Exhibit 10.1

 

REVENUE SHARING AND NOTE PURCHASE AGREEMENT

 

(SITO MOBILE, LTD.)

 

 

Dated as of OCTOBER 3, 2014

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS 1   1.1. Certain Defined Terms. 1   1.2. Other
Interpretative Provisions. 1     ARTICLE II CLOSING AND TERMS OF THE REVENUE
STREAM AND NOTES 2   2.1. The Revenue Stream. 2   2.2. The Notes. 2   2.3.
Monetization Revenues. 4   2.4. Purchase Price Allocation. 4   2.5. Taxes. 4  
2.6. Manner and Time of Payment. 5   2.7. Patent License. 5     ARTICLE III
CONDITIONS PRECEDENT 5   3.1. Conditions to Closing. 5     ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7   4.1. Organization and
Business. 7   4.2. Qualification. 7   4.3. Operations in Conformity with Law,
etc. 7   4.4. Authorization and Non-Contravention. 7   4.5. Intellectual
Property. 8   4.6. Material Agreements. 8   4.7. Margin Regulations. 8   4.8.
Investment Company Act. 8   4.9. USA PATRIOT Act, FCPA and OFAC. 8   4.10. No
Default. 9   4.11. Binding Effect. 9   4.12. Disclosure. 9     ARTICLE V 9    
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS AND COLLATERAL AGENT
9   5.1. Authority. 9   5.2. Binding Effect. 10   5.3. Investment Intent. 10  
5.4. Experience of the Purchaser. 10   5.5. Access to Information. 10   5.6
Reliance on Exemptions. 10     ARTICLE VII COVENANTS 10   6.1. Taxes and Other
Charges. 11   6.2. Conduct of Monetization Activities. 11   6.3. Maintenance of
Existence. 11

 

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  6.4. Compliance with Legal Requirements. 11   6.5. Notices; Reports. 11   6.6.
Information Rights. 12   6.7. Indebtedness. 13   6.8. Liens. 13   6.9.
Management of Patents and Patent Licenses. 14   6.10. Minimum Liquidity. 14  
6.11. Cash Collateral Account. 15   6.12. Further Assurances. 15   6.13.
Confidentiality. 16     ARTICLE VIII EVENTS OF DEFAULT 16   7.1. Events of
Default. 16   7.2. Remedies Following an Event of Default. 18   7.3. Annulment
of Defaults. 19   7.4. Waivers. 19     ARTICLE IX COLLATERAL AGENT 20   8.1.
Appointment of Collateral Agent. 20   8.2. Collateral. 20   8.3. Collateral
Agent’s Resignation. 20   8.4. Concerning the Collateral Agent. 20     ARTICLE X
GENERAL PROVISIONS 22   9.1. Expenses. 22   9.2. Indemnity. 23   9.3. Notices.
23   9.4. Amendments, Consents, Waivers, etc. 24   9.5. No Strict Construction.
24   9.6. Certain Acknowledgments. 24   9.7. Venue; Service of Process; Certain
Waivers. 24   9.8. WAIVER OF JURY TRIAL. 25   9.9. Interpretation; Governing
Law; etc. 25   9.10. Successors and Assigns 26   9.11. Tax Treatment. 27

 

APPENDICES, SCHEDULES AND EXHIBITS

 

Appendix I Definitions     Exhibit A Form of Note Exhibit B Control Agreement
Exhibit C Form of Certificate (Payments to Cash Collateral Account) Exhibit D-1
Note Assignment and Acceptance Agreement Exhibit D-2 Revenue Stream Assignment
and Acceptance Agreement Exhibit E Patent License Agreement Exhibit F Patent
Security Agreement Exhibit G Security Agreement

 

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REVENUE SHARING AND NOTE PURCHASE AGREEMENT

 

This REVENUE SHARING AND NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as
of October 3, 2014 by and among SITO Mobile, Ltd., a Delaware corporation
(“Parent”), Single Touch Interactive, Inc., a Nevada corporation (“Licensee”)
and Single Touch Interactive R&D IP, LLC, a Delaware limited liability company
(“Owner”, and, collectively, together with Parent and Licensee, the “Company”),
and Fortress Credit Co LLC as collateral agent (the “Collateral Agent”), each
Person listed on Schedule 2.1 hereto (the “Revenue Participants”) and each
Person listed on Schedule 2.2 hereto (the “Note Purchasers” and, together with
the Revenue Participants, the “Purchasers”).

 

RECITALS

 

WHEREAS, the Revenue Participants wish to acquire, and the Company has agreed to
grant, an interest in certain of the Company’s future revenues from its patent
portfolio subject to payment of the purchase price and other conditions
specified herein; and

 

WHEREAS, the Note Purchasers have agreed to purchase from the Company, and the
Company has agreed to issue and sell to the Purchasers, up to $10,000,000 in
aggregate original principal amount of the Company’s senior secured notes (the
“Notes”) in the form of Exhibit A hereto, subject to the terms of this
Agreement;

 

NOW THEREFORE, in consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

ARTICLE I
DEFINITIONS

 

1.1. Certain Defined Terms. Capitalized terms used in this Agreement and not
otherwise defined shall have the meanings set forth in Appendix I.

 

1.2. Other Interpretative Provisions. Unless otherwise specified, all references
to “$”, “cash”, “dollars” or similar references shall mean U.S. dollars, paid in
cash or other immediately available funds. The definitions set forth in this
Agreement are equally applicable to both the singular and plural forms of the
terms defined. The words “hereof”, “herein”, and “hereunder” and words of like
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All references to time of day
herein are references to New York, New York time (daylight or standard, as
applicable) unless otherwise specifically provided. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, it shall be done in accordance with
GAAP except where such principles are inconsistent with the specific provisions
of this Agreement. References in this Agreement to an Appendix, Exhibit,
Schedule, Article, Section, clause or subclause refer (A) to the appropriate
Appendix, Exhibit or Schedule to, or Article, Section, clause or subclause in
this Agreement or (B) to the extent such references are not present in this
Agreement, to the Document in which such reference appears. The term “including”
is by way of example and not limitation. The word “or” is not exclusive. In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each mean
“to but excluding”; and the word “through” means “to and including.” The term
“documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form. All references to any Person
shall be constructed to include such Person’s successors and assigns (subject to
any restriction on assignment set forth herein). Unless otherwise expressly
provided herein, references to any law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such law.

 

 

 

 

ARTICLE II
CLOSING AND TERMS OF THE REVENUE STREAM AND NOTES

 

2.1. The Revenue Stream.

 

2.1.1. Purchase of the Revenue Stream. On the Closing Date, subject to the
satisfaction of the conditions set forth in Section 3.1, and against the payment
of an aggregate purchase price of $500,000 allocated as set forth on Schedule
2.1, the Company hereby grants, and the Revenue Participants hereby acquire the
Revenue Stream. The rights of the Revenue Participants to the Revenue Stream
shall be secured pursuant to the Collateral Documents, junior in priority to the
rights of the Note Purchasers.

 

2.1.2. Payments to Revenue Participants. Following the prior payment in full of
the Notes, the Company shall pay to the Revenue Participants their proportionate
share, in accordance with Schedule 2.1, of the Revenue Stream; provided, that
the Company shall instruct any payors to deposit Monetization Revenues, directly
into the Cash Collateral Account. Except to the extent that the Collateral Agent
is enjoined or stayed from distributing any such Monetization Revenues, such
direct deposit in the Cash Collateral Account by payors shall constitute timely
payment by the Company. Payments by the Company to the Revenue Participants
shall be made monthly on the last Business Day of each month with respect to any
Monetization Revenues received through such date. For the avoidance of doubt,
prior to the payment in full of the Notes, all Monetization Proceeds shall be
applied by the Company or the Collateral Agent, as the case may be, to the
payment of principal, interest and any applicable premiums or fees on the Notes
or payments owed pursuant to Sections 9.1(ii)-(iv) or 9.2, and shall not be
shared with any Revenue Participants as a payment in respect of the Revenue
Stream.

 

2.2. The Notes.

 

2.2.1. Purchase and Sale of the Notes. On the Closing Date, subject to
satisfaction of the conditions set forth in Section 3.1, the Company agrees to
issue and sell, and each Note Purchaser agrees to purchase, for the purchase
price set forth on Schedule 2.2 and in accordance with the percentages set forth
on Schedule 2.2, Notes in an aggregate original principal amount of $10,000,000.

 

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2.2.2. Interest on the Notes. The unpaid principal amount of the Notes
(including any PIK Interest) shall bear interest at a rate equal to LIBOR plus
9% per annum; provided that upon and during the continuance of an Event of
Default under Section 7.1.1, the interest rate shall increase by an additional
2% per annum. Interest on the Notes shall be paid on the last Business Day of
each calendar month (the “Interest Payment Date”), starting with the calendar
month ending October 31, 2014. Such interest shall be paid in cash except that
2.00% per annum of the interest due on each Interest Payment Date shall be
paid-in-kind, by increasing the principal amount of the Notes by the amount of
such interest, effective as of the applicable Interest Payment Date (“PIK
Interest”). PIK Interest shall be treated as principal of the Note for all
purposes of interest accrual or calculation of any premium.

 

2.2.3. Fees.

 

2.2.3.1. At the Closing Date, the Company shall pay to the Purchasers a
structuring fee equal to $150,000 (the “Structuring Fee”), which amount shall be
netted out of the funding at the Closing Date.1

 

2.2.3.2. Upon the earlier of the date on which the Notes are paid in full, or
become due (whether at the Maturity Date or upon acceleration), the Company
shall pay to the Note Purchasers a termination fee equal to $350,000.

 

2.2.4. Payment of the Notes.

 

2.2.4.1. Payment at Maturity. The principal of the Notes and all unpaid interest
thereon or other amounts owing hereunder shall be paid in full in cash on March
31, 2018 (the “Maturity Date”).

 

2.2.4.2. Optional Prepayments. The Company may prepay the Notes from time to
time in whole or in part, without penalty or premium, except that any optional
prepayments of the Notes prior to the first anniversary of the Closing Date
shall be accompanied by a prepayment premium equal to 5.00% of the principal
amount prepaid. Any such prepayment shall include accrued and unpaid interest on
the amount prepaid.

 

2.2.4.3. Amortization. Commencing on the last Business Day of October, 2015, the
Company shall make monthly amortization payments on the Notes each in a
principal amount equal to Three Hundred Thirty Three Thousand, Three Hundred and
Thirty Four Dollars ($333,334) until the Notes are paid in full.

 

2.2.4.4. Mandatory Prepayments. Upon receipt of any Monetization Revenues, the
Company or the Collateral Agent, as the case may be, shall apply 85% of such
Monetization Revenues to the payment of accrued and unpaid interest on, and then
to repay outstanding principal (at par) of, and any fees with respect to, the
Notes until all amounts due with respect to the Notes have been paid in full.
Payments by the Company on the Notes shall be made monthly on the last Business
Day of each month with respect to Monetization Revenues received in through such
date.

 

 

1 Structuring fee to be 1.5% of the original principal amount; termination fee
to be 3.5% of the original principal amount. 

 

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2.2.4.5. Application of Payments. Payments on the Notes shall be applied in the
following order, first to any then outstanding expenses or other amounts owing
pursuant to Article 9; second, to accrued and unpaid interest (excluding PIK
Interest); third to principal; fourth to any prepayment premium on the principal
so repaid; and finally, after all principal of the Notes and any prepayment
premium, has been paid in full, to the termination fee. Prepayments of the Notes
(whether mandatory or optional) shall reduce amortization payments, pro rata.

 

2.3. Monetization Revenues. All Monetization Revenues received by the Company or
deposited in the Cash Collateral Account shall be applied so that 85% of
Monetization Revenues are applied to the Notes until paid in full; provided,
that 100% of Monetization Revenues shall be applied to pay any past due amounts
on the Notes, including in the event of acceleration of the Notes. Following
payment in full of the Notes, the Applicable Percentage of the Monetization
Revenues shall be paid to the Revenue Participants for application to the
Revenue Stream until fully satisfied.

 

2.4. Purchase Price Allocation. The Company and the Purchasers agree that, for
purposes of Sections 305 and 1271 through 1275 of the Code or any other
jurisdiction, the aggregate purchase price of the Notes shall be $8,350,000, and
the aggregate purchase price of the Revenue Stream shall be $500,000, and that
such purchase prices shall be used by the Company and each Purchaser for all
financial and income tax reporting purposes.2

 

2.5. Taxes. Any and all payments by the Company with respect to any Notes or the
Revenue Stream shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings in any such case imposed by the United States or any political
subdivision thereof, excluding taxes imposed or based on the recipient
Purchaser’s overall net income, and franchise or capital taxes imposed on it in
lieu of net income taxes (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder being hereinafter referred to as “Taxes”). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Notes to any Purchaser, (i) the sum payable shall be
increased as may be reasonably necessary so that after making all required
deductions for taxes (including deductions for taxes applicable to additional
sums payable under this Section 2.5) such Purchaser receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Company shall make such deductions and (iii) the Company shall remit the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. Within 30 days after the date of any payment of
such Taxes, the Company shall furnish to the Purchasers the original or
certified copy of a receipt evidencing payment thereof.

 

 

2 We contemplate that a purchase price of $500,000 be allocated to the Revenue
Stream, and that the balance of the $10,000,000 funding after netting out the
structuring fee and $1mm OID will be allocated to the Notes. As such, the net
purchase price of the Notes will total $8,350,000.

 

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2.6. Manner and Time of Payment. All payments to the Note Purchasers or the
Revenue Participants (or the Cash Collateral Account, as the case may be) shall
be made by wire transfer or other same day funds, without set off, not later
than 2:00 p.m. on the day such payment is due, in accordance with the payment
instructions set forth on Schedule 2.6.

 

2.7. Patent License. Effective as of the Closing Date, the Company shall grant
to the Collateral Agent, for the benefit of the Secured Parties, a
non-exclusive, royalty free, license (including the right to grant sublicenses)
with respect to the Patents, which shall be evidenced by, and reflected in, the
Patent License Agreement. The Collateral Agent and the Secured Parties agree
that the Collateral Agent shall only use such license following an Event of
Default.

 

ARTICLE III
CONDITIONS PRECEDENT

 

3.1. Conditions to Closing. The obligation of each Revenue Participant to
purchase its respective pro rata share of the Revenue Stream and the obligation
of each Note Purchaser to purchase its respective pro rata share of the Notes on
the Closing Date is subject to the satisfaction of the conditions set forth in
this Section 3.1:

 

3.1.1. Deliveries. The Company (and each of its Subsidiaries, as applicable)
shall have delivered to each Purchaser and the Collateral Agent fully executed
(where applicable) copies of the following:

 

3.1.1.1. this Agreement;

 

3.1.1.2. the Notes;

 

3.1.1.3. the Security Agreement;

 

3.1.1.4. the Patent License Agreement;

 

3.1.1.5. the Patent Security Agreement;

 

3.1.1.6. the Limited Liability Company Agreement;

 

3.1.1.7. the Proxy;

 

3.1.1.8. Stock Certificate in SITO Mobile, Ltd.

 

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3.1.1.9. (i) a copy of the certificate or articles of incorporation, certificate
of formation, limited liability company agreement or other constitutive
document, including all amendments thereto, of the Company, certified as of a
recent date by the Secretary of State of the state of its organization and a
certificate as to the good standing of the Company as of a recent date, from
such Secretary of State (or, in each case, a comparable governmental official,
if available); (ii) a certificate of the Secretary or Assistant Secretary of the
Company, dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws and any limited liability company
agreement of the Company as in effect on the Closing Date and at all times since
a date prior to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors or managers of the Company authorizing the
execution, delivery and performance of the Documents, and that such resolutions
and consents have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation of the Company
or the applicable subsidiary have not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished pursuant
to clause (i) above, and (D) as to the incumbency and specimen signature of each
officer executing this Agreement or any other Document on behalf of the Company;
and (iii) to the extent available, a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above;

 

3.1.1.10. an opinion of counsel for the Company addressed to the Collateral
Agent and each other party hereto in customary form and otherwise in form and
substance reasonably satisfactory to the Collateral Agent;

 

3.1.1.11. an officer’s certificate from an Authorized Officer of the Company
certifying that the condition set forth in Section 3.1.2 has been satisfied; and

 

3.1.1.12. all documentation and other information about the Company requested by
the Revenue Participants or the Note Purchasers or the Collateral Agent under
applicable “know your customer” and anti-money laundering rules and regulations,
including the USA PATRIOT Act.

 

3.1.2. Representations and Warranties; No Default. The representations and
warranties contained in this Agreement and the other Documents shall be true and
correct in all material respects, and there shall exist no Default or Event of
Default, including after giving effect to the transactions contemplated herein.

 

3.1.3. Consummation of Purchase of Common Stock. The Subscription Agreement
shall have been executed and delivered and shares of Parent Common Stock sold to
the Purchasers as contemplated thereby.

 

3.1.4. Fees and Expenses. The Structuring Fee, and the expenses of the
Purchasers and the Collateral Agent invoiced as of the Closing Date (subject to
Section 9.1(i)), shall have been paid in full, in cash.

 

3.1.5. Due Diligence. The Purchasers shall have completed their due diligence,
and shall be satisfied with the results thereof, in their sole judgment.

 

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3.1.6. Senior Lien. The Purchasers shall be satisfied that, after giving effect
to the Collateral Documents, and to the making of any filings contemplated
thereby, the Collateral Agent will have a first priority perfected lien in the
Patents and all other material assets of the Company and its Subsidiaries.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

In order to induce the Revenue Participants to purchase the Revenue Stream and
the Note Purchasers to purchase the Notes, the Company hereby represents and
warrants to the Purchasers as of the Closing Date that:

 

4.1. Organization and Business. The Company is (a) a duly organized and validly
existing corporation or limited liability company, (b) in good standing under
the laws of the jurisdiction of its incorporation or organization, and (c) has
the power and authority, corporate or otherwise, necessary (i) to enter into and
perform this Agreement and the Documents to which it is a party, and (ii) to
carry on the business now conducted or proposed to be conducted by it. Parent
has no Subsidiaries other than Licensee and Owner. Schedule 4.1 sets forth each
entity in which the Company holds an interest, directly or indirectly, and sets
forth the ownership of all equity securities of each such entity (including
joint venture, membership or partnership interests, and including convertible
securities, options or warrants).

 

4.2. Qualification. The Company is duly and legally qualified to do business as
a foreign corporation or limited liability company and is in good standing in
each state or jurisdiction in which such qualification is required and is duly
authorized, qualified and licensed under all laws, regulations, ordinances or
orders of public authorities, or otherwise, to carry on its business in the
places and in the manner in which it is conducted.

 

4.3. Operations in Conformity with Law, etc. The operations of the Company as
now conducted or proposed to be conducted are not in violation in any material
respect of, nor is the Company in default in any material respect under, any
Legal Requirement.

 

4.4. Authorization and Non-Contravention. The Company has taken all corporate,
limited liability or other action required to execute, deliver and perform this
Agreement and each other Document. All necessary consents, approvals and
authorizations of any governmental or administrative agency or any other Person
of any of the transactions contemplated hereby shall have been obtained and
shall be in full force and effect. This Agreement and each other Document does
not (i) contravene the terms of any of the Company’s Organization Documents,
(ii) conflict with or result in any breach or contravention of, or the creation
of any Lien under, or require any payment to be made under (x) any Contractual
Obligation of the Company or its applicable Subsidiaries or (y) any material
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which the Company is subject or (iii) violate any Legal Requirement.

