Document:

Exhibit
10.3

 

SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT, dated as of April 22, 2021 (this “Agreement”), is among Data443 Risk Mitigation, Inc., a Nevada
corporation (the “Company”), all of the Subsidiaries of the Company (such subsidiaries, the “Guarantors”
and together with the Company, the “Debtors”) and Auctus Fund, LLC, a Delaware limited liability company (collectively
with its endorsees, transferees and assigns, the “Secured Parties”).

 

W
I T N E S S E T H:

 

WHEREAS,
pursuant to the Purchase Agreement (as defined in the Note (as defined below)), the Company has agreed to issue that certain 12% senior
secured promissory note dated April 22, 2021, in the original principal amount of $832,000.00 (the “Note”);

 

WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the “Guarantee”), the Guarantors have jointly
and severally agreed to guarantee and act as surety for payment of such Note; and

 

WHEREAS,
in order to induce the Secured Parties to enter into the investment evidenced by the Note, each Debtor has agreed to execute and deliver
to the Secured Parties this Agreement and to grant the Secured Parties, a security interest in certain property of such Debtor to secure
the prompt payment, performance and discharge in full of all of the Company’s obligations under the Note and the Guarantors’
obligations under the Guarantee.

 

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

 

1.
Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms
used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”,
“general intangibles”, “goods”, “instruments”, “inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and “supporting obligations”) shall have the respective meanings
given such terms in Article 9 of the UCC.

 

(a) “Collateral”
means the collateral in which the Secured Parties are granted a security interest by this Agreement and which shall include the following
personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence, wherever situated,
and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any
tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest or other property at any time
and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities
(as defined below):

 

(i) All
goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever
situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with any
Debtor’s businesses and all improvements thereto; and (B) all inventory;

 

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(ii) All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests, stock
or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution
and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by any Debtor),
computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, Intellectual
Property and income tax refunds;

 

(iii) All
accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods,
equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect
to each account, including any right of stoppage in transit;

 

 (iv) All documents, letter-of-credit rights, instruments and chattel paper;

 

 (v) All commercial tort claims;

 

(vi) All
deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

 (vii) All investment property;

 

 (viii) All supporting obligations; and

 

(ix) All
files, records, books of account, business papers, and computer programs; and

 

(x) the
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

 

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Without
limiting the generality of the foregoing, the “Collateral” shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock and
the other equity interests listed on Schedule H hereto (as the same may be modified from time to time pursuant to the terms hereof),
and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of any Debtor obtained
in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each case, all rights, options,
warrants, stock, other securities and/or equity interests that may hereafter be received, receivable or distributed in respect of, or
exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged Securities, including, but not limited
to, all dividends, interest and cash.

 

Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent
that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided,
however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and,
to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

 

(b) “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights arising under
the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of the United
States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters
patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks,
trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names
and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all applications in connection therewith, whether 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, or otherwise,
and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country or any
political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all licenses for
any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

 

 (c) [Intentionally Omitted].

 

(d) “Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and such
other instruments or documents as the Secured Parties may reasonably request.

 

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(e) “Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or
that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties, including, without limitation,
all obligations under this Agreement, the Note, the Guarantee and any other instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to
the extent all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties as a preference,
fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.
Without limiting the generality of the foregoing, the term “Obligations” shall include, without limitation: (i) principal,
interest, and penalties under the Note and all other amounts owed thereunder; (ii) any and all other fees, indemnities, costs, obligations
and liabilities of the Debtors from time to time under or in connection with this Agreement, the Note, the Guarantee and any other instruments,
agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not
limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such
amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.

 

(f) “Organizational
Documents” means with respect to any Debtor, the documents by which such Debtor was organized (such as a certificate of incorporation,
certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for
preferred stock or other forms of preferred equity) and which relate to the internal governance of such Debtor (such as bylaws, a partnership
agreement or an operating, limited liability or members agreement).

