the Party making such waiver.

10.8       This Agreement may be executed in several counterparts, each of which is deemed to be an original but all of which constitute one and the same instrument.

10.9       Each Party and its counsel have reviewed and approved this Agreement, and accordingly any presumption or rule of construction permitting ambiguities to be resolved against the drafting party shall not be employed in the interpretation or application of this Agreement.

10.10       This Agreement shall be construed, and the relationship between the Parties determined, in accordance with the laws of the State of New York, notwithstanding any choice-of-law principle that might dictate a different governing law. Notwithstanding the content of Section 8 herein, each Party irrevocably agrees, consents, and submits to jurisdiction and venue in the federal and state courts located within Wilmington, Delaware, with respect to any other dispute arising out of or relating in any way to this Agreement, and the Parties hereby waive all defenses based upon forum non conveniens , improper venue, or personal jurisdiction. Neither Party shall use the choice of law or venue provision in this Agreement to support or oppose a transfer motion in any litigation.

10.11       With respect to claims released under this Agreement, the Parties acknowledge that they may have sustained damages, losses, costs, or expenses which are presently unknown and unsuspected and that such damages, losses, costs, or expenses as may have been sustained may give rise to additional damages, losses, costs, or expenses in the future. The Parties further acknowledge that they have negotiated this Agreement taking into account presently unsuspected and unknown claims, counterclaims, causes of action, damages, losses, costs, and expenses arising from or relating to the Action and the relationship between the Parties, and the Parties voluntarily and with full knowledge of its significance, expressly waive and relinquish any and all rights they may have under any state or federal statute, rule, or common law principle, in law or equity, relating to limitations on general releases.

10.12       EXCEPT AS PROVIDED EXPLICITLY HEREIN, IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY OR ANY OTHER PERSON OR ENTITY (UNDER CONTRACT, STRICT LIABILITY, NEGLIGENCE, OR OTHER THEORY) FOR SPECIAL, INDIRECT, EXEMPLARY, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, OPPORTUNITIES, OR SAVINGS, ARISING OUT OF OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT.

[ Signature Page Follows ]

IN WITNESS WHEREOF , this Agreement has been duly executed by the Parties as of the Effective Date.

EXHIBIT A

Form of Stipulation of Dismissal

STIPULATION OF DISMISSAL

WHEREAS, on December 31, 2014, Plaintiff IOENGINE, LLC (“IOENGINE”) sued Defendant GlassBridge Enterprises, Inc., f/k/a Imation Corp. (“GlassBridge”) for patent infringement (D.I. 1);

WHEREAS, the parties participated in a five-day jury trial in the above-referenced action from February 13, 2017 through February 17, 2017;

WHEREAS, on February 17, 2017, the jury delivered its verdict, finding in favor of IOENGINE that all asserted claims of U.S. Patent 8,539,047 are infringed by each of the accused products, are not invalid, and that no individual other than Mr. McNulty made a significant contribution to the idea claimed in any claim of U.S. Patent 8,539,047 (D.I. 201); and

WHEREAS, the parties have informed the Court that they have settled their respective claims for relief asserted in this case.

IT IS HEREBY STIPULATED by the parties, subject to the approval of the Court, that all claims for relief asserted herein against GlassBridge, IOENGINE, and Scott F. McNulty by IOENGINE and GlassBridge shall be dismissed, with prejudice; and

IT IS HEREBY STIPULATED by the parties, subject to the approval of the Court, that all attorneys’ fees, costs of court, and expenses shall be borne by each party incurring the same.

EXHIBIT B

Settlement Note

EXHIBIT C

Pledge Agreement

EXHIBIT D

Form of Current Report on Form 8-K

Exhibit 10.2

Execution Version

THIS SECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS GLASSBRIDGE ENTERPRISES, INC. HAS EXPRESSLY CONSENTED IN WRITING THERETO AND (I) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (II) EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE.

GLASSBRIDGE ENTERPRISES, INC.

Secured Promissory Note

FOR VALUE RECEIVED, the undersigned, GlassBridge Enterprises, Inc., a Delaware corporation f/k/a Imation Corp. (the “ Company ”), hereby promises to pay to the order of IOENGINE, LLC, a Delaware limited liability company (the “ Noteholder ”), on or before September 28, 2020 (the “ Maturity Date ”), the principal amount of Four Million Dollars ($4,000,000.00) plus the PIK Interest Accrual Amount (as defined below) and interest on the unpaid principal amount of this Note as provided below.

1.              THE NOTE

This Secured Promissory Note (this “ Note ”) is issued pursuant to that certain Settlement Agreement dated as of even date with this Note, by and between the Company and the Noteholder. The Company’s obligations under this Note are secured by the collateral granted pursuant to that certain Pledge Agreement, also dated as of even date with this Note, by and between the Company and the Noteholder (as amended or supplemented from time to time, the “ Pledge Agreement ”).