 

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4.5. Intellectual Property. As of the Closing Date, subject solely to the
licensing agreements set forth on Schedule 4.5 (the “Existing Licenses”) (true
and complete copies of which have been delivered to the Purchasers), Owner is
the entire, valid, sole and exclusive beneficial and record owner of all right,
title and interest to all of the Patents with good and marketable title free and
clear of any and all Liens, charges and encumbrances, including, without
limitation, that other than the Existing Licenses, there are no pledges,
assignments, licenses, springing licenses, options, non-assertion agreements,
earn-outs, monetization agreements, profit and revenue sharing arrangements,
derivative interests, fee and recovery splitting agreements, registered user
agreements, shop rights and covenants by Owner not to sue third persons, and
Owner has the power to bring and sustain action and recover for past, present
and future infringement without having to join any other third party and that no
provision of any Existing License will materially restrict the ability of Owner
to pursue Monetization Activities. Owner is listed as record owner of all of the
Patents and the recordings in the United States Patent and Trademark Office do
not reflect any defects in chain-of-title or unreleased liens. All of the
Patents are subsisting and have not been adjudged invalid or unenforceable, in
whole or in part, and none of the Patents are at this time the subject to any
challenge to their validity or enforceability. To the knowledge of the Company,
the Patents are valid and enforceable. The Company has no notice of any
lawsuits, actions or opposition, cancellation, revocation, re-examination or
reissue proceedings commenced or threatened with reference to any of the
Patents.

 

4.6. Material Agreements. Schedule 4.6 sets forth each agreement relating to the
purchase or other acquisition of any Patent, including seller notes issued in
connection with such acquisition, and any other material agreement relating to
any Patent (other than the Existing Licenses). Each such agreement is in full
force and effect for the benefit of the Company and to the knowledge of the
Company there are no material defaults under any such agreement.

 

4.7. Margin Regulations. The Company is not engaged, nor will it engage,
principally or as one of its important activities, in the business of purchasing
or carrying Margin Stock, or extending credit for the purpose of purchasing or
carrying Margin Stock, and the Notes will not be used for any purpose that
violates Regulation U of the Board of Governors of the United States Federal
Reserve System.

 

4.8. Investment Company Act. The Company is not, and is not required to be,
registered as an “investment company” under the Investment Company Act of 1940.

 

4.9. USA PATRIOT Act, FCPA and OFAC.

 

4.9.1. To the extent applicable, the Company is in compliance, in all material
respects, with (i) the Trading with the Enemy Act, as amended, and each of the
foreign assets control regulations of the United States Treasury Department (31
CFR Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto and (ii) the USA Patriot Act.

 

4.9.2. No part of the proceeds of the Notes or the purchase price for the
Revenue Stream will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

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4.9.3. None of the Company nor, to the knowledge of the Company, any director,
officer, agent, employee or controlled Affiliate of the Company, is currently
the subject of any U.S. sanctions program administered by the Office of Foreign
Assets Control of the United States Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the Notes or
otherwise make available such proceeds to any Person, for the purpose of
financing the activities of any Person currently the subject of any U.S.
sanctions program administered by OFAC, except to the extent licensed or
otherwise approved by OFAC.

 

4.10. No Default. No Default or Event of Default exists or would result from the
incurring of any Obligations by the Company or the grant or perfection of Liens
on the Collateral. The Company is not in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, would reasonably be expected to have a Material Adverse Effect.

 

4.11. Binding Effect. This Agreement and each other Document constitute the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors’ rights generally or by equitable principles relating
to enforceability.

 

4.12. Disclosure. No report, financial statement, certificate or other written
information furnished by or on behalf of the Company (other than projected
financial information, pro forma financial information and information of a
general economic or industry nature) to any Purchaser or the Collateral Agent in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder or any other Document (as modified or
supplemented by other information so furnished) when taken as a whole contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein (when taken as a whole), in the light of the
circumstances under which they were made, not materially misleading. With
respect to projected financial information and pro forma financial information,
the Company represents that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time of preparation; it being
understood that such projections may vary from actual results and that such
variances may be material.

 

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS AND COLLATERAL AGENT

 

Each Purchaser, for itself and for no other Purchaser, and the Collateral Agent
hereby represents and warrants to the Company as of the Closing Date:

 

6.1. Authority. The Purchaser and the Collateral Agent, as the case may be, has
the power and authority, corporate or otherwise, necessary to enter into and
perform this Agreement and the Documents to which it is a party.

 

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6.2. Binding Effect. This Agreement and each other Document constitute the
legal, valid and binding obligations of the Purchaser and the Collateral Agent,
enforceable against the Purchaser or the Collateral Agent as the case may be in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to
enforceability.

 

6.3. Investment Intent. The Purchaser understands that the Note is a “restricted
security” and has not been registered under the Securities Act or any applicable
state securities law and is acquiring the Note as principal for its own account
and not with a view to or for distributing or reselling the Note or any part
thereof in violation of the Securities Act or any applicable state securities
laws. The Purchaser does not presently have any agreement, plan or
understanding, directly or indirectly, with any Person to distribute or effect
any distribution of the Note (or any securities which are derivatives thereof)
to or through any person or entity.

 

6.4. Experience of the Purchaser. The Purchaser has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Note, and has so evaluated the merits and risks of such investment. The
Purchaser is able to bear the economic risk of an investment in the Note and, at
the present time, is able to afford a complete loss of such investment. The
Purchaser understands that its investment in the Note involves a significant
degree of risk.

 

6.5. Access to Information. The Purchaser acknowledges that it has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Note and the merits and risks of investing in
the Note; (ii) access to information about the Company and its subsidiaries and
their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. The Purchaser has sought such accounting, legal and tax advice as it
has considered necessary to make an informed decision with respect to its
acquisition of the Note.

 

5.6 Reliance on Exemptions. The Purchaser understands that the Notes are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of U.S. federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and the Purchaser’s compliance
with, the representations, warranties, agreements, acknowledgements and
understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
its Note.

 

ARTICLE VII
COVENANTS

 

Until all of the Company’s obligations with respect to the Notes and the Revenue
Stream, have been paid in full in cash, the Company shall comply with the
covenants set forth in this Article VI.

 

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7.1. Taxes and Other Charges. The Company shall duly pay and discharge, or cause
to be paid and discharged, before the same becomes in arrears, all taxes,
assessments and other governmental charges imposed upon such Person and its
properties, sales or activities, or upon the income or profits therefrom;
provided, however, that any such tax, assessment, charge or claim need not be
paid if the validity or amount thereof shall at the time be contested in good
faith by appropriate proceedings and if such Person shall, in accordance with
GAAP, have set aside on its books adequate reserves with respect thereto;
provided, further, that the Company shall pay or bond, or cause to be paid or
bonded, all such taxes, assessments, charges or other governmental claims
immediately upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor (except to the extent such proceedings have
been dismissed or stayed).

 

7.2. Conduct of Monetization Activities. The Company shall undertake its best
efforts to diligently pursue the monetization of the Patents, and shall provide
regular updates to the Purchasers and their advisors, and shall consult with
Purchasers and their advisors on request, as to such activities.

 

7.3. Maintenance of Existence. The Company shall do all things necessary to
preserve, renew and keep in full force and effect and in good standing its legal
existence and authority necessary to continue its business.

 

7.4. Compliance with Legal Requirements. The Company shall comply in all
material respects with all valid Legal Requirements applicable to it, except
where compliance therewith shall at the time be contested in good faith by
appropriate proceedings.

 

7.5. Notices; Reports.

 

7.5.1. Certain Notices. The Company shall, promptly following having notice or
knowledge thereof, furnish to each of the Note Purchasers and Revenue
Participants such information as they may reasonably request concerning the
Company’s Monetization Activities and Monetization Revenues, including without
limitation the following:

 

7.5.1.1. any dispute, litigation, investigation, suspension or any
administrative or arbitration proceeding by or against the Company for an amount
in excess of $500,000 or affecting the Company’s ownership rights with respect
to the Patents; and

 

7.5.1.2. promptly upon acquiring knowledge thereof, the existence of any Default
or Event of Default, specifying the nature thereof and what action the Company
has taken, is taking or proposes to take with respect thereto.

 

Each notice pursuant to this Section shall be accompanied by a statement by an
Authorized Officer of the Company, on behalf of the Company, setting forth
details of the occurrence referred to therein, and stating what action the
Company or other Person proposes to take with respect thereto and at what time.
Each notice under Section 6.5.1.2 shall describe with particularity any and all
clauses or provisions of this Agreement or other Document that have been
breached or violated.

 

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7.5.2. Certain Reports. The Company shall cause to be furnished to each of the
Note Purchasers and the Revenue Participants the following:

 

7.5.2.1. no later than the 15th day of every month, a report calculating in
detail its Monetization Revenues, in each case in form and substance reasonably
satisfactory to the Majority Purchasers;

 

7.5.2.2. copies of any demand, cease and desist or other similar letter and
copies of any material filing in any litigation or arbitration relating to the
Patents by or against the Company that is not subject to an “attorneys’ eyes
only” or other protective order, as soon as reasonably practical after receipt
thereof or, in the case of any material letter sent or material filing made by
the Company, which is not subject to an “attorneys’ eyes only” or other
protective order, as early as practical prior to the date such letter is to be
sent or such filing is to be made;

 

7.5.2.3. promptly (and in any event within 10 Business Days) after execution
thereof, copies of all judgments, settlement agreements or licenses with respect
to the Patents; and

 

7.5.2.4. promptly (and in any event within 10 Business Days), such additional
business, financial, corporate affairs and other information as the Majority
Purchasers may from time to time reasonably request.

 

Subject to the preservation of any privilege, the Company shall authorize and
direct any legal counsel or consultant engaged by it to discuss the status of
the Company’s Monetization Activities with the Purchasers and the Collateral
Agent.

 

7.6. Information Rights.

 

7.6.1. Upon request of the Majority Purchasers, the Company shall permit any
Purchaser and any Purchaser’s duly authorized representatives and agents to
visit during normal business hours and inspect any of its property, corporate
books, and financial records related to the Patents, to examine and make copies
of its books of accounts and other financial records related to the Patents and
its Monetization Activities and Monetization Revenues, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its
managers, officers, employees and independent public accountants (and by this
provision the Company hereby authorizes such accountants to discuss with the
Purchasers the finances and affairs of the Company so long as (i) an officer or
manager of the Company has been afforded a reasonable opportunity to be present
for such discussion and (ii) such accountants shall be bound by standard
confidentiality obligations), in each case related to the Patents and the
Monetization Activities and Monetization Revenues. In addition, upon request of
the Majority Purchasers from time to time, and subject to any claims of
privilege, the Company shall provide the Purchasers with a status update of any
material development in any litigations or any administrative or arbitration
proceeding related to the Patents. All costs and expenses incurred by the
Purchasers and their duly authorized representatives and agents in connection
with the exercise of the Purchasers’ rights pursuant to this Section 6.6 shall
be paid by the Company.

 

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7.6.2. The Purchasers acknowledge that in connection with their information and
access rights under this Agreement, the Company may be required to provide
information that may be deemed to be material non public information; provided
that the Company agrees to clearly identify any such information prior to
delivery and to request and obtain Purchaser confirmation prior to such delivery
that the Purchasers wish to receive such information notwithstanding that it may
constitute material non public information. The Purchasers and the Company agree
to work together in good faith to establish procedures for the handling of
information that may constitute material non public information, including
procedures that enable the Purchasers to evaluate from time to time the extent
to which they are prepared to receive material non public information by the
Company and as to which of such information will be subject to periodic
“cleansing disclosure” and/or the establishment of “trading windows” in order to
achieve the Purchasers’ objectives of remaining reasonably informed of the
Company’s Monetization Activities and available to consult with the Company
regarding such activities, while not being unreasonably restricted in public
trading of common stock of the Company. For the avoidance of doubt, subject to
the Company not providing the Purchasers with any information that it is not
prepared to disclose to the public without first providing a written notice to
the Purchasers identifying, with specificity, which information is subject to
such restriction, the Company shall have no obligation to any Purchaser to
disclose information to the public, whether by press release or SEC filing, that
it is not otherwise obligated to disclose at such time pursuant to the
Securities Exchange Act of 1943 and the regulations of the SEC promulgated
thereunder.

 

7.7. Indebtedness. The Company shall not create, incur, assume or otherwise
become or remain liable with respect to any Indebtedness that is secured by the
Patents or any rights related thereto. The Company shall not incur any other
Indebtedness, except for:

 

7.7.1. Indebtedness in respect of the Obligations;

 

7.7.2. unsecured trade payables that are not evidenced by a promissory note and
are incurred in the Ordinary Course of Business;

 

7.7.3. the existing Indebtedness set forth on Schedule 6.7; and

 

7.7.4. additional unsecured Indebtedness that is subordinated to the rights of
the Purchasers under this Agreement pursuant to an agreement in form and
substance satisfactory to the Majority Purchasers.

 

7.8. Liens. The Company shall not create, incur, assume or suffer to exist any
Lien upon any Patent other than the following (“Permitted Liens”):

 

7.8.1. Liens securing the Obligations, and

 

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7.8.2. the Existing Licenses and other non-exclusive licenses that are entered
into pursuant to the Company’s Monetization Activities and otherwise in
compliance with this Agreement.

 

7.9. Management of Patents and Patent Licenses.

 

7.9.1. Dispositions. The Company shall not make any Disposition of any Patents
other than (i) entering into settlement agreements or non-exclusive licensing
arrangements with respect to the Patents in pursuit of the Monetization
Activities, (ii) sales of the Company’s proprietary hardware and software
products in the ordinary course of business provided, for the avoidance of
doubt, that no such arrangements shall permit the use of any Patents other than
as required for the sale of such products; and (iii) the entry into exclusive
license agreements or sales of Patents with the written consent of the Majority
Purchasers. For the avoidance of doubt, proceeds of any Disposition shall
constitute Monetization Revenues. The Company shall include in any Disposition
(other than outright sales of Patents) a prohibition against any sublicenses,
and a provision that terminates any such arrangement upon a Change of Control of
the sublicensee.

 

7.9.2. Preservation of Patents. (a) The Company shall, at its own expense, take
all reasonable steps to pursue the registration and maintenance of each Patent
and shall take all reasonably necessary steps to preserve and protect each
Patent and (b) the Company shall not do or permit any act or knowingly omit to
do any act whereby any of the Patents may lapse, be terminated, or become
invalid or unenforceable or placed in the public domain. At its option, the
Collateral Agent or the Majority Purchasers may, at the Company’s expense, take
all reasonable steps to pursue the registration and maintenance of each Patent
and take all reasonably necessary steps to preserve and protect each Patent and
the Company hereby grants the Collateral Agent a power-of-attorney to take all
steps in the Company’s name in furtherance of the foregoing; provided that the
foregoing shall not be interpreted as excusing the Company from the performance
of, or imposing any obligation on the Collateral Agent or the Majority
Purchasers to cure or perform any obligation of the Company; provided further
that the Collateral Agent shall give the Company prompt written notice following
any action taken by the Collateral Agent under this Section 6.9.2, and shall
endeavor to the advance written notice where feasible.

 

7.9.3. Entry into Agreements. Neither the Company nor any Affiliate of the
Company shall enter into any contract or other agreement with respect to the
Patents that contains confidentiality provisions prohibiting or otherwise
restricting the Company or such Affiliate from disclosing the existence and
content of such contract or other agreement to the Note Purchasers and their
counsel.

 

7.10. Minimum Liquidity. The Company shall maintain not less than One Million
Dollars ($1,000,000) in unrestricted cash and Cash Equivalents (“Liquidity”)
(not including amounts on deposit in the Cash Collateral Account except to the
extent the Company is entitled to such amounts), and shall provide monthly
certifications demonstrating the Company’s Liquidity.

 

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7.11. Cash Collateral Account. Within 30 days following the Closing Date, the
Company shall open a depository account (the “Cash Collateral Account”) with
[U.S. Bank, N.A.] which Cash Collateral Account shall be subject to a control
agreement, substantially in the form of Exhibit B (and with such other changes
as may be approved by the Collateral Agent and the Company) (the “Control
Agreement”), between the Company, [U.S. Bank, N.A.] and the Collateral Agent.
The Company shall cause all Monetization Revenues to be deposited into such Cash
Collateral Account, shall provide instructions to each payor of Monetization
Revenues to directly deposit any Monetization Revenues into the Cash Collateral
Account, and the Company hereby authorizes the Majority Purchasers to inform any
payor of Monetization Revenues of the Company’s obligation to direct all
Monetization Revenues to the Cash Collateral Account as required hereunder. On
each deposit of Monetization Revenues to the Cash Collateral Account, the
Company shall deliver an officer’s certificate in the form of Exhibit C to the
Collateral Agent detailing the source and nature of such Monetization Revenues
and setting forth the Company’s calculation of the required application of the
resulting Monetization Revenues. On a monthly basis on and after the Closing
Date, but no later than the 15th day of each month, the Collateral Agent shall
deliver to the Company a written statement (each a “Collateral Agent Statement”)
with reasonable detail showing the amounts applied by the Collateral Agent in
the Cash Collateral Account for the prior month to the payment of the Note or,
after the payment in full of the Notes, the payments made to Revenue
Participants, and payments to the Company in respect of the Monetization
Revenues. The Cash Collateral Account shall be under the sole control of the
Collateral Agent and the Company may not have withdrawal rights with respect to,
or otherwise control of, the Cash Collateral Account; provided that the
Collateral Agent shall make withdrawals from the Cash Collateral Account
promptly following the deposit of any Monetization Revenues, and will apply such
Monetization Revenues to amounts due hereunder in accordance with this
Agreement, and will release any excess amounts to the Company. The Company shall
have access to account statements from the depositary bank concerning the Cash
Collateral Account.

 

7.12. Further Assurances. Upon the reasonable request of the Majority Purchasers
or the Collateral Agent, the Company shall (i) correct any material defect or
error that may be discovered in the execution, acknowledgment, filing or
recordation of any Document or other document or instrument relating to any
Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the Collateral Agent or
Majority Purchasers may reasonably request from time to time in order to carry
out the purposes of the Documents. Promptly upon the Company acquiring any new
Subsidiary, the Company shall cause such Subsidiary to execute the Collateral
Documents and any other documentation requested by the Collateral Agent, and to
take any action reasonably requested to grant to the Collateral Agent, and
perfected, liens on its material assets.

 

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7.13. Confidentiality. Each party hereto will hold, and will cause its
respective Affiliates and its and their respective directors, officers,
employees, agents, members, investors, auditors, attorneys, financial advisors,
other consultants and advisors and assignees to hold, in strict confidence,
unless disclosure to a regulatory authority is necessary in connection with any
necessary regulatory approval, examination or inspection or unless disclosure is
required by judicial or administrative process or, in the written opinion of its
counsel, by other requirement of law or the applicable requirements of any
regulatory agency or relevant stock exchange, all non-public records, books,
contracts, instruments, computer data and other data and information
(collectively, “Information”) concerning the other party hereto furnished to it
by or on behalf of such other party or its representatives pursuant to this
Agreement (except to the extent that such information can be shown to have been
(1) previously known by such party on a non-confidential basis or becomes
available to such party on a non-confidential basis, (2) publicly available
through no fault of such party or (3) later lawfully acquired from other sources
by such party), and neither party hereto shall release or disclose such
Information to any other person, except on a confidential basis to its officers,
directors, employees, agents, members, investors, Affiliates, auditors,
attorneys, financial advisors, other consultants and advisors and except in
connection with any proposed assignment or participation of the rights of a
Purchaser under this Agreement made in accordance with Section 9.10.2, provided
such prospective assignee or participant has agreed to be bound by the
confidentiality provisions consistent with those set forth herein.3

 

ARTICLE VIII
EVENTS OF DEFAULT

 

8.1. Events of Default. Each of the following events is referred to as an “Event
of Default”:

 

8.1.1. Payment. The Company shall fail to make any payment due hereunder within
3 Business Days of when such payment is due and payable.

