Exhibit 4.4


 


PLEDGE AND SECURITY AGREEMENT


 


This PLEDGE AND SECURITY
AGREEMENT (the “Agreement”) is made and entered into on March 10, 2022, by and between SmartCard
Marketing Systems, Inc., a corporation organized under the laws of the State of Delaware (the “Debtor”)
and Leonite Fund I, LP, a limited partnership organized under the laws of
the State of Delaware, and its permitted endorsees, transferees and assigns (collectively, the “Secured Party”).


 


RECITALS


 


A.        Concurrently herewith, Debtor and
the Secured Party have entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) and
certain other agreements, pursuant to which the Debtor issued that certain senior secured promissory note (the “Note”)
in the principal amount of up to Five Hundred Sixty Eight Thousand One Hundred Eighty One and 82/100 Dollars ($568,181.82) to the
Secured Party.


 


B.         The Debtor now enters into this Agreement
with the Secured Party as security for Debtor’s Obligations (as defined below).


 


AGREEMENT


 


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


 


1.         Definitions.
Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the Uniform Commercial Code as adopted
in the state of Delaware (the “UCC”) (such as “account,” “adverse claim,”
“chattel paper,” “deposit account,” “document,” “equipment,”
“fixtures,” “general intangibles,” “goods,” “instruments,”
“inventory,” “investment property,” “proceeds,” and “supporting
obligations”) shall have the respective meanings given such terms in Article 9 of the UCC. Capitalized terms used in
this Agreement and not defined elsewhere herein or in the Securities Purchase Agreement shall have the meanings set forth below:


 


“Collateral”
means all of the collateral identified on Exhibit A hereto.


 


“Debtor’s
Books” means and includes all of Debtor’s books and records in any medium or form, including, but not limited
to, all records, ledgers and computer programs, disk or tape files, thumb drives, material stored in the “cloud,” printouts
and other information indicating, summarizing or evidencing the Collateral.


 


“Equity
Interests” means, with respect to any entity, all of the shares of capital stock of (or other ownership or profit
interests in) such entity, all of the warrants, options or other rights for the purchase or acquisition from such entity of shares
of capital stock of (or other ownership or profit interests in) such entity, all of the securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such entity or warrants, rights or options for the purchase
or acquisition from such entity of such shares (or such other interests), and all of the other ownership or profit interests in
such entity (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of determination.


 






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“Event of Default”
has the meaning specified in Section 6 of this Agreement.


 


“Negotiable
Collateral” means and includes all of Debtor’s presently existing and hereafter acquired or arising letters
of credit, advices of credit, promissory notes, drafts, instruments, documents, Equity Interests in any entity, leases of personal
property and chattel paper, as well as Debtor’s Books relating to any of the foregoing.


 


“Obligations”
means and includes any and all present or future indebtedness or obligations of Debtor owing to the Secured Party under the
Note and the other Subscription Documents, as defined herein, including, without limitation, (i) all interest and other payments
required thereunder that are not paid when due, and (ii) all of the Secured Party Expenses (as defined below) which Debtor is required
to pay or reimburse by this Agreement, by law, or otherwise.


 


“Permitted
Liens” means (i) statutory liens of landlords and liens of carriers, warehousemen, bailees, mechanics, materialmen
and other like liens imposed by law, created in the ordinary course of business and securing amounts not yet due (or which are
being contested in good faith, by appropriate proceedings or other appropriate actions which are sufficient to prevent imminent
foreclosure of such liens), and with respect to which adequate reserves or other appropriate provisions are being maintained by
Debtor in accordance with generally accepted accounting principles (“GAAP”) , (ii) deposits made (and the liens
thereon) in the ordinary course of business of Debtor (including, without limitation, security deposits for leases, indemnity bonds,
surety bonds and appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, contracts (other than for the repayment or guarantee of borrowed
money or purchase money obligations), statutory obligations and other similar obligations arising as a result of progress payments
under government contracts, (iii) liens for taxes not yet due and payable or which are being contested in good faith and with respect
to which adequate reserves are being maintained by Debtor in accordance with GAAP, (iv) purchase money liens relating to the acquisition
of equipment, machinery or other goods of Debtor approved in writing by the Secured Party (which approval shall not be unreasonably
withheld, conditioned or delayed) and (v) liens in favor of the Secured Party under the Subscription Documents.