2.              INTEREST RATE

All unpaid principal amounts under this Note (including any PIK Interest Accrual Amount capitalized into principal as of the PIK Interest Payment Date, if any (each as defined below)) shall accrue interest at an annual rate equal to four percent (4%). Notwithstanding the foregoing, the interest rate shall be automatically reduced, without any amendment by the parties, to be equal to an annual rate of two percent (2%) with respect to any portion of the outstanding principal amount (including any PIK Interest Accrual Amount capitalized into principal as of the PIK Interest Payment Date, if any (each as defined below)) that is fully secured by Bank Collateral (as defined in the Pledge Agreement) in accordance with the terms of the Pledge Agreement and only for such periods so fully secured. Interest shall be computed on the basis of a 365-day year and the actual days elapsed and shall be payable in arrears on the PIK Interest Payment Date (by capitalizing such accrued interest as of such date in accordance with Section 3.2 ) and on each Cash Payment Date (as defined below).

3.              ACCRUAL AND PAYMENT PROVISIONS

3.1                Certain Definitions .

3.1.1          “ Cash Payment Dates ” means each of June 30, 2019; September 30, 2019; December 31, 2019; March 31, 2020; June 30, 2020; and the Maturity Date.

3.1.2          “ Issuance Date ” shall mean September 28, 2017.

3.1.3          “ PIK Interest Accrual Period ” shall mean the period commencing as of the Issuance Date and concluding on June 30, 2019.

3.1.4          “ PIK Interest Accrual Amount ” shall mean the amount of interest accrued during the PIK Interest Accrual Period on the outstanding principal amount hereunder from time to time at the rate(s) set forth in Section 2 above.

3.1.5          “ PIK Interest Payment Date ” shall mean June 30, 2019.

3.2                PIK Interest Accrual and Payment . During the PIK Interest Accrual Period, interest shall accrue at the rates set forth in Section 2 but no payments of principal or accrued interest shall be due (other than by an acceleration after an Event of Default); provided that upon any prepayment of principal during the PIK Interest Accrual Period, all accrued interest on such principal shall be due on the date of such prepayment and must be paid together with such principal. On the PIK Interest Payment Date, the PIK Interest Accrual Amount shall be paid in kind such that effective as of the PIK Interest Payment Date the PIK Interest Accrual Amount shall be deemed to constitute, and shall be capitalized into, outstanding principal.

3.3                Cash Payments . On each of the Cash Payment Dates, cash payments of outstanding principal and interest shall be due and payable as follows: (a) the payment amount on each Cash Payment Date shall be an amount not less than sixteen and two-thirds percent (16.67%) of the unpaid outstanding principal and accrued interest as of the PIK Interest Payment Date (after giving effect to the capitalization of the PIK Interest Accrual Amount) and (b) subject to the foregoing Section 3.3(a) , estimated on a pro forma basis such that each such cash payment is an amount roughly equal with all subsequent cash payments; (c) all accrued interest shall be paid in cash on each Cash Payment Date; and (d) on the Maturity Date, the Company will pay in cash the sum of any remaining outstanding principal (including any remaining PIK Interest Accrual Amount) together with any remaining accrued and unpaid interest. For illustrative purposes, Schedule A sets forth the payment schedule contemplated above assuming (a) no acceleration pursuant to Section 4.3 ; (b) an Issuance Date of September 30, 2017; (c) the continuous applicability of a four percent (4%) interest rate for the period of time commencing on the Issuance Date and concluding on the Maturity Date; and (c) no prepayments of principal or interest.

3.4                Payments Due on Business Days . “ Business Day ” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City, New York are required or authorized to be closed. Notwithstanding anything in this Note to the contrary, any payment of principal or interest on this Note that is due on a date other than a Business Day may be made on the next Business Day.

3.5                Optional Prepayment . At any time and from time to time, the Company may prepay this Note, in whole or in part, at any time without premium or penalty at a price equal to 100% of the principal amount of the Note so prepaid or redeemed, together with all accrued and unpaid interest thereon (including the PIK Interest Accrual Amount), to the extent applicable. Any voluntary prepayments shall be applied by the Noteholder to principal or interest as directed by the Company but any prepayment of principal shall be accompanied with a corresponding payment of accrued interest as of such date.

3.6                Notice of Optional Prepayment . Notice of each optional prepayment of this Note pursuant to Section 3.3 above must be given in accordance with Section 9.1 hereof not fewer than two (2) Business Days before the prepayment date, which such notice must specify the date of prepayment, the aggregate principal amount to be prepaid on such date, the accrued and unpaid interest applicable to the portion of the Note subject to such prepayment and the application of such payments.

