Exhibit 10.1





 


SECURITY AND PLEDGE
AGREEMENT


 


SECURITY AND PLEDGE AGREEMENT,
dated as of April 19, 2022 (this “Agreement”), made by American Virtual Cloud Technologies, Inc., a company organized
under the laws of Delaware, with offices located at 1720 Peachtree Street, Suite 629, Atlanta, GA 30309 (the “Company”),
and each of the undersigned, and any additional entities which becomes parties to this Agreement pursuant to Section 6(m) hereunder
(each a “Grantor” and together with the Company, collectively, the “Grantors”), in favor of [ ],
with office located at 28 Havemeyer Place, Greenwich, CT 06830, in its capacity as collateral agent (together with its successors and
assignees, in such capacity, the “Collateral Agent”) for the Noteholders (as defined below) party to the Securities
Purchase Agreement (as defined below).


  


W  I 
T  N  E  S  S  E  T  H:


 


WHEREAS, the Company is party
to that certain Securities Purchase Agreement, dated as of April 14, 2022, (as amended, modified, supplemented, extended, renewed, restated
or replaced from time to time in accordance with the terms thereof, the “Securities Purchase Agreement”) by and among
the Company and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (each a “Buyer”
and collectively, the “Buyers”), pursuant to which the Company shall be required to sell, and the Buyers shall purchase
or have the right to purchase, the “Notes” issued pursuant thereto (as such Notes may be amended, modified, supplemented,
extended, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”);


 


WHEREAS, certain Grantors (other
than the Company) from time to time (each a “Guarantor” and collectively, the “Guarantors”) may
execute and deliver one or more guarantees (each, a “Guaranty” and collectively, the “Guaranties”)
in form and substance acceptable to and in favor of the Collateral Agent, for the ratable benefit of itself and the Noteholders, with
respect to the Company’s obligations under the Securities Purchase Agreement, the Notes and the other “Transaction Documents”
(as defined below);


 


WHEREAS, it is a condition precedent
to the Buyers’ obligation to purchase the Notes that the Grantors shall have executed and delivered to the Collateral Agent this
Agreement providing for the grant to the Collateral Agent, for the ratable benefit of itself and the Noteholders, of a valid, enforceable,
and perfected security interest in the Collateral (as defined below) to secure all of the Company’s obligations under the Transaction
Documents and the Guarantors’ obligations under the Guaranties, as applicable; and


 


WHEREAS, the Grantors are Affiliates
that are part of a common enterprise such that each Grantor will derive substantial direct and indirect financial and other benefits from
the consummation of the transactions contemplated under the Transaction Documents and, accordingly, the consummation of such transactions
are in the best interests of each Grantor;


 






     


     


    

 


NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor
agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows:




 


Section
1.      Definitions.


 


(a)
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used
in this Agreement and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in the Code, and which
are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which
are defined in the Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of the
Code except as the Collateral Agent may otherwise determine in its sole and absolute discretion.


 


(b)
Without limiting the generality of, and subject to the proviso at the end of, Section 1(a) of this Agreement, the following terms
shall have the respective meanings provided for in the Code: “Accounts”, “Account Debtor”, “Cash Proceeds”,
“Certificate of Title”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”,
“Commodity Contracts”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”,
“Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment
Property”, “Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment Intangibles”, “Proceeds”,
“Promissory Notes”, “Security”, “Record”, “Security Account”, “Software”,
“Supporting Obligations” and “Uncertificated Securities”.


 


(c)
As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:


 


“Affiliate”
of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with such
Person and any officer or director of such Person. Without limiting the generality of the foregoing, a Person shall be deemed to be “controlled
by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.


 


“Bankruptcy Code”
means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency
or similar laws).


 


“Bankruptcy Event
of Default” shall have the meaning as set forth in the Note.


 


“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to
remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar
orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so long as the electronic
funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers
on such day.


 


“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.


 






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“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities
exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not an individual
or a corporation, any and all partnership, membership, trust or other equity interests of such Person.


 


“Closing Date”
means the date the Company initially issues the Notes pursuant to the terms of the Securities Purchase Agreement.


 


“Code”
means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” 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.


 


“Collateral”
shall have the meaning set forth in Section 3(a) of this Agreement.


 


“Collateral Agent”
shall have the meaning set forth in the preamble hereto.


 


“Company”
shall have the meaning set forth in the preamble hereto.


 


“Controlled Account
Agreement” means a deposit account control agreement or securities account control agreement with respect to a Pledged Account,
pursuant to which the Collateral Agent is granted control over such Pledged Account in a manner that perfects its security interest in
such Pledged Account under applicable law, all in form and substance satisfactory to the Collateral Agent, as the same may be amended,
modified, supplemented, extended, renewed, restated or replaced from time to time.


 


“Controlled Accounts”
means the Deposit Accounts, Commodity Accounts, Securities Accounts, and/or Foreign Currency Controlled Account of the Grantors listed
on Schedule IV attached hereto.


 


“Controlled Account
Bank” shall have the meaning set forth in Section 6(i) of this Agreement.


 


“Copyright Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any Copyright (including, without limitation, all Copyright Licenses set forth
in Schedule II hereto).


 


“Copyrights”
means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the
universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of
authorship fixed in any tangible medium of expression, acquired or used by any Grantor (including, without limitation, all copyrights
described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications,
registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other
country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals
thereof.


 






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“Domestic Subsidiary”
means any Subsidiary other than a Foreign Subsidiary.


 


“Event of Default”
shall have the meaning set forth in Section 4(a) of the Notes.


 


“Excluded Collateral”
means such (i) any lease, license, other agreement or any property owned by a Grantor that is subject to
a purchase money lien, a capital lease or similar arrangement to the extent that a grant of a security interest therein would violate
or invalidate such lease, license, other agreement or purchase money or similar arrangement or create a right of termination, in each
case, solely to the extent as in effect as of the date hereof, in favor of any other party thereto (other than a Grantor) after giving
effect to the applicable anti-assignment provisions of the Code and other applicable law and other than proceeds and receivables thereof,
the assignment of which is expressly deemed effective under the Code or other applicable law notwithstanding such prohibition, (ii) any
asset or property to the extent that the grant of a security interest is prohibited by applicable law, rule or regulation or requires
a consent not obtained of any governmental authority pursuant to such applicable law, rule or regulation, in each case after giving effect
to the applicable anti-assignment provisions of the Code and other applicable law and other than proceeds and receivables thereof, the
assignment of which is expressly deemed effective under the Code or other applicable law notwithstanding such prohibition, (iii) any “intent
to use” Trademark applications for which a statement of use has not been filed (but only until such statement is filed), (iv) to
the extent prohibited or restricted by, or creating an enforceable right of termination in favor of, any party thereto (other than a Grantor)
under the terms of any charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership
agreement, other organizational or governing documents, joint venture agreement or shareholders’ agreement, Equity Interests, in
each case, solely to the extent as in effect as of the date hereof, in any Person other than a wholly-owned Subsidiary (other than to
the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor
provision or provisions) of any relevant jurisdiction or any other applicable Law or principles of equity) and (v) portion of the
voting Capital Stock of any Foreign Subsidiary in excess of 65% of the issued and outstanding voting Capital Stock of such Foreign Subsidiary
at any time the pledging of more than 65% of the total outstanding voting Capital Stock of such Foreign Subsidiary would result in a material
adverse tax consequence to a Grantor. Notwithstanding the foregoing, “Excluded Collateral” shall
not include any proceeds, products, substitutions or replacements of Excluded Collateral (unless such proceeds, products, substitutions
or replacements would otherwise constitute Excluded Collateral).


 


“Foreign Currency
Controlled Accounts” means any Controlled Account of a Grantor or any of its Subsidiaries holding a deposit denominated in a
currency other than United States dollar.


 


“Foreign Subsidiary”
means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof,
Puerto Rico or the District of Columbia.


 


“GAAP”
means U.S. generally accepted accounting principles consistently applied.


 


“Governmental Authority”
means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political subdivision thereof
or thereto and any department, commission, board, bureau, court, tribunal, instrumentality, agency or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.


 






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“Guaranteed Obligations”
shall have the meaning set forth in Section 2 of each Guaranty.


 


“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.


 


“Guaranty”
or “Guaranties” shall have the meaning set forth in the recitals hereto.


 


“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency
law or law for the relief of debtors, any proceeding relating to assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or any proceeding seeking reorganization, arrangement, or other similar relief.


 


“Intellectual Property”
means, collectively, all intellectual property rights and assets, and all rights, interests and protections that are associated with,
similar to, or required for the exercise of, any of the foregoing, however arising, under the applicable laws of any jurisdiction throughout
the world, whether registered or unregistered, including, without limitation, any and all: (a) Trademarks; (b) internet domain names,
whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses,
web pages, websites and related content; (c) accounts with YouTube, LinkedIn, Twitter, Instagram, Facebook and other social media companies
and the content found thereon (to the extent that such accounts and content are transferable pursuant to the terms, conditions, and policies
of each applicable social media platform); (d) Copyrights; (e) Patents; and (f) business and technical information, databases, data collections
and other confidential and proprietary information and all rights therein.


 


“Intellectual Property
Security Agreement” means the Intellectual Property Security Agreement required to be delivered pursuant to Section 6(h)(i)
of this Agreement, substantially in the form attached hereto as Exhibit A.


 


“Licenses”
means, collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.


 


“Lien”
means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.


 


“Noteholders”
means, at any time, the holders of the Notes at such time.


 


“Notes”
shall have the meaning set forth in the recitals hereto.


 


“Obligations”
shall have the meaning set forth in Section 4 of this Agreement.


 


“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Obligations.


 


“Patent Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses
set forth in Schedule II hereto).