 

8.1.2. Other Covenants. The Company shall (x) fail to perform or observe any of
the covenants or agreements contained in Section 6.6 and Section 6.10 or (y)
fail to perform or observe any of the covenants or agreements in Article VI,
Section 6.2 or elsewhere in this Agreement or in any other Document (other than
those covenants or agreements specified in clause (x) above) such failure
continues for thirty days after the earlier of (i) written notice to the Company
by the Collateral Agent or any Purchaser of such failure or (ii) knowledge of
the Company of such failure; provided, that no such cure period shall apply to
breaches of any of Sections 6.7 through Section 6.9 or to Section 6.11 that
either are intentional by the Company or where, in the reasonable judgment of
the Majority Purchasers, a material delay in the exercise of remedies or the
taking of curative action is reasonably likely to result in material harm to the
value of the Patents or the success of the monetization efforts.

 

8.1.3. Representations and Warranties. Any representation or warranty of or with
respect to the Company, pursuant to or in connection with any Document, or in
any financial statement, report, notice, mortgage, assignment or certificate
delivered by the Company so representing to the other parties hereto in
connection herewith or therewith, shall be false in any material respect on the
date as of which it was made provided such failure continues for thirty days
after the earlier of (i) written notice to the Company by the Collateral Agent
or any Purchaser of such failure or (ii) knowledge of the Company of such
failure.

 

 

3 Provisions requiring cleansing disclosure to be included in Subscription
Agreement.

 

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8.1.4. Cross Default. Prior to the Maturity Date, any event of default, after
giving effect to any applicable grace, cure, or waiver period specified in the
underlying document, with respect to any Indebtedness in excess of $500,000 of
the Company that is on account of a default in any payment under such
Indebtedness shall occur and be continuing if such event of default continues
for thirty days after the earlier of (i) written notice to the Company by the
Collateral Agent or any Purchaser of such failure or (ii) knowledge of the
Company of such event of default.

 

8.1.5. Liquidation; etc. The Company shall initiate any action to dissolve,
liquidate or otherwise terminate its existence.

 

8.1.6. Change of Control. A Change of Control shall have occurred.

 

8.1.7. Judgments. A final judgment (a) which, with other outstanding final
judgments against the Company, exceeds an aggregate of $500,000 shall be
rendered against the Company or (b) which grants injunctive relief that results,
or creates a material risk of resulting, in a Material Adverse Effect and in
either case if (i) within 60 days after entry thereof (or such longer period
permitted under the terms of such judgment), such judgment shall not have been
discharged or execution thereof stayed pending appeal or (ii) within 60 days
after the expiration of any such stay, such judgment shall not have been
discharged.

 

8.1.8. Bankruptcy, etc. The Company shall:

 

8.1.8.1. commence a voluntary case under the Bankruptcy Code or authorize, by
appropriate proceedings of its board of directors or other governing body, the
commencement of such a voluntary case;

 

8.1.8.2. (i) have filed against it a petition commencing an involuntary case
under the Bankruptcy Code that shall not have been dismissed within 60 days
after the date on which such petition is filed or (ii) file an answer or other
pleading within such 60-day period admitting or failing to deny the material
allegations of such a petition or seeking, consenting to or acquiescing in the
relief therein provided or (iii) have entered against it an order for relief in
any involuntary case commenced under the Bankruptcy Code;

 

8.1.8.3. seek relief as a debtor under any applicable law, other than the
Bankruptcy Code, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors, or consent to or acquiesce in such relief;

 

8.1.8.4. have entered against it an order by a court of competent jurisdiction
(i) finding it to be bankrupt or insolvent, (ii) ordering or approving its
liquidation or reorganization as a debtor or any modification or alteration of
the rights of its creditors or (iii) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial portion of its property;
or

 

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8.1.8.5. make an assignment for the benefit of, or enter into a composition
with, its creditors, or appoint, or consent to the appointment of, or suffer to
exist a receiver or other custodian for, all or a substantial portion of its
property.

 

8.1.9. Collateral. Any material provision of any Document shall for any reason
cease to be valid and binding on or enforceable against the Company or the
Company shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or any Collateral Document shall for any reason (other
than pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby or such security interest shall
for any reason (other than the failure of the Collateral Agent or the Note
Purchasers to take any action within its control) cease to be a perfected and
first priority security interest subject only to Permitted Liens and such
failure shall continue for thirty days after the earlier of (i) written notice
to the Company by the Collateral Agent or any Purchaser of such failure or (ii)
knowledge of the Company of such failure.

 

8.2. Remedies Following an Event of Default. If any one or more Events of
Default shall occur and be continuing, then in each and every such case:

 

8.2.1. Specific Performance; Exercise of Rights. The Majority Purchasers (or the
Collateral Agent, acting at the direction of the Majority Purchasers) may
proceed to protect and enforce such party’s rights by suit in equity, action at
law and/or other appropriate proceeding, either for specific performance of any
covenant or condition contained in any Document, or in aid of the exercise of
any power granted in any Document, including directing the Company to take any
action requested by the Majority Purchasers (or the Collateral Agent, acting at
the direction of the Majority Purchasers) in any Monetization Activity regarding
the Patents;

 

8.2.2. Acceleration. The Majority Purchasers may, by notice in writing to the
Company, declare the remaining unpaid amount of the then-outstanding Notes,
together with accrued and unpaid interest and fees thereon, and the balance of
the Revenue Stream, to be immediately due and payable; provided that if a
Bankruptcy Event of Default pursuant to Section 7.1.8 shall have occurred, such
amounts shall automatically become immediately due and payable; and provided,
that in such event, the Company shall immediately and unconditionally be
obligated to pay, as liquidated damages with respect to the Revenue Stream, the
maximum amount of the Revenue Stream in full, in cash, i.e., the Company shall
pay to the Revenue Participants in respect of the Revenue Stream $5,000,000 to
the extent such payment occurs prior to March 31, 2018 and $7,500,000
thereafter, in each case, less any amounts previously applied to the Revenue
Stream.

 

8.2.3. Standstill. Upon notice in writing from the Majority Purchasers, the
Company shall not enter into any new pledges, assignments, licenses, springing
licenses, options, non-assertion agreements, earn-outs, monetization agreements,
profit and revenue sharing arrangements, derivative interests, fee and recovery
splitting agreements, registered user agreements, shop rights and covenants by
the Company not to sue third persons with respect to any of the Patents; and

 

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8.2.4. Cumulative Remedies. To the extent not prohibited by applicable law which
cannot be waived, each party’s rights hereunder and under the other Documents
shall be cumulative;

 

provided that, effective upon the Majority Purchasers (or the Collateral Agent,
acting at the direction of the Majority Purchasers) enforcing any such rights or
remedies under this Agreement or any other Document, or under applicable law,
the Purchasers and the Collateral Agent shall (1) grant, and do hereby grant, to
the Company a perpetual non-exclusive, royalty-free, world-wide license (with
the right to sublicense to third parties under the Existing Licenses and the
sale of proprietary products and any other licenses entered into in compliance
with this Agreement) to the Patents, which license shall be non-revocable by any
third party transferee or any other person or entity that acquires rights in the
Patents (by foreclosure or otherwise) at any time following such exercise of
rights or remedies, and (2) require as a condition to the effectiveness of any
such transfer or assignment (by foreclosure or otherwise) of the Patents or
rights in the Patents, that the applicable transferee or assignee acknowledge
and agree to the non-revocable grant to the Company of the perpetual license of
the type described in the immediately preceding clause (1), which
acknowledgement and agreement by such transferee or assignee shall be made in a
writing, signed by a duly authorized officer of such transferee or assignee,
made to and for the express benefit of the Company, and the original of which
shall be delivered by the Purchasers or the Collateral Agent to the Company
promptly following any such transfer or assignment.

 

8.3. Annulment of Defaults. Once an Event of Default has occurred, such Event of
Default shall be deemed to exist and be continuing for all purposes of this
Agreement until the earlier of (x) Majority Purchasers shall have waived such
Event of Default in writing, (y) the Company shall have cured such Event of
Default to the Majority Purchasers’ reasonable satisfaction or the Company or
such Event of Default otherwise ceases to exist, or (z) the Collateral Agent and
the Purchasers or Majority Purchasers (as required by Section 9.4.1) have
entered into an amendment to this Agreement which by its express terms cures
such Event of Default, at which time such Event of Default shall no longer be
deemed to exist or to have continued. No such action by the parties hereto shall
prevent the occurrence of, or effect a waiver with respect to, any subsequent
Event of Default or impair any rights of the parties hereto upon the occurrence
thereof.

 

8.4. Waivers. To the extent that such waiver is not prohibited by the provisions
of applicable law that cannot be waived, the Company waives:

 

8.4.1. all presentments, demands for performance, notices of nonperformance
(except to the extent required by this Agreement), protests, notices of protest
and notices of dishonor;

 

8.4.2. any requirement of diligence or promptness on the part of the Purchasers
in the enforcement of its rights under this Agreement;

 

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8.4.3. any and all notices of every kind and description which may be required
to be given by any statute or rule of law; and

 

8.4.4. any defense (other than indefeasible payment in full) which it may now or
hereafter have with respect to its liability under this Agreement or with
respect to the Obligations.

 

ARTICLE IX
COLLATERAL AGENT

 

9.1. Appointment of Collateral Agent. Each of the Purchasers hereby appoints
Fortress Credit Co LLC as Collateral Agent to act for them as collateral agent,
to hold any pledged collateral and any other collateral perfected by perfection
or control for the benefit of the Purchasers; provided that the rights of the
Note Purchasers to direct the Collateral Agent and to receive proceeds of
Collateral shall be prior to, and controlling of, any rights of the Revenue
Participants. Without limiting the foregoing, the Collateral Agent shall take
direction from the Majority Purchasers and shall distribute any proceeds of
Collateral (net of its own expenses) to the Note Purchasers to apply to the
payment of the Notes prior to distributing any proceeds to the Revenue
Participants.

 

9.2. Collateral. The Collateral Agent shall act at the instruction of the
Majority Purchasers with respect to providing any vote, consent or taking other
action with respect to the Collateral.

 

9.3. Collateral Agent’s Resignation. The Collateral Agent may resign at any time
by giving at least 30 days’ prior written notice of its intention to do so to
each of the other parties hereto and upon the appointment by the Majority
Purchasers of a successor Collateral Agent. If no successor Collateral Agent
shall have been so appointed and shall have accepted such appointment within 45
days after the retiring Collateral Agent’s giving of such notice of resignation,
then the retiring Collateral Agent may appoint a successor Collateral Agent,
with the consent of the Majority Purchasers. Upon the appointment of a new
Collateral Agent hereunder, the term “Collateral Agent” shall for all purposes
of this Agreement thereafter mean such successor. After any retiring Collateral
Agent’s resignation hereunder as Collateral Agent, or the removal hereunder of
any successor Collateral Agent, the provisions of this Agreement shall continue
to inure to the benefit of such retiring or removed Collateral Agent as to any
actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement.

 

9.4. Concerning the Collateral Agent.

 

9.4.1. Standard of Conduct, etc. The Collateral Agent and its officers,
directors, employees and agents shall be under no liability to any of the
Purchasers or to any future holder of any interest in the Obligations for any
action or failure to act taken or suffered in the absence of gross negligence
and willful misconduct, and any action or failure to act in accordance with an
opinion of its counsel shall conclusively be deemed to be in the absence of
gross negligence and willful misconduct.

 

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9.4.2. No Implied Duties, etc. The Collateral Agent shall have and may exercise
such powers as are specifically delegated to the Collateral Agent under this
Agreement together with all other powers incidental thereto. The Collateral
Agent shall have no implied duties to any Person or any obligation to take any
action under this Agreement except for action specifically provided for in this
Agreement to be taken by the Collateral Agent.

 

9.4.3. Validity, etc. The Collateral Agent shall not be responsible to any other
party or any future holder of any interest in the Obligations (a) for the
legality, validity, enforceability or effectiveness of any Document, (b) for any
recitals, reports, representations, warranties or statements contained in or
made in connection with any Document, (c) for the existence or value of any
assets included in any security for the Obligations, (d) for the effectiveness
of any Lien purported to be included in the security for the Obligations, or (e)
for the perfection of the security interests for the Obligations.

 

9.4.4. Compliance. The Collateral Agent shall not be obligated to ascertain or
inquire as to the performance or observance of any of the terms of this
Agreement or any other Document.

 

9.4.5. Employment of Agents and Counsel. The Collateral Agent may execute any of
its duties as Collateral Agent under this Agreement or the other Documents by or
through employees, agents and attorneys-in-fact and shall not be responsible to
any of the parties hereto for the default or misconduct of any such employees,
agents or attorneys-in-fact selected by the Collateral Agent acting in the
absence of gross negligence and willful misconduct. The Collateral Agent shall
be entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder.

 

9.4.6. Reliance on Documents and Counsel. The Collateral Agent shall be entitled
to rely, and shall be fully protected in relying, upon any affidavit,
certificate, cablegram, consent, instrument, letter, notice, order, document,
statement, telecopy, telegram, telex or teletype message or writing reasonably
believed in good faith by the Collateral Agent to be genuine and correct and to
have been signed, sent or made by the Person in question, including any
telephonic or oral statement made by such Person, and, with respect to legal
matters, upon an opinion or the advice of counsel selected by the Collateral
Agent.

 

9.4.7. Collateral Agent’s Reimbursement. The Purchasers agree to indemnify the
Collateral Agent for any losses arising from its appointment as the Collateral
Agent or from the performance of its duties hereunder and to reimburse the
Collateral Agent for any reasonable expenses; provided, however, that the
Collateral Agent shall not be indemnified or reimbursed for liabilities or
expenses to the extent resulting from its own gross negligence or willful
misconduct.

 

9.4.8. Assumption of Collateral Agent’s Rights. Notwithstanding anything herein
to the contrary, if at any time no Person constitutes the Collateral Agent
hereunder or the Collateral Agent fails to act upon written directions from the
parties hereto, the Majority Purchasers shall be entitled to exercise any power,
right or privilege granted to the Collateral Agent and in so acting the Majority
Purchasers shall have the same rights, privileges, indemnities and protections
provided to the Collateral Agent hereunder.

 

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ARTICLE X
GENERAL PROVISIONS

 

10.1. Expenses. The Company agrees to promptly pay in full (i) subject to the
availability and limited to the proceeds of the Notes, all reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable fees
and disbursements of a single external counsel and of any local counsel in any
relevant jurisdiction) incurred, by the Collateral Agent or the Purchasers in
connection with the preparation, negotiation, execution and delivery of the
proposal letter and the Documents, including the Purchasers’ due diligence and
credit approval process in connection with the financing; provided that the
aggregate reimbursable expenses under this clause (i) shall not exceed $100,000,
(ii) all reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable fees and disbursements of a counsel to the Company)
incurred by the Purchasers pursuant to Section 6.9.2 or otherwise expressly
payable by the Company under this Agreement, (iii) following an Event of
Default, all reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable fees and disbursements of a counsel to the Company)
incurred by the Collateral Agent or the Purchasers in enforcing any obligations
hereunder or under any other Document on account of such Default or in
collecting any payments due hereunder, including broker’s fees and other third
party professional fees and expenses and (iv) all reasonable out-of-pocket costs
and expenses (including, without limitation, reasonable fees and disbursements
of a single external counsel and any local counsel in any relevant jurisdiction)
incurred by the Collateral Agent or the Purchasers in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a workout, or any insolvency or bankruptcy
proceedings. Any such costs and expenses invoiced prior to a Closing Date shall
be paid on such Closing Date, first through application of any expense deposit.
The unused balance, if any, of any expense deposit shall be released to the
Company following completion of the Control Agreement pursuant to Section 6.11
and any post- closing activities, including perfection in any Collateral. Any
other costs and expenses shall be paid within thirty (30) days of the submission
of an invoice to the Company therefor, provided that the Collateral Agent’s
application of the proceeds of the Monetization Revenues towards such expenses
pursuant to Section 6.11 shall be deemed to be timely payment thereof if the
Collateral Agent receives sufficient Monetization Revenues within such 30 day
period. Any amounts not timely paid shall bear interest, payable in cash, at a
rate of 10% per annum compounding quarterly. The provisions of this Section 9.1
shall survive the repayment in full of the Notes and the termination of this
Agreement.

 

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10.2. Indemnity. In addition to the payment of expenses pursuant to Section 9.1,
whether or not the transactions contemplated hereby shall be consummated, the
Company (as “Indemnitor”) agrees to indemnify, pay and hold the Collateral Agent
and the Purchasers, and the officers, directors, partners, managers, members,
employees, agents, and Affiliates of the Collateral Agent and the Purchasers
(collectively, the “Indemnitees”) harmless from and against any and all other
liabilities, costs, expenses, obligations, losses (other than lost profit),
damages, penalties, actions, judgments, suits, claims and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of one counsel for such Indemnitees) in connection with any
investigative, administrative or judicial proceeding commenced or threatened
(excluding claims among Indemnitees) by any person who is not a Purchaser or an
Affiliate thereof or the Collateral Agent or an Affiliate thereof, whether or
not such Indemnitee shall be designated a party thereto, which may be imposed
on, incurred by, or asserted against that Indemnitee, in any manner relating to
or arising out of this Agreement and the Notes (the “Indemnified Liabilities”);
provided that the Indemnitor shall not have any obligation to an Indemnitee
hereunder with respect to an Indemnified Liability to the extent that such
Indemnified Liability arises from the gross negligence or willful misconduct of
that Indemnitee or any of its officers, directors, partners, managers, members,
employees, agents and/or Affiliates. Each Indemnitee shall give the Indemnitor
prompt written notice of any claim that might give rise to Indemnified
Liabilities setting forth a description of those elements of such claim of which
such Indemnitee has knowledge; provided that any failure to give such notice
shall not affect the obligations of the Indemnitor. The Indemnitor shall have
the right at any time during which such claim is pending to select counsel to
defend and control the defense thereof and settle any claims for which it is
responsible for indemnification hereunder (provided that the Indemnitor will not
settle any such claim without (i) the appropriate Indemnitee’s prior written
consent, which consent shall not be unreasonably withheld or (ii) obtaining an
unconditional release of the appropriate Indemnitee from all claims arising out
of or in any way relating to the circumstances involving such claim and without
any admission as to culpability or fault of such Indemnitee) so long as in any
such event, the Indemnitor shall have stated in a writing delivered to the
Indemnitee that, as between the Indemnitor and the Indemnitee, the Indemnitor is
responsible to the Indemnitee with respect to such claim to the extent and
subject to the limitations set forth herein; provided that the Indemnitor shall
not be entitled to control the defense of any claim in the event that in the
reasonable opinion of counsel for the Indemnitee, there are one or more material
defenses available to the Indemnitee which are not available to the Indemnitor;
provided further, that with respect to any claim as to which the Indemnitee is
controlling the defense, the Indemnitor will not be liable to any Indemnitee for
any settlement of any claim pursuant to this Section 9.2 that is effected
without its prior written consent, which consent shall not be unreasonably
withheld. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section 9.2 may be unenforceable because it is violative of
any law or public policy, the Company shall contribute the maximum portion which
it is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them. Notwithstanding anything to the contrary in this Agreement, no party
shall be liable to the other party or any third party for any indirect,
incidental, exemplary, special, punitive or consequential damages (including
with respect to lost revenue, lost profits or savings or business interruption)
of any kind or nature whatsoever suffered by the other party or any third party
howsoever caused and regardless of the form or cause of action, even if such
damages are foreseeable or such party has been advised of the possibility of
such damages. The provisions of this Section 9.2 shall survive the repayment in
full of the Notes and the termination of this Agreement.

