CASH COLLATERAL AGREEMENT


 


CASH COLLATERAL AGREEMENT, dated as of March
26, 2014 (this "Agreement"), made by Inventergy, Inc. (the "Pledgor") in favor of Hudson Bay
IP Opportunities Master Fund, LP, in its capacity as collateral agent (in such capacity, the "Collateral Agent")
for the Buyers (as defined below) party to each of the Securities Purchase Agreements (as defined below).


 


WITNESSETH:


 


WHEREAS, the Pledgor and each party listed
as a "Buyer" on the Schedule of Buyers (as such schedule may be amended, restated or otherwise modified from time to
time) attached thereto, each an "Original Buyer", and collectively, the "Original Buyers") are
parties to a Securities Purchase Agreement, dated as of May 10, 2013 (as amended, restated, supplemented or otherwise modified
from time to time, the "Original SPA"), pursuant to which the Pledgor sold to the Original Buyers certain promissory
notes (together with any additional notes issued under the Original SPA from time to time, the "Original Notes");


 


WHEREAS, the Pledgor and each party listed
as a "Buyer" on the Schedule of Buyers (as such schedule may be amended, restated or otherwise modified from time to
time) attached thereto, each a "New Buyer", and collectively, the "New Buyers", and together
with the Original Buyers, each a "Buyer" and collectively, the "Buyers") are parties to a Securities
Purchase Agreement, dated as of March 24, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the
"New SPA", and together with the Original SPA, each a "Securities Purchase Agreement" and collectively,
the "Securities Purchase Agreements"), pursuant to which the Pledgor shall be required to sell, and the New Buyers
shall purchase or have the right to purchase, certain promissory notes (together with any additional notes issued under the New
SPA from time to time, the "New Notes", and together with the Original Notes, each a "Note" and
collectively, the "Notes"); and


 


WHEREAS, pursuant to Securities Purchase Agreements
and the Notes, the Pledgor has agreed to deposit into the Pledgor's account number 80001852293 at First Republic Bank (the "Collateral
Account") certain funds as cash collateral and to execute and deliver to the Collateral Agent a cash collateral agreement,
providing for the pledge to the Collateral Agent, and the grant to the Collateral Agent, of a security interest in the Collateral
Account and all amounts deposited therein, as collateral security for the obligations of the Pledgor in respect of the Notes, the
Securities Purchase Agreements and the other obligations related thereto;


 


NOW, THEREFORE, in consideration of the premises
and the agreements herein, the Pledgor hereby, jointly and severally, agrees with the Collateral Agent as follows:


 


SECTION 1.   Definitions. As used
in this Agreement, the following terms shall have the respective meanings indicated below (such meanings applicable equally to
both the singular and plural forms of such terms):


 


"Cash Collateral" means all
cash, and all other property from time to time deposited in the Controlled Account.


 




    	 



    	 



    

 


"Cash Collateral Event" means
(i) a failure by the Pledgor to pay, upon demand, any Obligation, or (ii) a breach by the Pledgor of any agreement, covenant, representation
or warranty set forth in this Agreement.


 


"Collateral" has the meaning
specified therefor in Section 3 hereof.


 


"Controlled Account" means,
the Collateral Account or any other bank account of the Pledgor at the Controlled Account Bank which is the subject of a Controlled
Account Agreement.


 


"Controlled Account Agreement"
means that certain deposit account control agreement, in form and substance reasonably satisfactory to the Collateral Agent, which
is among the Pledgor, the Collateral Agent and the Controlled Account Bank.


 


"Controlled Account Bank"
means First Republic Bank.


 


"Obligations" has the meaning
specified therefor in Section 4 hereof.


 


"Termination Date" means
the date on which all Obligations and all amounts due to the Collateral Agent and the Buyers under the Notes and the Securities
Purchase Agreements shall have been satisfied and paid in full in cash.


 


SECTION 2.   Controlled Account. The
Controlled Account Bank shall establish and maintain a Controlled Account Agreement with the Collateral Agent and the Pledgor,
in form and substance reasonably acceptable to the Collateral Agent. The Controlled Account Agreement shall provide, among other
things, that (a) the Controlled Account Bank will comply with any instructions originated by the Collateral Agent directing the
disposition of the funds in such Controlled Account without further consent by the Pledgor, (b) the Controlled Account Bank has
no 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, and (c) the Controlled Account shall be under the sole dominion and control of the Collateral Agent and the Pledgor
will have no right to give any instructions on the Controlled Account without the prior written consent of the Collateral Agent.