3.7                Payment Mechanics . All payments to be made hereunder shall be made in lawful money of the United States of America in immediately available funds (other than paid in kind interest permitted under Section 3.1 ) by wire transfer to the Noteholder’s account, as provided by Noteholder to the Company from time to time.

4.              DEFAULTS

4.1                Certain Definitions .

4.1.1          “ Reorganization ” means (i) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or its assets, (ii) any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy.

4.1.2          “ Permitted Transaction ” means (a) sales or transfers to an affiliate or related entity as part of a corporate restructuring provided such affiliate and related entity become an obligor under this Note contemporaneously with such sale or transfer; (b) sales or transfers to which the Noteholder consents in writing, such consent not to be unreasonably withheld and (c) a sale or transfer of the Pledged Note in a manner that complies with the terms and conditions of the Pledge Agreement.

4.2                An “ Event of Default ” will exist if any of the following conditions or events occurs and is continuing:

4.2.1          The Company defaults in the payment, when due, of any principal payment under Section 3 , or the Company defaults in the payment, when due, of any interest payment under Section 3 , and such payment default is not remedied within fifteen (15) days after the same becomes due and payable; or

4.2.2          The Company (i) files, or consents by answer or otherwise to the filing against it of, a petition or Reorganization (as defined below), (ii) makes an assignment for the benefit of its creditors, (iii) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (iv) is adjudicated as insolvent or to be liquidated, or (v) takes corporate action for the purpose of approving a Reorganization with respect to the Company, or any of the foregoing; or

4.2.3          A governmental authority enters an order appointing, without consent by the Company, a custodian, receiver, trustee or other officer with similar powers with respect to the Company or with respect to any substantial part of the Company’s property, or constituting an order for relief or approving a petition for Reorganization, or any such petition is filed against the Company and such petition is not dismissed within 60 days; or

4.2.4          The Company shall be in default under the material covenants set forth herein (other than a covenant described in Section 4.2.1 above) or in the Pledge Agreement and shall fail to cure such default on the earlier of thirty (30) days following (i) written notice from the Noteholder of such default or (ii) the Company having actual knowledge of the existence of such default; or

4.2.5          Any representation or warranty made by the Company under or in connection with this Note or the Pledge Agreement shall have been incorrect in any material respect when made;

4.2.6          This Note or the Pledge Agreement shall cease, for any reason other than the actions or omissions of the Noteholder, to be in full force and effect, or the Company shall so assert, or any lien created by the Pledge Agreement shall cease to be enforceable and of the same priority purported to be created thereby; or

4.2.7          The Company merges with another entity and is not the surviving entity, or sells or transfers all or substantially all of its assets other than a Permitted Transaction.

4.3                Acceleration . Upon the occurrence and during the continuance of any Event of Default specified in Section 4.2.2 or Section 4.2.3 , this Note and all outstanding principal and other amounts due and owing hereunder will automatically, without notice, become immediately due and payable. Upon the occurrence and during the continuance of any Event of Default other than the type specified in Section 4.2.2 or 4.2.3 , the Noteholder may declare this Note due and payable by giving notice to the Company. Upon the occurrence and during the continuance of an Event of Default, the Noteholder shall be entitled to exercise the rights of a secured party under the Uniform Commercial Code and other applicable law.

5.               RePRESENTATIONS AND WARRANTIES; CoveNANTS

As of the Issuance Date, the Company hereby represents and warrants to the Noteholder that:

5.1                The Company is duly formed, validly existing and in good standing under the laws of the State of Delaware, has full power, authority and legal right to execute, deliver and perform this Note and the Pledge Agreement and has taken all necessary corporate and legal action to authorize the execution, delivery and performance of this Note and the Pledge Agreement on the terms and conditions hereof and thereof and has duly executed and delivered this Note and the Pledge Agreement;

5.2                this Note and the Pledge Agreement constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law);

5.3                the execution, delivery and performance by the Company of this Note and the Pledge Agreement will not violate the restated certificate of incorporation and bylaws of the Company or, to the knowledge of the Company, any provision of law or regulation or of any judgment, order or decree of any court, arbitrator or governmental authority or of any agreement of any nature whatsoever, binding upon the Company or its assets;

5.4                no consent, authorization or approval of, filing with, notice to or exemption from any governmental authority (other than disclosures or filings with the U.S. Securities and Exchange Commission), creditor of the Company or any other person or entity is required in connection with the execution, delivery, performance, validity or enforceability of this Note or the Pledge Agreement; and

5.5                no Event of Default has occurred and is continuing, is currently contemplated to occur, or will occur immediately after giving effect to this Note. 

The Company makes no representations or warranties in this Note, express or implied, other than the express foregoing representations and warranties of the Company made as of the Issuance Date set forth in this Section 5 .