 


“Pledged
Equity” means, with respect to Debtor, 100% of the issued and outstanding Equity Interests of any subsidiary that
is directly owned by Debtor, whether now owned or hereafter acquired, in each case together with the certificates (or other agreements
or instruments), if any, representing such shares, and all options and other rights, contractual or otherwise, with respect thereto,
including, but not limited to, the following:


 


(1)
all Equity Interests representing a dividend thereon, or representing a distribution or return of capital upon or in respect thereof,
or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights
or options issued to the holder thereof, or otherwise in respect thereof; and


 






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(2) in the event of any
consolidation or merger involving the issuer thereof and in which such issuer is not the surviving entity, all shares of each class
of the Equity Interests of the successor entity formed by or resulting from such consolidation or merger, to the extent that such
successor entity is a direct subsidiary of Debtor.


 


The term “Pledged
Equity” specifically includes, but is not limited to, all rights of Debtor embodied in or arising out of the Debtor’s
status as a shareholder or member, consisting of: (a) all economic rights, including without limitation, all rights to share in
the profits and losses and all rights to receive distributions of the assets; and (b) all governance rights, including without
limitation, all rights to vote, consent to action and otherwise participate in the management.


 


“Secured Party
Expenses” means and includes (i) all costs or expenses required to be paid by Debtor under this Agreement that are
instead paid or advanced by the Secured Party, including without limitation, all taxes, insurance, satisfaction of liens, securities
interests, encumbrances or other claims at any time levied or placed on the Collateral, (ii) all reasonable costs and expenses
incurred to correct any default or enforce any provision of this Agreement, or in gaining possession of, maintaining, disabling,
handling, preserving, storing, shipping, selling, preparing for sale or advertising to sell all or any part of the Collateral,
irrespective of whether a sale is consummated, and (iii) all reasonable costs and expenses (including reasonable attorney’s
fees) incurred by the Secured Party in enforcing or defending this Agreement, irrespective of whether suit is brought.


 


“Subscription
Documents” means and includes the Note, Securities Purchase Agreement and all related documents executed in connection
therewith, including, without limitation, any amendments to any of the foregoing.


 


2.         Construction.
Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular and vice versa,
to the part include the whole, “including” is not limiting, and “or” has the inclusive meaning represented
by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Section
references are to this Agreement, unless otherwise specified.


 


3.         Creation
of Security Interest. In order to secure Debtor’s timely payment of the Obligations and timely performance of each
and all of its covenants and obligations under this Agreement, the Subscription Documents, and any other document, instrument or
agreement executed by Debtor or delivered by Debtor to the Secured Party in connection with the Obligations, Debtor hereby unconditionally
and irrevocably grants, pledges and hypothecates to the Secured Party a continuing security interest in and to, a lien upon, assignment
of, and right of set-off against, all presently existing and hereafter acquired or arising Collateral. Such security interest shall
be a first priority security interest. Such security interest shall attach to all Collateral without further act on the part of
the Secured Party or Debtor.


 






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4.         Filings;
Further Assurances.


 