 


SECTION 3.   Security Interest. As
collateral security for the due and punctual payment of all of the Obligations (as defined in Section 4 below), the Pledgor hereby
pledges and assigns to the Collateral Agent, and grants to the Collateral Agent, a continuing security interest in and lien on,
all of the Pledgor's right, title and interest in and to the following (all being collectively referred to herein as the "Collateral"):
(i) the Controlled Account, (ii) the Cash Collateral and all certificates and instruments, if any, from time to time representing
or evidencing the Collateral; (ii) all cash, instruments, and other property from time to time received or otherwise distributed
in respect of or in exchange for any or all of the then existing Collateral; (iii) any deposit account into which the Cash Collateral
has been deposited, including, without limitation, the Controlled Account; and (iv) to the extent not described above, all proceeds
of any and all of the foregoing Collateral.


 




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SECTION 4.   Obligations. The security
interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether
now existing or hereafter incurred (the "Obligations"):


 


(a)      the payment by the Pledgor, when
due, of all obligations, interest thereon and all fees, commissions, charges, expense reimbursements, indemnifications and other
amounts payable to the Collateral Agent and the Buyers under or in respect of this Agreement, the Notes and the Securities Purchase
Agreements in accordance with the terms thereof;


 


(b)      the due performance and observance
by the Pledgor in all material respects of all of its other obligations from time to time existing under or in respect of this
Agreement, the Notes and the Securities Purchase Agreements.


 


SECTION 5.   Application of Cash Collateral
Account. All Collateral shall remain in the Controlled Account until the Termination Date; provided, however, that the
Collateral Agent may, as and when any Obligation shall become due or during the continuance of a Cash Collateral Event, direct
the Controlled Account Bank to remit to the Collateral Agent all or part of the Collateral to satisfy payment of all Obligations
then payable.


 


SECTION 6.   Representations and Warranties.
The Pledgor hereby represents and warrants as follows:


 


(a)      Organization, Good Standing, Etc.
The Pledgor (i) is a corporation, duly organized, validly existing and in good standing under the laws of the state or jurisdiction
of its organization, (ii) has all requisite power to carry on its business as now conducted and as presently contemplated, and
(iii) has all requisite power to execute, deliver and perform this Agreement, and to consummate the transactions contemplated hereby.


 


(b)      Authorization, Etc. The execution,
delivery and performance by the Pledgor of this Agreement, (i) has been duly authorized by all necessary action, and (ii) does
not and will not contravene the Pledgor's charter or by-laws or any applicable law or any contractual restriction binding on or
otherwise affecting the Pledgor or any of its properties, and (iii) does not result in the creation of any lien, security interest
or other charge or encumbrance (except as provided in or contemplated by this Agreement) upon or with respect to any of its properties.


 


(c)      Governmental and other Approvals.
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or any other person
or entity is required for (i) the due execution, delivery and performance by the Pledgor of this Agreement, (ii) the grant by the
Pledgor, or the perfection, of the security interest purported to be created hereby in the Collateral, or (iii) the exercise by
the Collateral Agent of any of its rights and remedies hereunder.


 


(d)      Enforceability of Agreement.
This Agreement is a legal, valid and binding obligation of the Pledgor, enforceable against the Pledgor in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws.


 




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(e)      Security Interest. This Agreement
creates a legal, valid and enforceable security interest in favor of the Collateral Agent in the Collateral, as security for the
Obligations. Such security interest is a perfected, first priority security interest, and all action necessary to perfect and protect
such security interest has been duly taken.


 


(f)      Legal Ownership. The Pledgor
is and will be at all times the legal and beneficial owner of the Collateral and has and will at all times have good and marketable
title thereto, free and clear of any lien, security interest, or other charge or encumbrance, except for the security interest
created by this Agreement.


 


SECTION 7.   Covenants of the Pledgor.