 

10.3. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and delivered via facsimile, email (in each case, followed promptly by
delivery from a nationally recognized overnight courier) or a nationally
recognized overnight courier. Such notices, demands and other communications
will be delivered or sent to the address indicated on Schedule 9.3 or such other
address or to the attention of such other Person as the recipient party shall
have specified by prior written notice to the sending party. Any such
communication shall be deemed to have been received when actually delivered or
refused.

 

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10.4. Amendments, Consents, Waivers, etc.

 

10.4.1. Amendments. No amendment, modification, termination or waiver of any
provision of this Agreement shall in any event be effective without the written
consent of each of the Company, the Collateral Agent and the Majority
Purchasers; provided that the consent of each affected Purchaser shall be
required for any amendment that (i) waives or reduces any amounts owed to it
under this Agreement or extends the date for payment of any amount hereunder,
(ii) releases the Company or (iii) releases all or any material portion of the
Collateral, except in connection with any Disposition of Patents to the extent
permitted under Section 6.9.1. Any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Company in any case shall entitle the Company to any
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 9.4.1 shall be binding upon the holders of the Obligations at the time
outstanding and each future holder thereof.

 

10.4.2. Course of Dealing; No Implied Waivers. No course of dealing between the
Purchasers and the Company shall operate as a waiver of any Purchaser’s rights
under this Agreement or with respect to the Obligations. In particular, no delay
or omission on the part of any Purchaser in exercising any right under this
Agreement or with respect to the Obligations shall operate as a waiver of such
right or any other right hereunder or thereunder. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion.

 

10.5. No Strict Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement with counsel sophisticated in
financing transactions. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

 

10.6. Certain Acknowledgments. Each of the Company and the Purchasers
acknowledges that:

 

10.6.1. it has been advised by counsel in the negotiation, execution and
delivery of this Agreement; and

 

10.6.2. no joint venture is created hereby or otherwise exists by virtue of the
transactions contemplated hereby or thereby among the Company and the
Purchasers.

 

10.7. Venue; Service of Process; Certain Waivers. The Company and Purchaser:

 

10.7.1. irrevocably submit to the exclusive jurisdiction of any New York state
court or federal court sitting in New York, New York, and any court having
jurisdiction over appeals of matters heard in such courts, for the purpose of
any suit, action or other proceeding arising out of or based upon this Agreement
or the subject matter hereof or thereof;

 

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10.7.2. waive to the extent not prohibited by applicable law that cannot be
waived, and agree not to assert, by way of motion, as a defense or otherwise, in
any such proceeding brought in any of the above-named courts, any claim that
they are not subject personally to the jurisdiction of such court, that their
property is exempt or immune from attachment or execution, that such proceeding
is brought in an inconvenient forum, that the venue of such proceeding is
improper, or that this Agreement, or the subject matter hereof or thereof, may
not be enforced in or by such court;

 

10.7.3. consent to service of process in any such proceeding in any manner at
the time permitted under the applicable laws of the State of New York and agree
that service of process by registered or certified mail, return receipt
requested, at the address specified in or pursuant to Section 9.3 is reasonably
calculated to give actual notice; and

 

10.7.4. waive to the extent not prohibited by applicable law that cannot be
waived any right to claim or recover in any such proceeding any special,
exemplary, punitive or consequential damages.

 

10.8. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH COMPANY AND EACH PURCHASER WAIVES, AND COVENANTS THAT IT
WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE CONDUCT OF THE PARTIES HERETO,
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR
OTHERWISE. The Company acknowledges that it has been informed by the Purchasers
that the foregoing sentence constitutes a material inducement upon which the
Purchasers have relied and will rely in entering into this Agreement. Any of the
Company or Purchasers may file an original counterpart or a copy of this
Agreement with any court as written evidence of the consent of the Company and
Purchasers to the waiver of their rights to trial by jury.

 

10.9. Interpretation; Governing Law; etc. All covenants, agreements,
representations and warranties made in this Agreement or in certificates
delivered pursuant hereto or thereto shall be deemed to have been relied on by
each Purchaser, notwithstanding any investigation made by such Purchaser, and
shall survive the execution and delivery to the Purchasers hereof and thereof.
The invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of any other provision hereof, and any invalid or
unenforceable provision shall be modified so as to be enforced to the maximum
extent of its validity or enforceability. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement and the Documents constitute the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous understandings and
agreements, whether written or oral. This Agreement may be executed in any
number of counterparts which together shall constitute one instrument. This
Agreement, and any issue, claim or proceeding arising out of or relating to this
Agreement or the Documents or the conduct of the parties hereto, whether now
existing or hereafter arising and whether in contract, tort or otherwise, shall
be governed by and construed in accordance with the laws of the State of New
York.

 

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10.10. Successors and Assigns

 

10.10.1. The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted by Sections 9.10.2 and 9.10.3.

 

10.10.2. The Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Majority
Purchasers. Subject to Section 9.10.4 below, any Note Purchaser may sell,
assign, participate or transfer all or any part of their rights under this
Agreement to an Eligible Assignee (as defined below) with the written consent of
the Company (not to be unreasonably withheld, delayed or conditioned); provided
that (x) the consent of the Company shall not be required (a) in the case of any
sale, assignment, participation or transfer to any person that is not a direct
competitor of the Company (as reasonably determined by the Majority Purchasers
after notice to the Company), (b) in the case of any sale, assignment,
participation or transfer to any Affiliate of a Purchaser that is an Eligible
Assignee and (c) if an Event of Default has occurred and is continuing; (y) such
Note Purchaser and the assignee of such Note Purchaser shall have delivered an
executed Assignment and Acceptance Agreement substantially in the form attached
hereto as Exhibit D-1 to the Company and each other Purchaser; and (z) other
than during an Event of Default, no Note Purchaser may sell, assign, participate
or transfer all or any part of their rights under this Agreement without the
prior written consent of the Company if, as a result of such sale, assignment,
participation or transfer, the resulting Note Purchasers constituting the
Majority Note Purchasers would at any time be greater in number than one Note
Purchaser except that all Affiliates of the original Note Purchaser shall be
treated as if they were one entity for purposes of this clause (z) and there is
a single point of contact representing the original Note Purchaser and all such
Affiliates for purposes of this Agreement. In the case of any sale, assignment,
transfer or negotiation of all or part of the rights of a Note Purchaser under
this Agreement that is authorized under this Section 9.10.2, the assignee,
transferee or recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and obligations as it would
if it were a Note Purchaser hereunder. The Note Purchasers agree to provide to
the Company prompt written notice of any sales, assignments or transfers
permitted hereunder, including the name and address of the transferee(s).
“Eligible Assignee” means any commercial bank, insurance company, finance
company, financial institution, fund that invests in loans or any other
“accredited investor” (as defined in Regulation D of the Securities Act (subject
to such consents, if any, as may be required above under this Section 9.10.2)).

 

10.10.3. The Company shall maintain at its principal office, or the principal
office of its counsel, a register (the “Register”) in which the Company shall
keep a record of the Notes made by each Purchaser, payments to each Purchaser
and any transfer of the rights of an Purchaser; provided that the Company shall
have no obligation to update the register to reflect any sales, assignments or
transfers made by the Purchasers in the event that the Purchasers fail to give
the Company written notice as required under Section 9.10.2. The requirement
that the ownership and transfer of the rights of the Purchasers under this
Agreement shall be reflected in the Register is intended to ensure that the
Notes qualify as an obligation issued in “registered form” as that term is used
in Sections 163(f), 871(h), and 881(c) of the Code and shall be interpreted
accordingly and, notwithstanding anything to the contrary in this Agreement.

 

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10.10.4. Any Revenue Participant may sell, assign, participate or transfer all
or any part of their rights under this Agreement to an Eligible Assignee with
the written consent of the Company (not to be unreasonably withheld, delayed or
conditioned); provided that (x) the consent of the Company shall not be required
(a) in the case of any sale, assignment, participation or transfer to any person
that is not a direct competitor of the Company (as reasonably determined by the
Majority Revenue Participant after notice to the Company), (b) in the case of
any sale, assignment, participation or transfer to any Affiliate of a Revenue
Participant that is an Eligible Assignee and (c) if an Event of Default has
occurred and is continuing; (y) such Revenue Participant and the assignee of
such Revenue Participant shall have delivered an executed Assignment and
Acceptance Agreement substantially in the form attached hereto as Exhibit D-2 to
the Company and each other Purchaser; and (z) other than during an Event of
Default, no Revenue Participant may sell, assign, participate or transfer all or
any part of their rights under this Agreement without the prior written consent
of the Company if, as a result of such sale, assignment, participation or
transfer, the resulting Revenue Participants constituting the Majority Revenue
Participants would at any time be greater in number than one Revenue Participant
except that all Affiliates of the original Revenue Participant shall be treated
as if they were one entity for purposes of this clause (z) and there is a single
point of contact representing the original Revenue Participant and all such
Affiliates for purposes of this Agreement. In the case of any sale, assignment,
transfer or negotiation of all or part of the rights of a Revenue Participant
under this Agreement that is authorized under this Section 9.10.4, the assignee,
transferee or recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and obligations as it would
if it were a Revenue Participant hereunder. The Revenue Participants agree to
provide to the Company prompt written notice of any sales, assignments or
transfers permitted hereunder, including the name and address of the
transferee(s).

 

10.11. Tax Treatment.4

 

10.11.1. The Company and each Revenue Participant intend that, solely for
federal, state and local income tax purposes and for no other purpose, the
relationship between the Revenue Participants and the Company that is created by
this Agreement with respect to the Revenue Stream shall be treated as creating a
partnership with respect to the Revenue Stream (the “Tax Partnership”), with the
Revenue Participants and the Company being treated as partners of such
partnership; it being understood for avoidance of doubt that the relationship
between the Company and the Note Purchasers by this Agreement with respect to
the Notes shall be a debtor-creditor relationship for all purposes, including
for all federal, state and local income tax purposes.

 

 

4 Under tax review. 

 

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10.11.2. The Company and each Revenue Participant hereby agree that for purposes
of determining the Company’s and each Revenue Participant’s distributive share
of income, gain, loss and deduction of the Tax Partnership:

 

10.11.2.1. The Tax Partnership shall maintain capital accounts for each of the
Company and the Revenue Participants consistent with the rules of Treasury
Regulations Section 1.704-1(b); it being understood that under no circumstances
shall any such rule override the economic relationship between the parties as to
their respective shares of the Monetization Revenues set forth in this
Agreement;

 

10.11.2.2. The Company shall be deemed to contribute to the Tax Partnership the
right to generate revenue through the exploitation of the Patents (the “Patent
Rights”), which such right the parties agree had a fair market value of $50,000
as of the date of contribution;

 

10.11.2.3. The Revenue Participants shall be deemed to contribute to the Tax
Partnership the purchase price for the Revenue Stream;

 

10.11.2.4. The Tax Partnership shall allocate items of income, gain, loss and
deduction to the Company and the Revenue Participants in a manner that causes
the capital accounts of the parties to be equal to the amounts payable pursuant
to this agreement if the Tax Partnership sold the Patent Rights and any other
non-cash assets for an amount equal to the book value of the Patent Rights and
any other non-cash assets (as determined pursuant to Treasury Regulations
Section 1.704-1(b)) and distributed the proceeds and any other cash pursuant to
this Agreement; it being understood that any losses attributable to Monetization
Expenses shall be allocated to the Revenue Participants until the aggregate
capital accounts of the Revenue Participants shall have been reduced to $50,000.

 

10.11.3. The Company and each Revenue Participant shall file all tax returns and
shall otherwise take all tax and financial reporting positions in a manner
consistent with any treatment described in this Section 9.11.  The Company shall
be the tax matters partner of the Tax Partnership.

 

10.11.4. The Company and each of the Revenue Participants will cooperate to
provide each other with any information reasonably requested by any of them in
connection with the preparation or filing of any return, declaration, report,
election, information return or other statement or form filed or required to be
filed with any governmental authority relating to Taxes (a “Tax Return”) for any
of them or for or relating to the partnership described in the first sentence of
this Section 9.11. The Company shall be responsible for preparing and filing any
Tax Return for or relating to such partnership, and the out-of-pocket costs
incurred in connection with the preparation and filing of any Tax Return for or
relating to the Tax Partnership shall be treated as an expense of the Tax
Partnership.

 

10.11.5. For the avoidance of doubt, no fiduciary relationship is intended to be
created by this Agreement between the Company and any Revenue Participant.

 

(The remainder of this page intentionally has been left blank.)

 

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

 

  Revenue Participant:       CF DB EZ LLC       /s/ Constantine M. Dakolias  
By: Constantine M. Dakolias   Title: President       Note Purchasers:      
Fortress Credit Co LLC       /s/ Constantine M. Dakolias   By: Constantine M.
Dakolias   Title: President

 

[Signature Page to Single Touch Revenue Sharing and Note Purchase Agreement]

 

 

  Collateral Agent:       Fortress Credit Co LLC       /s/ Constantine M.
Dakolias   By: Constantine M. Dakolias   Title: President

 

[Signature Page to Single Touch Revenue Sharing and Note Purchase Agreement]

 

 

  Company:       SITO MOBILE, LTD.       /s/ Jerry Hug   By:  Jerry Hug   Title:
Interim CEO       SINGLE TOUCH INTERACTIVE, INC.       /s/ Jerry Hug   By: Jerry
Hug   Title: President       SINGLE TOUCH INTERACTIVE R&D IP, LLC       /s/
Jerry Hug   By: Jerry Hug   Title: Authorized Manager

 

[Signature Page to Single Touch Revenue Sharing and Note Purchase Agreement]

 

 

APPENDIX I

 

DEFINITIONS

 

“Affiliate” means with respect to any specified Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person, and shall include (a) any officer or director
or general partner of such specified Person, (b) any other Person of which such
specified Person or any Affiliate (as defined in clause (a) above) of such
specified Person shall, directly or indirectly, beneficially own either (i) at
least 10% of the outstanding equity securities having the general power to vote
or (ii) at least 10% of all equity interests, (c) any other Person directly or
indirectly controlling such specified Person through a management agreement,
voting agreement or other contract and (d) with respect to any individual, such
individual’s child, stepchild, grandchild or more remote descendant, parent,
stepparent, grandparent, spouse, former spouse, qualified domestic partner,
sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including
adoptive relationships) and any trust, partnership or other bona fide
estate-planning vehicle the only beneficiaries of which are any of the foregoing
individuals or any private foundation or fund that is controlled by any of the
foregoing individuals or any donor-advised fund of which any such individual is
the donor; provided that neither the Collateral Agent or any Purchaser (or any
Affiliate thereof) shall be deemed an Affiliate of the Company on account of the
amounts owed to it under the Agreement or the relationship created thereby.

 

“Applicable Percentage” means:

 

(a) until such time as the Revenue Participants have received $2,500,000 in the
aggregate with respect to the Revenue Stream, 50%;

 

(b) thereafter, until such time that the Revenue Participants have received
$5,000,000 in the aggregate with respect to the Revenue Stream, 35%;

 

(c) thereafter, 10%, until the Revenue Stream has been fully satisfied;

 

Provided, upon any acceleration of the Notes and Revenue Stream, the Applicable
Percentage shall be 100% until the Revenue Stream has been fully satisfied.

 

“Authorized Officer” means, with respect to any Person, the chief executive
officer, chief restructuring officer, chief financial officer, president,
treasurer, comptroller or executive vice president of such Person.

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“Bankruptcy Default” means an Event of Default referred to in Section 7.1.8.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be closed.

 

A-1

 

 

“Capital Stock” means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person’s capital stock, partnership interests, membership interests or
other equivalent interests and any rights (other than debt securities
convertible into or exchangeable for capital stock), warrants or options
exchangeable for or convertible into such capital stock or other equity
interests.

 

“Capitalized Lease” means any lease which is required to be capitalized on the
balance sheet of the lessee in accordance with GAAP, including Statement Nos. 13
and 98 of the Financial Accounting Standards Board.

 

“Capitalized Lease Obligations” means the amount of the liability reflecting the
aggregate discounted amount of future payments under all Capitalized Leases in
accordance with GAAP, including Statement Nos. 13 and 98 of the Financial
Accounting Standards Board.

 

“Cash Equivalents” means cash on deposit at a bank; certificates of deposit;
money market mutual funds or U.S. Treasury bills with a remaining maturity of 90
days or less.

 

“Change of Control” means (x) any Person or “group” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding
any employee benefit plan of such Person and its subsidiaries, and any Person
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan), either becomes the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 of the Securities Exchange Act of 1934), directly or
indirectly, of equity interests representing more than thirty percent (30%) of
the aggregate ordinary voting power represented by the issued and outstanding
equity interests of Parent or (y) Parent ceases to own all of the equity
interests in Licensee and Owner, other than interests held by the Collateral
Agent.

 

“Closing Date” means October 3, 2014.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

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

 

“Collateral Documents” means the Security Agreement, the Patent Security
Agreement, the Control Agreement referred to in Section 6.11, any financing
statement (or amendment thereto) naming the Company as debtor and the Collateral
Agent as secured party, and all other instruments, documents, agreements and
certificates delivered by the Company to the Purchasers or the Collateral Agent
pursuant to these agreements.

 

“Contractual Obligations” means, as to any Person, any provision of any security
(whether in the nature of Capital Stock or otherwise) issued by such Person or
of any agreement, undertaking, contract, indenture, mortgage, deed of trust or
other instrument, document or agreement (other than a Document) to which such
Person is a party or by which it or any of its Property is bound or to which any
of its Property is subject.

 

“Default” means any Event of Default and any event or condition which with the
passage of time or giving of notice, or both, would become an Event of Default.

 

A-2

 

 

“Disposition” means the sale, transfer, license, profit and revenue sharing
arrangements, derivative interests, lease or other disposition (including any
sale or issuance of equity interests in the Company or any subsidiary of the
Company) of any property by any Person, including any sale, assignment, transfer
or other disposal, with or without recourse, of any notes or accounts receivable
or any rights and claims associated therewith, whether in a single transaction
or a series of related transactions. “Dispose” shall have the correlative
meaning.

 

“Documents” means this Agreement, Collateral Documents, the Subscription
Agreement, and all other instruments, documents, agreements and certificates
delivered by the Company to the Purchasers or the Collateral Agent pursuant to
this Agreement.

