Exhibit 10.4

 

SUBSIDIARY GUARANTEE

 

This SUBSIDIARY GUARANTEE, dated as of April 26, 2017 (this “Guarantee”), is
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the “Guarantors”), in favor of
RedDiamond Partners, LLC (together with their permitted assigns, the “Secured
Parties”).

 

W I T N E S S E T H:

 

WHEREAS, Helix TCS, Inc. (the “Company”) has agreed to sell and issue to the
Secured Parties, and the Secured Parties have agreed to purchase from the
Company, certain debt securities (collectively, the “Notes”), subject to the
terms and conditions set forth therein;

 

WHEREAS, each Guarantor will directly benefit from the extension of credit to
the Company represented by the issuance of the Notes; and

 

WHEREAS, as a material inducement to the Secured Parties to purchase the Notes
and to enter into all of the other agreements to be entered into in connection
with the transactions contemplated thereby (collectively, the “Transaction
Documents”), the Secured Parties have requested the Guarantors and the Company
enter into this Guarantee;

 

NOW, THEREFORE, in consideration of the premises and for such other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby agrees with the Secured Parties as follows:

 

1.           Definitions. The words “hereof,” “herein,” “hereto” and “hereunder”
and words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
Section and Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The following
terms shall have the following meanings:

 

“Guarantee” means this Subsidiary Guarantee, as the same may be amended,
supplemented, or otherwise modified from time to time.

 

“Obligations” means, in addition to all other costs and expenses of collection
incurred by Secured Parties in enforcing any of such Obligations and/or this
Guarantee, all of the liabilities and obligations (primary, secondary, direct,
contingent, sole, joint or several) due or to become due, or that are now or may
be hereafter contracted or acquired, or owing to, of the Company or any
Guarantor to the Secured Parties, including, without limitation, all obligations
under this Guarantee, the Notes, that certain Security Agreement (the “Security
Agreement”), dated as of the date hereof, among the Company, the Guarantors and
the Secured Parties, and any other instruments, agreements or other documents
executed and/or delivered in connection herewith or therewith, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from any of the Secured Parties as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time. Without
limiting the generality of the foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the Notes and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs,
obligations and liabilities of the Company or any Guarantor from time to time
under or in connection with this Guarantee, the Notes, the Security Agreement,
and any other instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith; and (iii) all amounts (including
but not limited to post-petition interest) in respect of the foregoing that
would be payable but for the fact that the obligations to pay such amounts are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company or any Guarantor.

 

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2.  Guarantee.

 

(a)           Guarantee.

 

(i)           The Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantee to the Secured Parties and their respective successors,
endorsees, transferees and assigns, the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.

 

(ii)          Anything herein or in any other Transaction Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Transaction Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws,
including laws relating to the insolvency of debtors, fraudulent conveyance or
transfer or laws affecting the rights of creditors generally (after giving
effect to the right of contribution established in Section 2(b)).

 

(iii)         Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Secured Parties hereunder.

 

(iv)         The guarantee contained in this Section 2 shall remain in full
force and effect until all the Obligations and the obligations of each Guarantor
under the guarantee contained in this Section 2 shall have been satisfied by
indefeasible payment in full.

 

(v)          No payment made by the Company, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Secured Parties
from the Company, any of the Guarantors, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor in respect
of the Obligations), remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Obligations are indefeasibly
paid in full.

 

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(vi)         Notwithstanding anything to the contrary in this Guarantee, with
respect to any defaulted non-monetary Obligations the specific performance of
which by the Guarantors is not reasonably possible (e.g. the issuance of the
Company’s Common Stock), the Guarantors shall only be liable for making the
Secured Parties whole on a monetary basis for the Company’s failure to perform
such Obligations in accordance with the Transaction Documents.

 

(b)           Right of Contribution. Subject to Section 2(c), each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment. Each
Guarantor’s right of contribution shall be subject to the terms and conditions
of Section 2(c). The provisions of this Section 2(b) shall in no respect limit
the obligations and liabilities of any Guarantor to the Secured Parties and each
Guarantor shall remain liable to the Secured Parties for the full amount
guaranteed by such Guarantor hereunder.

 

(c)           No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the Secured
Parties, no Guarantor shall be entitled to be subrogated to any of the rights of
the Secured Parties against the Company or any other Guarantor or any collateral
security or guarantee or right of offset held by the Secured Parties for the
payment of the Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or reimbursement from the Company or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Secured Parties by the Company on account of the Obligations are
indefeasibly paid in full. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such Guarantor in trust
for the Secured Parties, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Agent, if required), applied against the Obligations, whether matured or
unmetered, in such order as the Secured Parties may determine.