6.               NO TRANSFERS

This Note may not be sold, assigned, transferred or pledged (“ Transferred ”) by the Noteholder unless the Company has expressly consented in writing thereto, which consent shall not be unreasonably withheld, delayed or conditioned; provided (i) such consent shall not be required during the occurrence of an Event of Default; (ii) such consent shall not be required for a Transfer to an affiliate of the Noteholder; (iii) the Company may withhold consent in its sole and absolute discretion for any Transfer to a competitor or to any party with a then existing business relationship with GlassBridge Enterprises, Inc.; and (iv) the Company shall be deemed to consent to a Transfer unless the Company shall object thereto by written notice to the Noteholder within twenty (20) days after having received notice thereof. In addition, this Note may not be Transferred by the Noteholder unless (i) a registration statement with respect thereto is effective under the Securities Act, and any applicable state securities law requirements have been met (the costs and expenses of any such registration to be borne by Noteholder) or (ii) exemptions from the registration requirements under the Securities Act and the registration or qualification requirements of applicable state securities laws are available.

7.               COMPANY WAIVERS

The Company hereby waives presentment, demand, notice of nonpayment, protest and all other demands and notices (except as expressly provided herein) in connection with the delivery, acceptance, performance or enforcement of this Note.

8.               AMENDMENT AND WAIVER

8.1                Requirements . This Note may be amended and the observance of this Note may be waived (either retroactively or prospectively) as follows:

8.2                Binding Effect, etc . Any amendment, waiver or consent consented to as provided in this Section 8 will be binding upon the Noteholder and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the Noteholder nor any delay in exercising any rights hereunder will operate as a waiver of any rights of the Noteholder.

9.               MISCELLANEOUS

9.1                Notices . All notices and other communications required or permitted to be given or otherwise provided under this Note must be in writing and must be given or otherwise provided: (a) by hand (in which case, it will be effective upon delivery); (b) by facsimile (in which case, it will be effective upon receipt of confirmation of good transmission by the intended recipient; provided, that such communication is also sent by some other means permitted by this Section 9.1 ); or (c) by overnight delivery by a nationally recognized courier service (in which case, it will be effective on the Business Day after being deposited with such courier service); in each case, to the address (or facsimile number) listed below:

If to the Noteholder , to :

IOENGINE, LLC

22 Ensign Road

Norwalk, CT 06853

Attn: Scott McNulty, CEO

with a copy to :

Simpson Thacher & Bartlett, LLP

425 Lexington Ave.

New York, NY 10017

Attn: Noah M. Leibowitz, Esq.

If to the Company , to :

GlassBridge Enterprises, Inc.

1099 Helmo Avenue, Suite 250

Oakdale, MN 55128

Attn: Danny Zheng, Chief Financial Officer

with a copy to :

GlassBridge Enterprises, Inc.

1099 Helmo Avenue, Suite 250

Oakdale, MN 55128

Attn: Tavis J. Morello, General Counsel

and to :

Quinn Emanuel Urquhart & Sullivan, LLP

50 California Street, 22nd Floor

San Francisco, California 94111

Attn: Charles K. Verhoeven, Esq. & Carl G. Anderson, Esq.

The Company and the Noteholder may specify different address or facsimile number by giving notice in accordance with this Section 9.1 to the other party.

9.2                Governing Law . This Note, the negotiation, terms and performance of this Note, the rights of the parties under this Note, and all actions arising in whole or in part under or in connection with this Note shall be governed by and construed in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

9.3                Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HERETO HEREBY WAIVE, AND COVENANT THAT THEY SHALL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS NOTE , or the negotiation, terms or performance hereof or thereof , WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES HERETO AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT BETWEEN THE PARTIES HERETO IRREVOCABLY TO WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY PROCEEDING SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

9.4                Construction; Headings . This Note shall be deemed to be jointly drafted by the Company and the Noteholder and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

9.5                Successors and Assigns . All covenants and other agreements contained in this Note by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and permitted assigns whether so expressed or not; provided that neither the Company, nor the Noteholder may assign or otherwise transfer its rights and obligations hereunder without the prior written consent of the other party.

[ Remainder of Page Intentionally Left Blank ]

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by a duly authorized officer as of the date first written above.

Accepted and Agreed :

IOENGINE, LLC

Name: Scott McNulty

Title:  CEO

The foregoing illustration of amortization and payment schedule assumes: (a) an Issuance Date of September 28, 2017; (b) the continuous applicability of a four percent (4%) interest rate for the period of time commencing on the Issuance Date and concluding on the Maturity Date; and (c) assumes no prepayments of principal or interest.