 

(g) “Pledged
Interests” shall have the meaning ascribed to such term in Section 4(j).

 

(h) “Pledged
Securities” shall have the meaning ascribed to such term in Section 4(i).

 

(i) “UCC”
means the Uniform Commercial Code of the State of Nevada and or any other applicable law of any state or states which has jurisdiction
with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent of the parties that defined
terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed in its broadest
sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated
herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.

 

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2. Grant
of Security Interest in Collateral. As an inducement for the Secured Parties to enter into the investment as evidenced by the Note
and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each
Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties a security interest in and to,
a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to,
the Collateral (a “Security Interest” and, collectively, the “Security Interests”).

 

3. Delivery
of Certain Collateral. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to be delivered
to the Secured Parties (a) any and all certificates and other instruments representing or evidencing the Pledged Securities, and

(b)
any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together with all
Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to Secured Parties, or have previously
delivered to Secured Parties, a true and correct copy of each Organizational Document governing any of the Pledged Securities.

 

4. Representations,
Warranties, Covenants and Agreements of the Debtors. Except as set forth under the corresponding section of the disclosure schedules
delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure Schedules shall
be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties as follows:

 

(a) Each
Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required
by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and binding obligation
of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors
and by general principles of equity.

 

(b) The
Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily at
the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A
attached hereto. Except as specifically set forth on Schedule A, each Debtor is the record owner of the real property where such
Collateral is located, and there exist no mortgages or other liens on any such real property. Except as disclosed on Schedule A,
none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.

 

(c) Except
as set forth on Schedule C-I attached hereto, the Debtors are the sole owner of the Collateral (except for non-exclusive licenses
granted by any Debtor in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims.
The Debtors are fully authorized to grant the Security Interests. Except as set forth on Schedule C-I attached hereto, there is
not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that will be filed in favor of the Secured Parties pursuant
to this Agreement) covering or affecting any of the Collateral. Except as set forth on Schedule C-I attached hereto and except
pursuant to this Agreement, as long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit
to be on file in any such office or agency any other financing statement or other document or instrument (except to the extent filed
or recorded in favor of the Secured Parties pursuant to the terms of this Agreement).

 

(d) No
written claim has been received that any Collateral or any Debtor’s use of any Collateral violates the rights of any third party.
There has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.

 

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(e) Each
Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and
its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records
or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements
under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interests
to create in favor of the Secured Parties a valid, perfected and continuing perfected lien in the Collateral.

 

(f) This
Agreement creates in favor of the Secured Parties a valid security interest in the Collateral securing the payment and performance of
the Obligations. Upon making the filings described in the immediately following paragraph, all security interests created hereunder in
any Collateral which may be perfected by filing UCC financing statements shall have been duly perfected. Except for the filing of the
UCC financing statements referred to in the immediately following paragraph, the recordation of this Agreement with respect to copyrights
and copyright applications in the United States Copyright Office referred to in paragraph (m), the execution and delivery of deposit
account control agreements satisfying the requirements of Section 9-104 of the UCC with respect to each deposit account of the Debtors,
and the delivery of the certificates and other instruments provided in Section 3, no action is necessary to create, perfect or protect
the security interests created hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements,
the recordation of this Agreement, and the execution and delivery of said deposit account control agreements, no consent of any third
parties and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory
body is required for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interests
created hereunder in the Collateral or (iii) the enforcement of the rights of the Secured Parties hereunder.

 

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(g) Each
Debtor hereby authorizes the Secured Parties to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.

 

(h) The
execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational
Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law,
rule or regulation applicable to any Debtor or (ii) except as set forth on Schedule B, conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing any Debtor’s debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset
of any Debtor is bound or affected. If any, all required consents (including, without limitation, from stockholders or creditors of any
Debtor) necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.