 

(d)           Amendments, Etc. With Respect to the Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Obligations made by the Secured
Parties may be rescinded by the Secured Parties and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Secured Parties, and the Transaction Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Secured Parties may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Secured Parties
for the payment of the Obligations may be sold, exchanged, waived, surrendered
or released. The Secured Parties shall have no obligation to protect, secure,
perfect, or insure any Lien at any time held by them as security for the
Obligations or for the guarantee contained in this Section 2 or any property
subject thereto.

 

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(e)           Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Secured Parties upon the
guarantee contained in this Section 2 or acceptance of the guarantee contained
in this Section 2; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Company and any of the Guarantors, on the one hand,
and the Secured Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 2. Each Guarantor waives to the extent permitted by
law diligence, presentment, protest, and demand for payment and notice of
default or nonpayment to or upon the Company or any of the Guarantors with
respect to the Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment and performance without regard
to (a) the validity or enforceability of any Transaction Document, any of the
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the Secured
Parties, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance or fraud by Secured Parties) which may at any time be
available to or be asserted by the Company or any other Person against the
Secured Parties, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Company or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the Company
for the Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Secured Parties may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as they may have
against the Company, any other Guarantor or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Secured Parties to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Company, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Company, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Secured Parties against any Guarantor. For the purposes
hereof, “demand” shall include the commencement and continuance of any legal
proceedings.

 

(f)            Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Secured Parties upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

 

(g)           Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Secured Parties without set-off or counterclaim in U.S.
dollars at the address set forth or referred to in the Signature Pages to the
Notes or other Transaction Documents.

 

3. Representations and Warranties. Each Guarantor hereby makes the following
representations and warranties to Secured Parties as of the date hereof:

 

(a)           Organization and Qualification. The Guarantor is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
applicable jurisdiction set forth on Schedule 1, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted. The Guarantor has no subsidiaries other than
those that are signatories hereto. The Guarantor is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of any of this
Guaranty in any material respect, (y) have a material adverse effect on the
results of operations, assets, prospects, or financial condition of the
Guarantor or (z) adversely impair in any material respect the Guarantor’s
ability to perform fully on a timely basis its obligations under this Guaranty
(a “Material Adverse Effect”).

 

(b)           Authorization; Enforcement. The Guarantor has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by this Guaranty, and otherwise to carry out its obligations
hereunder. The execution and delivery of this Guaranty by the Guarantor and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of the Guarantor. This
Guaranty has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application.

 

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(c)           No Conflicts. The execution, delivery and performance of this
Guaranty by the Guarantor and the consummation by the Guarantor of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its Certificate of Incorporation or By-laws or (ii)
conflict with, constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Guarantor is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Guarantor
is subject (including Federal and State securities laws and regulations), or by
which any material property or asset of the Guarantor is bound or affected,
except in the case of each of clauses (ii) and (iii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as could
not, individually or in the aggregate, have or result in a Material Adverse
Effect. The business of the Guarantor is not being conducted in violation of any
law, ordinance, or regulation of any governmental authority, except for
violations which, individually or in the aggregate, do not have a Material
Adverse Effect.

 

(d)           Consents and Approvals. The Guarantor is not required to obtain
any consent, waiver, authorization, or order of, or make any filing or
registration with, any court or other federal, state, local, foreign, or other
governmental authority or other person in connection with the execution,
delivery, and performance by the Guarantor of this Guaranty.

 

(e)           Universality of Representations and Warranties. The
representations and warranties of the Company set forth in any of the
Transaction Documents, as they relate to such Guarantor, each of which is hereby
incorporated herein by reference, are true and correct as of each time such
representations are deemed to be made pursuant to such Transaction Document, and
the Secured Parties shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation
and warranty to the Company’s knowledge shall, for the purposes of this Section
3, be deemed to be a reference to such Guarantor’s knowledge.

 

(f)            Foreign Law. If applicable, each Guarantor has consulted with
appropriate foreign legal counsel with respect to any of the above
representations for which non-U.S. law is applicable. Such foreign counsel have
advised each applicable Guarantor that such counsel knows of no reason why any
of the above representations would not be true and accurate. Such foreign
counsel were provided with copies of this Subsidiary Guarantee and the
Transaction Documents prior to rendering their advice.