 


(a)      The Pledgor agrees that it will not,
without the prior written consent of the Collateral Agent, (i) sell, assign (by operation of law or otherwise), or otherwise dispose
of any interest in the Collateral, or (ii) create or suffer to exist any lien, claim, security interest, charge or other encumbrance
upon or with respect to any Collateral, except for the security interest purported to be created in the Collateral by this Agreement;
provided, that, subject to any restrictions or requirements in the Notes and the Securities Purchase Agreements, no separate consent
shall be required from the Collateral Agent for the Pledgor to engage in any merger or reorganization transaction that is otherwise
permitted under or consented to pursuant to the terms of the Notes and the Securities Purchase Agreements, to the extent that any
such merger or reorganization will not result or reasonably be expected to result in the impairment in any manner of the Collateral
Agent’s rights or priority in respect of the Collateral.


 


(b)      The Pledgor will not, without the
prior written consent of the Collateral Agent, cancel, terminate, amend, modify or waive any provision of any agreement, document
or other instrument constituting Collateral, or enter into any agreement or permit to exist any restriction with respect to any
Collateral other than pursuant hereto.


 


(c)      The Pledgor will, at the Pledgor's
expense, defend the Collateral Agent's right, title and security interest in and to the Collateral against the claims of any person
or entity.


 


(d)      The Pledgor will not take or fail
to take any action that would in any manner impair the enforceability of the Collateral Agent's security interest in any Collateral.


 


(e)      The Pledgor will, at the Pledgor's
expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by it in respect of the
Collateral.


 


SECTION 8.   Additional Provisions Concerning
the Collateral.


 


(a)      The Pledgor 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 may be necessary or desirable or that the Collateral Agent may request in order (i) to perfect and protect, or maintain
the perfection of, the security interest and lien purported to be created hereby; (ii) to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder in respect of the Collateral; or (ii) otherwise to effect the purposes of this
Agreement. If the Pledgor fails to perform any agreement or obligation contained herein, the Collateral Agent itself may perform
or cause performance of such agreement or obligation, and the expenses of the Collateral Agent incurred in connection therewith
shall be jointly and severally payable to the Collateral Agent by the Pledgor pursuant to Section 11 hereof.


 




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(b)      The Pledgor hereby (i) authorizes
the Collateral Agent at any time and from time to time to file, without the signature of the Pledgor where permitted by law, one
or more financing or continuation statements, and amendments thereto, relating to the Collateral and (ii) ratifies such authorization
to the extent that the Collateral Agent has filed any such financing statements, continuation statements, or amendments thereto,
prior to the date hereof.


 


(c)      The Pledgor hereby irrevocably appoints
the Collateral Agent as the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name
of the Pledgor or otherwise, from time to time until the Termination Date in the Collateral Agent's discretion to take any action
and to execute any instrument which the Collateral Agent, in its sole discretion, may deem necessary or advisable to accomplish
the purposes of this Agreement solely with respect to the Collateral, including, without limitation, to receive, indorse and collect
all instruments made payable to the Pledgor representing any dividend, payment of principal, interest, redemption price, purchase
price or other distribution or payment in respect of any Collateral and to give full discharge for the same.


 


SECTION 9.   Intentionally Deleted.


 


SECTION 10.   Remedies Upon Default.
If any Cash Collateral Event shall have occurred and be continuing:


 


(a)      The Collateral Agent may exercise
in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all of
the rights and remedies of a secured party on default under the Uniform Commercial Code then in effect in the State of New York.


 


(b)      Any Collateral may be applied (after
payment of any amounts payable to the Collateral Agent hereunder, under Section 11 hereof or otherwise) by the Collateral Agent
to pay or to provide for the future payment of all or any part of the Obligations in such order as the Collateral Agent may elect.


 


SECTION 11.   Indemnity and Expenses.


 


(a)      The Pledgor agrees to defend, protect,
indemnify and hold harmless the Collateral Agent from and against any and all claims, losses, damages, liabilities, obligations,
penalties, fees, reasonable costs and expenses (including, without limitation, reasonable attorneys' fees, costs, expenses and
disbursements) incurred by the Collateral Agent to the extent that they arise out of or otherwise result from or relate to or are
in connection with this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting solely and directly from the Collateral Agent's gross negligence or willful misconduct, as determined by a final judgment
of a court of competent jurisdiction.