(a)        General.
The Secured Party is authorized to file a UCC-1 Financing Statement (or its equivalent) with the Secretary of State of the State
of Delaware and in any other jurisdictions where the Secured Party chooses to file, with respect to the Debtor. Debtor also authorizes
the filing by the Secured Party of such other UCC financing statements, continuation financing statements, fixture filings, filing
appropriate notices in international or federal registries including the United States Patent and Trademark Office, security agreements,
mortgages, deeds of trust, chattel mortgages, assignments, assignments of rents, motor vehicle lien acknowledgments and other documents
as the Secured Party may reasonably require in order to perfect, maintain, protect or enforce its security interest in the Collateral
or any portion thereof and in order to fully consummate all of the transactions contemplated under this Agreement. Subject to the
foregoing, if so requested by the Secured Party at any time hereafter, Debtor shall promptly execute and deliver to the Secured
Party such fixture filings, agreements, security agreements, mortgages, deeds of trust, chattel mortgages, assignments, motor vehicle
lien acknowledgments and other documents as the Secured Party may reasonably require from such Debtor in order to perfect, maintain,
protect or enforce its rights under this Agreement. Debtor shall promptly deliver to the Secured Party any and all certificates
and instruments constituting the Pledged Equity in suitable form for transfer by delivery as may be necessary to obtain a first
priority security interest in the Collateral and accompanied by duly executed instruments of transfer or assignment in blank. Upon
Debtor’s failure or refusal to promptly comply with its obligations in this Section 4(a), Debtor hereby irrevocably makes,
constitutes and appoints the Secured Party as such Debtor’s true and lawful attorney with power to sign the name of Debtor
on any of the above-described documents or on any other similar documents which need to be executed, recorded or filed in order
to perfect, maintain, protect or enforce the Secured Party’s security interest in the Collateral. Debtor further agrees to
enter into such control agreements with the Secured Party and such third parties as may be necessary to obtain a first priority
security interest in the Collateral, including deposit accounts and Pledged Equity, and agrees to use best efforts to obtain the
assent of the third parties to said agreements.


 


(b)Mortgage.
Debtor hereby authorizes Secured Party to obtain a mortgage on any and all of its real estate. Debtor covenants and agrees that
it will execute any documents, provide any information and take such other action as is requested by Secured Party to effectuate
such mortgage.


 


(c)Additional
Matters. Without limiting the generality of Section 4(a), Debtor will at the reasonable written request of the Secured Party,
appear in and defend any action or proceeding which is reasonably expected to have a material and adverse effect with respect to
such Debtor’s title to, or the security interest of the Secured Party in, the Collateral.


 


5.         Representations,
Warranties and Agreements. Debtor represents, warrants and agrees as follows:


 


(a)        No
Other Encumbrances. Debtor has good and marketable title to its Collateral, free and clear of any liens, claims, encumbrances
and rights of any kind, except the Liens scheduled pursuant to the Securities Purchase Agreement or as otherwise approved in writing
by the Secured Party, and has the right to pledge, sell, assign or transfer the Collateral.


 


(b)       Authorization
of Pledged Equity. All Pledged Equity is duly authorized and validly issued, is fully paid and, to the extent applicable, nonassessable
and is not subject to the preemptive rights of any person.


 






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(c)        Security
Interest/Priority. This Agreement creates a valid security interest in favor of the Secured party in the Collateral of Debtor
and, when properly perfected by filing shall constitute a valid and perfected first priority security interest in such Collateral
(including all uncertificated Pledged Equity consisting of partnership or limited liability company interests that do not constitute
securities), to the extent such security interest can be perfected by filing under the UCC, free and clear of all liens except
for liens permitted by the Securities Purchase Agreement. The taking possession by the Secured Party of the certificated securities
(if any) evidencing the Pledged Equity and all other Instruments constituting Collateral will perfect and establish the first priority
of the Secured Party’s security interest in all the Pledged Equity evidenced by such certificated securities and such instruments.
With respect to any Collateral consisting of a deposit account, investment property, securities entitlement or held in a securities
account, upon execution and delivery by the Debtor, the applicable depository bank or securities intermediary and the Secured Party
of an agreement granting control to the Secured Party over such Collateral, the Secured Party shall have a valid and perfected
first priority security interest in such Collateral.


 