 

4. Covenants.

 

(a)          Each Guarantor covenants and agrees with the Secured Parties that,
from and after the date of this Guarantee until the Obligations shall have been
indefeasibly paid in full, such Guarantor shall take, and/or shall refrain from
taking, as the case may be, each commercially reasonable action that is
necessary to be taken or not taken, as the case may be, so that no Event of
Default (as defined in the Notes) is caused by the failure to take such action
or to refrain from taking such action by such Guarantor.

 

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(b)         So long as any of the Obligations are outstanding, unless Secured
Parties holding at least 67% of the aggregate principal amount of the then
outstanding Notes shall otherwise consent in writing, each Guarantor will not
directly or indirectly on or after the date of this Guarantee:

 

i.            Enter into, create, incur, assume or suffer to exist any
indebtedness for borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

ii.           Enter into, create, incur, assume or suffer to exist any liens of
any kind, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom
except for permitted Liens;

 

iii.          Amend its certificate of incorporation, bylaws or other charter
documents so as to adversely affect any rights of any Secured Party;

 

iv.          Repay, repurchase or offer to repay, repurchase or otherwise
acquire more than a de minimis number of shares of its securities or debt
obligations;

 

v.           Pay cash dividends on any equity securities of the Company;

 

vi.          Enter into any transaction with any Affiliate of the Guarantor
which would be required to be disclosed in any public filing of the Company with
the Commission, unless such transaction is made on an arm’s-length basis and
expressly approved by a majority of the disinterested directors of the Company
(even if less than a quorum otherwise required for board approval); or

 

vii.         Enter into any agreement with respect to any of the foregoing.

 

5. Miscellaneous.

 

(a)           Amendments in Writing. None of the terms or provisions of this
Guarantee may be waived, amended, supplemented, or otherwise modified except in
writing by the Secured Parties.

 

(b)           Notices. All notices, requests, and demands to or upon the Secured
Parties or any Guarantor hereunder shall be effected in the manner provided for
in any of the Transaction Documents, provided that any such notice, request, or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 5(b).

 

(c)           No Waiver By Course Of Conduct; Cumulative Remedies. The Secured
Parties shall not by any act (except by a written instrument pursuant to Section
5(a)), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any default under the
Transaction Documents or Event of Default. No failure to exercise, nor any delay
in exercising, on the part of the Secured Parties, 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 Secured Parties of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Secured Parties 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.

 

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(d)         Enforcement Expenses; Indemnification.

 

(i)           Each Guarantor agrees to pay, or reimburse the Secured Parties
for, all its reasonable costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Guarantee and the other Transaction Documents
to which such Guarantor is a party, including, without limitation, the
reasonable fees and disbursements of counsel to the Secured Parties.

 

(ii)          Each Guarantor agrees to pay, and to save the Secured Parties
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable in connection with any of the transactions
contemplated by this Guarantee.

 

(iii)         Each Guarantor agrees to pay, and to save the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Guarantee to the extent the Company would
be required to do so pursuant to any of the Transaction Documents.

 

(iv)         The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under any of the Transaction
Documents.

 

(e)                Successor and Assigns. This Guarantee shall be binding upon
the successors and assigns of each Guarantor and shall inure to the benefit of
the Secured Parties and their respective successors and assigns; provided that
no Guarantor may assign, transfer or delegate any of its rights or obligations
under this Guarantee without the prior written consent of the Secured Parties.

 

(f)                Set-Off. Each Guarantor hereby irrevocably authorizes the
Secured Parties at any time and from time to time while an Event of Default
under any of the Transaction Documents shall have occurred and be continuing,
without notice to such Guarantor or any other Guarantor, any such notice being
expressly waived by each Guarantor, to set-off and appropriate and apply any and
all deposits, credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmetered, at any
time held or owing by the Secured Parties to or for the credit or the account of
such Guarantor, or any part thereof in such amounts as the Secured Parties may
elect, against and on account of the obligations and liabilities of such
Guarantor to the Secured Parties hereunder and claims of every nature and
description of the Secured Parties against such Guarantor, in any currency,
whether arising hereunder, under any Transaction Document or otherwise, as the
Secured Parties may elect, whether or not the Secured Parties have made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmetered. The Secured Parties shall notify such Guarantor
promptly of any such set-off and the application made by the Secured Parties of
the proceeds thereof, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Secured
Parties under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Secured
Parties may have.

 

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(g)           Counterparts. This Guarantee may be executed by two or more of the
parties to this Guarantee on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

 

(h)           Severability. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

(i)            Section Headings. The Section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

 

(j)            Integration. This Guarantee and the other Transaction Documents
represent the agreement of the Guarantors and the Secured Parties with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Secured Parties relative to
subject matter hereof and thereof not expressly set forth or referred to herein
or in the other Transaction Documents.