 






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“Patents”
means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general
intangibles of like nature, now existing or hereafter acquired (including, without limitation, all domestic and foreign letters patent,
design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary
information, technology, know-how and formulae described in Schedule II hereto), all applications, registrations and recordings
thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or
in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, reexaminations,
divisions, continuations, continuations in part and extensions or renewals thereof.


 


“Perfection Requirement”
or “Perfection Requirements” shall have the meaning set forth in Section 5(j) of this Agreement.


 


“Permitted Liens”
shall have the meaning set forth in the Notes.


 


“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization,
joint venture or other enterprise or entity or Governmental Authority.


 


“Pledged Accounts”
means all of each Grantor’s right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities Accounts
(in all cases, including, without limitation, all Controlled Accounts and Foreign Currency Control Accounts).


 


“Pledged Collateral”
shall have the meaning set forth in Section 2(a).


 


“Pledged Debt”
shall have the meaning set forth in Section 2(a).


 


“Pledged Entity”
means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each other Person,
any right in or interest in or to all or a portion of whose Securities or Capital Stock is acquired or otherwise owned by a Grantor after
the date hereof.


 


“Pledged Equity”
means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter owned by
such Grantor (including, without limitation, those interests listed opposite the name of such Grantor on Schedule IV), regardless
of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto,
also including, without limitation, any certificates representing such Securities and/or Capital Stock, the right to receive any certificates
representing any of such Securities and/or Capital Stock, all warrants, options, subscription, share appreciation rights and other rights,
contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income, profits, surplus, or other
compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to
time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange
for any or all of the foregoing.


 






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“Pledged Operating
Agreements” means all of each Grantor’s rights, powers and remedies under the limited liability company operating agreements
of each of the Pledged Entities that is a limited liability company, as may be amended, modified, supplemented, extended, renewed, restated
or replaced from time to time.


 


“Pledged Partnership
Agreements” means all of each Grantor’s rights, powers, and remedies under the general or limited partnership agreements
of each of the Pledged Entities that is a general or limited partnership, as may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time.


 


“Pledged Securities”
means any Promissory Notes, stock certificates, limited liability membership interests or other Securities, certificates or Instruments
now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments
or other documents representing or evidencing any Pledged Collateral.


 


“Securities Purchase
Agreement” shall have the meaning set forth in the recitals hereto.


 


“Subsidiary”
means any Person in which a Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity or similar
interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and
all of the foregoing, collectively, “Subsidiaries”.


 


“Trademark Licenses”
means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and providing for
the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such licenses, contracts
or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter owned by any Grantor
and now or hereafter covered by such licenses, contracts or agreements (including, without limitation, all Trademark Licenses described
in Schedule II hereto).


 


“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
assumed names, Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles
of like nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and foreign
trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, assumed names, Internet
domain names, trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), all applications,
registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent
and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business symbolized by such
marks and all customer lists, formulae and other Records of any Grantor relating to the distribution of products and services in connection
with which any of such marks are used.


 






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Section
2.      Pledge of
Pledged Collateral.


 


(a)
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor
hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security
interest in, all of such Grantor’s right, title and interest in, to and under all of the following, wherever located and whether
now or hereafter existing and whether now owned or hereafter acquired: (i) the Pledged Equity; (ii) all Promissory Notes, Security and
Instruments evidencing debt now owned or at any time hereafter acquired by it (including, without limitation, those listed opposite the
name of such Grantor on Schedule IV) (the “Pledged Debt”); (iii) subject to Section 2(g) and 2(h),
all payments of principal or interest, dividends, distributions, cash, Promissory Notes, Securities, Instruments and other property from
time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds
received in respect of, the Pledged Equity and the Pledged Debt; (iv) all rights and privileges of such Grantor with respect to the Securities
and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of, and Security Entitlements in respect of,
any of the foregoing (the items referred to in clauses (a) through (v) above being collectively referred to as the “Pledged Collateral”);
provided that the Pledged Collateral shall not include any item referred to in clauses (a) through (f) above if, for so long as and to
the extent such item constitutes Excluded Collateral.


 


(b)
On the Closing Date (in the case of any Grantor that grants a Lien on any of its assets hereunder on the Closing Date) or on the
date on which it becomes a party to this Agreement pursuant to Section 6(m) (in the case of any other Grantor), each Grantor shall
deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities (other than any Uncertificated Securities, but
only for so long as such Securities remain uncertificated) to the extent such Pledged Securities, in the case of Promissory Notes and
other Instruments evidencing debt, are required to be delivered pursuant to Section 2(c). Thereafter, whenever such Grantor acquires
any other Pledged Security (other than any Uncertificated Securities, but only for so long as such Uncertificated Securities remain uncertificated),
such Grantor shall promptly, and in any event within 30 days (or such longer period as the Collateral Agent may agree to in writing),
deliver or cause to be delivered to the Collateral Agent such Pledged Security as Collateral hereunder to the extent such Pledged Securities,
in the case of Promissory Notes and Instruments evidencing debt, are required to be delivered pursuant to Section 2(c).


 


(c)
Each Grantor will cause all debt for borrowed money in an aggregate principal amount of $10,000 or more owed to such Grantor by
any other Person to be evidenced by a duly executed Promissory Note, and shall cause each such Promissory Note to be pledged and delivered
to the Collateral Agent, (i) on the date hereof, in the case of any such debt existing on the date hereof (or, in the case of any
Grantor that becomes a party hereto after the date hereof, on the date such Grantor becomes a party hereto, in the case of any such debt
existing on such date) or (ii) promptly following the incurrence thereof, in the case of any such debt incurred after the date hereof
(or such other date), in each case pursuant to the terms hereof.


 


(d)
Upon delivery to the Collateral Agent, (i) any Pledged Securities required to be delivered pursuant to Section 2(b) and/or
2(c) shall be accompanied by undated stock or note powers duly executed by the applicable Grantor in blank or other instruments
of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably
request in order to effect the transfer of such Pledged Securities and (ii) all other property comprising part of the Pledged Collateral
required to be delivered pursuant to Section 2(b) and/or 2(c) shall be accompanied by undated proper instruments of assignment
duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request in order
to effect transfer of such Pledged Collateral. Each delivery of Pledged Securities or other Pledged Collateral shall be accompanied by
a schedule describing such Pledged Securities or Pledged Collateral, as the case may be, which schedule shall be deemed to supplement
Schedule IV and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity
of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.


 






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(e)
The assignment, pledge, Lien and security interest granted in Section 2(a) are granted as security only and shall not subject the
Collateral Agent or any Buyer to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising
out of the Pledged Collateral.


 


(f)       
If an Event of Default shall occur and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral
Agent shall have notified the Borrower of its intent to exercise such rights, (a) the Collateral Agent, shall have the right (in its sole
and absolute discretion) to cause each of the Pledged Securities to be transferred of record into the name of the Collateral Agent or
into the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor
of the Collateral Agent and (b) to the extent permitted by the documentation governing such Pledged Securities and applicable law, the
Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement. Each Grantor will promptly give to the Collateral Agent copies of any material
notices received by it with respect to Pledged Securities registered in the name of such Grantor. Each Grantor will take any and all actions
reasonably requested by the Collateral Agent to facilitate compliance with this Section 2(f).


 


(g)
Unless and until an Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of
Default, the Collateral Agent shall have notified the Grantors that the rights of the Grantors under this Section 2(g) are being
suspended:


 


(i) Each Grantor shall
be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose consistent with the terms of this Agreement and the other Transaction Documents.


 


(ii) The Collateral
Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers
of attorney and other instruments as such Grantor may reasonably request in writing for the purpose of enabling such Grantor to exercise
the voting and/or consensual rights and powers it is entitled to exercise pursuant to Section 2(g)(i), in each case as shall be
specified in such request.


 






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(iii) Each Grantor
shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect
of the Pledged Collateral, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are
permitted by, the other Transaction Documents and applicable laws; provided that any noncash dividends, interest, principal or
other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification
of the outstanding equity interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall be held
in trust for the benefit of the Collateral Agent and shall, to the extent required by Section 2(b) and/or 2(c) be forthwith
delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or documents set forth in Section
2(d) or as otherwise reasonably requested by the Collateral Agent). So long as no Event of Default has occurred and is continuing,
the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the
issuer thereof in connection with any exchange or redemption of such Pledged Securities.


 


(h)
Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default,
after the Collateral Agent shall have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(iii),
all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant
to Section 2(g)(iii) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the
sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions as part of the
Pledged Collateral, subject to Section 2(k) and the last sentence of this Section 2(h). All dividends, interest, principal
or other distributions received by any Grantor contrary to the provisions of Section 2(g) or this Section 2(h) shall be
held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent upon demand in the same
form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property
paid over to or received by the Collateral Agent pursuant to the provisions of Section 2(g) and/or this Section 2(h) shall
be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property,
shall be held as security for the payment and performance of the Obligations and shall be applied in accordance with the provisions of
Section 8. After all Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate
of an executive officer to such effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of Section 2(g)(iii)
in the absence of an Event of Default and that remain in such account.


 


(i)
Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default,
after the Collateral Agent shall have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(i),
all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 2(g)(i),
and the obligations of the Collateral Agent under Section 2(g)(ii), shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and
powers subject to Section 2(k) and the last sentence of this Section 2(i); provided that, the Collateral Agent shall
have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.
After all Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of an executive
officer to such effect, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such
Grantor would otherwise be entitled to exercise pursuant to the terms of Section 2(g)(i), and the obligations of the Collateral
Agent under Section 2(g)(ii) shall be reinstated.


 






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(j)
Any notice given by the Collateral Agent to the Grantors under Section 2(f) or Section 2(g) (i) may be given by telephone
if promptly confirmed in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii)
may suspend the rights of the Grantors under Section 2(g)(i) or 2(g)(iii) in part without suspending all such rights (as
specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.