(d)       Consents;
Etc. There are no restrictions in any organizational document governing any Pledged Equity or any other document related thereto
which would limit or restrict (i) the grant of a security interest pursuant to this Agreement in such Pledged Equity, (ii) the
perfection of such security interest or (iii) the exercise of remedies in respect of such perfected security interest in the Pledged
Equity as contemplated by this Agreement. Except for (i) the filing or recording of UCC financing statements, (ii) the
filing of appropriate notices with the United States Patent and Trademark Office, the United States Copyright Office; with other
applicable international registries, federal registries; and with local registries regarding assignments of rents and fixture filings,
(iii) obtaining control to perfect the security interests created by this Agreement (to the extent required under Section 4
hereof), (iv) such actions as may be required by laws affecting the offering and sale of securities, and (v) consents, authorizations,
filings or other actions which have been obtained or made, no consent or authorization of, filing with, or other act by or in respect
of, any arbitrator or governmental authority and no consent of any other person (including, without limitation, any stockholder,
member or creditor of Debtor), is required for (A) the grant by Debtor of the security interest in the Collateral granted
hereby or for the execution, delivery or performance of this Agreement by Debtor, (B) the perfection of such security interest
(to the extent such security interest can be perfected by filing under the UCC, the granting of control (to the extent required,
or as provided in Section 4(a) hereof) or by filing an appropriate notice with the United States Patent and Trademark Office, the
United States Copyright Office or other applicable registry) or (C) the exercise by the Secured party of the rights and remedies
provided for in this Agreement.


 


(e)        Location
of Place(s) of Business. All places of business of Debtor, including the identification of the principal place of business
of Debtor, and the address(es) at which the Collateral is (are) located, are indicated on Schedule 5(e) hereto. Debtor shall not,
without at least thirty (30) days prior written notice to the Secured Party, relocate such principal place of business or the Collateral,
with no relocation being permitted outside the United States in any event.


 


(f)         Right
to Inspect the Collateral. The Secured Party shall have the right, during usual business hours of the Debtor and upon reasonable
advance notice, to inspect and examine the Collateral. Debtor agrees that any reasonable expenses incurred by the Secured Party
in connection with this Section 5(f) during the continuance of an Event of Default shall constitute Secured Party Expenses.


 






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(g)       Negative
Covenants. Except for sale of inventory in the ordinary course of business, Debtor shall not (i) sell, lease or otherwise dispose
of, relocate or transfer, any of the Collateral, except dispositions of Collateral that is worn out, obsolete or no longer necessary
in the business of Debtor, (ii) allow any liens on or grant security interests in the Collateral except the Permitted Liens or
(iii) change the Debtor’s name or add any new fictitious name without the written consent of the Secured Party.


 


(h)        Further
Information. Debtor shall promptly supply the Secured Party with such information concerning Debtor and Debtor’s business
as the Secured Party may reasonably request from time-to-time hereafter, and shall within five (5) business days of obtaining knowledge
thereof, notify the Secured Party of any event which constitutes an Event of Default.


 


(i)         Solvency.
Debtor is now and shall be at all times hereafter able to pay its debts (including trade debts) as they mature.


 


(j)         Secured
Party Expenses. Debtor shall, within 30 business days of written demand from the Secured Party accompanied by adequate documentation
of such expenses, reimburse the Secured Party for all sums expended by it which constitute Secured Party Expenses and, in the event
that Debtor does not pay any Secured Party Expenses payable to a third party within 30 business days after notice thereof, then
the Secured Party may immediately and without further notice pay such Secured Party Expenses on Debtor’s behalf. All such
expenses shall become a part of the Obligations and, at the Secured Party’s option, will (i) be payable on demand or (ii)
be added to the balance of the Note and be payable proportionately with any installment payments that become due during the remaining
term of the Note or, (iii) at Secured Party’s option, may be treated as a balloon payment which will be due and payable at
the maturity of the Note. This Agreement shall also secure payment of those amounts.


 


(k)
      Commercial Tort Claims. Debtor has no pending commercial tort claim (as a plaintiff) against any
individual or entity (a “Commercial Claim”). Debtor shall promptly deliver to the Secured Party notice of any
Commercial Claim that a Debtor may bring against any individual or entity, together with such information with respect
thereto as the Secured Party may reasonably request. Within ten (10) business days after a written request by the Secured
Party, Debtor shall grant the Secured Party a security interest in any pending Commercial Claim to the extent such security
interest is permitted by applicable law.


 


(l)         Reliance
by the Secured Party; Representations Cumulative. Each representation, warranty and agreement contained in this Agreement
shall be conclusively presumed to have been relied on by the Secured Party regardless of any investigation made or information
possessed by the Secured Party. The representations, warranties and agreements set forth herein shall be cumulative and in addition
to any and all other representations, warranties and agreements set forth in the Subscription Documents or any other documents
created after the Closing Date and signed by Debtor.