 

(k)           Governing Laws. All questions concerning the construction,
validity, enforcement and interpretation of this Guarantee shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each of
the Company and the Guarantors agree that all proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Guarantee (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members, employees or
agents) shall be commenced exclusively in the state and federal courts sitting
in the City of New York. Each of the Company and the Guarantors hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Guarantee and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Guarantee or the transactions contemplated hereby.

  

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(l)            Acknowledgements. Each Guarantor hereby acknowledges that:

 

(i)           It has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the other Transaction Documents to which it is a
party;

 

(ii)          The Secured Parties have no fiduciary relationship with or duty to
any Guarantor arising out of or in connection with this Guarantee or any of the
other Transaction Documents, and the relationship between the Guarantors, on the
one hand, and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

 

(iii)         No joint venture is created hereby or by the other Transaction
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Guarantors and the Secured Parties.

 

(m)          Additional Guarantors. The Company shall cause each of its
subsidiaries formed or acquired on or subsequent to the date hereof to become a
Guarantor for all purposes of this Guarantee by executing and delivering an
Assumption Agreement in the form of Annex 1 hereto.

 

(n)           Release of Guarantors. Each Guarantor will be released from all
liability hereunder concurrently with the indefeasible repayment in full of all
amounts owed under the Notes and the Transaction Documents.

 

(o)           Seniority. The Obligations of each of the Guarantors hereunder
rank senior in priority to any other Indebtedness (as defined in the Notes) of
such Guarantor.

 

(p)           WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND
FOR ANY COUNTERCLAIM THEREIN.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly
executed and delivered as of the date first above written.

 

HELIX TCS, LLC         By:      

Name:

Title:

        SECURITY CONSULTANTS GROUP         By:      

Name:

Title:

        BOSS SECURITY SOLUTIONS, INC.       By:      

Name:

Title:

        Consented and agreed to:         REDDIAMOND PARTNERS, LLC       By:    
 

Name:

Title:

 

  

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SCHEDULE 1

 

GUARANTORS

 

The following are the names, notice addresses, and jurisdiction of organization
of each Guarantor.

 

NAME/ADDRESS  JURISDICTION OF
INCORPORATION  COMPANY PERCENTAGE
OWNERSHIP Helix TCS, LLC
  Delaware  100% Security Consultants Group
  Colorado  100% BOSS Security Solutions, Inc.
  Colorado  100%        

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DISCLOSURE SCHEDULES

(Subsidiary Guarantee)

 

 

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ANNEX 1 TO

 

SUBSIDIARY GUARANTEE

 

ASSUMPTION AGREEMENT, dated as of ___________ __, 201__ made by
______________________________, a ______________ corporation (the “Additional
Guarantor”), in favor of the Secured Parties pursuant to the Notes referred to
below. All capitalized terms not defined herein shall have the meaning ascribed
to them in such Notes.

 

W I T N E S S E T H:

 

WHEREAS, Helix TCS, Inc., a Nevada corporation (the “Company”) and the Secured
Parties have entered into a series of transactions, dated as of February __,
2017, including the purchase by the Secured Parties of certain debt securities
of the Company (as amended, supplemented, or otherwise modified from time to
time, the “Transaction Documents”);

 

WHEREAS, in connection with the Transaction Documents, the Subsidiaries of the
Company (other than the Additional Guarantor) have entered into the Subsidiary
Guarantee, dated as of February __, 2017 (as amended, supplemented or otherwise
modified from time to time, the “Guarantee”) in favor of the Secured Parties;

 

WHEREAS, one or more of the Transaction Documents requires the Additional
Guarantor to become a party to the Guarantee; and

 

WHEREAS, the Additional Guarantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee;

 

NOW, THEREFORE, IT IS AGREED:

 

1.           Guarantee. By executing and delivering this Assumption Agreement,
the Additional Guarantor, as provided in Section 5(m) of the Guarantee, hereby
becomes a party to the Guarantee as a Guarantor thereunder with the same force
and effect as if originally named therein as a Guarantor and, without limiting
the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1
hereto is hereby added to the information set forth in Schedule 1 to the
Guarantee. The Additional Guarantor hereby represents and warrants that each of
the representations and warranties contained in Section 3 of the Guarantee is
true and correct on and as the date hereof as to such Additional Guarantor
(after giving effect to this Assumption Agreement) as if made on and as of such
date.

 

2.           Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

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IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GUARANTOR]         By:      

Name:

Title:

 

  

 

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