 


(k)
Nothing contained in this Agreement shall be construed to make the Collateral Agent or any Buyer liable as a member of any limited
liability company or as a partner of any partnership, and neither the Collateral Agent nor any Buyer by virtue of this Agreement or otherwise
(except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited
liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become
the absolute owner of Pledged Equity consisting of a limited liability company interest or a partnership interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any Buyer, any Grantor and/or
any other Person.


 


Section
3.      Grant of Security
Interest


 


(a)
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor
hereby pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security
interest in, all of such Grantor’s right, title and interest in, to and under all personal property and assets of such Grantor,
wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature and description,
whether tangible or intangible (together with the Pledged Collateral, the “Collateral”), including, without limitation,
the following:


 


		(i)	all Accounts;



 


		(ii)	all Chattel Paper (whether tangible or Electronic Chattel
Paper);



 


		(iii)	all Commercial Tort Claims, including, without limitation,
those specified on Schedule VI hereto;



 






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		(iv)	all Documents;



 


		(v)	all Equipment;



 


		(vi)	all Fixtures;



 


		(vii)	all General Intangibles (including, without limitation, all
Payment Intangibles);



 


		(viii)	 all Goods;



 


		(ix)	all Instruments;



 


		(x)	all Inventory;



 


		(xi)	all Investment Property (and, regardless of whether classified
as Investment Property under the Code, all Pledged Equity, Pledged Operating Agreements and Pledged Partnership Agreements);



 


		(xii)	all Intellectual Property and all Licenses;



 


		(xiii)	all Letter-of-Credit Rights;



 


		(xiv)	all Pledged Accounts, all cash and other property from time
to time deposited therein, and all monies and property in the possession or under the control of the Collateral Agent or any Noteholder
or any Affiliate, representative, agent or correspondent of the Collateral Agent or any such Noteholder;



 


		(xv)	all Supporting Obligations;



 


		(xvi)	all other tangible and intangible personal property of each
Grantor (whether or not subject to the Code), including, without limitation, all Deposit Accounts and other accounts and all cash and
all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements
of and to any of the property of any Grantor described in the preceding clauses of this Section 3(a) (including, without limitation,
any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by each Grantor in respect of
any of the items listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, desks,
cards, Software, data and computer programs in the possession or under the control of any Grantor or any other Person from time to time
acting for any Grantor, in each case, to the extent of such Grantor’s rights therein, that at any time evidence or contain information
relating to any of the property described in the preceding clauses of this Section 3(a) or are otherwise necessary or helpful
in the collection or realization thereof; and



 


		(xvii)	all Proceeds, including all Cash Proceeds and Noncash Proceeds,
and products of any and all of the foregoing Collateral; in each case howsoever any Grantor’s interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).



 






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(b)
Notwithstanding anything herein to the contrary, the term “Collateral” shall not include any Excluded Collateral.


 


(c)
Each Grantor agrees not to further encumber, or permit any other Lien to exist that encumbers, any of its Intellectual Property,
including, without limitation, any of its Copyrights, Copyright applications, Copyright registrations and like protections in each work
of authorship and derivative work, whether published or unpublished, Licenses, Patents, Patent applications and like protections, including,
without limitation, improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill
of the business of such Grantor connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented
inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing, in each case without
the Collateral Agent’s prior written consent (which consent may be withheld or given in the Collateral Agent’s sole and absolute
discretion).


 


(d)
Each Grantor agrees that the pledge of the shares of Capital Stock acquired by such Grantor of any and all Persons now or hereafter
existing that is a Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges or
other similar agreements or instruments, executed and delivered by such Grantor in favor of the Collateral Agent, which agreements or
instruments will provide for the pledge of such shares of Capital Stock and perfection of the Lien on such shares in accordance with the
laws of the applicable foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from
time to time, in its sole and absolute discretion, take such actions in such foreign jurisdictions that will result in the perfection
of the Lien created in such shares of Capital Stock.


 


(e)
In addition, to secure the due and punctual payment and performance in full of the Obligations, as and when due, and in order to
induce the Buyers as aforesaid, each Grantor hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable
benefit of the Collateral Agent and the Noteholders, a right of set-off against the property of such Grantor held by the Collateral Agent,
for itself and for the ratable benefit of the Noteholders, consisting of property described above in Section 2(a) and/or Section
3(a) now or hereafter in the possession or custody of or in transit to the Collateral Agent, for any purpose, including safekeeping,
collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power; provided that such right
shall only to be exercised after an Event of Default has occurred and is continuing.


 


Section
4.      Security for
Obligations. The Lien and security interest created hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether direct or indirect, absolute or contingent, and whether now existing or hereafter incurred (collectively,
the “Obligations”):


 


(a)
 (i) the payment by the Company and each other Grantor, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, this
Agreement, the Notes and the other Transaction Documents, and (ii) in the case of the Guarantors, the payment by such Guarantors, as and
when due and payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A) all principal
of, interest, make-whole and other amounts on the Notes (including, without limitation, all interest, make-whole and other amounts that
accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of such interest is enforceable
or is allowable in such Insolvency Proceeding), and (B) all fees, interest, premiums, penalties, contract causes of action, costs, commissions,
expense reimbursements, indemnifications and all other amounts due or to become due under this Agreement or any of the Transaction Documents;
and


 






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(b)
the due and punctual performance and observance by each Grantor of all of its other obligations from time to time existing in respect
of any of the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders
under the Notes.


 


Section
5.      Representations
and Warranties. Each Grantor represents and warrants as follows:


 


(a)
Schedule I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization
or formation and the organizational identification number of each Grantor in such state. The information set forth in Schedule I
hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name (or operated
under any other name), jurisdiction of organization or organizational identification number from those set forth in Schedule I
hereto except as disclosed in Schedule I hereto.


 


(b)
There is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any Grantor
before any Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator,
in each case, that may adversely affect the grant by any Grantor, or the perfection, of the Lien and security interest purported to be
created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.


 


(c)
All Federal, state and local tax returns and other reports required by applicable law to be filed by any Grantor have been filed,
or extensions have been obtained, and all taxes, assessments and other governmental charges or levies imposed upon any Grantor or any
property of any Grantor (including, without limitation, all federal income and social security taxes on employees’ wages) and which
have become due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves
have been set aside for the payment thereof in accordance with GAAP.


 


(d)
All Equipment, Fixtures, Goods and Inventory of each Grantor (other than Inventory in transit or out for repair or other bona fide
business reason in the ordinary course of business) now existing are, and all Equipment, Fixtures, Goods and Inventory of each Grantor
(other than Inventory in transit or out for repair or other bona fide business reason in the ordinary course of business) hereafter existing
will be, located and/or based at the addresses specified therefor in Schedule III hereto, except that each Grantor will give the
Collateral Agent written notice of any change in the location of any such Collateral within 20 days of such change, other than to locations
set forth on Schedule III hereto (and with respect to which the Collateral Agent has filed financing statements and otherwise
fully perfected its Liens thereon). Each Grantor’s principal place of business and chief executive office, the place where each
Grantor keeps its Records concerning the Collateral and all originals of all Chattel Paper in which any Grantor has any right, title or
interest are located and will continue to be located at the addresses specified therefor in Schedule III hereto. None of the
Accounts in which any Grantor has any right, title or interest is evidenced by Promissory Notes or other Instruments.


 






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(e)
Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of (i) all Pledged Debt,
specifying the debtor thereof and the outstanding principal amount thereof as of the Closing Date, Securities and other Instruments in
which any Grantor has any right, title or interest, (ii) each Pledged Account of each Grantor, together with the name and address
of each institution at which each such Pledged Account is maintained, the account number for each such Pledged Account and a description
of the purpose of each such Pledged Account and (iii) the name of each Foreign Currency Controlled Account of each Grantor, together with
the name and address of each institution at which each such Foreign Currency Controlled Account is maintained and the amount of cash or
cash equivalents held in each such Foreign Currency Controlled Account. Set forth in Schedule II hereto is a complete and correct
list of each trade name used by each Grantor and the name of, and each trade name used by, each Person from which each Grantor has acquired
any substantial part of the Collateral. All of the Pledged Debt, to the best of the Grantors’ knowledge (provided that no such knowledge
qualification applies to Pledged Debt issued by a Grantor or a Subsidiary), is the legal, valid and binding obligation of the issuer thereof,
enforceable against such issuer in accordance with its terms.


 


(f)       
Each Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule II
hereto, including all schedules and exhibits thereto, which represent all of the Licenses of the Grantors existing on the date of this
Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights
of such Grantor or any of its Affiliates in respect thereof. Each material License now existing is, and any material License entered into
in the future will be, the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance
with its terms. No default under any material License by any such party has occurred, nor does any defense, offset, deduction or counterclaim
exist thereunder in favor of any such party.


 


(g)
Each Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, which is a complete
list of the Intellectual Property necessary to conduct its business in substantially the same manner as conducted as of the date hereof.
Schedule II hereto sets forth a true and complete list of all Intellectual Property and Licenses owned or used by each Grantor
as of the date hereof, and applications for grant or registration of Intellectual Property. To the knowledge of each Grantor, all such
Intellectual Property of such Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid
and enforceable and has not been abandoned in whole or in part. Except as set forth in Schedule II, no such Intellectual Property
is the subject of any licensing or franchising agreement. Except as set forth in Schedule II, no Grantor has any knowledge of any
infringement upon or conflict with the Patent, Trademark, Copyright, trade secret rights of others and, each Grantor is not now infringing
or in conflict with any Patent, Trademark, Copyright, trade secret or similar rights of others, and to the knowledge of each Grantor,
no other Person is now infringing or in conflict in any material respect with any such properties, assets and rights owned or used by
each Grantor. No Grantor has received any notice that it is violating or has violated the Trademarks, Patents, Copyrights, inventions,
trade secrets, proprietary information and technology, know-how, formulae, rights of publicity or other intellectual property rights of
any third party.