 

“GAAP” means generally accepted accounting principles as from time to time in
effect, including the statements and interpretations of the United States
Financial Accounting Standards Board.

 

“Governmental Authority” means any nation, sovereign or government, any state or
other political subdivision thereof, any agency, authority or instrumentality
thereof and any entity or authority exercising executive, legislative, taxing,
judicial, regulatory or administrative functions of or pertaining to government,
including any central bank, stock exchange, regulatory body, arbitrator, public
sector entity, supra-national entity (including the European Union and the
European Central Bank) and any self-regulatory organization (including the
National Association of Insurance Commissioners).

 

“Guarantee” means, with respect to any specified Person:

 

(a) any guarantee by such Person of the payment or performance of, or any
contingent obligation by such Person in respect of, any Indebtedness or other
obligation of any primary obligor;

 

(b) any other arrangement whereby credit is extended to a primary obligor on the
basis of any promise or undertaking of such Person, including any binding
“comfort letter” or “keep well agreement” written by such Person, to a creditor
or prospective creditor of such primary obligor, to (i) pay the Indebtedness of
such primary obligor, (ii) purchase an obligation owed by such primary obligor,
(iii) pay for the purchase or lease of assets or services regardless of the
actual delivery thereof or (iv) maintain the capital, working capital, solvency
or general financial condition of such primary obligor;

 

(c) any liability of such Person, as a general partner of a partnership in
respect of Indebtedness or other obligations of such partnership;

 

(d) any liability of such Person as a joint venturer of a joint venture in
respect of Indebtedness or other obligations of such joint venture;

 

(e) any liability of such Person with respect to the tax liability of others as
a member of a group (other than a group consisting solely of such Person and its
Subsidiaries) that is consolidated for tax purposes; and

 

(f) reimbursement obligations, whether contingent or matured, of such Person
with respect to letters of credit, bankers acceptances, surety bonds and other
financial guarantees;

 

A-3

 

 

in each case whether or not any of the foregoing are reflected on the balance
sheet of such Person or in a footnote thereto; provided, however, that the term
“Guarantee” shall not include endorsements for collection or deposit in the
Ordinary Course of Business.

 

“Indebtedness” means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified as indebtedness upon a
balance sheet of the Company, but in any event including (without duplication):

 

(a) indebtedness for borrowed money;

 

(b) indebtedness evidenced by notes, debentures or similar instruments;

 

(c) Capitalized Lease Obligations and Synthetic Lease Obligations;

 

(d) the deferred purchase price of assets, services or securities, including
related noncompetition, consulting and stock repurchase obligations (other than
ordinary trade accounts payable on customary terms in the Ordinary Course of
Business), and any long-term contractual obligations for the payment of money,
but not including contingent fees payable to counsel;

 

(e) mandatory redemption, repurchase or dividend rights on Capital Stock (or
other equity), including provisions that require the exchange of such Capital
Stock (or other equity) for Indebtedness from the issuer;

 

(f) reimbursement obligations, whether contingent or matured, with respect to
letters of credit, bankers acceptances, surety bonds and other financial
guarantees (without duplication of other Indebtedness supported or guaranteed
thereby);

 

(g) unfunded pension liabilities;

 

(h) liabilities secured by any Lien (other than Liens securing the Obligations)
existing on property owned or acquired by the Company, whether or not the
liability secured thereby shall have been assumed; and

 

(i) all Guarantees in respect of Indebtedness of others and reimbursement
obligations, whether contingent or matured, under letters of credit or other
financial guarantees by third parties (or become contractually committed to do
so).

 

“Legal Requirement” means, with respect to any specified Person, any present or
future requirement imposed upon such Person and its Subsidiaries by any law,
statute, rule, regulation, directive, order, decree or guideline (or any
interpretation thereof by courts or of administrative bodies) of the United
States of America or any state or political subdivision thereof, governmental or
administrative agency, central bank or monetary authority of the United States
of America, any jurisdiction where the such Person or any of its Subsidiaries
owns property or conducts its business, or any political subdivision of any of
the foregoing.

 

A-4

 

 

“LIBOR” means the greater of (x) 1.00% per annum or (y) the London interbank
offered rate administered by the British Bankers Association (or any other
Person that takes over the administration of such rate for Dollars) for a twelve
(12) month period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen
or, in the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate, or on the
appropriate page of such other information service that publishes such rate as
shall be selected by the Majority Note Purchaser from time to time in its
reasonable discretion (the “Eurodollar Screen Rate”), such to be annually
established as of each January 2.

 

“Lien” means with respect to any specified Person:

 

(a) any lien, encumbrance, mortgage, pledge, charge or security interest of any
kind upon any property or assets of such Person, whether now owned or hereafter
acquired, or upon the income or profits therefrom (excluding in any event a
financing statement filed by a lessor under an operating lease not intended to
be a secured financing), but shall not include: (i) liens for any tax,
assessment or other governmental charge not yet due or that are being contested
in good faith by appropriate proceeding, (ii) materialmen’s and mechanics’ liens
or other like Liens, arising in the Ordinary Course of Business for amounts not
yet due or that are being contested in good faith; and (iii) liens, deposits or
pledges to secure statutory obligations or performance of bids, tenders,
contracts or leases, incurred in the Ordinary Course of Business;

 

(b) the acquisition of, or the agreement to acquire, any property or asset upon
conditional sale or subject to any other title retention agreement, device or
arrangement (including a Capitalized Lease and a Synthetic Lease);

 

(c) the sale, assignment, pledge or transfer for security of any accounts,
general intangibles or chattel paper of such Person, with or without recourse;

 

(d) in the case of securities, any purchase option, call or similar purchase
right of a third party;

 

(e) the existence for a period of more than 120 consecutive days of any
Indebtedness against such Person which if unpaid would by law or upon a
Bankruptcy Default be given priority over general creditors.

 

“Limited Liability Company Agreement” means that certain Limited Liability
Company Agreement, dated as of the date hereof, by Single Touch Interactive R&D
IP, LLC.

 

“Majority Note Purchasers” means the Note Purchasers that hold more than 50% of
the aggregate outstanding Notes.

 

“Majority Purchasers” means the Majority Revenue Participant and, if any of the
Notes are outstanding, the Majority Note Purchaser.

 

“Majority Revenue Participants” means the Revenue Participants representing more
than 50% of such participation right.

 

“Margin Stock” means “margin stock” within the meaning of Regulation T, U or X
of the Board of Governors of the Federal Reserve System.

 

A-5

 

 

“Material Adverse Effect” means, with respect to the Company, since any
specified date or from the circumstances existing immediately prior to the
happening of any specified event, a material adverse effect on the business,
assets, financial condition, income or prospects of the Company.

 

“Monetization Activities” means any activities necessary or desirable to
generate revenue from intellectual property anywhere in the world by means of
license (non-exclusive or exclusive), assignment, enforcement, litigation,
arbitration, negotiation, covenant not to sue or assert, or otherwise.

 

“Monetization Revenues” means the sum of (x) amounts that the Company receives
in cash or an amount equal to the fair market value of any in-kind payment the
Company receives (i) from third parties in respect of the Patents; (ii) on
account of any sale of products or services using the Patents not under
development or offered by the Company as of the Closing Date solely to the
extent reasonably determined by the Majority Purchasers, following discussion
with the Company, that such sales are to a party that would otherwise have been
or was a target of Monetization Activities, that ; (iii) the development to
order of any software or other products using the Patents, including royalty
payments, license fees, settlement payments, judgments or other similar payments
in respect of the Patents; and (iv) the purchase price or other amounts received
in connection the sale of hardware or software with respect to the Patents, in
each case as and when actually received by the Company (including any and all
such amounts actually received by any attorneys, agents or other representatives
of the Company). Monetization Revenues shall be calculated prior to giving
effect to any expenses incurred by the Company in the collection of any
Monetization Revenues, including, without limitation, prior to giving effect to
any contingent or other fees owed to any attorneys, consultants or other
professionals in the monetization of any of the Company’s rights with respect to
any Patents.

 

“Obligations” means any and all obligations of the Company under this Agreement
or any other Document.

 

“Ordinary Course of Business” means, in respect of any transaction involving any
Person, the ordinary course of such Person’s business, as conducted by any such
Person in accordance with past practice and undertaken by such Person in good
faith and not for purposes of evading any covenant or restriction in any
Document.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

A-6

 

 

“Patent License Agreement” means the Patent License Agreement attached hereto as
Exhibit E.

 

“Patent Security Agreement” means the Patent Security Agreement substantially in
the form of Exhibit F hereto.

 

“Patents” means the letters Patent set forth on Schedule I(a), whether
registered in the United States or any other jurisdiction, all registrations and
recordings thereof, including all re-examination certificates and all utility
models, including registrations, recordings and pending applications, and all
reissues, continuations, divisions, continuations-in-part, renewals,
improvements or extensions thereof, and the inventions disclosed or claimed
therein.

 

“Person” means any entity, whether of natural or legal constitution, including
any present or future individual, corporation, partnership, joint venture,
limited liability company, unlimited liability company, trust, estate,
unincorporated organization, government or any agency or political subdivision
thereof.

 

“Property” means, as to any Person, all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent balance sheet of such Person and its Subsidiaries under GAAP.

 

“Proxy” means that certain Proxy, dated as of the date hereof, by and between
SITO Mobile, Single Touch Interactive, Inc., Single Touch R&D IP, LLC, and CF DB
EZ LLC.

 

“Revenue Stream” means a right to receive a portion of Monetization Revenues
totaling (x) if paid in full prior to March 31, 2018, up to $5,000,000 and (y)
otherwise, up to $7,500,000; provided, that upon an acceleration, the Revenue
Stream shall represent an absolute entitlement to receive such amounts without
regard to the existence of Monetization Revenues.

 

“Secured Parties” means, collectively, the Collateral Agent and the Purchasers.

 

“Security Agreement” means a Security Agreement substantially in the form of
Exhibit G hereto.

 

“Subscription Agreement” means the subscription agreement between the Parent and
the Note Purchasers for the purchase of $1,000,000 of the Parent’s common stock.

 

“Synthetic Lease” means a lease that is treated as an operating lease under GAAP
and as a loan or other financing for federal income tax purposes.

 

“Synthetic Lease Obligations” means the aggregate amount of future rental
payments under all Synthetic Leases, discounted as if such Synthetic Leases were
Capitalized Leases.

 

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56.

 

A-7

Senior Note N-[_]
Original Principal Amount: [$_______]
Holder: [_________________________]

 

Exhibit A

FORM OF NOTE

 

THIS NOTE WAS ISSUED IN A PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, ASSIGNED,
PLEDGED OR OTHERWISE TRANSFERRED (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT COVERING THE TRANSFER OR AN EXEMPTION FROM SUCH
REGISTRATION AND (II) EXCEPT IN COMPLIANCE WITH SECTION 9.10 OF THAT CERTAIN
REVENUE SHARING AND NOTE PURCHASE AGREEMENT DATED AS OF OCTOBER 3, 2014, AMONG
THE COMPANY, THE COLLATERAL AGENT AND THE PURCHASERS (EACH AS DEFINED THEREIN).

 

SITO MOBILE LTD., SINGLE TOUCH INTERACTIVE, INC., AND

SINGLE TOUCH INTERACTIVE R&D IP, LLC

 

SENIOR NOTE

DUE [ ]

 

N-[_]

Original Principal Amount: $[_________]

 

Issue Date: [___], 201[_]

 

FOR VALUE RECEIVED, the undersigned, SITO Mobile, Ltd., a Delaware corporation,
Single Touch Interactive, Inc., a Nevada corporation and Single Touch
Interactive R&D IP, LLC, a Delaware limited liability company (collectively, the
“Company”) HEREBY PROMISE TO PAY [__________], or its permitted assigns (the
“Holder”), the Adjusted Principal Amount (as defined below) of this Note on or
before [___], 201[], or such later date as the Holder may have consented to
pursuant to Section 2.2.4.1 of the Agreement (the “Maturity Date”), or such
earlier date as due and payable in accordance with the Revenue Sharing and Note
Purchase Agreement (as amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”), dated as of October 3, 2014, among the
Company, Fortress Credit Co LLC, as Collateral Agent and the purchasers from
time to time party thereto, plus interest on the Adjusted Principal Amount
outstanding from time to time at the interest rate specified in the Agreement.

 

This Note (i) is one of a series of Senior Notes (herein called the “Notes”) of
the Company issued pursuant to the Agreement, (ii) is entitled to the benefits
and subject to the terms set forth in the Agreement with respect to the Notes,
and (iii) constitutes an Obligation under the Agreement. Capitalized terms used
but not defined herein have the meanings provided in the Agreement. The issuance
date of this Note is [___], 201[].

 

 

Senior Note N-[_]
Original Principal Amount: [$_______]
Holder: [_________________________]

 

The Adjusted Principal Amount of this Note is equal to the sum of (x) [______],
plus (y) any PIK Interest, in accordance with the Agreement, minus (z) any prior
principal amounts paid with respect to this Note.

 

Interest shall be payable on the interest payment dates specified in the
Agreement, and shall further be due and payable on any partial or complete
prepayment of this Note, on any portion of the Adjusted Principal Amount so
prepaid, and on the Maturity Date (and after the Maturity Date, to the extent
not paid, on demand) and upon any acceleration of the amounts due hereunder. All
computations of interest hereunder shall be made on the actual number of days
elapsed over a year of 360 days.

 

In case an Event of Default shall occur and be continuing, the entire principal
of this Note may become or be declared due and payable in the manner and with
the effect provided in the Agreement.

 

Interest on this Note shall accrue on the Adjusted Principal Amount of this Note
in the manner and at the rate or rates per annum determined pursuant to the
terms of the Agreement. Payments of principal and interest (other than payments
of interest payable as PIK Interest to the extent permitted by the Agreement) on
this Note are to be made in lawful money of the United States of America in
immediately available funds at the times and in the manner described in the
Agreement.

 

All payments made on account of principal hereof, and any adjustments to the
Adjusted Principal Amount, shall be recorded by the Holder and, prior to any
transfer hereof, endorsed on the grid attached hereto which is part of this
Note, provided, however, that the failure of the Holder hereof to make such a
notation or any error in such a notation shall not in any manner affect the
obligations of the Company to make payments of principal, interest or any other
amounts with respect to this Note and the Agreement.

 

The Company shall, upon surrender of a Note that is paid or prepaid in part,
promptly execute and deliver to the Holder a new Note equal in principal amount
to the unpaid portion of the Note surrendered.

 

The Company hereby acknowledges and makes this Note a registered obligation for
U.S. federal tax purposes. The Company shall be the registrar for this Note.

 

This Note shall be governed by and construed in accordance with the laws (other
than the conflict of laws rules) of the State of New York.

 

The Company hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically otherwise provided in the
Agreement.

 

[The remainder of this page intentionally has been left blank.]

 

 

Senior Subordinated Note N-[_]
Holder: [________________________]

 

In witness whereof, the Company has caused this Note to be executed and
delivered by its duly authorized officer, on the date first above mentioned.

 

  SITO MOBILE, LTD.           By:     Name: Jerry Hug     Title: Interim CEO    
      SINGLE TOUCH INTERACTIVE, INC.           By:     Name: Jerry Hug    
Title: President           SINGLE TOUCH INTERACTIVE R&D IP, LLC           By:  
  Name: Jerry Hug     Title: Authorized Manager

 

Signature Page to Note

 

 

 

 

PRINCIPAL AMOUNT OF NOTE AND PAYMENTS OF PRINCIPAL

 

Date

 

Additional Principal
(PIK Interest)

 

Amount of

Principal Repaid

 

Remaining Outstanding Principal Amount of Note

 

Notation

Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

CONTROL AGREEMENT

 

Within 30 days following the Closing Date, the Company shall open a depository
account (the “Cash Collateral Account”) which Cash Collateral Account shall be
subject to a Control Agreement

 

 

 

 

[Form of]

 

CASH COLLATERAL ACCOUNT CERTIFICATE

OF

SITO MOBILE LTD., SINGLE TOUCH INTERACTIVE, INC. AND

SINGLE TOUCH R&D IP LLC

 

October 3, 2014

 

Reference is made to the Revenue Sharing and Note Purchase Agreement, dated as
of October 3, 2014, (the “Agreement”), by and among SITO Mobile, Ltd., a
Delaware corporation, Single Touch Interactive, Inc., a Nevada corporation and
Single Touch R&D IP, LLC, a Delaware limited liability company (collectively,
the “Company”) the Purchasers party thereto from time to time and Fortress
Credit Co LLC, as Collateral Agent. Capitalized terms used, but not defined
herein, shall have the meanings provided in the Agreement.

The undersigned, [ ], being the duly elected, qualified and acting [ ] of the
Company, hereby certifies as follows pursuant to Section 6.11 of the Agreement:

1.        On or about the date hereof, $[ ] of Monetization Revenues will be
deposited into the Cash Collateral Account.

IN WITNESS WHEREOF, I have executed this Certificate of Officer as of the date
first set forth above.

 

    Name:   Title:

 

 

 

 

EXHIBIT D-1

 

[FORM OF]

 

NOTE ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Note Assignment and Assumption Agreement (this “Note Assignment and
Assumption Agreement”) is dated as of the Effective Date set forth below and is
entered into by and between the Assignor (as defined below) and the Assignee (as
defined below). Capitalized terms used in this Note Assignment and Assumption
Agreement and not otherwise defined herein have the meanings specified in the
Revenue Sharing and Note Purchase Agreement dated as of October 3, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”), between SITO Mobile, Ltd., a Delaware corporation, Single Touch
Interactive, Inc., a Nevada corporation and Single Touch Interactive R&D IP, LLC
(collectively, the “Company”), each of the Purchasers party thereto and Fortress
Credit Co LLC, as collateral agent (the “Collateral Agent”), receipt of a copy
of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto (the “Standard Terms and
Conditions”) are hereby agreed to and incorporated herein by reference and made
a part of this Note Assignment and Assumption Agreement as if set forth herein
in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Agreement, as of the Effective Date inserted by the
Collateral Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Note Purchaser under the Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the Notes identified
below and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Notes Purchaser) against any Person, whether known or unknown,
arising under or in connection with the Agreement, any other documents or
instruments delivered pursuant thereto or the transactions governed thereby or
in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Note
Assignment and Assumption Agreement, without representation or warranty by the
Assignor.

 

1.Assignor (the “Assignor”): [NAME]     2.Assignee (the “Assignee”): [NAME]    
3.Company: SITO Mobile, Ltd., Single Touch Interactive, Inc., and Single Touch
R&D IP, LLC

 

 

 

    4.Collateral Agent: Fortress Credit Co LLC     5.Assigned Interest:

 

Aggregate Amount of Notes of all Note Purchasers Amount of Notes Assigned
Percentage Assigned of Notes5 $ $ % $ $ % $ $ %

 

Effective Date: __________________, 20[ ] [TO BE INSERTED BY THE COLLATERAL
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

--------------------------------------------------------------------------------

5 Set forth, to at least 8 decimals, as a percentage of the Notes of all Notes
Purchasers thereunder.

 

 

 

 

The terms set forth in this Note Assignment and Assumption Agreement are hereby
agreed to:

 

  [NAME OF ASSIGNOR], as Assignor       By:     Name:    

Title:

        [NAME OF ASSIGNEE], as Assignee         By:  

 

Name:     Title:

 

 

 

 

STANDARD TERMS AND CONDITIONS FOR
NOTE ASSIGNMENT AND ASSUMPTION AGREEMENT6

 

1. Representations and Warranties.Assignor. The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Note Assignment and Assumption
Agreement and to consummate the transactions contemplated hereby; and (b)
assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Agreement or any other
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Documents or any collateral thereunder, (iii) the
financial condition of the Company or any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Document or (iv) the performance or
observance by the Company or any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Document.