Exhibit 10.3

Execution Version

PLEDGE AGREEMENT

This Pledge Agreement (as amended, modified or supplemented from time to time, this “ Agreement ”) is made as of September 28, 2017 (the “ Effective Date ”), by and between IOENGINE, LLC, a Delaware limited liability company (the “ Secured Party ”) and GlassBridge Enterprises, Inc., a Delaware corporation f/k/a Imation Corp. (the “ Pledgor ”).

WHEREAS, pursuant to that certain Settlement Agreement dated as of even date herewith between the Pledgor and the Secured Party (the “ Settlement Agreement ”), the Pledgor is obligated to make future payments to the Secured Party, as evidenced by that certain Secured Promissory Note, made by the Pledgor to the order of the Secured Party dated as of the date hereof (the “ Settlement Note ”);

WHEREAS, the Pledgor has agreed to execute and deliver this Agreement and grant to the Secured Party all of Pledgor’s right, title and interest in the Pledged Collateral in order to secure the Pledgor’s obligations under the Settlement Note;

WHEREAS, the Secured Party’s willingness to accept the Settlement Note pursuant to the Settlement Agreement is subject to the condition that the Pledgor executes and delivers this Agreement;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgor and the Secured Party hereby agree as follows:

1.                    Defined Terms . Capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided for in the Settlement Note. In addition, the following terms shall have the meanings set forth below:

“ Acceptable Bank ” means any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $250,000,000.

“ Bank Collateral ” means any of the following that become Pledged Collateral in accordance with Section 6 below: (i) any irrevocable standby letter of credit issued to the Secured Party by any Acceptable Bank, which letters of credit (A) shall be delivered to the Secured Party, (B) may be drawn on demand by the Secured Party subject only to the delivery of a certificate to the issuing bank executed by the Secured Party certifying that an Event of Default has occurred under the Settlement Note (and there being no other conditions to drawing such letter of credit) and (C) require the issuer thereof to provide at least thirty (30) days’ notice to the Secured Party of the renewal or non-renewal thereof and provides that the Secured Party may draw the full amount of the letter of credit if it is not renewed or extended, (ii) any cash or cash equivalents held in a designated account of Pledgor with an Acceptable Bank, which account shall be subject to the exclusive dominion and control of the Secured Party pursuant to a customary control agreement which shall provide the Secured Party the right to withdraw any amounts contained therein upon the occurrence of an Event of Default without the need for any notice or consent of the Pledgor and/or (iii) any bank guaranty provided by an Acceptable Bank in form and substance reasonably acceptable to the Secured Party.

“ Collateralization Amount ” means, as of any date of determination, the sum of (x) sixty six and two-thirds percent (66.67%) of the Pledged Note Applicable Value under each Pledged Note as of such date of determination in which Secured Party has a valid and enforceable first priority lien plus (y) the value of any Pledged Collateral that consists of Bank Collateral in which the Secured Party has a valid and enforceable first priority lien. For purposes of determining the Collateralization Amount, the value of Bank Collateral shall equal the face amount of any undrawn letter of credit or bank guaranty, or the amount of cash or cash equivalent of any deposit accounts, in each case that are pledged to the Secured Party as Bank Collateral as of such date of determination in accordance with the terms of this Agreement. The Pledgor shall deliver a calculation of the Collateralization Amount to the Secured Party no later than five (5) Business Days after the Secured Party has requested a calculation (together with supporting documentation containing reasonable detail). The Secured Party may not request more than four (4) such calculations in any calendar year, provided that during the occurrence of an Event of Default there shall be no limitation on the frequency of such requests.

“ Event of Default ” has the meaning specified in Section 10 below.

“ Issuer ” means NXSN Acquisition Corp., a Delaware corporation.

“ Issuer Insolvency Event ” means any of the following: (A) The Issuer (i) files, or consents by answer or otherwise to the filing against it of, a petition or Reorganization (as defined below), (ii) makes an assignment for the benefit of its creditors, (iii) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (iv) is adjudicated as insolvent or to be liquidated, or (v) takes corporate action for the purpose of approving a Reorganization with respect to the Issuer, or any of the foregoing; (B) a governmental authority enters an order appointing, without consent by the Issuer, a custodian, receiver, trustee or other officer with similar powers with respect to the Issuer or with respect to any substantial part of the Issuer’s property, or constituting an order for relief or approving a petition for Reorganization, or any such petition is filed against the Issuer and such petition is not dismissed within sixty (60) days; or (C) the Issuer fails to pay scheduled principal or interest on the Pledged Note as and when due and such failure remains uncured for fifteen (15) Business Days.

“ Issuer Reorganization ” means (i) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Issuer or its assets, (ii) any liquidation, dissolution or other winding up of the Issuer, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy.

“ Original Pledged Note ” shall mean that certain Senior Secured Convertible Note dated January 23, 2017, issued by the Issuer to the order of the Pledgor, in the original principal amount of $25,000,000, a copy of which is attached hereto as Exhibit A .