 






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6.         Events
of Default. The occurrence of any Event of Default under the Note and the Securities Purchase Agreement, after the expiration
of any applicable grace or cure period, shall constitute an “Event of Default” by Debtor under this Agreement.


 


7.         Rights
and Remedies.


 


(a)        Rights
and Remedies of the Secured Party.


 


(i)        Upon
the occurrence and during the continuance of an Event of Default, and upon five (5) business days’ advance notice of election
by Secured Party to Debtor, the Secured Party may cause any one or more of the following to occur, all of which are authorized
by Debtor:


 


(A)    The
Secured Party may make such payments and do such acts as it reasonably considers necessary to protect its security interest in
the Collateral. Debtor agrees to promptly assemble and make available the Collateral if the Secured Party so requires. Debtor authorizes
the Secured Party to enter the premises where any of the Collateral is located, take and maintain possession of the Collateral,
or any part thereof, and pay, purchase, contest or compromise any encumbrance, claim, right or lien which, in the reasonable opinion
of the Secured Party, appears to be prior or superior to its security interest in violation of this Agreement, and to pay all reasonable
expenses incurred in connection therewith.


 


(B)     The
Secured Party shall be automatically deemed to be granted a license or other appropriate right to use, without charge or representation
or warranty, Debtor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, and any other property of a similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale and selling any Collateral.


 


(C)     The
Secured Party may ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale and sell (in the
manner provided for herein) the Collateral.


 


(D)    The
Secured Party may sell the Collateral at either a public or private sale, or both (which in the case of a private sale of Pledged
Equity, shall be to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities
for their own accounts, for investment and not with a view to the distribution or resale thereof), by way of one or more contracts
or transactions, for cash or on terms, in such manner and at such places (including Debtor’s premises) as is commercially
reasonable (it not being necessary that the Collateral be present at any such sale). In the case of a sale of Pledged Equity, the
Secured Party shall have no obligation to delay sale of any such securities for the period of time necessary to permit the issuer
of such securities to register such securities for public sale under the Securities Act of 1933. Debtor further acknowledges and
agrees that any offer to sell any Pledged Equity which has been (i) publicly advertised on a bona fide basis in a newspaper
or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may
be advertised without prior registration under the Securities Act of 1933), or (ii) made privately in the manner described
above shall be deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not constitute a
“public offering” under the Securities Act of 1933, and the Secured Party may, in such event, bid for the purchase
of such securities.


 






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(E)     The
Secured Party shall be entitled to give notice of the disposition of the Collateral as follows: (1) the Secured Party shall give
Debtor a notice in writing of the time and place of public sale, or, if the sale is a private sale or some other disposition other
than a public sale is to be made of the Collateral, the time on or after which the private sale or other disposition is to be made,
(2) the notice shall be personally delivered or mailed, postage prepaid, to Debtor at least ten (10) business days before the date
fixed for the sale, or at least ten (10) business days before the date on or after which the private sale or other disposition
is to be made, unless the Collateral is perishable or threatens to decline speedily in value, in which case the Secured Party shall
use commercially reasonable efforts to provide such notice to Debtor as far in advance of such disposition as is practicable.


 


(F)     The
Secured Party may purchase all or any portion of the Collateral at any public sale by credit bid or other appropriate payment therefor.


 


(G)     To
the extent permitted by applicable law, the Secured Party shall have the following rights and remedies regarding the appointment
of a receiver: (1) the Secured Party may have a receiver appointed as a matter of right, (2) the receiver may be an employee of
the Secured Party and may serve without bond, and (3) all fees of the receiver and his or her attorney shall be Secured Party Expenses
and become part of the Obligations and shall be payable on demand, with interest at the Rate specified in the Note from the date
of expenditure until repaid.


 


(H)    To the extent permitted by applicable law, the Secured Party, either itself or through a receiver, may collect the
payments, rents, income, dividends, distributions and revenues (together, “Revenue”) from the Collateral. The
Secured Party may at any time, in its reasonable discretion, transfer any Collateral into its own name or that of its
nominee(s) and receive the Revenue therefrom and hold the same as security for the Obligations or apply it to payment of the
Obligations in such order of preference as the Secured Party may determine. Insofar as the Collateral consists of accounts,
general intangibles, loans receivable, insurance policies, instruments, chattel paper, choses in action, or similar property,
the Secured Party may demand, collect, issue receipts for, settle, compromise, adjust, sue for, foreclose, or otherwise
realize on the Collateral as the Secured Party may determine (in its reasonable discretion), whether or not the Obligations
are then due. For these purposes, the Secured Party may, on behalf of and in the name of Debtor, (1) receive, open, and
dispose of mail addressed to Debtor; (2) change any address to which mail and payments are to be sent; and (3) endorse notes,
checks, drafts, money orders, documents of title, instruments and items pertaining to the payment, shipment, or storage of
any Collateral. To facilitate collection, the Secured Party may notify account debtors and Debtor on any Collateral to make
payments directly to the Secured Party.


 






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(ii)       The
Secured Party may deduct from the proceeds of any sale of the Collateral all Secured Party Expenses incurred in connection with
the enforcement and exercise of any of the rights and remedies of the Secured Party provided for herein, irrespective of whether
suit is commenced. If such deduction does not occur (in the Secured Party’s reasonable discretion), upon demand, Debtor shall
pay all of such Secured Party Expenses. Any deficiency which exists after disposition of the Collateral as provided herein will
be paid immediately by Debtor, and any excess that exists will be returned, without interest and subject to the rights of third
parties, to Debtor by the Secured Party; provided, however, that if any excess exists at a time when any of the Obligations
remain outstanding, such excess shall instead remain as part of the Collateral and continue to be subject to the security interest
in Section 3(a) above until such time as all of the Obligations have been fully satisfied or otherwise terminated.


 


(iii)      Voting
and payment Rights in Respect of the Pledged Equity.


 


(A)    So
long as no Event of Default shall exist, Debtor may (1) exercise any and all voting and other rights pertaining to the Pledged
Equity of such Debtor or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Securities Purchase
Agreement and (2) receive and retain any and all dividends (other than stock dividends and other dividends constituting Collateral
which are addressed hereinabove), principal or interest paid in respect of the Pledged Equity to the extent they are allowed under
the Securities Purchase Agreement; and


 


(B)     During the continuance
of an Event of Default, (1) all rights of an Debtor to exercise the voting and other consensual rights which it would otherwise
be entitled to exercise pursuant to clause (A)(1) above shall cease and all such rights shall thereupon become vested in the Secured
Party which shall then have the sole right to exercise such voting and other consensual rights, (2) all rights of an Debtor to
receive the dividends, principal and interest payments which it would otherwise be authorized to receive and retain pursuant to
clause (A)(2) above shall cease and all such rights shall thereupon be vested in the Secured Party which shall then have the sole
right to receive and hold as Collateral such dividends, principal and interest payments, and (3) all dividends, principal and interest
payments which are received by a Debtor contrary to the provisions of clause (B)(2) above shall be received in trust for the benefit
of the Secured Party, shall be segregated from other property or funds of such Debtor, and shall be forthwith paid over to the
Secured Party as Collateral in the exact form received, to be held by the Secured Party as Collateral and as further collateral
security for the Secured Obligations.


 


(b)        Rights
and Remedies Cumulative. The rights and remedies of the Secured Party under this Agreement and any other agreements and documents
delivered or executed in connection with the Obligations shall be cumulative. The Secured Party shall also have all other rights
and remedies not inconsistent herewith as are provided under applicable law, or in equity. No exercise by the Secured Party of
any one right or remedy shall be deemed an election.


 






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8.         Additional
Waivers. The Secured Party shall not in any way or manner be liable or responsible for (i) the safekeeping of the Collateral,
(ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value
thereof or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency or other person whomsoever, except to
the extent that such loss, damage, liability, cost or expense has resulted from the gross negligence or willful misconduct of the
Secured Party or its affiliates. If the Secured Party at any time has possession of any Collateral, whether before or after an
Event of Default, the Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral
if the Secured Party takes such action for that purpose as Debtor shall request or as the Secured Party, in its reasonable discretion,
shall deem appropriate under the circumstances, but failure to honor any request by Debtor shall not of itself be deemed to be
a failure to exercise reasonable care. The Secured Party shall not be required to take any steps necessary to preserve any rights
in the Collateral against prior parties, nor to protect, preserve, or maintain any security interest given to secure the Obligations.


 


9.         Notices.
All notices or demands by any party relating to this Agreement shall be made in writing as provided in the Note, and such notices
shall be delivered to the addresses indicated therein. Each party shall provide written notice to the other party of any change
in address.


 


10.       Choice
of Law. The validity of this Agreement, its construction, interpretation and enforcement, and the rights of the parties
hereunder and concerning the Collateral, shall be determined under, governed by, and construed in accordance with the laws of the
state of Delaware as applied to contracts made and to be fully performed in such state, without regard to the conflicts of laws
provisions thereof, except to the extent that the validity, perfection or enforcement of a security interest hereunder in respect
of any Collateral is governed by the laws of the state of Delaware or some other jurisdiction, in which case such laws shall govern.


 


11.       Waiver
of Jury Trial. THE DEBTOR WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT.


 


12.       General
Provisions.


 


(a)        Effectiveness.
This Agreement shall be binding and deemed effective against Debtor when executed by Debtor and the Secured Party.


 


(b)        Successors
and Assigns. This Agreement shall bind and inure to the benefit of the successors and permitted endorsees, transferees and
assigns of the Secured Party. Debtor shall not assign this Agreement or any rights or obligations hereunder, and any such assignment
shall be absolutely void.


 


(c)        Section
Headings. Section headings are for convenience only.


 


(d)        Interpretation.
No uncertainty or ambiguity herein shall be construed or resolved against the Secured Party or Debtor, whether under any rule of
construction or otherwise. This Agreement shall be construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of the parties.


 






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(e)        Severability
of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.


 


(f)         Entire
Agreement; Amendments. This Agreement and the agreements and documents referenced herein contain the entire understanding of
the parties with respect to the subject matter covered herein and supersede all prior agreements, negotiations and understandings,
written or oral, with respect to such subject matter. No provision of this Agreement shall be waived or amended other than by an
instrument in writing signed by Debtor and the Secured Party.


 


(g)        Good
Faith. The parties intend and agree that their respective rights, duties, powers, liabilities and obligations shall be performed,
carried out, discharged and exercised reasonably and in good faith.


 


(h)        Waiver
and Consent. No delay or omission on the part of the Secured Party in exercising any right shall operate as a waiver of such
right or any other right. A waiver by the Secured Party of a provision of this Agreement or any other agreement between or among
the parties shall not prejudice or constitute a waiver of the Secured Party’s right otherwise to demand strict compliance
with that provision or any other provision of this Agreement. No prior waiver by the Secured Party, nor any course of dealing between
the Secured Party and Debtor, shall constitute a waiver of any of the Secured Party’s rights or of any of Debtor’s
obligations as to any future transactions. Whenever the consent of the Secured Party is required under this Agreement, the granting
of such consent by the Secured Party in any instance shall not constitute continuing consent to subsequent instances where such
consent is required, and in all cases such consent may be granted or withheld in the reasonable discretion of the Secured Party.


 


(i)         Counterparts.
This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and the same agreement.


 


(j)         Termination.
Upon full satisfaction or other termination of the Obligations (i) the Secured Party shall release and return to Debtor all of
the Collateral and any and all certificates and other documentation representing or relating to the Collateral and (ii) the security
interests provided for under this Agreement shall be terminated and of no further force and effect. At Debtor’s expense,
the Secured Party shall take all actions reasonably requested by Debtor in connection with the foregoing.


 


(k)        Consent
of Debtor as Issuers of Pledged Equity. Debtor/issuer of Pledged Equity party to this Agreement hereby acknowledges, consents
and agrees to the grant of the security interests in such Pledged Equity pursuant to this Agreement, together with all rights accompanying
such security interest as provided by this Agreement and applicable law, notwithstanding any anti-assignment provisions in any
operating agreement, limited partnership agreement or similar organizational or governance documents of such issuer.