 

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Note Assignment and Assumption Agreement and to consummate the transactions
contemplated hereby and to become a Note Purchaser under the Agreement, (ii) it
satisfies the requirements, if any, specified in the Agreement that are required
to be satisfied by it in order to acquire the Assigned Interest and become a
Note Purchaser, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Agreement as a Note Purchaser thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Note Purchaser
thereunder and (iv) it has received a copy of the Agreement and has received or
has been accorded the opportunity to receive copies of such documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Note Assignment and Assumption Agreement and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Collateral Agent or any
other Purchaser; and (b) agrees that (i) it will, independently and without
reliance on the Assignor, the Collateral Agent or any other Purchaser, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Documents, and (ii) it will perform in accordance with their terms all of
the obligations which by the terms of the Documents are required to be performed
by it as a Note Purchaser.

 

--------------------------------------------------------------------------------

6 Capitalized terms used in this Note Assignment and Assumption Agreement and
not otherwise defined herein have the meanings specified in the Revenue Sharing
and Note Purchase Agreement dated as of October 3, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”), between
SITO Mobile, Ltd., a Delaware corporation, Single Touch Interactive, Inc., a
Nevada corporation and Single Touch R&D IP, LLC, a Delaware limited liability
company (collectively, the “Company”), each of the Purchasers party thereto and
Fortress Credit Co LLC, as collateral agent (the “Collateral Agent”).

 

 

 

 

2. Payments. From and after the later of the Effective Date and the date that
the Company received written notice pursuant to the provisions of Section 9.3 of
the Agreement, the Company shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 

3. General Provisions. This Note Assignment and Assumption Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted by the Agreement. This Note Assignment and
Assumption Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Delivery by telecopier, .pdf or other electronic imaging
means of an executed counterpart of a signature page to this Note Assignment and
Assumption Agreement shall be effective as delivery of an original executed
counterpart of this Note Assignment and Assumption Agreement. This Note
Assignment and Assumption Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.

 

 

 

 

EXHIBIT d-2

 

[FORM OF]

 

REVENUE STREAM ASSIGNMENT AND ASSUMPTION AGREEMENT

This Revenue Stream Assignment and Assumption Agreement (this “Revenue Stream
Assignment and Assumption Agreement”) is dated as of the Effective Date set
forth below and is entered into by and between the Assignor (as defined below)
and the Assignee (as defined below). Capitalized terms used in this Revenue
Stream Assignment and Assumption Agreement and not otherwise defined herein have
the meanings specified in the Revenue Sharing and Note Purchase Agreement dated
as of October 3, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”), between SITO Mobile Ltd., a Delaware
corporation, Single Touch Interactive, Inc., a Nevada corporation and Single
Touch Interactive R&D IP, LLC, a Delaware limited liability company
(collectively, the “Company”), each of the Purchasers party thereto and Fortress
Credit Co LLC, as collateral agent (the “Collateral Agent”), receipt of a copy
of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto (the “Standard Terms and
Conditions”) are hereby agreed to and incorporated herein by reference and made
a part of this Revenue Stream Assignment and Assumption Agreement as if set
forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Agreement, as of the Effective Date inserted by the
Collateral Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Revenue Participant under the Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor to the Revenue Stream
identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Revenue Participant) against any Person, whether
known or unknown, arising under or in connection with the Agreement, any other
documents or instruments delivered pursuant thereto or the transactions governed
thereby or in any way based on or related to any of the foregoing, including,
but not limited to, contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Revenue Stream Assignment and Assumption Agreement, without
representation or warranty by the Assignor.

6.Assignor (the “Assignor”): [NAME]     7.Assignee (the “Assignee”): [NAME]    
8.Company: SITO Mobile, Ltd., Single Touch Interactive, Inc., and Single Touch
R&D IP, LLC

 

 

 

    9.Collateral Agent: Fortress Credit Co LLC     10.Assigned Interest:

 

Percentage Assigned of the Revenue Stream 7 % % %

 

Effective Date: __________________, 20[ ] [TO BE INSERTED BY THE COLLATERAL
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

--------------------------------------------------------------------------------

7 Set forth, to at least 8 decimals, as a percentage of the Revenue Stream of
all Revenue Participants thereunder.

 

 

 

 

The terms set forth in this Revenue Stream Assignment and Assumption Agreement
are hereby agreed to:

 

  [NAME OF ASSIGNOR], as Assignor       By:     Name:    

Title:

        [NAME OF ASSIGNEE], as Assignee         By:  

 

Name:     Title:

 

 

 

 

STANDARD TERMS AND CONDITIONS FOR

REVENUE STREAM ASSIGNMENT AND ASSUMPTION AGREEMENT8

 

1. Representations and Warranties.Assignor. The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Revenue Stream Assignment and
Assumption Agreement and to consummate the transactions contemplated hereby; and
(b) assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Agreement or any other
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Documents or any collateral thereunder, (iii) the
financial condition of the Company or any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Document or (iv) the performance or
observance by the Company or any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Document.

 

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Revenue Stream Assignment and Assumption Agreement and to consummate the
transactions contemplated hereby and to become a Revenue Participant under the
Agreement, (ii) it satisfies the requirements, if any, specified in the
Agreement that are required to be satisfied by it in order to acquire the
Assigned Interest and become a Revenue Participant, (iii) from and after the
Effective Date, it shall be bound by the provisions of the Agreement as a
Revenue Participant thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Revenue Participant thereunder and (iv) it has
received a copy of the Agreement and has received or has been accorded the
opportunity to receive copies of such documents and information as it has deemed
appropriate to make its own analysis and decision to enter into this Revenue
Stream Assignment and Assumption Agreement and to purchase the Assigned Interest
on the basis of which it has made such analysis and decision independently and
without reliance on the Collateral Agent or any other Purchaser; and (b) agrees
that (i) it will, independently and without reliance on the Assignor, the
Collateral Agent or any other Purchaser, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under the Documents, and (ii) it will
perform in accordance with their terms all of the obligations which by the terms
of the Documents are required to be performed by it as a Revenue Participant.

 

2. Payments. From and after the later of the Effective Date and the date that
the Company received written notice pursuant to the provisions of Section 9.3 of
the Agreement, the Company shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 

 

8 Capitalized terms used in this Revenue Stream Assignment and Assumption
Agreement and not otherwise defined herein have the meanings specified in the
Revenue Sharing and Note Purchase Agreement dated as of October 3, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”), between the SITO Mobile, Ltd., a Delaware corporation, Single
Touch Interactive, Inc., a Nevada corporation and Single Touch Interactive R&D
IP, LLC, a limited liability company (collectively, the “Company”), each of the
Purchasers party thereto and Fortress Credit Co LLC, as collateral agent (the
“Collateral Agent”).

 

 

 

 

3. General Provisions. This Revenue Stream Assignment and Assumption Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted by the Agreement. This Revenue
Stream Assignment and Assumption Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by telecopier,
.pdf or other electronic imaging means of an executed counterpart of a signature
page to this Revenue Stream Assignment and Assumption Agreement shall be
effective as delivery of an original executed counterpart of this Revenue Stream
Assignment and Assumption Agreement. This Revenue Stream Assignment and
Assumption Agreement shall be governed by, and construed in accordance with, the
law of the State of New York.

  

 

 

 

 Exhibit E

 

PATENT LICENSE AGREEMENT

 

THIS PATENT LICENSE AGREEMENT (the “Agreement”) is made and entered into
effective as of October 3, 2014 by and among:

 

SITO Mobile, Ltd., a Delaware corporation having its principal place of business
located at at 100 Town Square Place, Suite 204, Jersey City, NJ 07310;

 

Single Touch Interactive, Inc., a Nevada corporation having its principal place
of business located at 100 Town Square Place, Suite 204, Jersey City, NJ 07310;

 

Single Touch Interactive R&D IP LLC, a Delaware limited liability company having
its principal place of business located at 100 Town Square Place, Suite 204,
Jersey City, NJ 07310. (collectively, “Licensor”); and

 

Fortress Credit Co LLC, an entity incorporated under the laws of Delaware having
its principal place of business located at 1345 Avenue of the Americas, 46th
Floor, New York, NY 1005 (“Licensee”).

 

Licensor and Licensee are sometimes referred to herein individually as a “Party”
and collectively as the “Parties”.

 

WHEREAS, reference is made to the Revenue Sharing and Note Purchase Agreement,
dated as of the date hereof (as it may be amended, restated, supplemented or
otherwise modified from time to time, the “Revenue Sharing and Note Purchase
Agreement”), by and among the Licensor, the Purchasers (including the Licensee)
and the Licensee, acting as the Collateral Agent and the Security Agreement,
dated as of the date hereof (as it may be amended, restated, supplemented or
otherwise modified from time to time, the “Security Agreement”), by and among
the Grantors (as defined therein, including Licensor) and the Licensee, acting
as the Collateral Agent;

 

WHEREAS, in consideration of the investments set forth in the Revenue Sharing
and Note Purchase Agreement, Licensor agreed to grant certain rights, including
rights to license patents and patent applications, to the Licensee for the
benefit of the Secured Parties; and

 

WHEREAS, Licensor is the owner of certain patents and patent applications
identified in Schedule I(a) of the Revenue Sharing and Note Purchase Agreement,
which Schedule I(a) shall be an integral part of this Agreement; and

 

Page 1 of 7

 

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the Parties hereto agree as follows:

 

1.Definitions

 

In this Agreement, the following terms shall have the assigned meaning.
Capitalized terms used in this Agreement but not defined herein shall have the
meaning given to them in the Revenue Sharing and Note Purchase Agreement and/or
the Security Agreement, as applicable.

 

“Licensed Patents” shall mean the Patents listed on Schedule I(a) of the Revenue
Sharing and Note Purchase Agreement. .

 

2.License

 

2.1Subject to the terms and conditions herein and in the Revenue Sharing and
Note Purchase Agreement, Licensor hereby grants to Licensee a perpetual,
non-exclusive, transferrable, sub-licensable, divisible, irrevocable, fully
paid-up, royalty-free, and worldwide license to the Licensed Patents, including,
but not limited to, the rights to make, have made, market, use, sell, offer for
sale, import, export and distribute the inventions disclosed in the Licensed
Patents and otherwise exploit the Licensed Patents in any lawful manner in
Licensee’s sole and absolute discretion solely for the benefit of the Secured
Parties (“Patent License”), provided that Licensee shall only use the Patent
License following an Event of Default.

 

2.2If Licensee elects to grant any sublicense(s) pursuant to the Patent License
in Section 2.1, Licensee shall (x) obtain the prior written approval of Licensor
before entering into any sublicense agreement imposing financial obligations or
restrictions on Licensor and (y) provide written notice within fifteen days of
entering into any sublicense agreement.

 

3.Representations, Warranties and Acknowledgements

 

3.1Each Party represents, warrants and covenant to the other that the execution,
delivery and performance of this Agreement is within each Party's powers and has
been duly authorized.

 

3.2Licensor hereby represents, warrants and covenant that it is the sole and
exclusive owner of all rights, title and interest in and to the Licensed
Patents.

 

3.3EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY WARRANTIES OF
ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EACH PARTY
SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE OR THAT
ARISE BY COURSE OF DEALING OR BY REASON OF CUSTOM OR USAGE IN THE TRADE, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.

 

3.4Notwithstanding anything to the contrary in this Agreement, no Party shall be
liable to the other or any third party for any indirect, incidental, exemplary,
special, punitive or consequential damages (including with respect to lost
revenue, lost profits or savings or business interruption) of any kind or nature
whatsoever suffered by the other Party or any third party howsoever caused and
regardless of the form or cause of action, even if such damages are foreseeable
or such party has been advised of the possibility of such damages.

 

Page 2 of 7

 

 

4.Infringement

 

Upon request, Licensee shall notify Licensor of any infringement of the Licensed
Patents by third parties of which Licensee become aware. Licensor shall have the
sole right, at its expense, to bring any action on account of any such
infringement of the Licensed Patents, and Licensee shall reasonably cooperate
with Licensor, as Licensor may request and at Licensor’s expense, in connection
with any such action brought by Licensor.

 

5.Termination

 

5.1The Parties may terminate this Agreement at any time by mutual written
agreement executed by both Parties provided that any sublicenses granted
hereunder prior to the termination of this Agreement shall survive according to
the respective terms and conditions of such sublicenses.

 

5.2The Agreement shall end after the later of (x) the expiration of the last
Licensed Patent to expire and (y) the date on which all statutes of limitations
have fully run for bringing infringement claims under the Licensed Patents.
Breach(es), material or otherwise, of this Agreement by either Party or any
other Person will not constitute grounds by which this Agreement may be
terminated.

 

6.Survival

 

Any rights and obligations which by their nature survive and continue after any
expiration or termination of this Agreement will survive and continue and will
bind the Parties and their successors and assigns, until such rights are
extinguished and obligations are fulfilled.

 

7.Statement of Intent With Respect to Bankruptcy.

 

The Parties intend that the licenses granted under this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the United States
Bankruptcy Code, 111 U.S.C. § 101, et seq. (“Bankruptcy Code”), licenses of
rights to “intellectual property” as defined in the Bankruptcy Code.

 

8.Assignment

 

Licensee and each of its sublicensees may, without the consent of Licensor,
assign any or all of their rights and interests, and delegate any or all of
their obligations without restriction. The rights and obligations of the Parties
hereto shall inure to the benefit of, and be binding and enforceable upon and
by, the respective successors and assigns of the Parties.

 

9.Entire Agreement and Construction

 

This Agreement along with the pertinent provisions of the Revenue Sharing and
Note Purchase Agreement constitute the sole, final and entire understanding of
the parties hereto concerning the subject matter hereof, and all prior
understandings having been merged herein. This Agreement cannot be modified or
amended except by a writing signed by the Parties hereto. The language used in
this Agreement will be deemed to be the language chosen by the Parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any Party.

 

Page 3 of 7

 

 

10.Severability

 

The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to
other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

 

11.Notices

 

All notices, requests, claims, demands, and other communications hereunder shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, or by overnight delivery service from a
recognized carrier, to the respective Party as follows:

  

if to Licensor:

  

SITO Mobile, Ltd. 

100 Town Square, Suite 204 

Jersey City, NJ 07310 

Attention: Chief Executive Officer

Fax: 201-942-3091

With a copy to: 

 

Sichenzia Ross Friedman Ference LLP 

61 Broadway, 32nd Floor 

New York, New York 10006 

Attention: Gregory Sichenzia 

Fax: 212-930-9725 

Electronic mail: gsichenzia@SRFF.COM

 

Notices to the Collateral Agent or the Purchasers should be sent to the
following:

  

Yoni Shtein 

Vice President 

Intellectual Property Finance Group 

Fortress Investment Group 

One Market Plaza 

Spear Tower, 42nd Floor 

San Francisco, CA 94105 

Phone: 415-284-7415 

Email: yshtein@fortress.com 

CC:     jnoble@fortress.com

With a copy to:

 

Alyson Allen 

Ropes & Gray LLP 

Prudential Tower, 800 Boylston Street 

Boston, MA 02199-3600 

Tel: 617-951-7483 

Email: alyson.allen@ropesgray.com

 

 

  

or to such other address as the person to whom notice is given may have
previously furnished to the other Party in writing in the manner set forth
above.

 

Page 4 of 7

 

 

12.Governing Law; Jurisdiction; Venue

 

This Agreement, and all claims arising hereunder or relating hereto, shall be
governed by and construed in accordance with the internal laws of the State of
New York in the United States of America applicable to agreements made and to be
performed entirely within such State, without regard to the conflicts of law
principles of such State that would result in the application of the laws of
another jurisdiction. In any action or proceeding between either of the Parties
arising out of or relating to this Agreement or any of the transactions
contemplated by this Agreement, each of the Parties (a) irrevocably and
unconditionally consents and submits to the exclusive jurisdiction and venue of
the state and federal courts residing in the State of New York and (b) agrees
that all claims in respect of such action or proceeding must be heard and
determined exclusively in the state or federal courts in the State of New York.
Each Party shall be entitled to seek injunctive or other equitable relief,
without the posting of a bond, at any time (with or without delivering a demand
notice) whenever the facts or circumstances would permit a Party to seek such
equitable relief in a court of competent jurisdiction.

 

13.Waiver

 

Except as otherwise provided herein, any failure of any Party to comply with any
obligation, covenant, agreement, or condition herein may be waived by the Party
entitled to the benefits thereof only by a written instrument signed by the
Party granting such waiver; provided, however, that such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement, or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.

 

14.Counterparts

 

This Agreement may be executed in one or more counterparts, each of which will
be an original and both of which will constitute together the same document.
Counterparts may be signed and delivered by facsimile or PDF file, each of which
will be binding when received by the applicable Party.

 

[Signature Page Follows]

 

Page 5 of 7

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date firs
written above.

  

  Licensor:           SITO Mobile, Ltd.           /s/ Jerry Hug     Authorized
Signature           Jerry Hug     Print Name and Title           Single Touch
Interactive, Inc.           /s/ Jerry Hug     Authorized Signature          
Jerry Hug     Print Name and Title  

  

Single Touch Interactive R&D IP, LLC

  

  /s/ Jerry Hug     Authorized Signature           Jerry Hug     Print Name and
Title           Licensee:           Fortress Credit Co LLC           /s/
Constantine M. Dakolias     Authorized Signature           Constantine M.
Dakolias, President     Print Name and Title  

 

[Signature Page to Patent License Agreement] 

 

 

 

 

Exhibit F

 

Patent Security Agreement

 

Patent Security Agreement, dated as of October 3, 2014, by SITO MOBILE, LTD., a
Delaware corporation, SINGLE TOUCH INTERACTIVE, INC., a Nevada corporation and
SINGLE TOUCH INTERACTIVE R&D IP, LLC, a Delaware limited liability company
(collectively, the “Pledgor”), in favor of FORTRESS CREDIT CO LLC, in its
capacity as collateral agent pursuant to the Revenue Sharing and Note Purchase
Agreement (in such capacity, the “Collateral Agent”).

 

W i t n e s s e t h:

  

Whereas, the Pledgor is party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Collateral Agent pursuant to which the
Pledgor is required to execute and deliver this Patent Security Agreement;

 

Now, Therefore, in consideration of the premises and to induce the Collateral
Agent, for the benefit of the Secured Parties, to enter into the Revenue Sharing
and Note Purchase Agreement, the Pledgor hereby agrees with the Collateral Agent
as follows:

 

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

 

SECTION 2. Grant of Security Interest in Patent Collateral. The Pledgor hereby
pledges and grants to the Collateral Agent for the benefit of the Secured
Parties a lien on and security interest in and to all of its right, title and
interest in, to and under all the following Collateral:

 

(a) registered Patents and applications of the Pledgor set forth on Schedule A
attached hereto; and

 

(b) all Proceeds of any and all of the foregoing.