“ Other NXSN Note ” has the meaning specified in Section 3 below.

“ Permitted Liens ” means (i) inchoate liens for taxes, fees, assessments or other governmental charges not yet due; (ii) in the case of Bank Collateral consisting of cash on deposit, liens of a depositary bank or collecting bank in such deposits granted in the ordinary course of business securing amounts owing to such bank for cash management or operating account arrangements; and (iii) subordinated liens subject to subordination and/or intercreditor agreements in form and substance reasonably satisfactory to the Secured Party.

“ Pledged Collatera l” has the meaning specified in Section 2 below.

“ Pledged Note ” means the Original Pledged Note or a Replacement Note or a Restatement Note, as applicable.

“ Pledged Note Applicable Value ” means, as of any date of determination, (a) at any time during which an Issuer Insolvency Event is not occurring, the outstanding principal balance under the Pledged Note as of such date of determination, (b) at any time on or before the ninetieth (90th) day following the commencement of an Issuer Insolvency Event, seventy percent (70%) of the outstanding principal balance under the Pledged Note as of such date of determination, (c) at any time after the ninetieth (90th) day but on or before the one-hundred and twentieth (120 ^th ) day following the commencement of an Issuer Insolvency Event, fifty percent (50%) of the outstanding principal balance under the Pledged Note as of such date of determination, (d) at any time after the one-hundred and twentieth (120 ^th ) day following the commencement of an Issuer Insolvency Event, 25 percent (25%) of the outstanding principal balance under the Pledged Note as of such date of determination.

“ Pledged Note Proceeds ” means the amount of (i) principal payments made to or on behalf of the Pledgor or its designee under the Pledged Note and/or the Other NXSN Note; (ii) consideration received by or on behalf of the Pledgor or its designee upon the sale, transfer or assignment, or in exchange for or as part of the restructuring, reduction or work-out of the obligations of all or a portion of the Pledged Note and/or Other NXSN Note; and (iii) consideration received by or on behalf of the Pledgor or its designee for effectuating the conversion or split of all or a portion of the Pledged Note and/or Other NXSN Note (but not including any preferred stock issued upon the conversion thereof or any Other NXSN Note).

“ Replacement Note ” has the meaning specified in Section 3.1 below.

“ Restatement Note ” has the meaning specified in Section 3.2 below.

“ Required Collateral Value ” means, as of any date of determination, the amount of the outstanding principal balance under the Settlement Note, including any PIK Interest Accrual Amount as defined in the Settlement Note .

“ UCC ” means the Uniform Commercial Code as enacted in the State of New York or any other applicable jurisdiction.

2.                    Pledge . The Pledgor hereby grants and pledges to the Secured Party a security interest in all of its right, title and interest in and to the following, whether now owned or existing or hereafter acquired or arising:

The Pledgor authorizes the Secured Party to file a UCC-1 financing statement in the form attached hereto as Exhibit B (the “ UCC-1 ”) describing the Pledged Collateral in any required jurisdiction. Upon the pledge of any Replacement Note or Bank Collateral, the Secured Party is hereby authorized to file a new or amended UCC-3 financing statement to reflect such additional collateral in any required jurisdiction. Notwithstanding any provision in this Agreement to the contrary, no provision of this Agreement shall require the Pledgor to deliver to the Secured Party the original (a) Original Pledged Note or (b) Replacement Note, subject in all respects to the rights and remedies available to the Secured Party after the occurrence of an Event of Default.

3.                    Exchanges of the Pledged Note .

3.1                Replacement Note . The Pledgor and the Secured Party agree that the Pledgor shall be entitled, in its sole discretion, to “split” the Pledged Note into one or more secured promissory notes of similar tenor and following such “split” only one such note shall then remain as Pledged Collateral under this Agreement in replacement of the Original Pledged Note (such promissory note, the “ Replacement Note ” and such promissory note or notes arising from the “split” that are not thereafter pledged, the “ Other NXSN Note ”), so long as: (a) the Collateralization Amount is equal to or greater than the Required Collateral Value after giving pro forma effect to pledge of the Replacement Note; (b) the Replacement Note shall be senior in payment priority to the Other NXSN Note; and (c) the Replacement Note shall contain identical terms with respect to the obligors, interest, security, and maturity date. Notwithstanding any provision herein to the contrary, the face principal amount of the Replacement Note may be lower than the Original Pledged Note and the Replacement Note may or may not (as determined by the Pledgor in its sole discretion) include any features that permit the noteholder to convert any principal owing on such Replacement Note into preferred stock of the Issuer. The Pledgor shall notify the Secured Party in writing at least ten (10) Business Days in advance of the “split,” which notice shall include finalized drafts of the Replacement Note and the Other NXSN Note and an agreement by the holder of the Other NXSN Note to subordinate payments on the Other NXSN Note to the payments in full and in cash under the Replacement Note, which agreement shall be reasonably satisfactory to the Secured Party.