 






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(h)
Each Grantor is and will be at all times the sole and exclusive owner of the Collateral in which such Grantor has granted a Lien
and security interest hereunder free and clear of any Liens, except for (i) Permitted Liens thereon and (ii) certain Intellectual Property
rights of the Company which is jointly owned by the Company with certain third parties as described in Schedule II hereto. No effective
financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing
office except such as (i) may have been filed in favor of the Collateral Agent and/or the Noteholders relating to this Agreement or the
other Transaction Documents, or (ii) are intended to perfect Permitted Liens existing as of the date hereof and disclosed on Schedule
VII hereto.


 


(i)
The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any material contractual
restriction binding on or otherwise affecting any Grantor or any of its properties and will not result in or require the creation of any
Lien, upon or with respect to any of its properties other than as granted pursuant to this Agreement.


 


(j)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required for (i) the
grant by each Grantor, or the perfection, of the Lien and security interest purported to be created hereby in the Collateral, or (ii) the
exercise by the Collateral Agent of any of its rights and remedies hereunder, except for (A) the filing under the Code as in effect
in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of which financing statements have
been duly filed and are in full force and effect, (B) with respect to all Pledged Accounts, and all cash and other property from time
to time deposited therein, the execution of a Controlled Account Agreement with the depository or other institution with which the applicable
Pledged Accounts are maintained, as provided in Section 6(i), (C) with respect to Commodity Contracts, the execution of a
control agreement with the commodity intermediary with which such Commodity Contract is carried, as provided in Section 6(i), (D) with
respect to the perfection of the security interest created hereby in the United States Intellectual Property and Licenses, the recording
of the appropriate Intellectual Property Security Agreement in the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, (E) with respect to the perfection of the security interest created hereby in foreign Intellectual Property
and Licenses, registrations and filings in jurisdictions located outside of the United States and covering rights in such jurisdictions
relating to such foreign Intellectual Property and Licenses, (F) with respect to the perfection of the security interest created hereby
in any Letter-of-Credit Rights, the consent of the issuer of the applicable letter of credit to the assignment of proceeds as provided
in the Code as in effect in the applicable jurisdiction, (G) with respect to Investment Property constituting uncertificated securities,
the applicable Grantor causing the issuer thereof either (i) to register the Collateral Agent as the registered owner of such securities
or (ii) to agree in an authenticated record with such Grantor and the Collateral Agent that such issuer will comply with instructions
with respect to such securities originated by the Collateral Agent without further consent of such Grantor, such authenticated record
to be in form and substance satisfactory to the Collateral Agent, (H) with respect to Investment Property constituting certificated securities
or instruments, such items to be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable form for transfer
by delivery or accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to
the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting Commodity Contracts,
Electronic Chattel Paper or Letter of Credit Rights, the taking of such actions, and (J) the Collateral Agent having possession of all
Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses (A) through (J) each a “Perfection Requirement”
and collectively, the “Perfection Requirements”).


 






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(k)
This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable Lien on and security interest in the Collateral,
as security for the Obligations. The performance of the Perfection Requirements results in the perfection of such Lien on and security
interest in the Collateral. Such Lien and security interest is (or in the case of Collateral in which any Grantor obtains any right, title
or interest after the date hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid,
enforceable and perfected Lien on and security interest in all personal property of each Grantor (other than Excluded Collateral). Such
recordings and filings and all other action necessary to perfect and protect such Lien and security interest have been duly taken (and,
in the case of Collateral in which any Grantor obtains right, title or interest after the date hereof, will be duly taken), except for
the Collateral Agent’s having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral after the
date hereof and the other actions, filings and recordations described above, including the Perfection Requirements.


 


(l)
As of the date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims, except
for the Commercial Tort Claims described in Schedule VI.


 


(m)
All of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV free and clear of all
Liens other than Permitted Liens, and is presently represented by the certificates listed on Schedule IV hereto (if applicable).
As of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged
Equity other than as contemplated and permitted by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial
owner of the Pledged Equity, as applicable. None of the Pledged Equity has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes
100% or such other percentage as set forth on Schedule IV of the issued and outstanding shares of Capital Stock of the applicable
Pledged Entity. All of the Pledged Equity has been duly and validly authorized and issued by the issuer thereof and (i) in the case of
Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to
the relevant organizational or formation documents, cannot be fully paid and non-assessable), is fully paid and non-assessable.


 


(n)
Such Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (ii) has all requisite corporate,
limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated
and to execute and deliver this Agreement and each other Transaction Document to which such Grantor is a party, and to consummate the
transactions contemplated hereby and thereby and (iii) is duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified would not result in a Material Adverse Effect.


 


(o)
The execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such Grantor
is a party (i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (ii) do
not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership or partnership
agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties, (iii) do not
and will not result in or require the creation of any Lien (other than pursuant to any Transaction Document) upon or with respect to any
of its assets or properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture
or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its assets or properties.


 






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(p)
This Agreement has been duly executed and delivered by each Grantor and is the legal, valid and binding obligation of such Grantor,
enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought
in equity or at law). Each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, duly executed
and delivered by such Grantor and the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship
or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).


 


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


 


Section
6.      Covenants
as to the Collateral. Until all of the Obligations shall have been fully performed and Paid in Full, unless the Collateral Agent shall
otherwise consent in writing (in its sole and absolute discretion):


 


(a)
Further Assurances. Each Grantor will, at its expense, at any time and from time to time, promptly execute and deliver all
further instruments and documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect
and protect the Lien and security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation, the Controlled Accounts; or (iii) otherwise
effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously all Chattel Paper and each License
and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral with a legend, in form and substance reasonably
satisfactory to the Collateral Agent, indicating that such Chattel Paper, License or Collateral is subject to the Lien and security interest
created hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note, Security (subject to the limitations set
forth in Section 3), Chattel Paper or other Instrument, each in excess of $50,000 (but with respect to all such undelivered and/or
unpledged Promissory Note, Security, Chattel Paper or other Instrument, not in the aggregate in excess $100,000), now or hereafter owned
by any Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory
to the Collateral Agent, (C) executing and filing (to the extent, if any, that any Grantor’s signature is required thereon)
or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or that the Collateral
Agent may reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing to the Collateral
Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection
with the Collateral in each case as the Collateral Agent may reasonably request, all in reasonable detail, (E) if any Collateral
shall be in the possession of a third party, notifying such Person of the Collateral Agent’s security interest created hereby and
obtaining a written acknowledgment from such Person, in form and substance satisfactory to the Collateral Agent, that such Person holds
possession of the Collateral for the benefit of the Collateral Agent (for the ratable benefit of the Collateral Agent and the Noteholders),
(F) if at any time after the date hereof, any Grantor acquires or holds any Commercial Tort Claim in excess of $10,000, promptly
notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and
granting to the Collateral Agent a Lien and security interest therein and in the Proceeds thereof, which writing shall incorporate the
provisions hereof and shall be in form and substance satisfactory to the Collateral Agent, (G) upon the acquisition after the date
hereof by any Grantor of any motor vehicle or other Equipment subject to a certificate of title or ownership (other than a motor vehicle
or Equipment that is subject to a purchase money security interest), causing the Collateral Agent to be listed as the lienholder on such
certificate of title or ownership and delivering evidence of the same to the Collateral Agent in accordance with Section 6(j) hereof;
and (H) taking all actions required by the Code or by other law, as applicable, in any relevant Code jurisdiction, or by other law
as applicable in any foreign jurisdiction.


 






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(b)
Location of Collateral. Each Grantor will keep the Collateral (i) at the locations specified therefor on Schedule III
hereto, or (ii) at such other locations set forth on Schedule III and with respect to which the Collateral Agent has filed financing
statements and otherwise fully perfected its Liens thereon, or (iii) at such other locations in the United States, provided that 30 days
prior to any change in the location of any Collateral to such other location, or upon the acquisition of any Collateral to be kept at
such other locations, the Grantors shall give the Collateral Agent written notice thereof and deliver to the Collateral Agent a new Schedule
III indicating such new locations and such other written statements and schedules as the Collateral Agent may require.


 


(c)
Condition of Equipment. Each Grantor will maintain or cause to be maintained and preserved in good condition, repair and
working order, ordinary wear and tear excepted, the Equipment (necessary or useful to its business) and will forthwith, or in the case
of any loss or damage to any Equipment of any Grantor within a commercially reasonable time after the occurrence thereof, make or cause
to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent with
past practice, or which the Collateral Agent may request to such end. Any Grantor will promptly furnish to the Collateral Agent a statement
describing in reasonable detail any such loss or damage in excess of $25,000 per occurrence to any Equipment.


 


(d)
Taxes, Etc. Each Grantor agrees to pay promptly when due all property and other taxes, assessments and governmental charges
or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory, except
to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine
or Lien resulting from the non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside
for the payment thereof.


 


(e)
Insurance.


 


(i)
Each Grantor will, at its own expense, maintain insurance (including, without limitation, comprehensive general liability, hazard,
rent and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks, in such form and with responsible and reputable insurance companies or associations as is required
by any Governmental Authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and in any event, in amount, adequacy and scope reasonably satisfactory to the Collateral
Agent.