 




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(b)      The Pledgor agrees to pay to the
Collateral Agent upon demand (and authorizes the Collateral Agent in its sole discretion to apply the Collateral against) the amount
of any and all 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 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 the Pledgor to perform or observe any of the provisions hereof.


 


SECTION 12.   Notices, Etc. All notices
and other communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to the Pledgor,
to it at the address listed below its signature hereto, and if to the Collateral Agent, to it at its address specified under its
signature hereto. All such notices and other communications shall be effective (i) if mailed, when received or three Business Days
after mailing, whichever occurs first, (ii) if telecopied, when transmitted and confirmation is received or (iii) if delivered,
upon delivery.


 


SECTION 13.   Continuing Security Interest;
Termination.


 


(a)      This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and effect until the Termination Date irrespective of (w)
any lack of validity or enforceability of the Notes or the Securities Purchase Agreements, (x) any change in the time, manner or
place of payment of, or in any other term in respect of, all or any of the Obligations, or any other amendment or waiver of or
any consent to departure from the Notes or the Securities Purchase Agreements, (y) any exchange or release of, or non-perfection
of any lien on or security interest in, any collateral for any of the Obligations or (z) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Pledgor or any other person or entity in respect of the Obligations,
and (ii) be binding on the Pledgor and its successors and assigns and inure, together with all rights and remedies of the Collateral
Agent hereunder and its successors, transferees and assigns. None of the rights or obligations of the Pledgor hereunder may be
assigned or otherwise transferred except as consented to in writing by the Collateral Agent.


 


(b)      Upon the Termination Date, (i) this
Agreement and the security interest created hereby shall terminate and all rights to the Collateral shall revert to the Pledgor,
and (ii) the Collateral Agent will, upon the Pledgor's request and at the Pledgor's expense, without any representation, warranty
or recourse whatsoever, (A) return to the Pledgor (or whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct) such of the Collateral as shall not have been applied pursuant to the terms hereof and (B)
execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request in writing to evidence such termination.


 




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SECTION 14.   Miscellaneous.


 


(a)      No amendment of any provision of
this Agreement shall be effective unless it is in writing and signed by the Pledgor and the Collateral Agent, and no waiver of
any provision of this Agreement, and no consent to any departure by the Pledgor therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.


 


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


 


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


 


(d)      This Agreement shall be governed
by and construed in accordance with the law of the State of New York.


 


(e)      THE PLEDGOR AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE COLLATERAL AGENT IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.


 




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SECTION 15.   Waiver. To the extent
permitted by applicable law or otherwise explicitly provided in the Transaction Documents (as defined in the New SPA), the Pledgor
hereby waives (a) promptness and diligence, (b) notice of acceptance and notice of the incurrence of any Obligation by the Pledgor,
(c) notice of any actions taken by the Collateral Agent or any other person under the Notes, the Securities Purchase Agreements
or any other agreement, document or instrument relating thereto, (d) all other notices, demands and protests, and all other formalities
of every kind in connection with the enforcement of the Obligations, the omission of or delay in which, but for the provisions
of this Section 15, might constitute grounds for relieving the Pledgor of any of its obligations hereunder and (e) any requirement
that the Collateral Agent protect, secure, perfect or insure any security interest or other lien on any property subject thereto
or exhaust any right or take any action against the Pledgor or any other person or any collateral; provided, however,
that the Collateral Agent will endeavor to provide prompt notice to the Pledgor after any action is taken by the Collateral Agent
under the Notes, the Securities Purchase Agreements or any other agreement, document or instrument relating thereto.


 


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Signature Page, Cash Collateral
Agreement


 


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


 


	 	INVENTERGY, INC.
	 	 
	 	By:	   /s/ Joseph Beyers
	 	 	Name: Joseph Beyers
	 	 	Title: Chairman and Chief Executive Officer
	 	 	 
	 	 	Address for notices:
	 	 	19995 Stevens Creek Blvd., Suite 100
	 	 	Cupertino, CA 95014


 


	ACCEPTED AND AGREED:	 
	 	 
	HUDSON BAY IP OPPORTUNITIES MASTER FUND, LP,	 
	 	 
	By:	/s/ Yoav Roth	 
	 	Name: Yoav Roth	 
	 	Title: Authorized Signatory	 
	 	 
	Address for notices:	 
	777 Third Avenue, 30th Floor	 
	New York, NY 10017