3.2                Restatement Note . The Pledgor and the Secured Party agree that the Pledgor shall be entitled, in its sole discretion, to amend or restate the Pledged Note from time to time in replacement of the Original Pledged Note (such promissory note, the “ Restatement Note ”), so long as: (a) the principal amount of the Restatement note is an amount equal to or greater than $25,000,000 minus the amount of any principal payments actually made to the Secured Party in respect to the Settlement Note; (b) the Restatement Note shall contain identical terms with respect to the obligors, interest, security, guarantees, payment dates, payment triggering events, the form of consideration and maturity date as the Original Pledged Note, and shall otherwise have terms no less favorable to the Company than the Original Pledged Note other than with respect to the aggregate principal amount outstanding thereunder (which may be reduced to no less than $25,000,000) minus the amount of any principal payments actually made to the Secured Party in respect to the Settlement Note, and (c) the amendment or restatement occurs on or prior to the date that is one-hundred and eighty (180) days after the date hereof (after which, amendment or restatement of the Pledged Note may only be done so long as the conditions of clause (a) and clause (b) to this Section 3.2 are satisfied, and the consent of the Secured Party is obtained, which shall not be unreasonably withheld). The Pledgor shall notify the Secured Party in writing at least ten (10) Business Days in advance of any such amendment or restatement, which notice shall include finalized drafts of the Restatement Note.

4.               Required Collateral Value . The Pledgor hereby covenants that, except as provided in Section 6.1 below, at all times the Collateralization Amount shall be equal to or greater than the Required Collateral Amount.

5.               Pledgor’s Rights . Unless an Event of Default has occurred and is continuing, the Pledgor shall be entitled to (i) receive and retain all payments of interest that are paid on the Pledged Note (except that receipt and retention of principal are governed by the following subsection (ii)), (ii) receive and retain all payments of principal that are paid on the Pledged Note, provided that Secured Party is provided with Bank Collateral in an amount equal to the Pledged Note Proceeds, (iii) assign, transfer or otherwise dispose of the Pledged Note in exchange for consideration, provided that the Pledgor must provide the Secured Party with Bank Collateral in an amount equal to the Pledged Note Proceeds, and (iv) exercise all rights of the holder of the Pledged Note; provided the Pledgor shall not exercise any rights to convert the Pledged Note or any portion thereof into preferred stock unless it gives the Secured Party no less than ten (10) Business Days’ advance written notice, and the Pledgor provides Bank Collateral in an amount such that the Collateralization Amount is equal to or greater than the Required Collateral Value.

6.               Replacement Collateral .

6.1                Pledged Note Proceeds . If the Pledgor or its designee realizes Pledged Note Proceeds, Pledgor must provide the Secured Party with Bank Collateral within ten (10) Business Days of its realization of such Pledged Note Proceeds in an amount equal to such Pledged Note Proceeds (up to the aggregate principal amount outstanding under the Settlement Note as of such date) and the Collateralization Amount shall continue to be greater than the Required Collateral Value after giving pro forma effect to such realization. Nothing contained in this Pledge Agreement shall have the effect of prohibiting the Pledgor from consummating one or more transactions that would result in the realization of Pledged Note Proceeds subject to the obligations set forth in the foregoing sentence.

6.2                Issuer Insolvency Event . In the event of an Issuer Insolvency Event that is not cured within five (5) Business Days, to the extent necessary, the Pledgor must provide the Secured Party with Bank Collateral sufficient to ensure the Collateralization Amount is equal to or greater than the Required Collateral Amount.

6.3                Bank Collateral . If the Bank Collateral is cash, the Pledgor shall take all necessary actions to provide the Secured Party with control of such Bank Collateral within the meaning of Section 9-104 of the UCC promptly upon providing such Bank Collateral. In addition, the Pledgor may at any time in its discretion, replace the Pledged Note in its entirety with Bank Collateral provided that the Collateralization Amount shall be equal to or greater than the Required Collateral Value. Once the Secured Party is provided with Bank Collateral pursuant to the preceding sentence, the Secured Party’s security interest in the Pledged Note will automatically terminate without any further action required on the part of the Secured Party.

7.               Rights of the Secured Party .

7.1                Certain Rights of the Secured Party . The Secured Party shall not be liable for failure to collect or realize upon this Agreement or any collateral security hereof, or any part hereof, or for any delay in so doing, nor shall the Secured Party be under any obligation to take any action whatsoever with regards thereto.