 






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(ii)
To the extent requested by the Collateral Agent at any time and from time to time, each such policy for liability insurance shall
provide for all losses to be paid on behalf of the Collateral Agent and any Grantor as their respective interests may appear, and each
policy for property damage insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral Agent. In
addition to and without limiting the foregoing, to the extent requested by the Collateral Agent at any time and from time to time, each
such policy shall in addition (A) name the Collateral Agent as an additional insured party and/or loss payee, as applicable, thereunder
(without any representation or warranty by or obligation upon the Collateral Agent) as its interests may appear, (B) contain an agreement
by the insurer that any loss thereunder shall be payable to the Collateral Agent on its own account notwithstanding any action, inaction
or breach of representation or warranty by any Grantor, (C) provide that there shall be no recourse against the Collateral Agent for payment
of premiums or other amounts with respect thereto, and (D) provide that at least 30 days’ prior written notice of cancellation,
lapse, expiration or other adverse change shall be given to the Collateral Agent by the insurer. Any Grantor will, if so requested by
the Collateral Agent, deliver to the Collateral Agent original or duplicate policies of such insurance (including certificates demonstrating
compliance with this Section 6(e)) and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance broker
with respect to such insurance. Any Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment
of such insurance policies and cause the respective insurers to acknowledge notice of such assignment.


 


(iii)           
Reimbursement under any liability insurance maintained by any Grantor pursuant to this Section 6(e) may be paid directly
to the Person who shall have incurred liability covered by such insurance. In the case of any loss involving damage to Equipment or Inventory,
to the extent paragraph (iv) of this Section 6(e) is not applicable, any proceeds of insurance involving such damage shall be paid
to the Collateral Agent, and any Grantor will make or cause to be made the necessary repairs to or replacements of such Equipment or Inventory,
and any proceeds of insurance maintained by any Grantor pursuant to this Section 6(e) (except as otherwise provided in paragraph
(iv) in this Section 6(e)) shall be paid by the Collateral Agent to any Grantor as reimbursement for the reasonable costs of such
repairs or replacements.


 


(iv)
Notwithstanding anything to the contrary in subsection 6(e)(iii) above, following and during the continuance of an Event of Default,
all insurance payments in respect of each Grantor’s properties and business shall be paid to the Collateral Agent and applied as
specified in Section 8(b) hereof.


 






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(f)       
Provisions Concerning Name, Organization, Location, Accounts and Licenses.


 


(i)
Each Grantor will (A) give the Collateral Agent at least 30 days’ prior written notice of any change in such Grantor’s
name, identity or organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth in
Schedule I hereto, (C) immediately notify the Collateral Agent upon obtaining an organizational identification number, if on the
date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Collateral and permit representatives
of the Collateral Agent during normal business hours on reasonable notice to such Grantor, to inspect and make abstracts from such records.


 


(ii)
Each Grantor will (except as otherwise provided in this subsection (f)), continue to collect, at its own expense, all amounts
due or to become due under the Accounts. In connection with such collections, any Grantor may (and, at the Collateral Agent’s direction,
will) take such action as any Grantor or the Collateral Agent may deem necessary or advisable to enforce collection or performance of
the Accounts; provided, however, that the Collateral Agent shall have the right at any time following the occurrence and
during the continuance of an Event of Default to notify the Account Debtors or obligors under any Accounts of the assignment of such Accounts
to the Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to any Grantor
thereunder directly to the Collateral Agent or its designated agent and, upon such notification and at the expense of any Grantor and
to the extent permitted by applicable law, to enforce collection of any such Accounts and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as any Grantor might have done. After receipt by any Grantor of a notice from
the Collateral Agent that the Collateral Agent has notified, intends to notify, or has enforced or intends to enforce any Grantor’s
rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence,
(A) all amounts and proceeds (including, without limitation, Instruments) received by any Grantor in respect of the Accounts shall
be received in trust for the benefit of the Collateral Agent hereunder (for the ratable benefit of the Collateral Agent and the Noteholders),
shall be segregated from other funds of any Grantor and shall be forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary endorsement) to be applied as specified in Section 8(b) hereof, and (B) no Grantor will adjust, settle or compromise
the amount or payment of any Account or release wholly or partly any Account Debtor or obligor thereof or allow any credit or discount
thereon. In addition, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may (in its sole and
absolute discretion) direct any or all of the banks and financial institutions with which any Grantor either maintains a Deposit Account
or a lockbox (including, without limitation, any Controlled Account) or deposits the proceeds of any Accounts to send immediately to the
Collateral Agent by wire transfer (to such deposit account as the Collateral Agent shall specify, or in such other manner as the Collateral
Agent shall direct) all or a portion of such Securities, cash, investments and other items held by such institution. Any such Securities,
cash, investments and other items so received by the Collateral Agent shall be applied as specified in accordance with Section 8(b)
hereof.


 


(iii)           
Upon the occurrence and during the continuance of any breach or default under any material License referred to in Schedule II
hereto by any party thereto other than any Grantor, each Grantor party thereto will, promptly after obtaining knowledge thereof, give
the Collateral Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes to take
with respect thereto and thereafter will take reasonable steps to protect and preserve its rights and remedies in respect of such breach
or default, or will obtain or acquire an appropriate substitute License.


 






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(iv)
Each Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received
by it by which any other party to any material License referred to in Schedule II hereto purports to exercise any of its rights
or affect any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.


 


(v)
Each Grantor will exercise promptly and diligently each and every right which it may have under each material License (other than
any right of termination) and will duly perform and observe in all respects all of its obligations under each material License and will
take all action necessary or reasonable to maintain such Licenses in full force and effect. No Grantor will, without the prior written
consent of the Collateral Agent (in its sole and absolute discretion), cancel, terminate, amend or otherwise modify in any respect, or
waive any provision of, any material License referred to in Schedule II hereto.


 


(g)
Transfers and Other Liens.


 


(i)
Except as otherwise expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, sell, lease,
license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single transaction or
a series of related transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of
such assets or rights by such Grantor for fair value in the ordinary course of business consistent with past practices and (B) sales of
Inventory and product in the ordinary course of business.


 


(ii)
Except as permitted under Section 14(e) of the Notes, no Grantor shall, directly or indirectly, redeem, repurchase or declare or
pay any cash dividend or distribution on any of its Capital Stock.


 


(iii)           
No Grantor shall, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes (other
than as contemplated by the Securities Purchase Agreement and the Notes) or (B) issue any other Securities that would cause a breach or
default under the Notes.


 


(iv)
No Grantor shall enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind)
with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary
or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it than would be obtainable
in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.


 


(v)
No Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.


 






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(h)
Intellectual Property.


 


(i)
If applicable, each Grantor shall duly execute and deliver the applicable Intellectual Property Security Agreement. Each Grantor
(either itself or through licensees) will, and will cause each licensee thereof to, take all action necessary to maintain all of the Intellectual
Property in full force and effect, including, without limitation, using the proper statutory notices, numbers and markings (relating to
patent, trademark and copyright rights) and using the Trademarks on each applicable trademark class of goods in order to so maintain the
Trademarks in full force and free from any claim of abandonment for non-use, and each Grantor will not (nor permit any licensee thereof
to) do any act or knowingly omit to do any act whereby any Intellectual Property may become abandoned, cancelled or invalidated; provided,
however, that so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to use or to maintain
any Intellectual Property (A) that relates solely to any product or work, that is no longer necessary or material and has been, or
is in the process of being, discontinued, abandoned or terminated in the ordinary course of business and consistent with the exercise
of reasonable business judgment, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property
that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does not materially
adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property is subject
to the Lien created by this Agreement and does not have a material adverse effect on the business of any Grantor or (C) that is substantially
the same as other Intellectual Property that is in full force, so long the failure to use or maintain such Intellectual Property does
not materially adversely affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property
is subject to the Lien and security interest created by this Agreement and does not have a material adverse effect on the business of
any Grantor. Each Grantor will cause to be taken all necessary steps in any proceeding before the United States Patent and Trademark Office
and the United States Copyright Office or any similar office or agency in any other country or political subdivision thereof to maintain
each registration of the Intellectual Property and application for registration of Intellectual Property (other than the Intellectual
Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits
of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees, filing
fees, taxes or other governmental charges or fees. If any Intellectual Property (other than Intellectual Property described in the proviso
to the second sentence of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, each Grantor shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly
notify the Collateral Agent and (y) promptly sue for infringement, misappropriation, dilution or other violation, seek injunctive relief
where appropriate and recover any and all damages for such infringement, misappropriation, dilution or other violation, or take such other
actions as such Grantor shall deem appropriate under the circumstances to protect such Intellectual Property. Each Grantor shall furnish
to the Collateral Agent from time to time upon its request statements and schedules further identifying and describing the Intellectual
Property and Licenses and such other reports in connection with the Intellectual Property and Licenses as the Collateral Agent may reasonably
request, all in reasonable detail and promptly upon request of the Collateral Agent, following receipt by the Collateral Agent of any
such statements, schedules or reports, each Grantor shall modify this Agreement by amending Schedule II hereto, as the case may
be, to include any Intellectual Property and License, as the case may be, which is or hereafter becomes part of the Collateral under this
Agreement and shall execute and authenticate such documents and do such acts as shall be necessary or, in the reasonable judgment of the
Collateral Agent, desirable to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement.
Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may
abandon, surrender or cancel or otherwise permit any Intellectual Property to become abandoned, surrendered, cancelled or invalid without
the prior written consent of the Collateral Agent (in its sole and absolute discretion), and if any Intellectual Property is infringed,
misappropriated, diluted or otherwise violated in any material respect by a third party, each Grantor will take such reasonable action
as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property.


 






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(ii)
In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright or the United States Copyright Office or the United States Patent and Trademark Office,
as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof unless it gives
the Collateral Agent prior written notice thereof. Upon request of the Collateral Agent, any Grantor shall execute, authenticate and deliver
any and all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the
Collateral Agent’s security interest hereunder in such Intellectual Property and the General Intangibles of any Grantor relating
thereto or represented thereby, and each Grantor hereby appoints the Collateral Agent its attorney-in-fact to execute and/or authenticate
and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being
coupled with an interest) shall be irrevocable until all Obligations are fully performed and Paid in Full.