 


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IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed by their respective authorized persons on the date first written above.


 





	 	The Debtor:
	 	 
	 	SmartCard Marketing Systems, Inc.
	 	 
	 	By:	 
	 	Name:	 Massimo Barone
	 	Title: 	Chief Executive Officer








 





	 	The Secured Party:
	 	 
	 	LEONITE FUND I, LP
	 	By its Manager, Leonite Advisors LLC
	 	 
	 	 
	 	By:	 
	 	Name: 	Avi Geller
	 	Title:	 Manager








 





[signature page to Security Agreement]


 






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Schedule 5(e)


 


Addresses of Debtor/Principal
Place of Business of Debtor


 


20C Trolley Square


Wilmington, DE, 19806


 


3079 Avenue des Aristrocrates


Laval, QC H7E 5H3, Canada


 






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EXHIBIT A


 


COLLATERAL


 


All of the right, title
and interest of Debtor in and to the following property, wherever located and whether now owned by Debtor or hereafter acquired
by Debtor:


 


1.         All
accounts, chattel paper, contracts, contract rights, accounts receivable, tax refunds, tax credits, Notes receivable, Pledged Equity,
documents, choses in action and general intangibles, including, but not limited to, proceeds of inventory and returned goods and
proceeds from the sale of goods and services, and all rights, liens, securities, guaranties, remedies and privileges related thereto,
including the right of stoppage in transit and rights and property of any kind forming the subject matter of any of the foregoing;


 


2.         All
certificates of deposit and all time, savings, demand, or other deposit accounts in the name of Debtor or in which Debtor has any
right, title or interest, including but not limited to all sums now or at any time hereafter on deposit, and any renewals, extensions
or replacements of and all other property which may from time to time be acquired directly or indirectly using the proceeds of
any of the foregoing;


 


3.         All
inventory and equipment of every type or description wherever located, including, but not limited to all raw materials, parts,
containers, work in process, finished goods until such time that finished goods are sold to
consumers in the normal course of business, goods in transit to Debtor, wares, merchandise until
such time that merchandise is sold to consumers in the normal course of business, furniture, fixtures, hardware, machinery, tools,
parts, supplies, automobiles, trucks, other intangible property of whatever kind and wherever located associated with the Debtor’s
business, tools and goods returned for credit, repossessed, reclaimed or otherwise reacquired by Debtor;


 


4.         All
documents of title and other property from time to time received, receivable or otherwise distributed in respect of, exchange or
substitution for or addition to any of the foregoing including, but not limited to, any documents of title;


 


5.         All
know-how, information, labels, permits, patents, copyrights, goodwill, trademarks, trade names, licenses and approvals held by
Debtor, including all other intangible property of Debtor;


 


6.         All
assets of any type or description that may at any time be assigned or delivered to or come into possession of Debtor for any purpose
for the account of Debtor or as to which Debtor may have any right, title, interest or power, and property in the possession or
custody of or in transit to anyone for the account of Debtor, as well as all proceeds and products thereof and accessions and annexations
thereto; and


 


7.         Debtor’s tangible
and intangible personal property assets, including, but not limited to, all of the following: (i) all accounts, health-care-insurance
receivables, cash and currency, chattel paper, deposit accounts, documents, equipment, fixtures, general intangibles, instruments,
intellectual property, inventory, investment property, Negotiable Collateral, loans receivable, motor vehicles goods until such
time that goods are sold to consumers in the normal course of business, Pledged Equity, supporting obligations, Debtor’s
Books, and such other assets of Debtor as may hereafter arise or Debtor may hereafter acquire or in which the Secured Party may
from time-to-time obtain a security interest, and (ii) the proceeds of any of the foregoing, including, but not limited to, proceeds
of insurance covering the foregoing or any portion thereof; provided, however, that notwithstanding anything to the contrary
contained in this Agreement, the Collateral does not include any “hazardous waste” as that term is defined under 42
U.S.C. section 6903(5), as such section may be from time to time amended, or under any regulations thereunder;


 


8.All
proceeds (including but not limited to insurance proceeds), products of, and accessions and annexations of any of the foregoing.


 


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