 

SECTION 3. Security Agreement. The security interests granted to the Collateral
Agent pursuant to this Patent Security Agreement are granted in conjunction with
the security interests granted to the Collateral Agent pursuant to the Security
Agreement, and Pledgor hereby acknowledges and affirms that the rights and
remedies of the Collateral Agent with respect to the security interests in the
Patents made and granted hereby are set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Patent Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control.

 

SECTION 4. Counterparts. This Patent Security Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Patent Security Agreement by
signing and delivering one or more counterparts. Delivery of an executed
counterpart of a signature page of this Patent Security Agreement by telecopier
or other electronic transmission (i.e. a “pdf” or “tif” document) shall be
effective as delivery of a manually executed counterpart of this Patent Security
Agreement.

 

[Signature page follows]

 

 

 

 

In Witness Whereof, the Pledgor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized offer as of the date first set
forth above.

 

  Very truly yours,       SITO MOBILE, LTD.,   as Pledgor         By: /s/ Jerry
Hug   Name: Jerry Hug   Title: Interim CEO         SINGLE TOUCH INTERACTIVE,
INC.,   as Pledgor         By: /s/ Jerry Hug   Name: Jerry Hug   Title:
President

 

  SINGLE TOUCH INTERACTIVE, LLC   as Pledgor         By: /s/ Jerry Hug   Name:
Jerry Hug   Title: Authorized Manager

  

Accepted and Agreed:

 

FORTRESS CREDIT CO LLC, 

as Collateral Agent

 

By: /s/ Constantine M. Dakolias     Name: Constantine M. Dakolias     Title:
  President  

 

[Signature Page to Patent Security Agreement]

  

 

 

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT, dated as of October 3, 2014 (this “Agreement”), by and among
SITO Mobile, Ltd., a Delaware Corporation, Single Touch Interactive, Inc., a
Nevada corporation, and Single Touch Interactive R&D IP, LLC, a Delaware limited
liability company (collectively, “Grantor”), and Fortress Credit Co LLC, as
collateral agent for the Secured Parties (as defined in the Revenue Sharing and
Note Purchase Agreement, as defined below) (in such capacity as collateral
agent, the “Collateral Agent”).

 

RECITALS:

 

WHEREAS, reference is made to that certain Revenue Sharing and Note Purchase
Agreement, dated as of the date hereof (as it may be amended, restated,
supplemented or otherwise modified from time to time, the “Revenue Sharing and
Note Purchase Agreement”), by and among the Grantor, the Purchasers party
thereto from time to time and the Collateral Agent;

 

WHEREAS, in consideration of the purchase of the Notes by the Note Purchasers,
the purchase of the Revenue Stream by the Revenue Participants and the other
accommodations of the Purchasers, in each case as set forth in the Revenue
Sharing and Note Purchase Agreement, Grantor has agreed to secure Grantor’s
obligations under the Documents as set forth herein; and

 

NOW, THEREFORE, in consideration of the premises, agreements, provisions and
covenants herein contained, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, Grantor and
Collateral Agent agree as follows:

 

SECTION 1. DEFINITIONS.

 

1.1. General Definitions. In this Agreement, the following terms shall have the
following meanings:

 

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

 

“Commercial Tort Claims” shall mean all “commercial tort claims” as defined in
Article 9 of the UCC that relate to the Patents or rights deriving from the
Patents, including, without limitation, all commercial tort claims listed on
Schedule 4.3 (as such schedule may be amended or supplemented from time to
time).

 

“Documents” shall have the meaning assigned to such term in the Revenue Sharing
and Note Purchase Agreement.

 

“Patents” shall have the meaning assigned to such term in the Revenue Sharing
and Note Purchase Agreement.

 

 

 

 

“Patent Security Agreement” shall mean the patent security agreement executed by
the parties substantially in the form of Exhibit B to perfect the Secured
Parties’ security interest in the Collateral pursuant to the terms and
conditions of this Agreement.

 

“Permitted Liens” shall mean any Lien that is permitted to be incurred by
Grantor under Section 6.8 of the Revenue Sharing and Note Purchase Agreement.

 

“Proceeds” shall mean: (i) all “proceeds” as defined in Article 9 of the UCC and
(ii) whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.

 

“Security Agreement Supplement” shall mean any supplement to this Agreement
substantially in the form of Exhibit A.

  

“Supporting Obligation” shall mean all “supporting obligations” as defined in
Article 9 of the UCC.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New Jersey; provided that, if perfection or the effect of perfection or
non-perfection or the priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New Jersey, “UCC” means the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.

 

“United States” shall mean the United States of America.

 

1.2. Definitions; Interpretation. All capitalized terms used herein (including
the preamble and recitals hereto) but not otherwise defined herein shall have
the respective meanings ascribed to such terms in the Revenue Sharing and Note
Purchase Agreement or, if not defined therein, in the UCC. References to
“Sections,” “Exhibits” and “Schedules” shall be to sections, exhibits and
schedules, as the case may be, of this Agreement unless otherwise specifically
provided. The rules of construction specified in Section 1.2 of the Revenue
Sharing and Note Purchase Agreement also apply to this Agreement.

 

1.3. Schedules and Exhibits. This Agreement includes each of the following
Schedules and Exhibits, all of which are incorporated into this Agreement by
this reference, as each may be amended or supplemented from time to time in
accordance with the terms and conditions here.

 

Schedule 4.1 Grantor Corporate Information 

Schedule 4.2 Patents 

Schedule 4.3 Commercial Tort Claims 

Exhibit A Security Agreement Supplement 

Exhibit B Patent Security Agreement

 

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SECTION 2. GRANT OF SECURITY.

 

2.1. Grant of Security. As security for the payment and performance in full of
all of the Secured Obligations (as defined in Section 3.1), Grantor hereby
grants to Collateral Agent, for the benefit of Secured Parties, a security
interest and continuing lien on all of Grantor’s right, title and interest in,
to and under all personal property of the grantor, in each case whether now
owned or existing or hereafter acquired or arising and wherever located (all of
which are hereinafter collectively referred to as the “Collateral”):

 

(a) Patents;

 

(b) the license agreements set forth on Schedule 4.5 of the Revenue Sharing and
Note Purchase Agreement (the “Existing Licenses”);

 

(c) Commercial Tort Claims described on Schedule 4.3 (as such schedule may be
amended or supplemented from time to time);

 

(d) to the extent not otherwise included above, all Collateral Support and
Supporting Obligations relating to any of the foregoing; and

 

(e) to the extent not otherwise included above, all receivables, Proceeds,
products, accessions, rents and profits of or in respect of any of the
foregoing.

 

SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

 

3.1. Security for Obligations. This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. § 362(a) (and any successor provision thereof)),
of all Obligations with respect to Grantor, whether now existing or hereafter
incurred (collectively, the “Secured Obligations”).

 

3.2. Continuing Liability Under Collateral. Notwithstanding anything herein to
the contrary, (i) Grantor shall remain liable for all obligations under the
Collateral and nothing contained herein is intended to or shall be a delegation
of duties to Collateral Agent or any other Secured Party, (ii) Grantor shall
remain liable under each of the agreements included in the Collateral and
neither Collateral Agent nor any other Secured Party shall have any obligation
or liability under any of such agreements by reason of or arising out of this
Agreement and (iii) the exercise by Collateral Agent of any of its rights
hereunder shall not release Grantor from any of its duties or obligations under
the contracts and agreements included in the Collateral.

 

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SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

 

4.1. Generally.

 

(a) Representations and Warranties. Grantor hereby represents and warrants to
Collateral Agent and each other Secured Party, as of the Closing Date and as of
the date of each issuance of Notes, that:

 

(i) it owns the Collateral purported to be owned by it or otherwise has the
rights it purports to have in each item of Collateral and, as to all Collateral
whether now existing or hereafter acquired, will continue to own or have such
rights in each item of the Collateral, in each case free and clear of any and
all Liens, rights or claims of all other Persons other than Permitted Liens;

 

(ii) it has indicated on Schedule 4.1 (as such schedule may be amended or
supplemented from time to time): (w) the type of organization of Grantor, (x)
the jurisdiction of organization of Grantor, (y) its organizational
identification number, if any, and (z) the jurisdiction where the chief
executive office or its sole place of business is, and for the one-year period
preceding the date hereof has been, located.

 

(iii) the full legal name of Grantor is as set forth on Schedule 4.1 and it has
not done in the last five (5) years, and does not do, business under any other
name (including any trade-name or fictitious business name) except for those
names set forth on Schedule 4.1;

 

(iv) except as provided on Schedule 4.1, it has not changed its name,
jurisdiction of organization, chief executive office or sole place of business
or its corporate structure in any way (e.g., by merger, consolidation, change in
corporate form or otherwise) within the past five (5) years;

 

(v) it has not become bound (whether as a result of merger or otherwise) as
debtor under a security agreement entered into by another Person, which has not
heretofore been terminated other than the agreements identified on Schedule 4.1
hereof;

 

(vi) (x) upon the filing of all UCC financing statements naming Grantor as
“debtor” and Collateral Agent as “secured party” and describing the Collateral
in the filing offices set forth opposite such Grantor’s name on Schedule 4.1
hereof and other filings delivered by each Grantor and (y) to the extent
perfection or priority of a security interest therein not subject to Article 9
of the UCC, upon recordation of the security interests granted hereunder in
Patents in the applicable intellectual property registries, including but not
limited to the United States Patent and Trademark Office, the security interests
granted to Collateral Agent hereunder shall constitute valid and perfected first
priority Liens (subject in the case of priority only to Permitted Liens) on such
Collateral;

 

(vii) all actions and consents, including all filings, notices, registrations
and recordings necessary or desirable for the exercise by Collateral Agent of
the rights provided for in this Agreement or the exercise of remedies in respect
of the Collateral have been made or obtained;

 

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(viii) other than the financing statements filed in favor of Collateral Agent,
no effective UCC financing statement, fixture filing or other instrument similar
in effect under any applicable law covering all or any part of the Collateral is
on file in any filing or recording office except for (A) financing statements
for which proper termination statements have been delivered to Collateral Agent
for filing and (B) financing statements filed in connection with Permitted
Liens; and

 

(ix) no authorization, approval or other action by, and no notice to or filing
with, any Governmental Authority or regulatory body is required for either
(i) the pledge or grant by any Grantor of the Liens purported to be created in
favor of Collateral Agent hereunder or (ii) the exercise by Collateral Agent of
any rights or remedies in respect of any Collateral (whether specifically
granted or created hereunder or created or provided for by applicable law),
except for the filings contemplated by clause (vi) above.

 

(b) Covenants and Agreements. Grantor hereby covenants and agrees with
Collateral Agent and each other Secured Party that:

 

(i) it shall not change Grantor’s name, identity, corporate structure (e.g., by
merger, consolidation, change in corporate form or otherwise) sole place of
business, chief executive office, type of organization or jurisdiction of
organization or establish any trade names unless it shall have (A) notified
Collateral Agent in writing, by executing and delivering to Collateral Agent a
completed Security Agreement Supplement, together with all Supplements to
Schedules thereto, at least fifteen (15) Business Days prior to any such change
or establishment, identifying such new proposed name, identity, corporate
structure, sole place of business, chief executive office, jurisdiction of
organization or trade name and providing such other information in connection
therewith as Collateral Agent may reasonably request and (B) taken all actions
necessary or advisable to maintain the continuous validity, perfection and the
same or better priority of Collateral Agent’s security interest in the
Collateral intended to be granted and agreed to hereby; and

 

(ii) it shall not take or permit any action which could impair Collateral
Agent’s rights in the Collateral.

 

4.2. Intellectual Property.

 

(a) Representations and Warranties. Except as disclosed in Schedule 4.2, Grantor
hereby represents and warrants to Collateral Agent and each other Secured Party,
as of the Closing Date and as of the date of each issuance of Notes, that:

 

(i) Schedule 4.2 sets forth a true and complete list of all United States, state
and foreign registrations of and applications for the Patents;

 

(ii) it is the sole and exclusive owner of the entire right, title, and interest
in and to all of the Patents listed on Schedule 4.2, free and clear of all
Liens, claims, encumbrances and licenses, except for Permitted Liens and the
Existing Licenses set forth on Schedule 4.5 of the Revenue Sharing and Note
Purchase Agreement; and

 

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(iii) all registrations and applications for Patents of Grantor are standing in
the name of Grantor, and none of such Patents has been licensed by any Grantor
to any Affiliate or third party, except as disclosed in Schedule 4.2.

 

4.3. Commercial Tort Claims.

 

(a) Representations and Warranties. Each Grantor hereby represents and warrants
to Collateral Agent and each other Secured Party, as of the Closing Date and as
of the date of each issuance of Notes, that Schedule 4.3 (as such schedule may
be amended or supplemented from time to time) sets forth all Commercial Tort
Claims of each Grantor.

 

(b) Covenants and Agreements. Each Grantor hereby covenants and agrees with
Collateral Agent and each other Secured Party that prior to the initiation of
any Commercial Tort Claim hereafter arising it shall deliver to the Collateral
Agent a completed Security Agreement Supplement, together with all Supplements
to Schedules thereto, identifying such new Commercial Tort Claims and granting a
security interest therein to the Collateral Agent.

 

SECTION 5. FURTHER ASSURANCES.

 

5.1. Further Assurances.

 

(a) Grantor agrees that from time to time, at the expense of Grantor, it shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Collateral Agent may
reasonably request, in order to create and/or maintain the validity, perfection
or priority of and protect any security interest granted or purported to be
granted hereby or to enable Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Grantor shall:

 

(i) file or authorize the filing of such financing or continuation statements,
or amendments thereto, and execute and deliver such other agreements,
instruments, endorsements, powers of attorney or notices, as may be necessary or
desirable, or as Collateral Agent may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted hereby;

 

(ii) take all actions necessary to ensure the recordation of appropriate
evidence of the liens and security interest granted hereunder in the Patents
with any intellectual property registry in which said Patents are registered or
in which an application for registration is pending including, without
limitation, the United States Patent and Trademark Office, the various
Secretaries of State, and the foreign counterparts of any of the foregoing; and

 

6

 

 

(iii) at Collateral Agent’s reasonable request, appear in and defend any action
or proceeding that may affect Grantor’s title to or Collateral Agent’s security
interest in all or any part of the Collateral.

 

(b) Grantor hereby authorizes Collateral Agent to file a Record or Records,
including, without limitation, financing or continuation statements, and
amendments thereto, in any jurisdictions and with any filing offices as
Collateral Agent may determine, in its sole discretion, are necessary to perfect
the security interest granted to Collateral Agent herein. Grantor shall furnish
to Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Collateral Agent may reasonably request, all in
reasonable detail

 

(c) Grantor hereby authorizes Collateral Agent to amend Schedule 4.2 to include
reference to any right, title or interest in any existing Patents or any Patents
acquired or developed by any Grantor after the execution hereof or to delete any
reference to any right, title or interest in any Patents in which any Grantor no
longer has or claims any right, title or interest.

 

SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

 

6.1. Power of Attorney. Grantor hereby irrevocably appoints Collateral Agent
(such appointment being coupled with an interest) as Grantor’s attorney-in-fact,
with full authority in the place and stead of Grantor and in the name of
Grantor, Collateral Agent or otherwise, from time to time in Collateral Agent’s
discretion to take any action and to execute any instrument that Collateral
Agent may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, the following:

 

(a) upon the occurrence and during the continuance of any Event of Default, to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

 

(b) upon the occurrence and during the continuance of any Event of Default, to
receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clause (a) above;

 

(c) upon the occurrence and during the continuance of any Event of Default, to
file any claims or take any action or institute any proceedings that Collateral
Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Collateral Agent with respect
to any of the Collateral;

 

(d) to prepare and file any UCC financing statements and continuations and
amendments thereof against Grantor as debtor;

 

(e) to prepare, sign, and file for recordation in any intellectual property
registry, appropriate evidence of the lien and security interest granted herein
in the Patents in the name of Grantor as assignor or debtor;

 

(f) to take or cause to be taken all actions necessary to perform or comply or
cause performance or compliance with the terms of this Agreement, including,
without limitation, access to pay or discharge taxes or Liens (other than
Permitted Liens) levied or placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to discharge the same to
be determined by Collateral Agent in its sole discretion, any such payments made
by Collateral Agent to become obligations of Grantor to Collateral Agent, due
and payable immediately without demand; and

 

7

 

 

(g) upon the occurrence and during the continuation of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
Collateral Agent’s option and Grantor’s expense, at any time or from time to
time, all acts and things that Collateral Agent deems reasonably necessary to
protect, preserve or realize upon the Collateral and Collateral Agent’s security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.

 

6.2. No Duty on the Part of Collateral Agent or Secured Parties. The powers
conferred on Collateral Agent hereunder are solely to protect the interests of
the Secured Parties in the Collateral and shall not impose any duty upon
Collateral Agent or any Secured Party to exercise any such powers. Collateral
Agent and the Secured Parties shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither they
nor any of their respective officers, directors, employees or agents shall be
responsible to Grantor for any act or failure to act hereunder, except for their
own gross negligence or willful misconduct as determined by a final,
non-appealable judgment of a court of competent jurisdiction.

 

SECTION 7. REMEDIES.

 

7.1. Generally.

 

(a) If any Event of Default shall have occurred and be continuing, Collateral
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it at law or in
equity, all the rights and remedies of Collateral Agent on default under the UCC
(whether or not the UCC applies to the affected Collateral) to collect, enforce
or satisfy any Secured Obligations then owing, whether by acceleration or
otherwise, and also may, without notice except as required under the UCC,
exercise its rights under Section 2.7 of the Revenue Sharing and Note Purchase
Agreement and sell, assign, lease, license (on an exclusive or nonexclusive
basis) or otherwise dispose of the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Collateral Agent may deem
commercially reasonable, provided however, that any such exercise of remedies
(including any sale, assignment or disposition of Patents or any rights in any
Patents) shall be subject to (1) the required grant by Purchasers and the
Collateral Agent to the Grantor a perpetual non-exclusive, royalty-free,
world-wide license (with the right to sublicense to third parties under the
Existing Licenses and the sale of proprietary products and any other licenses
entered into in compliance with this Agreement) to the Patents pursuant to the
proviso at the end of Section 7.2 of the Revenue Sharing and Note Purchase
Agreement and (2) the Purchasers and Collateral Agent obtaining and delivering
to Grantor a written acknowledgement and agreement of the applicable transferee
or assignee as required pursuant to the proviso at the end of Section 7.2 of the
Revenue Sharing and Note Purchase Agreement.

 

8

 

 

(b) In connection with the exercise of remedies pursuant to Section 7.1(a) of
this Agreement, Collateral Agent or any other Secured Party may be the purchaser
of any or all of the Collateral at any public or private (to the extent that the
portion of the Collateral being privately sold is of a kind that is customarily
sold on a recognized market or the subject of widely distributed standard price
quotations) sale in accordance with the UCC and Collateral Agent, as collateral
agent for and representative of the Secured Parties, shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such sale made in accordance
with the UCC, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by Collateral Agent at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantor, and Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least thirty (30) days notice to such Grantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Collateral Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Grantor agrees that it would not be commercially unreasonable for Collateral
Agent to dispose of the Collateral or any portion thereof by using Internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets. Grantor hereby waives any claims against
Collateral Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Collateral Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the fees of any attorneys employed by Collateral Agent to
collect such deficiency. Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Collateral
Agent, that Collateral Agent has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against Grantor, and Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default has occurred
giving rise to the Secured Obligations becoming due and payable prior to their
stated maturities. Nothing in this Section shall in any way alter the rights of
Collateral Agent hereunder.