 


(i)
Pledged Accounts.


 


(A) Each Grantor shall cause
each bank and other financial institution which maintains a Controlled Account (each a “Controlled Account Bank”) to
execute and deliver to the Collateral Agent, in form and substance satisfactory to the Collateral Agent, a Controlled Account Agreement
with respect to such Controlled Account, duly executed by each Grantor and such Controlled Account Bank, pursuant to which such Controlled
Account Bank among other things shall irrevocably agree, with respect to such Controlled Account, that (i) at any time after any Grantor,
the Collateral Agent or any Buyer shall have notified such Controlled Account Bank that an Event of Default has occurred or is continuing,
such Controlled Account Bank will comply with any and all instructions originated by the Collateral Agent directing the disposition of
the funds in such Controlled Account without further consent by such Grantor, (ii) such Controlled Account Bank shall waive, subordinate
or agree not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for
payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks
or other items of payment, (iii) at any time after any Grantor, the Collateral Agent or any Buyer shall have notified such Controlled
Account Bank that an Event of Default has occurred or is continuing, with respect to each such Controlled Account, such Controlled Account
Bank shall not comply with any instructions, directions or orders of any form with respect to such Controlled Accounts other than instructions,
directions or orders originated by the Collateral Agent, (iv) all funds deposited by any Grantor with such Controlled Account Bank shall
be subject to a perfected, first priority security interest in favor of the Collateral Agent, and (v) upon receipt of written notice from
the Collateral Agent during the continuance of an Event of Default, such Controlled Account Bank shall immediately send to the Collateral
Agent by wire transfer (to such account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct)
all such funds and other items held by it. No Grantor shall create or maintain any Pledged Account without the prior written consent of
the Collateral Agent (in its sole and absolute discretion) and complying with the terms of this Agreement.


 






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(B) If at any time after the
date of this Agreement, the average daily balance of any Account (other than any non-payroll deposit accounts located in Canada, in an
aggregate amount not to exceed $100,000) that is not subject to a Controlled Account Agreement exceeds $10,000 during any calendar month
(including the calendar month in which the date of this Agreement occurs), the Company shall, either (x) within two (2) Business Days
following such date, transfer to a Controlled Account an amount sufficient to reduce the total aggregate amount of the cash in such Account
to an amount not in excess of $10,000 or (y) within twenty-one (21) calendar days following the last day of such calendar month, deliver
to the Collateral Agent a Controlled Account Agreement with respect to such Account, duly executed by such Grantor and the depositary
bank in which such Account is maintained.


 


(C) Notwithstanding anything
to the contrary contained in Section 6(i)(B) above, and without limiting any of the foregoing, if at any time on or after the date
that is twenty-one (21) calendar days following the Closing Date, the total aggregate amount of the cash of the Company and any of its
Subsidiaries, in the aggregate, that is not held in a Controlled Account (other than any non-payroll deposit accounts located in Canada,
in an aggregate amount not to exceed $100,000) exceeds $100,000 (the “Maximum Free Cash Amount”), the Company shall
within two (2) Business Days following such date, either (x) transfer to a Controlled Account an amount sufficient to reduce the total
aggregate amount of the cash that is not held in a Controlled Account to an amount not in excess of the Maximum Free Cash Amount or (y)
deliver to the Collateral Agent a Controlled Account Agreement with respect to such Account (or Accounts), duly executed by such Grantor
and the depositary bank in which such Account (or Accounts) is maintained, as necessary to reduce the total aggregate amount of the cash
that is not held in a Controlled Account to an amount not in excess of the Maximum Free Cash Amount.


 


(j)
Motor Vehicles.


 


(i)
Upon the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for each motor vehicle with a value in excess of $10,000 owned by it, with the Collateral Agent listed as lienholder,
for the ratable benefit of the Collateral Agent and the Noteholders.


 


(ii)
Each Grantor hereby appoints the Collateral Agent as its attorney-in-fact for the purpose of (A) executing on behalf of such
Grantor title or ownership applications for filing with appropriate Governmental Authorities to enable motor vehicles now owned or hereafter
acquired by such Grantor to be retitled and the Collateral Agent listed as lienholder thereof, (B) filing such applications with such
Governmental Authorities, and (C) executing such other agreements, documents and instruments on behalf of, and taking such other
action in the name of, such Grantor as the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (including,
without limitation, for the purpose of creating in favor of the Collateral Agent a perfected Lien on the motor vehicles and exercising
the rights and remedies of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and is irrevocable
until all of the Obligations are fully performed and Paid in Full.


 


(iii)           
Any certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by accurate odometer statements
for each motor vehicle covered thereby.


 






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(iv)
So long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Collateral Agent shall
execute and deliver to any Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Collateral
Agent as lienholder on any certificate of title for any motor vehicle; provided, however, that any such instruments shall
be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from any Grantor stating that such
motor vehicle is to be sold or has suffered a casualty loss (with title thereto in such case passing to the casualty insurance company
therefor in settlement of the claim for such loss) and the amount that any Grantor will receive as sale proceeds or insurance proceeds.
Any proceeds of such sale or casualty loss shall be paid to the Collateral Agent hereunder immediately upon receipt, to be applied to
the Obligations then outstanding.


 


(k)
Control. Each Grantor hereby agrees to take any or all action that may be necessary or that the Collateral Agent may reasonably
request in order for the Collateral Agent to obtain “control” in accordance with Sections 9-105 through 9-107 of the Code
with respect to the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.


 


(l)
Inspection and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such
attorneys, accountant or other professionals or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and
expense), during the normal business hours (i) to examine and make copies of and abstracts from any Grantor’s Records and books
of account, (ii) to visit and inspect its properties, (iii) to verify materials, leases, Instruments, Accounts, Inventory and other
assets of any Grantor from time to time, and (iv) to conduct audits, physical counts, appraisals, valuations and/or examinations
at the locations of any Grantor. Each Grantor shall also permit the Collateral Agent, or any agent or representatives thereof or such
attorneys, accountants or other professionals or other Persons as the Collateral Agent may designate to discuss such Grantor’s affairs,
finances and accounts with any of its directors, officers, managerial employees, attorneys, independent accountants or any of its other
representatives. Without limiting the foregoing, the Collateral Agent may, at any time, in the Collateral Agent’s own name, in the
name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with
the Account Debtors of such Grantor, parties to contracts with such Grantor and/or obligors in respect of Instruments or Pledged Debt
of such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other
matter relating to, Accounts, Instruments, Pledged Debt, Chattel Paper, payment intangibles and/or other receivables.


 


(m)
Future Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary, simultaneously with the creation or acquisition
of such Subsidiary, such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary (other than Excluded Subsidiary), cause such Subsidiary
to become a party to this Agreement as an additional “Grantor” hereunder, (ii) deliver to the Collateral Agent updated Schedules
to this Agreement, as appropriate (including, without limitation, an updated Schedule IV to reflect the grant by such Grantor of
a Lien on and security interest in all Pledged Debt and Pledged Equity now or hereafter owned by such Grantor), (iii) if such Subsidiary
is a Domestic Subsidiary (other than Excluded Subsidiary), cause such Subsidiary to duly execute and deliver a guaranty of the Obligations
in favor of the Collateral Agent in form and substance acceptable to the Collateral Agent, (iv) deliver to the Collateral Agent the
stock certificates representing all of the Capital Stock of such Subsidiary, along with undated stock powers for each such certificates,
executed in blank (or, if any such shares of Capital Stock are uncertificated, confirmation and evidence reasonably satisfactory to the
Collateral Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Collateral
Agent, in accordance with Sections 8-313, 8-321 and 9-115 of the Code or any other similar or local or foreign law that may be applicable),
and (v) duly execute and/or cause to be delivered to the Collateral Agent, in form and substance acceptable to the Collateral Agent, such
opinions of counsel and other documents as the Collateral Agent shall request with respect thereto; provided, however, that no Grantor
shall be required to pledge any Excluded Collateral. Each Grantor hereby authorizes the Collateral Agent to attach such updated Schedules
to this Agreement and agrees that all Pledged Equity and Pledged Debt listed on any updated Schedule delivered to the Collateral Agent
shall for all purposes hereunder be considered Collateral. The Grantors agree that the pledge of the shares of Capital Stock acquired
by a Grantor of Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges, or other
similar agreements or instruments, executed and delivered by the relevant Grantor in favor of the Collateral Agent, which pledge agreements
will provide for the pledge of such shares of Capital Stock in accordance with the laws of the applicable foreign jurisdiction. With respect
to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its sole discretion, take actions in
such foreign jurisdictions that will result in the perfection of the Lien created in such shares of Capital Stock.


 






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Section
7.      Additional
Provisions Concerning the Collateral.


 


(a)
To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent to execute
any such agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments or other documents
in such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any time and from time to time
to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral (including, without limitation,
any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or
words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Collateral Agent may determine
regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Code or whether any particular asset
of such Grantor constitutes part of the Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without limitation,
whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor)
and (iii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing or continuation statements,
or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering
the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.


 


(b)
Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place
and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral Agent’s discretion,
to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant
to Section 6(e) hereof, (ii) to ask, 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 Collateral, (iii) to receive, endorse, and collect any drafts or other Instruments,
Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to file any claims or take any action or institute any action,
suit or proceedings which the Collateral Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce
the rights of the Collateral Agent and the Noteholders with respect to any Collateral, (v) to execute assignments, licenses and other
documents to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral, and (vi) to verify any and
all information with respect to any and all Accounts. This power is coupled with an interest and is irrevocable until all of the Obligations
are fully performed and Paid in Full.