7.2                Care in Custody of Pledged Collateral . The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral and in protecting any rights with respect to the Pledged Collateral against prior parties, if the Secured Party takes such actions for that purpose as the Pledgor shall reasonably request in writing.

8.               Representations and Warranties . The Pledgor hereby represents and warrants to the Secured Party that, as of the Effective Date:

8.1                Ownership of the Pledged Collateral . The Pledgor is the legal and beneficial owner of the Pledged Collateral and no liens exist against the Pledged Collateral (other than the lien created pursuant to this Agreement and Permitted Liens). The security interests granted pursuant to this Agreement (a) constitute valid security interests in all of the Pledged Collateral in favor of the Secured Party that will be perfected upon the filing of the UCC-1 Financing Statement in the office of the Secretary of State of the State of Delaware and (b) are prior to all other liens on the Pledged Collateral in existence on the date hereof.

8.2                Authority to Enter into Agreement . The Pledgor has the corporate power and authority to enter into and perform its obligations under this Agreement.

8.3                Pledged Note . The Original Pledged Note is enforceable, in full force and effect and the Issuer has not breached any of its material obligations under the Original Pledged Note.

The Company makes no representations or warranties in this Agreement, express or implied, other than the express foregoing representations and warranties of the Company made as of the Effective Date set forth in this Section 8 .

9.               Covenants .

9.1                Defense of Claims . The Pledgor will, upon the Secured Party’s written request, defend the Secured Party’s right, title and security interest in and to the Pledged Collateral against the claims and demands of all persons whomsoever.

9.2                Limitation on Liens . Except as permitted by this Agreement, the Pledgor will not create, incur or permit to exist any lien with respect to any of the Pledged Collateral, except for the lien created by this Agreement and Permitted Liens.

9.3                Place of Organization; Name . The Pledgor shall not, except upon 15 days’ prior written notice to the Secured Party and delivery to the Secured Party of all additional executed financing statements and other documents reasonably requested by the Secured Party to maintain the validity, perfection and priority of the security interests provided for herein, (i) change its jurisdiction of organization or the location of its chief executive office or sole place of business or principal residence as in effect on the date hereof or (ii) change its name.

9.4                Maintenance of Perfected Security Interest: Further Documentation . (a) The Pledgor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 8.1 and (b) and at any time and from time to time, upon the written request of the Secured Party, and at the expense of the Pledgor, the Pledgor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Secured Party may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted.

10.             Event of Default . An “Event of Default” under this Agreement occurs if an Event of Default under the Settlement Note occurs in accordance with the terms of the Settlement Note.

11.             Remedies . If an Event of Default has occurred and is continuing, the Secured Party may exercise all rights and remedies of a secured party under the UCC or other applicable law.

12.             Termination . This Agreement and the security interests in the Pledged Collateral shall automatically terminate upon the satisfaction in full of the Pledgor’s obligations under the Settlement Note (including payment in cash of all outstanding amounts thereunder), at which time the Secured Party promptly shall take all reasonable actions requested by the Pledgor to evidence the termination of its liens in the Pledged Collateral.

13.             Notices . All notices and other communications required or permitted hereunder shall be given in accordance with Section 9.1 of the Settlement Note.

14.             Severability . If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then such provision or provisions shall be modified to the extent necessary to make such provision valid and enforceable, and to the extent that this is impossible, then such provision shall be deemed to be excised from this Agreement, and the validity, legality and enforceability of the rest of this Agreement shall not be affected thereby.

15.             No Waiver; Cumulative Remedies . The Secured Party shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by the Secured Party, and then only to the extent therein set forth. A waiver of any right or remedy hereunder on any occasion shall not be construed as a bar to any right or remedy that the Secured Party would otherwise have on any future occasion. No failure to exercise nor any delay in exercising, on the part of the Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise of any right, power or privilege. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law to the Secured Party.

16.             No Oral Modification; Successors . None of the terms or provisions of this Agreement may be waived, altered, modified or amended, except by an instrument in writing, executed by the Secured Party and the Pledgor. This Agreement and all obligations of the Pledgor hereunder shall be binding on its successors and assigns and shall, together with the rights and remedies of the Secured Party hereunder, inure to the benefit of each the Secured Party and the Pledgor and its respective successors and assigns.

17.             Governing Law . This Agreement, the negotiation, terms and performance of this Agreement, the rights of the parties under this Agreement, and all actions arising in whole or in part under or in connection with this Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

18.             Counterparts . This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile or electronic signatures shall constitute original signatures for all purposes of this Agreement.

19.             Construction; Headings . This Agreement shall be deemed to be jointly drafted by the Pledgor and the Secured Party and shall not be construed against any person as the drafter hereof. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Exhibit A

[Attach Copy of Original Pledged Note]

Exhibit B

[Form of UCC-1 Financing Statement]