 

(c) Collateral Agent may sell the Collateral in connection with the exercise of
remedies pursuant to Section 7.1(a) of this Agreement without giving any
warranties as to the Collateral. Collateral Agent may specifically disclaim or
modify any warranties of title or the like. This procedure will not be
considered to adversely affect the commercial reasonableness of any sale of the
Collateral.

 

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(d) Collateral Agent shall have no obligation to marshal any of the Collateral.

 

7.2. Application of Proceeds. All proceeds received by Collateral Agent in
respect of any sale, any collection from, or other realization upon all or any
part of the Collateral in connection with the exercise of remedies pursuant to
Section 7.1(a) or (b) of this Agreement shall be applied in full or in part by
Collateral Agent against the Secured Obligations as follows:

 

(a) First, to payment of that portion of the Secured Obligations constituting
fees, indemnities, expenses and other amounts (other than principal, interest
and the Revenue Participant’s proportionate share of Revenue Stream, but
including (x) attorney costs and other expenses payable under Section 9.1 of the
Revenue Sharing and Note Purchase Agreement, (y) amounts owing in respect of the
preservation of Collateral or the security interest in the Collateral and (z)
amounts owing in respect of enforcing the rights of the Secured Parties under
the Documents) payable to the Collateral Agent in its capacity as such or to the
Purchasers;

 

(b) Second, to the payment of that portion of the Secured Obligation
constituting amounts owed to the Note Purchasers;

 

(c) Third, to the payment of that portion of the Secured Obligations
constituting amounts owed to the Revenue Participants in accordance with Section
2.1.2 of the Revenue Sharing and Note Purchase Agreement; and

 

(d) Last, the balance, if any, after all the Secured Obligations have been paid
in full, to the Grantor or as otherwise required by applicable law.

 

7.3. Sales on Credit. If Collateral Agent sells any of the Collateral in
connection with the exercise of remedies pursuant to Section 7.1(a) of this
Agreement upon credit, Grantor will be credited only with payments actually made
by the purchaser thereof and received by Collateral Agent and applied to
indebtedness of the purchaser thereof. In the event the purchaser fails to pay
for the Collateral, Collateral Agent may resell the Collateral and Grantor shall
be credited with proceeds of the sale.

 

7.4. Intellectual Property.

 

(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default

 

(i) The Collateral Agent may exercise its rights under Section 2.7 of the
Revenue Sharing and Note Purchase Agreement;

 

(ii) Collateral Agent shall have the right (but not the obligation) to bring
suit or otherwise commence any action or proceeding in the name of Grantor,
Collateral Agent or otherwise, in Collateral Agent’s sole discretion, to enforce
any Patents, in which event Grantor shall, at the request of Collateral Agent,
do any and all lawful acts and execute any and all documents required by
Collateral Agent in aid of such enforcement and Grantor shall promptly, upon
demand, reimburse and indemnify Collateral Agent as provided in Sections 9.1 and
9.2 of the Revenue Sharing and Note Purchase Agreement in connection with the
exercise of its rights under this Section, and, to the extent that Collateral
Agent shall elect not to bring suit to enforce any Patents as provided in this
Section, Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement or other violation of any
of Grantor’s rights in the Patents by any other Person and for that purpose
agrees to diligently maintain any action, suit or proceeding against any Person
so infringing as shall be necessary to prevent such infringement or violation;

 

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(iii) Collateral Agent shall have the right to notify, or require Grantor to
notify, any obligors with respect to amounts due or to become due to Grantor in
respect of the Patents, of the existence of the security interest created
herein, to direct such obligors to make payment of all such amounts directly to
Collateral Agent, and, upon such notification and at the expense of Grantor, to
enforce collection of any such amounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as Grantor
might have done;

 

(1) all amounts and proceeds (including checks and other instruments) received
by Grantor in respect of amounts due to Grantor in respect of the Collateral or
any portion thereof shall be received in trust for the benefit of Collateral
Agent hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Collateral Agent in the same form as so
received (with any necessary endorsement) to be applied as per Section 7.2 of
this Agreement; and

 

(2) no Grantor shall adjust, settle or compromise the amount or payment of any
such amount or release wholly or partly any obligor with respect thereto or
allow any credit or discount thereon.

 

(b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to Collateral Agent of any rights, title and
interests in and to the Patents shall have been previously made and shall have
become absolute and effective, and (iv) the Secured Obligations shall not have
become immediately due and payable, upon the written request of Grantor,
Collateral Agent shall promptly execute and deliver to Grantor, at Grantor’s
sole cost and expense, such assignments or other transfer as may be necessary to
reassign to Grantor any and all such rights, title and interests as may have
been assigned to Collateral Agent as aforesaid, subject to any disposition
thereof that may have been made by Collateral Agent; provided, after giving
effect to such reassignment, Collateral Agent’s security interest granted
pursuant hereto, as well as all other rights and remedies of Collateral Agent
granted hereunder, shall continue to be in full force and effect; and provided
further, the rights, title and interests so reassigned shall be free and clear
of any other Liens granted by or on behalf of Collateral Agent and the Secured
Parties.

 

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SECTION 8. COLLATERAL AGENT.

 

Collateral Agent has been appointed to act as “Collateral Agent” hereunder by
Purchasers pursuant to the Revenue Sharing and Note Purchase Agreement.
Collateral Agent shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action (including, without limitation, the
release or substitution of Collateral), solely in accordance with this Agreement
and the other Documents; provided, Collateral Agent shall, after payment in full
of all Obligations under the Revenue Sharing and Note Purchase Agreement and the
other Documents, exercise, or refrain from exercising, any remedies provided for
herein in accordance with the instructions of the Majority Purchasers. In
furtherance of the foregoing provisions of this section, each Secured Party, by
its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Secured Party that all powers, rights and remedies
hereunder may be exercised solely by Collateral Agent for the benefit of Secured
Parties in accordance with the terms of this section. Collateral Agent may
resign, and a successor be appointed, in accordance with the Revenue Sharing and
Note Purchase Agreement. After any retiring Collateral Agent’s resignation
hereunder as Collateral Agent, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Collateral Agent hereunder.

 

SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF RIGHTS UNDER INVESTMENT
DOCUMENTS.

 

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment in full of all Secured
Obligations (other than contingent indemnity obligations not then asserted), be
binding upon Grantor, its successors and assigns, and inure, together with the
rights and remedies of Collateral Agent hereunder, to the benefit of Collateral
Agent and its successors, transferees and assigns. Without limiting the
generality of the foregoing, but subject to the terms of the Revenue Sharing and
Note Purchase Agreement, any Purchaser may assign or otherwise transfer any
rights held by it under the Documents to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to Purchasers herein or otherwise. Upon the payment in full of all Secured
Obligations (other than contingent indemnity obligations not then asserted), the
security interest granted hereby shall automatically terminate hereunder and of
record and all rights to the Collateral shall revert to Grantor. Upon any such
termination, Collateral Agent shall, at Grantor’s expense, execute and deliver
to Grantor or otherwise authorize the filing of such release documents as
Grantor shall reasonably request, including financing statement amendments to
evidence such termination, in each case, such documents to be in form and
substance satisfactory to Collateral Agent and without representation or
warranty by, or recourse to, Collateral Agent. Upon any Disposition of property
permitted by the Revenue Sharing and Note Purchase Agreement, the Liens granted
herein shall be deemed to be automatically released and such property shall
automatically revert to the Grantor (or transferee) with no further action on
the part of any Person. Collateral Agent shall, at Grantor’s expense, execute
and deliver or otherwise authorize the filing of such documents as Grantor shall
reasonably request, in form and substance reasonably satisfactory to Collateral
Agent and without representation or warranty by, or recourse to, Collateral
Agent, including financing statement amendments to evidence such release.

 

12

 

 

SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.

 

The powers conferred on Collateral Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Collateral Agent shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Collateral Agent shall be deemed
to have exercised reasonable care in the custody and preservation of Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which Collateral Agent accords its own property. Neither Collateral
Agent nor any of its directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Grantor or otherwise. If
Grantor fails to perform any agreement contained herein, Collateral Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Collateral Agent incurred in connection therewith shall be payable by Grantor
under Section 9.1 of the Revenue Sharing and Note Purchase Agreement.

 

SECTION 11. INDEMNITY

 

The Grantor (as “Indemnitor”) agrees to indemnify, pay and hold the Secured
Parties, and the officers, directors, partners, managers, members, employees,
agents, and Affiliates of the Secured Parties (collectively, the “Indemnitees”)
harmless from and against any and all other liabilities, costs, expenses,
obligations, losses (other than lost profit), damages, penalties, actions,
judgments, suits, claims and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of one
counsel for such Indemnitees) in connection with any investigative,
administrative or judicial proceeding commenced or threatened (excluding claims
among Indemnitees), whether or not such Indemnitee shall be designated a party
thereto, which may be imposed on, incurred by, or asserted against that
Indemnitee, in any manner relating to or arising out of this Agreement (the
“Indemnified Liabilities”); provided that the Indemnitor shall not have any
obligation to an Indemnitee hereunder with respect to an Indemnified Liability
to the extent that such Indemnified Liability arises from the gross negligence
or willful misconduct of that Indemnitee or any of its officers, directors,
partners, managers, members, employees, agents and/or Affiliates. Each
Indemnitee shall give the Indemnitor prompt written notice of any claim that
might give rise to Indemnified Liabilities setting forth a description of those
elements of such claim of which such Indemnitee has knowledge; provided that any
failure to give such notice shall not affect the obligations of the Indemnitor.
The Indemnitor shall have the right at any time during which such claim is
pending to select counsel to defend and control the defense thereof and settle
any claims for which it is responsible for indemnification hereunder (provided
that the Indemnitor will not settle any such claim without (i) the appropriate
Indemnitee’s prior written consent, which consent shall not be unreasonably
withheld or (ii) obtaining an unconditional release of the appropriate
Indemnitee from all claims arising out of or in any way relating to the
circumstances involving such claim and without any admission as to culpability
or fault of such Indemnitee) so long as in any such event, the Indemnitor shall
have stated in a writing delivered to the Indemnitee that, as between the
Indemnitor and the Indemnitee, the Indemnitor is responsible to the Indemnitee
with respect to such claim to the extent and subject to the limitations set
forth herein; provided that the Indemnitor shall not be entitled to control the
defense of any claim in the event that in the reasonable opinion of counsel for
the Indemnitee, there are one or more material defenses available to the
Indemnitee which are not available to the Indemnitor; provided further, that
with respect to any claim as to which the Indemnitee is controlling the defense,
the Indemnitor will not be liable to any Indemnitee for any settlement of any
claim pursuant to this Section 11 that is effected without its prior written
consent, which consent shall not be unreasonably withheld. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in this Section 11
may be unenforceable because it is violative of any law or public policy, the
Grantor shall contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. Notwithstanding anything
to the contrary in this Agreement, no party shall be liable to the other party
or any third party for any indirect, incidental, exemplary, special, punitive or
consequential damages (including with respect to lost revenue, lost profits or
savings or business interruption) of any kind or nature whatsoever suffered by
the other party or any third party howsoever caused and regardless of the form
or cause of action, even if such damages are foreseeable or such party has been
advised of the possibility of such damages. The provisions of this Section 11
shall survive the termination of this Agreement.

 

13

 

 

SECTION 12. MISCELLANEOUS.

 

Any notice required or permitted to be given under this Agreement shall be given
in accordance with Section 9.3 of the Revenue Sharing and Note Purchase
Agreement. No failure or delay on the part of Collateral Agent in the exercise
of any power, right or privilege hereunder or under any other Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Documents are cumulative to, and not exclusive of, any
rights or remedies otherwise available. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists. This Agreement
shall be binding upon and inure to the benefit of Collateral Agent and Grantor
and their respective successors and assigns. Grantor shall not, without the
prior written consent of Collateral Agent given in accordance with the Revenue
Sharing and Note Purchase Agreement, assign any right, duty or obligation
hereunder. This Agreement and the other Documents embody the entire agreement
and understanding between Grantor and Collateral Agent and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Documents may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties. This Agreement may
be executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other
electronic transmission shall be effective as a manually executed counterpart of
this Agreement. In the event of an express conflict between the terms and
conditions of this Agreement and the terms and conditions of the Revenue Sharing
and Note Purchase Agreement, the terms and conditions of the Revenue Sharing and
Note Purchase Agreement shall control.

 

14

 

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST OR THE REMEDIES HEREUNDER IN RESPECT OF ANY COLLATERAL ARE
GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY
HERETO WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE CONDUCT OF THE PARTIES HERETO, WHETHER NOW EXISTING OR HEREAFTER ARISING AND
WHETHER IN CONTRACT, TORT OR OTHERWISE. The Grantor acknowledges that Grantor
has been informed by the Secured Parties that the foregoing sentence constitutes
a material inducement upon which the Secured Parties have relied and will rely
in entering into this Agreement. Grantor or any of the Secured Parties may file
an original counterpart or a copy of this Agreement with any court as written
evidence of the consent of the Grantors and the Secured Parties to the waiver of
their rights to trial by jury.

 

Each party hereto (a) irrevocably submits to the exclusive jurisdiction of any
New York state court or federal court sitting in New York, New York, and any
court having jurisdiction over appeals of matters heard in such courts, for the
purpose of any suit, action or other proceeding arising out of or based upon
this Agreement or the subject matter hereof or thereof; (b) waives to the extent
not prohibited by applicable law that cannot be waived, and agrees not to
assert, by way of motion, as a defense or otherwise, in any such proceeding
brought in any of the above-named courts, any claim that they are not subject
personally to the jurisdiction of such court, that their property is exempt or
immune from attachment or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is improper, or that this
Agreement, or the subject matter hereof or thereof, may not be enforced in or by
such court; and (c) consents to service of process in any such proceeding in any
manner at the time permitted under the applicable laws of the State of New York
and agree that service of process by registered or certified mail, return
receipt requested, at the address specified in or pursuant to Section 9.3 of the
Revenue Sharing and Note Purchase Agreement is reasonably calculated to give
actual notice.

 

15

 

 

[Remainder of Page Intentionally Blank]

 

16

 

 

IN WITNESS WHEREOF, Grantor and Collateral Agent have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

 

  GRANTOR:       SITO MOBILE, LTD.         /s/ Jerry Hug   By: Jerry Hug  
Title: Interim CEO         SINGLE TOUCH INTERACTIVE, INC.         /s/ Jerry Hug
  By: Jerry Hug   Title: President

 

  SINGLE TOUCH INTERACTIVE R&D IP, LLC         /s/ Jerry Hug   By: Jerry Hug  
Title: Authorized Manager

 

[Signature Page to Security Agreement]

 

 

 

 

  COLLATERAL AGENT:       FORTRESS CREDIT CO LLC         By: /s/ Constantine M.
Dakolias   Name: Constantine M. Dakolias   Title: President

 

[Signature Page to Security Agreement]

 

 

 

 

EXHIBIT A

TO SECURITY AGREEMENT

 

Security Agreement SUPPLEMENT

 

This SECURITY AGREEMENT SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF
GRANTOR] a [NAME OF STATE OF INCORPORATION] [Corporation] (the “Grantor”)
pursuant to the Security Agreement, dated as of [mm/dd/yy] (as it may be from
time to time amended, restated, modified or supplemented, the “Security
Agreement”), among [NAME OF COMPANY], the Grantor and [NAME OF COLLATERAL
AGENT], as the Collateral Agent. Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Security
Agreement.

 

Grantor hereby confirms the grant to Collateral Agent set forth in the Security
Agreement of, and does hereby grant to Collateral Agent, a security interest in
all of Grantor’s right, title and interest in and to all Collateral to secure
the Secured Obligations, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located and specifically, without limitation, grants to the Collateral
Agent a security interest in all of Grantor’s right, title and interest in the
Commercial Tort Claims referenced on Schedule 4.3. Grantor represents and
warrants to Collateral Agent and each other Secured Party that the attached
Supplements9 to Schedules accurately and completely set forth all additional
information required pursuant to the Security Agreement and hereby agrees that
such Supplements to Schedules shall constitute part of the Schedules to the
Security Agreement.

 

IN WITNESS WHEREOF, Grantor has caused this Security Agreement Supplement to be
duly executed and delivered by its duly authorized officer as of [mm/dd/yy].

 

  [NAME OF GRANTOR]         By:     Name:     Title:  

 

 

9 Supplemental schedules to be attached

 

 

 

 

EXHIBIT B

TO SECURITY AGREEMENT

 

Patent Security Agreement

 

Patent Security Agreement, dated as of October 3, 2014, by SITO MOBILE, LTD., a
Delaware corporation, SINGLE TOUCH INTERACTIVE, INC., a Nevada corporation and
SINGLE TOUCH INTERACTIVE R&D IP, LLC, a Delaware limited liability company
(collectively, the “Pledgor”), in favor of FORTRESS CREDIT CO LLC, in its
capacity as collateral agent pursuant to the Revenue Sharing and Note Purchase
Agreement (in such capacity, the “Collateral Agent”).

 

W i t n e s s e t h:

 

Whereas, the Pledgor is party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Collateral Agent pursuant to which the
Pledgor is required to execute and deliver this Patent Security Agreement;

 

Now, Therefore, in consideration of the premises and to induce the Collateral
Agent, for the benefit of the Secured Parties, to enter into the Revenue Sharing
and Note Purchase Agreement, the Pledgor hereby agrees with the Collateral Agent
as follows:

 

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

 

SECTION 2. Grant of Security Interest in Patent Collateral. The Pledgor hereby
pledges and grants to the Collateral Agent for the benefit of the Secured
Parties a lien on and security interest in and to all of its right, title and
interest in, to and under all the following Collateral:

 

(a) registered Patents and applications of the Pledgor set forth on Schedule A
attached hereto; and

 

(c) all Proceeds of any and all of the foregoing.

 

SECTION 3. Security Agreement. The security interests granted to the Collateral
Agent pursuant to this Patent Security Agreement are granted in conjunction with
the security interests granted to the Collateral Agent pursuant to the Security
Agreement, and Pledgor hereby acknowledges and affirms that the rights and
remedies of the Collateral Agent with respect to the security interests in the
Patents made and granted hereby are set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Patent Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control.

 

SECTION 4. Counterparts. This Patent Security Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Patent Security Agreement by
signing and delivering one or more counterparts. Delivery of an executed
counterpart of a signature page of this Patent Security Agreement by telecopier
or other electronic transmission (i.e. a “pdf” or “tif” document) shall be
effective as delivery of a manually executed counterpart of this Patent Security
Agreement.

 

[Signature page follows]

 

 

 

 

In Witness Whereof, the Pledgor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized offer as of the date first set
forth above.

 

  Very truly yours,       SITO MOBILE, LTD.,   as Pledgor         By:     Name:
Jerry Hug   Title: Interim CEO         SINGLE TOUCH INTERACTIVE, INC.,   as
Pledgor         By:     Name: Jerry Hug   Title: President

 

  SINGLE TOUCH INTERACTIVE, LLC   as Pledgor         By:     Name: Jerry Hug  
Title: Authorized Manager

 

Accepted and Agreed:

 

FORTRESS CREDIT CO LLC, 

as Collateral Agent

 

By:       Name:     Title: