Exhibit
10.2


 


PLEDGE
AND SECURITY AGREEMENT


 


THIS
PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of May 29, 2015, is made by and among FONU2
Inc., a Nevada corporation (the “Company”) and each holder of Company’s common stock signatory hereto
(the “Pledgor” and, collectively, the “Pledgors”) in favor of SBI Investments LLC, 2014-1
(the “Agent”) and the holders of the Company’s 5% convertible promissory note due, unless demanded earlier
pursuant to the terms therein, on May 29, 2016 (collectively, the “Pledgee”).


 





W I T N E S S
E T H:


 


WHEREAS,
the Pledgee has agreed to lend to the Company, and the Company has agreed to borrow from the Pledgee $250,000 pursuant to the
terms and conditions set forth in the 5% convertible promissory note of the Company (the “Note”);


 


WHEREAS,
pursuant to the provisions of the Note, and as a condition to the obligation of the Pledgee to lend thereunder, the Pledgor(s),
as principals, employees and shareholders of the Company, have agreed to make the pledge contemplated by this Agreement in order
to induce the Pledgee to perform its obligations under the Note;


 


WHEREAS,
the Pledgor(s) own the shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”)
as set forth opposite the Pledgors’ respective names on Schedule A attached hereto;


 


WHEREAS,
terms used but not otherwise defined in this Agreement that are defined in Article 9 of the Uniform Commercial Code in effect
in the State of New York at that time (whether or not the UCC applies to the affected Pledged Collateral) (the "UCC")
shall have the meanings ascribed to them in the UCC; and


 


NOW,
THEREFORE, in consideration of the premises, covenants and promises contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:


 


SECTION
1.          Pledge and Security Interest. Each Pledgor hereby unconditionally
and irrevocably pledges, grants and hypothecates to the Pledgee, and grants to the Pledgee a continuing first priority security
interest in, a first lien upon and a right of set-off against, all of its respective rights, titles and interests of whatsoever
kind and nature in (the “Security Interest”), and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the obligations pursuant to the Note, the following (collectively, the “Pledged
Collateral”):


 


(a)          the
shares of Common Stock owned by such Pledgor and set forth on Schedule A attached hereto (the “Pledged Shares”),
and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares; and


 


(b)          all
proceeds of any and all of the foregoing Pledged Collateral, in whatever form (including, without limitation, proceeds that constitute
property of the types described above).


 


SECTION
2.          Security for Obligations. This Agreement secures the
payment and performance of the following obligations (collectively, the “Obligations”): all present and future
indebtedness, obligations, covenants, duties and liabilities of any kind or nature of the Company to the Pledgee now existing
or hereafter arising under or in connection with this Agreement or the Note (collectively, the “Transaction Documents”).


 






    	 



    	 



    

 


SECTION
3.          Delivery of Pledged Collateral. Upon the date hereof,
all certificates representing or evidencing the Pledged Shares, in suitable form for transfer by delivery, or accompanied by instruments
of transfer or assignment duly executed in blank, are being deposited with and delivered to the Agent, as collateral agent for
the Pledgee. The Agent shall have the right, at any time after the occurrence of an Event of Default (as hereinafter defined)
(unless such Event of Default is waived in writing by the Pledgee), without notice to the Pledgor, to transfer to or to register
in the name of the Pledgee or their nominees any or all of the Pledged Collateral. In addition, the Agent shall have the right
at any time after the occurrence of an Event of Default (unless such Event of Default is waived in writing by the Pledgee), to
exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller
or larger denominations.


 


SECTION
4.          Representations and Warranties. Each Pledgor, severally
and not jointly with the other Pledgors, represents and warrants as follows:


 


(a)          Except
as set forth on Schedule 4(a) hereto, such Pledgor is the legal, record and beneficial owner of the Pledged Collateral
owned by such Pledgor, free and clear of any lien, security interest, restriction, option or other charge or encumbrance (collectively,
"Liens").


 


(b)          The
pledge of the Pledged Collateral and the grant of the Security Interest pursuant to this Agreement creates a valid and perfected
first priority security interest in the Pledged Collateral, securing payment and performance of the Obligations.


 


(c)          Except
for the filing of financing statements pursuant to the UCC with the proper filing and recording agencies in the jurisdictions
indicated on Schedule B attached hereto, no consent of any other person or entity and no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the pledge by the
Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by
the Pledgor, (ii) for the perfection or maintenance of the security interest created hereby, or (iii) for the exercise by the
Agent of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant
to this Agreement (except as may be required in connection with any disposition of any portion of the Pledged Collateral by laws
affecting the offering and sale of securities generally).


 


(d)          There
are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.


 


(e)          Effective
on the date of execution of this Agreement, such Pledgor hereby authorizes the Agent to file one or more financing statements
under the UCC with respect to the Security Interest with the proper filing and recording agencies in the jurisdictions indicated
on Schedule B attached hereto, and in such other jurisdictions as may be requested by the Pledgee.


 


(f)          Such
Pledgor will not transfer, pledge, hypothecate, sell or otherwise dispose of any of the Pledged Collateral without the prior written
consent of the Pledgee.


 


(g)          Such
Pledgor shall promptly execute and deliver to the Pledgee such further assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and take such further action as the Pledgee may from time to time
request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Pledged Collateral.


 






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(h)          All
information heretofore, herein or hereafter supplied to the Pledgee by or on behalf of such Pledgor with respect to the Pledged
Collateral is accurate and complete in all material respects as of the date furnished.


 


SECTION
5.          Further Assurances. Each Pledgor, severally and not
jointly with the other Pledgors, agrees that at any time and from time to time, at the expense of such Pledgor, the Pledgor shall
promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable,
or that the Agent and/or the Pledgee may reasonably request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Agent and/or Pledgee to exercise and enforce their rights and remedies hereunder
with respect to any Pledged Collateral. The Company agrees that at any time and from time to time, at the expense of the Company,
the Company shall promptly execute and deliver all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Pledgee may reasonably request.


 


SECTION
6.          Voting Rights; Dividends; Etc.


 


(a)          So
long as no Event of Default shall have occurred (unless such Event of Default is waived in writing by the Pledgee):


 


(i)          Each
Pledgor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement; provided,
however, that such Pledgor shall not exercise or refrain from exercising any such right if, in the reasonable judgment
of such Pledgee, such action would have a material adverse effect on the Security Interest or the rights and remedies of the Pledgee
hereunder; provided, further, that such Pledgor shall give the Pledgee at least ten (10) days' prior written notice
of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right.


 


(ii)          Each
Pledgor shall be entitled to receive and retain any and all cash dividends and interest paid in respect of such Pledgor’s
Pledged Collateral.


 


(b)          Upon
and after the occurrence of any Event of Default (unless such Event of Default is waived in writing by the Pledgee):


 


(i)          All
rights of each Pledgor to exercise or refrain from exercising the voting and other consensual rights which it would otherwise
be entitled to exercise pursuant to Section 6(a)(i) and to receive the dividends and interest payments which it would otherwise
be authorized to receive and retain pursuant to Section 6(a)(ii) shall cease, and all such rights shall thereupon become vested
in the Agent who shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights
and to receive and hold as Pledged Collateral such dividends and interest payments.


 


(ii)          All
dividends and interest payments which are received by the Pledgors contrary to the provisions of paragraph (i) of this Section
6(b) shall be received in trust for the benefit of the Pledgee, shall be segregated from other funds of the applicable Pledgor
and shall be forthwith paid over to the Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).


 






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SECTION
7.          Transfers and Other Liens; Additional Shares. During
the term of this Agreement, the Pledgor agrees that it shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral, or (ii) create or permit to exist any Lien upon
or with respect to any of the Pledged Collateral, except for the security interest granted pursuant to this Agreement.


 


SECTION
8.          Agent Appointed Attorney-in-Fact.


 


(a)          Effective
only upon an Event of Default (unless such Event of Default is waived in writing by the Pledgee), the Pledgors hereby
appoints the Agent as the Pledgors’ attorney-in-fact, with full authority in the place and stead of, and in the name
of, the Pledgors or otherwise, from time to time in the Agent's discretion to take any action and to execute any instrument
which the Agent may deem necessary or desirable to accomplish the purposes of this Agreement, including, without limitation,
to receive, endorse and collect all instruments made payable to the Pledgors representing any dividend, interest payment or
other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the
same.


 


(b)          Each
Pledgor, severally and not jointly, authorizes the Agent, and do hereby make, constitute and appoint the Agent and its respective
officers, agents, successors or assigns with full power of substitution, as the Pledgors’ true and lawful attorney-in-fact,
with power, in the name of the Pledgee or the Pledgors, after the occurrence and during the continuance of an Event of Default,
(i) to endorse any checks, drafts, money orders or other instruments of payment (including payments payable under or in respect
of any policy of insurance) in respect of the Pledged Collateral that may come into possession of the Pledgee; (ii) to sign and
endorse any financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse
receipts, drafts against Pledgors, assignments, verifications and notices in connection with accounts, and other documents relating
to the Pledged Collateral; (iii) to pay or discharge taxes, liens, security interests or other encumbrances at any time levied
or placed on or threatened against the Pledged Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for
monies due in respect of the Pledged Collateral; (v) generally to do, at the option of the Pledgee, and at the expense of the
Pledgors, severally and jointly, at any time, or from time to time, all acts and things which the Pledgee deem necessary to protect,
preserve and realize upon the Pledged Collateral and the Security Interest granted herein in order to effect the intent of this
Agreement all as fully and effectually as the Pledgors might or could do; and (vi) in the event of the bankruptcy of such Pledgor,
to appoint a receiver or equivalent person to marshall such Pledgor’s assets, and such Pledgor hereby ratifies all that
said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest
and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.


 


(c)
          Each Pledgor hereby irrevocably appoints the Agent as such Pledgor’s attorney-in-fact, with full authority in the place
and stead of such Pledgor and in the name of such Pledgor, from time to time in the Agent’s discretion, to file in its sole
discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without
the signature of such Pledgor where permitted by law.


 


SECTION
9.          Pledgee May Perform. If any Pledgor fails to perform
any agreement contained herein, the Agent and/or Pledgee may itself perform, or cause performance of, such agreement, and the
expenses of the Agent and/or Pledgee incurred in connection therewith shall be payable by such Pledgor under Section 14 hereof.


 






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SECTION
10.          The Agent's Duties. The duties and rights of the Agent
are as set forth on Annex A attached hereto and incorporated herein by reference. Any fees of the Agent for its services
hereunder shall be paid by the Company. The powers conferred on the Agent hereunder are solely to protect the interests of the
Pledgee in the Pledged Collateral and shall not impose any duty upon the Agent to exercise any such powers. Except for the safe
custody of any Pledged Collateral in its possession and the accounting for moneys actually received it hereunder, neither the
Agent nor Pledgee shall have any duty as to any Pledged Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not such party has
or is to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or
any other rights pertaining to any Pledged Collateral. The Agent and Pledgee shall be deemed to have exercised reasonable care
in the custody and preservation of any Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially
equal to that which such party accords its own property.


 


SECTION
11.          Event of Default. The occurrence of any of the following
events shall constitute an event of default under this Agreement (each, an “Event of Default”):


 


(a)          The
failure of any Pledgor to observe, perform or comply with any act, duty, covenant, agreement or obligation under this Agreement,
which is not cured within ten business days following written notice by Agent to such Pledgor;


 


(b)          If
any of the representation or warranty of any Pledgor set forth in this Agreement shall be breached or shall be untrue or incorrect
in any material respect, and is not cured within ten business days following written notice by Agent to such Pledgor;


 


(c)          The
filing of any financing statement with regard to any of the Pledged Collateral other than pursuant to this Agreement, or the attachment
of any additional Lien to any portion of the Pledged Collateral in favor of any Person other than the Pledgee; or


 


(d)          If
any event of default (and expiration of any cure period) shall occur (unless such event of default is waived in writing by the
Pledgee) under any of the other Transaction Documents.


 


SECTION
12.          Cross-Default;
Cross-Collateralization. The Pledgors acknowledges and agrees that any default under the terms of this Agreement shall
constitute a default by the Company under the Note, and that any event of default (following expiration of any applicable
cure period) under the Note shall constitute a default under this Agreement.


 


SECTION
13.          Remedies upon Event of Default. Upon and after the
occurrence of any Event of Default:


 


(a)          The
Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise
available to the Agent (including, without limitation, the vesting in the Agent pursuant to Section 6(b)(i) of the sole right
to exercise voting rights pertaining to the Pledged Collateral, including, without limitation, voting rights with respect to the
sale of assets of the issuer of such Pledged Shares), all the rights and remedies of a secured party on default under the UCC,
and may also, without notice except as specified below and subject to the applicable securities laws, sell the Pledged Collateral
or any part thereof at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the Agent may deem commercially reasonable. Each Pledgor
agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ notice to such Pledgor 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.
The Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The 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. Each Pledgor acknowledges and agrees that
the Pledged Collateral consisting of the Pledged Shares, and/or any other shares of common stock of the Company, is of a type
customarily sold on a recognized market, and accordingly that no notice of the sale thereof need be given. In addition, Agent
may transfer all of the Pledged Collateral to Pledgee, who may hold all of such Pledged Collateral as payment in full of the Obligations.


 






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(b)          Any
cash held by the Agent or the Pledgee as Pledged Collateral and all cash proceeds received by the Agent or the Pledgee in respect
of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of
the Agent or the Pledgee, be held as collateral for, and/or then or at any time thereafter be applied (after payment of any amounts
payable pursuant to Section 14) in whole or in part against, all or any part of the Obligations. Any surplus of such cash or cash
proceeds held by the Agent or the Pledgee and remaining after payment in full of all the Obligations shall be paid over to the
Pledgors, pro-rata, or to whomsoever may be lawfully entitled to receive such surplus.


 


SECTION
14.          Expenses. The Pledgors and the Company, severally
and jointly, shall upon demand pay to the Agent and/or the Pledgee the amount of any and all reasonable expenses, including reasonable
attorneys’ fees and expenses and the reasonable fees and expenses of any experts and agents, which the Agent and/or Pledgee
may incur in connection with (a) the administration of this Agreement, (b) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (c) the exercise or enforcement of any of the rights of the Agent
and/or Pledgee hereunder or (d) the failure by any Pledgor to perform or observe any of the provisions hereof.


 


SECTION
15.          Continuing Security Interest; Termination. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall remain in full force and effect until the indefeasible
payment in full of the Obligations. Upon the indefeasible payment in full of the Obligations, the security interest granted hereby
shall terminate and all rights to the Pledged Collateral shall revert to the Pledgors. Upon any such termination, the Agent shall,
at such Pledgors’ expense, return, pro-rata, to the Pledgors such of the Pledged Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof and execute and deliver to such Pledgors such documents as such Pledgors shall
reasonably request to evidence such termination.


 


SECTION
16.          Governing Law; Terms. For the convenience of the Agent,
this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles
of conflict of laws. Each Pledgor agrees to submit to the in personam jurisdiction of the state and federal
courts situated within the City of New York, State of New York with regard to any controversy arising out of or relating to this
Agreement. Unless otherwise defined herein, terms defined in Article 9 of the UCC are used herein as therein defined.


 


SECTION
17.          Notice. All notices and other communications hereunder
shall be in writing and shall be deemed to have been received when delivered personally (which shall include, without limitation,
via express overnight courier) or if mailed, three (3) business days after having been mailed by registered or certified mail,
return receipt requested, postage prepaid, to the addresses of the parties as set forth herein.


 






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SECTION
18.          Waivers.


 


(a)          Waivers.
Each Pledgor waives any right to require the Pledgee to (i) proceed against any person, (ii) proceed against any other collateral
under any other agreement, (iii) pursue any other remedy, or (iv) make presentment, demand, dishonor, notice of dishonor, acceleration
and/or notice of non-payment.


 


(b)          Waiver
of Defense. No course of dealing between the Pledgors and the Pledgee, nor any failure to exercise nor any delay in exercising
on the part of the Agent or Pledgee, any right, power, or privilege under this Agreement or under any of the other Transaction
Documents shall operate as a waiver. No single or partial exercise of any right, power, or privilege under this Agreement or under
any of the other Transaction Documents shall preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege.


 


SECTION
19.          Rights Are Cumulative. All rights and remedies of
the Agent and the Pledgee with respect to the Pledged Collateral, whether established by this Agreement, the other Transaction
Documents or by law, shall be cumulative and may be exercised concurrently or in any order.


 


SECTION
20.          Indemnity. Each Pledgor, jointly and severally, agrees
to indemnify and hold harmless the Agent, the Pledgee and their respective heirs, successors and assigns against and from all
liabilities, losses and costs (including, without limitation, reasonable attorneys' fees) arising out of or relating to the taking
or the failure to take action in respect of any transaction effected under this Agreement or in connection with the lien provided
for herein, including, without limitation, any and all excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Pledged Collateral, except to the extent resulting from their gross negligence or intentional misconduct.
The liabilities of the Pledgors under this Section 20 shall survive the termination of this Agreement.


 


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


 


SECTION
22.          Counterparts. This Agreement may be executed in several
counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument.


 


SECTION
23.          Amendments; Entire Agreement. This Agreement is subject
to modification only by a writing signed by the parties. To the extent any provision of this Agreement conflicts with any provision
of the Note, the provision giving Pledgee greater rights or remedies shall govern, it being understood that the purpose of this
Agreement is to add to, and not detract from, the rights granted to Pledgee under the Note. This Agreement and the other Transaction
Documents constitute the entire agreement of the parties with respect to the subject matter of this Agreement.


 


SECTION
24.          Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs, executors, legal representatives, successors and
assigns; provided, however, that no Pledgor may, without the prior written consent of the Pledgee, assign or delegate
any rights, powers, duties or obligations hereunder, and any such purported assignment or delegation without such consent shall
be null and void.


 


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


 





	 	PLEDGOR:
	 	 
	 	 
	 	Jake Shapiro
	 	 
	 	THE COMPANY:
	 	 
	 	FONU2  INC.
	 	 	 
	 	By:	 
	 	 	Name:  Roger Miguel
	 	 	Title:
	 	 	 
	 	AGENT:
	 	 
	 	SBI INVESTMENTS LLC, 2014-1
	 	 	 
	 	By:	 
	 	 	Name: Peter Wisniewski
	 	 	Title: Manager, Sea Otter Global Ventures, L.L.C.




 


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SIGNATURE
PAGE FOR PLEDGEE FOLLOWS]


 






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[PLEDGEE
SIGNATURE PAGES TO PLEDGE AND SECURITY AGREEMENT]


 


Name of
Pledgee: SBI Investments LLC, 2014-1


 


Signature
of Authorized Signatory of Pledgee: ____________________________


 


Name of
Authorized Signatory: ________________________________


 


Title of
Authorized Signatory: _______________________________


 


E-mail Address
of Authorized Signatory: _______________________


 






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SCHEDULE
A


 


Pledged
Shares


 





	Pledgor:	 	Number of Shares:	 	Certificate Number:
	 	 	 	 	 
	Jake Shapiro	 	[3x face of  promissory note*]	 	 




 


*These shares
were received on ________as consideration for ________.


 


Pledgor
is providing a certificate in the amount of $2,500,000. In the event of a default, the certificate will be sent to the transfer
agent, with $750,000 of the Preferred shares being returned to escrow agent, and the balance returned to Mr. Jake Shapiro


 






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SCHEDULE
B


 






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ANNEX
A


 


to


 


PLEDGE
AND SECURITY


 


AGREEMENT


 


THE
AGENT


 


1.
Appointment. The Pledgee (all capitalized terms used herein and not otherwise defined shall have the respective
meanings provided in the Pledge and Security Agreement to which this Annex A is attached (the "Agreement")),
by their acceptance of the benefits of the Agreement, hereby designate SBI Investments LLC, 2014-1 (“Agent”)
as the Agent to act as specified herein and in the Agreement. Each Secured Party shall be deemed irrevocably to authorize the
Agent to take such action on its behalf under the provisions of the Agreement and any other Transaction Document and to exercise
such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof and such other powers as are reasonably incidental thereto. The Agent may perform any of its duties hereunder
by or through its agents or employees.


 


2.
Nature of Duties. The Agent shall have no duties or responsibilities except those expressly set forth in the Agreement.
Neither the Agent nor any of its partners, members, shareholders, officers, directors, employees or agents shall be liable for
any action taken or omitted by it as such under the Agreement or hereunder or in connection herewith or therewith, be responsible
for the consequence of any oversight or error of judgment or answerable for any loss, unless caused solely by its or their gross
negligence or willful conduct as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.
The duties of the Agent shall be mechanical and administrative in nature; the Agent shall not have by reason of the Agreement
or any other Transaction Document a fiduciary relationship in respect of any Debtor or any Secured Party; and nothing in the Agreement
or any other Transaction Document, expressed or implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of the Agreement or any other Transaction Document except as expressly set forth herein and therein.


 


3.
Lack of Reliance on the Agent. Independently and without reliance upon the Agent, each Secured Party, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs
of the Company and its subsidiaries in connection with such Secured Party’s investment in the Debtors, the creation and
continuance of the Obligations, the transactions contemplated by the Transaction Documents, and the taking or not taking of any
action in connection therewith, and (ii) its own appraisal of the creditworthiness of the Company and its subsidiaries, and of
the value of the Collateral from time to time, and the Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Secured Party with any credit, market or other information with respect thereto, whether coming into its
possession before any Obligations are incurred or at any time or times thereafter. The Agent shall not be responsible to the Debtors
or any Secured Party for any recitals, statements, information, representations or warranties herein or in any document, certificate
or other writing delivered in connection herewith, or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of the Agreement or any other Transaction Document, or for the financial condition
of the Debtors or the value of any of the Collateral, or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of the Agreement or any other Transaction Document, or the financial
condition of the Debtors, or the value of any of the Collateral, or the existence or possible existence of any default or Event
of Default under the Agreement, the Note or any of the other Transaction Documents.


 






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4.
Certain Rights of the Agent. The Agent shall have the right to take any action with respect to the Collateral, on behalf
of all of the Pledgee. To the extent practical, the Agent shall request instructions from the Pledgee with respect to any material
act or action (including failure to act) in connection with the Agreement or any other Transaction Document, and shall be entitled
to act or refrain from acting in accordance with the instructions of Pledgee holding a majority in principal amount of Note (based
on then-outstanding principal amounts of Note at the time of any such determination); if such instructions are not provided despite
the Agent’s request therefor, the Agent shall be entitled to refrain from such act or taking such action, and if such action
is taken, shall be entitled to appropriate indemnification from the Pledgee in respect of actions to be taken by the Agent; and
the Agent shall not incur liability to any person or entity by reason of so refraining. Without limiting the foregoing, (a) no
Secured Party shall have any right of action whatsoever against the Agent as a result of the Agent acting or refraining from acting
hereunder in accordance with the terms of the Agreement or any other Transaction Document, and the Debtors shall have no right
to question or challenge the authority of, or the instructions given to, the Agent pursuant to the foregoing and (b) the Agent
shall not be required to take any action which the Agent believes (i) could reasonably be expected to expose it to personal liability
or (ii) is contrary to this Agreement, the Transaction Documents or applicable law.


 


5.
Reliance. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the
other Transaction Documents and its duties thereunder, upon advice of counsel selected by it and upon all other matters pertaining
to this Agreement and the other Transaction Documents and its duties thereunder, upon advice of other experts selected by it.


 


6.
Indemnification. To the extent that the Agent is not reimbursed and indemnified by the Debtors, the Pledgee will
jointly and severally reimburse and indemnify the Agent, in proportion to their initially purchased respective principal amounts
of Note, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent
in performing its duties hereunder or under the Agreement or any other Transaction Document, or in any way relating to or arising
out of the Agreement or any other Transaction Document except for those determined by a final judgment (not subject to further
appeal) of a court of competent jurisdiction to have resulted solely from the Agent's own gross negligence or willful misconduct.
Prior to taking any action hereunder as Agent, the Agent may require each Secured Party to deposit with it sufficient sums as
it determines in good faith is necessary to protect the Agent for costs and expenses associated with taking such action.


 






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7.
Resignation by the Agent. 


 


(a)
The Agent may resign from the performance of all its functions and duties under the Agreement and the other Transaction Documents
at any time by giving 30 days' prior written notice (as provided in the Agreement) to the Debtors and the Pledgee. Such resignation
shall take effect upon the appointment of a successor Agent pursuant to clauses (b) and (c) below.


 


(b)
Upon any such notice of resignation, the Pledgee, acting by a Majority in Interest, shall appoint a successor Agent hereunder.


 


(c)
If a successor Agent shall not have been so appointed within said 30-day period, the Agent shall then appoint a successor Agent
who shall serve as Agent until such time, if any, as the Pledgee appoint a successor Agent as provided above. If a successor Agent
has not been appointed within such 30-day period, the Agent may petition any court of competent jurisdiction or may interplead
the Debtors and the Pledgee in a proceeding for the appointment of a successor Agent, and all fees, including, but not limited
to, extraordinary fees associated with the filing of interpleader and expenses associated therewith, shall be payable by the Debtors
on demand.


 


8.
Rights with respect to Collateral. Each Secured Party agrees with all other Pledgee and the Agent (i) that it shall
not, and shall not attempt to, exercise any rights with respect to its security interest in the Collateral, whether pursuant to
any other agreement or otherwise (other than pursuant to this Agreement), or take or institute any action against the Agent or
any of the other Pledgee in respect of the Collateral or its rights hereunder (other than any such action arising from the breach
of this Agreement) and (ii) that such Secured Party has no other rights with respect to the Collateral other than as set forth
in this Agreement and the other Transaction Documents.


 


 


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