 


(c)
For the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Collateral
Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to
any Grantor) to use, assign, license or sublicense any Intellectual Property in which such Grantor now or hereafter has any right, title
or interest, wherever the same may be located, including, without limitation, in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof. Notwithstanding
anything contained herein to the contrary, but subject to the provisions of the Securities Purchase Agreement that limit the right of
any Grantor to dispose of its property, and Section 6(g) and Section 6(h) hereof, so long as no Event of Default shall have
occurred and be continuing, any Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of its business and as otherwise expressly permitted by any of
the other Transaction Documents. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the
Collateral Agent shall from time to time, upon the request of any Grantor, execute and deliver any instruments, certificates or other
documents, in the form so requested, which such Grantor shall have certified are appropriate (in such Grantor’s judgment) to allow
it to take any action permitted above (including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual
Property). Further, upon the full performance and Payment in Full of all of the Obligations, the Collateral Agent (subject to Section
11(e) hereof) shall release and reassign to any Grantor all of the Collateral Agent’s right, title and interest in and to the
Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever. The exercise of rights and remedies
hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by
each Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby releases the Collateral Agent from any claims,
causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by the Collateral
Agent under the powers of attorney granted herein other than actions taken or omitted to be taken through the Collateral Agent’s
gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal.


 






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(d)
If any Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause
performance of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by such Grantor pursuant to Section 9 hereof and such obligation shall
be secured by the Collateral.


 


(e)
The powers conferred on the 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 safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the 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.


 


(f)       
Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with
respect to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights or remedies hereunder shall
not release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral
Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other Collateral,
nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.


 


(g)
As long as no Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default,
until written notice shall be given to the applicable Grantor:


 


(i)
Each Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any part
thereof for all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any other Transaction
Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of
impairing the position or interest of the Collateral Agent in respect of the Pledged Equity or which would authorize, effect or consent
to (unless and to the extent expressly permitted by the Securities Purchase Agreement):


 


(A)        the
dissolution or liquidation, in whole or in part, of a Pledged Entity;


 






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(B)        the
consolidation or merger of a Pledged Entity with any other Person;


 


(C)        the
sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral
Agent;


 


(D)        any
change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any
additional shares of its Capital Stock; or


 


(E)        the
alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.


 


(h)
(i)Each Grantor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and interest
paid in respect of the Pledged Equity to the extent not in violation of the Securities Purchase Agreement other than any and all: (A)
dividends and interest paid or payable other than in cash in respect of any Pledged Equity, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends and other distributions paid
or payable in cash in respect of any Pledged Equity in connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed,
in respect of principal of, or in redemption of, or in exchange for, any Pledged Equity; provided, however, that until actually paid all
rights to such distributions shall remain subject to the Lien created by this Agreement; and


 


(ii)        all
dividends and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with clause
(i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered to the Collateral
Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of the Collateral Agent (for
the ratable benefit of the Collateral Agent and the Noteholders), be segregated from the other property or funds of such Grantor, and
be forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement).


 






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Section
8.      Remedies Upon
Event of Default; Application of Proceeds. If any Event of Default shall have occurred and be continuing:


 


(a)
The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein,
in any other Transaction Document or otherwise available to it, all of the rights and remedies of a secured party upon default under the
Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including,
without limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral
Agent has not theretofore done so) and thereafter receive, for the ratable benefit of itself and the Noteholders, all payments made thereon,
give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright
owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Collateral
Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make it available to the Collateral
Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral
Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or any part thereof is located or assembled
for a reasonable period in order to effectuate the Collateral Agent’s rights and remedies hereunder or under law, without obligation
to any Grantor in respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare
or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale
(including, without limitation, by credit bid), at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or
(B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially
reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition of its respective Collateral shall be required
by law, at least ten (10) days’ notice to any Grantor of the time and place of any public sale or the time after which any private
sale or other disposition of its respective Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The 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. Each Grantor hereby waives any claims against the
Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective Collateral may have been sold
at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree,
and waives all rights that any Grantor may have to require that all or any part of such Collateral be marshaled upon any sale (public
or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent
shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment
or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness
of any such sale of Collateral. In addition to the foregoing, (1) upon written notice to any Grantor from the Collateral Agent after
and during the continuance of an Event of Default, such Grantor shall cease any use of the Intellectual Property or any trademark, patent
or copyright similar thereto for any purpose described in such notice; (2) the Collateral Agent may, at any time and from time to time
after and during the continuance of an Event of Default, upon 10 days’ prior notice to such Grantor, license, whether general, special
or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout the universe for such term
or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral
Agent may, at any time, pursuant to the authority granted in Section 7 hereof or otherwise (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments
of assignment of the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration
in any country.


 


(b)
Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale
or disposition of or collection from, or other realization upon, all or any part of the Collateral shall be applied as follows (subject
to the provisions of the Securities Purchase Agreement): first, to pay any fees, indemnities or expense reimbursements then due
to the Collateral Agent (including, without limitation, those described in Section 9 hereof); second, to pay any fees, indemnities
or expense reimbursements then due to the Noteholders, on a pro rata basis; third to pay interest due under the Notes owing to
the Noteholders, on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes, whether or not then due, owing
to the Noteholders, on a pro rata basis; fifth, to pay or prepay any other Obligations, whether or not then due, in such order
and manner as the Collateral Agent shall elect, consistent with the provisions of the Securities Purchase Agreement. Any surplus of such
cash or Cash Proceeds held by the Collateral Agent and remaining after the full performance and Payment in Full of all of the Obligations
shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.


 






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(c)
In the event that the proceeds of any such sale, disposition, collection or realization are insufficient to pay all amounts to
which the Collateral Agent and the Noteholders are legally entitled, each Grantor shall be, jointly and severally, liable for the deficiency,
together with interest thereon at the highest rate specified in the Notes for interest on overdue principal thereof or such other rate
as shall be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other charges
of any attorneys employed by the Collateral Agent to collect such deficiency.


 


(d)
To the extent that applicable law imposes duties on the Collateral Agent to exercise rights and remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses
deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process
into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to
be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection
or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or
other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral
is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest
in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that
provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against
risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment
bankers, consultants, attorneys and other professionals to assist the Collateral Agent in the collection or disposition of any of the
Collateral. Each Grantor acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions
by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of rights and remedies against the Collateral
and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being
indicated in this section. Without limitation of the foregoing, nothing contained in this section shall be construed to grant any rights
to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this section.


 


(e)
The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to,
this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of the Collateral Agent’s rights and remedies hereunder
and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and
remedies, however existing or arising. To the extent that any Grantor lawfully may, each Grantor hereby agrees that it will not invoke
any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s
rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any
of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent
that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.


 






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Section
9.      Indemnity
and Expenses.


 


(a)
Each Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the Noteholders
harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s counsel) to the extent that they
arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except to the extent
resulting from such Person’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction
no longer subject to appeal.


 


(b)
Each Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all reasonable costs
and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts
and agents (including, without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral
Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment,
waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights or remedies of
the Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.


 


Section
10.  Notices, Etc. All notices and
other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, first-class postage prepaid and
return receipt requested), telecopied, e-mailed or delivered, if to any Grantor, to the Company’s address, or if to the Collateral
Agent or any Noteholder, to it at its respective address, each as set forth in Section 9(f) of the Securities Purchase Agreement; or as
to any such Person, at such other address as shall be designated by such Person in a written notice to all other parties hereto complying
as to delivery with the terms of this Section 10. All such notices and other communications shall be effective (a) if sent by certified
mail, return receipt requested, when received or five Business Days after deposited in the mails, whichever occurs first, (b) if telecopied
or e-mailed, when transmitted (during normal business hours) and confirmation is received, and otherwise, the day after the notice or
communication was transmitted and confirmation is received, or (c) if delivered in person, upon delivery. For the avoidance of doubt,
all Foreign Subsidiaries, as Grantors, hereby appoint the Company as its agent for receipt of service of process and all notices and other
communications in the United States at the address specified below.


 


Section
11.  Miscellaneous.


 


(a)
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Collateral
Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure by each
Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent (and approved by the
Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given. No amendment, modification or waiver of this Agreement shall be effective to the extent that it (1) applies to fewer than all of
the holders of Notes or (2) imposes any obligation or liability on any holder of Notes without such holder’s prior written consent
(which may be granted or withheld in such holder’s sole and absolute discretion).


 


(b)
No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right or remedy hereunder or under
any of the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or
remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Collateral
Agent or any Noteholder provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law. The rights and remedies of the Collateral Agent or any Noteholder under any of the other Transaction
Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights or remedies
under any of the other Transaction Documents against such party or against any other Person, including but not limited to, any Grantor.


 






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(c)
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.


 


(d)
This Agreement shall create a continuing Lien on and security interest in the Collateral and shall (i) remain in full force and
effect until the full performance and Payment in Full of the Obligations, and (ii) be binding on each Grantor and all other Persons who
become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and
remedies of the Collateral Agent and the Noteholders hereunder, to the ratable benefit of the Collateral Agent and the Noteholders and
their respective permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding
sentence, without notice to any Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations
under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested
with all of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon any such assignment
or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral
Agent or such Noteholder. None of the rights or obligations of any Grantor hereunder may be assigned, delegated or otherwise transferred
without the prior written consent of the Collateral Agent in its sole and absolute discretion, and any such assignment, delegation or
transfer without such consent of the Collateral Agent shall be null and void.


 


(e)
Upon the full performance and Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby
shall terminate and all rights to the Collateral shall revert to the respective Grantor that granted such security interests hereunder,
and (ii) the Collateral Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such
of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any representation,
warranty or recourse whatsoever.


 


(f)       
Governing Law; Jurisdiction; Jury Trial.


 


(i)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any provision or rule of law (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.


 


(ii)
Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction
Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate
to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction
to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.


 


(iii)           
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT,
ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.


 






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(iv)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.


 


(g)
Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any
other purpose.


 


(h)
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of any executed
counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as delivery of
a manually executed counterpart of this Agreement.


 


(i)
This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations
is rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence of any
Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not been made).


 


Section
12.  Material Non-Public Information.
Upon receipt or delivery by any Grantor of any notice in accordance with the terms of this Agreement, unless such Grantor has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Grantor or
any of its Subsidiaries, such Grantor shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
non-public information on a Current Report on Form 8-K or otherwise. In the event that such Grantor believes that a notice contains material,
non-public information relating to such Grantor or any of its Subsidiaries, such Grantor so shall indicate to the Collateral Agent and
any applicable Noteholder contemporaneously with delivery of such notice, and in the absence of any such indication, the Collateral Agent
and each Noteholder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information
relating to such Grantor or its Subsidiaries. Nothing contained in this Section 12 shall limit any obligations of any Grantor,
or any rights or remedies of the Collateral Agent or any Noteholder, under Section 4(i) of the Securities Purchase Agreement.


 


[REMAINDER OF
THIS PAGE INTENTIONALLY LEFT BLANK]


 




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IN WITNESS WHEREOF, each Grantor
has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.


 


	 	GRANTORS:
	 	 	 
	 	AMERICAN VIRTUAL CLOUD TECHNOLOGIES,
    INC.
	 	 	 
	 	By:	/s/
                                            Thomas H. King
	 	Name:	Thomas H. King
	 	Title:	Chief Financial Officer & Secretary
	 	 	 
	 	AVCTECHNOLOGIES USA, INC.
	 	 	 
	 	By:	/s/ Thomas
    H. King
	 	Name:	Thomas H. King
	 	Title:	Chief Financial Officer, Treasurer & Secretary
	 	 	 
	 	KANDY COMMUNICATIONS LLC
	 	 	 
	 	By:	/s/ Thomas
    H. King
	 	Name:	Thomas H. King
	 	Title:	Chief Financial Officer, Treasurer & Secretary



 



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EXHIBIT A


 


FORM OF INTELLECTUAL
PROPERTY SECURITY AGREEMENT


 


INTELLECTUAL PROPERTY SECURITY AGREEMENT


 


This INTELLECTUAL PROPERTY SECURITY
AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this “IP Security Agreement”),
dated April [__], 2022, is made by the Persons listed on the signature pages hereof (collectively, the “Grantors”)
in favor of [ ], in its capacity as collateral agent (the “Collateral Agent”) for the Noteholders. All capitalized
terms not otherwise defined herein shall have the meanings respectively ascribed thereto in the Security Agreement (as defined below).


 


WHEREAS, American Virtual Cloud
Technologies, Inc., a company organized under the laws of the State of Delaware (the “Company”), and each party listed
as a “Buyer” therein (collectively, the “Buyers”) are parties to that certain Securities Purchase Agreement,
dated April [__], 2022, pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase,
the “Notes” (as defined therein) issued pursuant thereto (as such Notes may be amended, modified, supplemented, renewed, restated
or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”);


 


WHEREAS, it is a condition precedent
to the purchase of the Notes under the Securities Purchase Agreement that each Grantor has executed and delivered that certain Security
and Pledge Agreement, dated April [__], 2022, made by the Grantors to the Collateral Agent (as amended, modified, supplemented, renewed,
restated or replaced from time to time, the “Security Agreement”); and


 


WHEREAS, under the terms of
the Security Agreement, the Grantors have granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders,
a Lien on and security interest in, among other property, certain intellectual property of the Grantors, and have agreed as a condition
thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United States Copyright Office
and other governmental authorities.


 


WHEREAS, the Grantors have determined
that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best interest of, the Grantors.


 


NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor
agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows


 


SECTION 1. Grant of Security.
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby
pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors
and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest
in, all of such Grantor’s right, title and interest in, to and under the following (the “Collateral”):


 


(i)        the
Patents and Patent applications set forth in Schedule A hereto;


 






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(ii)        the
Trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security interest
shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable
federal law), together with the goodwill symbolized thereby;


 


(iii)        all
Copyrights, whether registered or unregistered, now owned or hereafter acquired by such Grantor, including, without limitation, the copyright
registrations and applications and exclusive copyright licenses set forth in Schedule C hereto;


 


(iv)        all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all rights
in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;


 


(v)        any
and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse
or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover,
such damages; and


 


(vi)        any
and all Proceeds, including without limitation Cash and Noncash Proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to, and Supporting Obligations relating to, any and all of the collateral of or arising from
any of the foregoing.


 


SECTION 2. Security for Obligations.
The grant of a Lien on and security interest in, the Collateral by each Grantor under this IP Security Agreement constitutes continuing
collateral security for the payment and performance of all Obligations of such Grantor now or hereafter existing under or in respect of
the Notes and the Transaction Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise.


 


SECTION 3. Recordation.
Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.


 


SECTION 4. Execution in Counterparts.
This IP Security Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement.


 






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SECTION 5. Grants, Rights
and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the Lien and security interest hereunder to, and the rights and remedies
of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated herein by reference as if fully set forth herein.


 


SECTION 6. Governing
Law; Jurisdiction; Jury Trial.


 


(i)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any provision or rule of law (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.


 


(ii)
Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction
Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate
to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction
to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.


 


(iii)           
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT,
ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.


 


(iv)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.


 


[The remainder of the page is
intentionally left blank]


 




    38


     


    

 


IN WITNESS WHEREOF, each Grantor
has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.


 


	 	AMERICAN VIRTUAL CLOUD
	 	TECHNOLOGIES, INC.
	 	AVCTECHNOLOGIES USA, INC.
	 	KANDY COMMUNICATIONS LLC
	 	 	 
	 	By	
	 	 	Name: Darrell Mays
	 	 	Title: Chief Executive Officer
	 	 	 
	 	Address for Notices:
	 	 	 
	 	1720 Peachtree Street, Suite 629
	 	Atlanta, GA 30309
	 	Telephone: (404) 769-3236
	 	Attention: Chief Financial Officer
	 	E-Mail: tking@avctechnologies.com



 




     


     


    

 


IN WITNESS WHEREOF, each Grantor
has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.


 


	 	[NAME OF GRANTOR]
	 	 	 
	 	By
    	
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	Address for Notices:
	 	 	 
	 	 	 
	 	 	 



  




     


     


    

 


Schedule A






Patents


  


	

    Grantor	 	

    Country	 	

    Title	 	Application
                           or

                           Patent No.
	 	Application
or

 Registration



                           Date
	 	

    Assignees
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 



 



     


     


    

 


Schedule B






Trademarks


  


	

    Grantor	 	

    Country	 	

    Trademark	 	Application
                                            or

 Registration No.
	 	Application
or

 Registration

 Date

    
	 	

    Assignees
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 


 




     


     


    

 


Schedule C


 


Copyrights


  


	

    Grantor	 	

    Country	 	

    Title	 	

    Type of Work	 	Application
or

 Registration No.
	 	

    Issue Date	 	

    Assignees
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 


  




     


     


    

 


SCHEDULE I


 


Legal Names; Organizational Identification
Numbers;

States or Jurisdiction of Organization


 


	Grantor’s Name	 	State of Organization	 	Federal

    Employer I.D.	 	Organizational I.D.
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 






 



     


     


    

 


SCHEDULE II


 


Intellectual Property


 


Patents


 


	

    Grantor	 	

    Country	 	

    Title	 	Application
                                            or

                                            Patent No.
	 	Application
or

 Registration

 Date

    
	 	

    Assignees
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 


 


Trademarks


 


	

    Grantor	 	

    Country	 	

    Trademark	 	Application
                                            or

 Registration No.
	 	Application
                                            or

 Registration

 Date

    
	 	

    Assignees
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 


 


Copyrights


 


	

    Grantor	 	

    Country	 	

    Title	 	

    Type of Work	 	

    Application or

 Registration
    No.

    
	 	

    Issue Date	 	

    Assignees
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 





 


Licenses


 


	

    Licensor	 	

    Licensee	 	

    Type	 	

    Scope	 	

    Term
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 


  




     


     


    

 


SCHEDULE III


 


Locations


 


	Grantor’s Name	 	Chief Executive



                                                                                Office
	 	Chief Place of



                                                                                Business
	 	Books and Records	 	Inventory,

    Equipment, Etc.
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 



 






     


     


    

 


SCHEDULE IV


 


Promissory Notes, Securities, Deposit Accounts,

Securities Accounts and Commodities Accounts


 


Securities


 


	Grantor	 	Name
                                            of Issuer /



    Pledged Entity

    
	 	Number

    of Shares	 	Class	 	Certificate

    No.(s)
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 


 


Deposit Accounts, Securities Accounts and Commodities Accounts


 


	Grantor	 	Name and Address of

 Institution	 	Purpose of the Account	 	Account No.
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


 


Foreign Currency Controlled Accounts


 


	Entity	 	Name and Address of



                                                                                Institution
	 	Amount Held in Account
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


 


Pledged Equity


 


	Pledged Equity	 	Holder
	 	 	 
	 	 	 
	 	 	 
	 	 	 


  




     


     


    

 


SCHEDULE V


 


Financing Statements


 


	Grantor	 	Jurisdiction for Filing Financing Statement
	 	 	 
	 	 	 
	 	 	 
	 	 	 



 






     


     


    




 


SCHEDULE VI


 


Commercial Tort Claims


 




     


     


    

 


SCHEDULE VII


 


Permitted Liens


 


 


None.