 

(i) The
capital stock and other equity interests listed on Schedule H hereto (the “Pledged Securities”) represent all
of the capital stock and other equity interests of the Guarantors, and represent all capital stock and other equity interests owned,
directly or indirectly, by the Company. All of the Pledged Securities are validly issued, fully paid and nonassessable, and the Company
is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other encumbrance except
for the security interests created by this Agreement.

 

(j) The
ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (the “Pledged
Interests”) by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held
in a securities account or by any financial intermediary.

 

(k) Each
Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and perfected first priority liens
and security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest hereunder shall
be terminated pursuant to Section 14 hereof. Each Debtor hereby agrees to defend the same against the claims of any and all persons and
entities. Each Debtor shall safeguard and protect all Collateral for the account of the Secured Parties. At the request of the Secured
Parties, each Debtor will sign and deliver to the Secured Parties on behalf of the Secured Parties at any time or from time to time one
or more financing statements pursuant to the UCC in form reasonably satisfactory to the Secured Parties and will pay the cost of filing
the same in all public offices wherever filing is, or is deemed by the Secured Parties to be, necessary or desirable to effect the rights
and obligations provided for herein. Without limiting the generality of the foregoing, each Debtor shall pay all fees, taxes and other
amounts necessary to maintain the Collateral and the Security Interests hereunder, and each Debtor shall obtain and furnish to the Secured
Parties from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the
priority of the Security Interests hereunder.

 

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(l) Except
as set forth on Schedule C-I, no Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any
of the Collateral (except for non-exclusive licenses granted by a Debtor in its ordinary course of business and sales of inventory by
a Debtor in its ordinary course of business) without the prior written consent of the Secured Parties.

 

(m) Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

 

(n) Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral hereafter
acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established reputation having
similar properties similarly situated and in such amounts as are customarily carried under similar circumstances by other such entities
and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover the full replacement cost
thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy
to certify to the Secured Parties, that (a) the Secured Parties will be named as lender loss payee and additional insured under each
such insurance policy; (b) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever, such insurer
will promptly notify the Secured Parties and such cancellation or change shall not be effective as to the Secured Parties for at least
thirty (30) days after receipt by the Secured Parties of such notice, unless the effect of such change is to extend or increase coverage
under the policy; and (c) the Secured Parties will have the right (but no obligation) at its election to remedy any default in the payment
of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined in the Note) exists
and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each instance will
be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent
reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the applicable
Debtor; provided, however, that payments received by any Debtor after an Event of Default occurs and is continuing or in
excess of $100,000 for any occurrence or series of related occurrences shall be paid to the Secured Parties and accordingly, if received
by such Debtor, shall be held in trust for the Secured Parties and immediately paid over to the Secured Parties. Copies of such policies
or the related certificates, in each case, naming the Secured Parties as lender loss payee and additional insured shall be delivered
to the Secured Parties at least annually and at the time any new policy of insurance is issued.

 

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(o) Each
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of any
material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value
of the Collateral or on the Secured Parties’ security interest therein.

 

(p) Each
Debtor shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take such further action as the Secured Parties may from
time to time request and may in its sole discretion deem necessary to perfect, protect or enforce the Secured Parties’ security
interest in the Collateral.

 

(q) Each
Debtor shall permit the Secured Parties and its representatives and agents to inspect the Collateral during normal business hours and
upon reasonable prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by the Secured
Parties from time to time.

 

(r) Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes
of action and accounts receivable in respect of the Collateral.

 

(s) Each
Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution or
other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect the
value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.

 

(t) All
information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of any Debtor with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.

 

(u) The
Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights
and franchises material to its business.

 

(v) No
Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one),
legal or corporate structure, or identity, or add any new fictitious name unless it provides at least 30 days prior written notice to
the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture
filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(w) Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold, sale or
return, sale on approval, or other conditional terms of sale without the consent of the Secured Parties which shall not be unreasonably
withheld.

 

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(x) No
Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof to the
Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements or fixture filings
necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(y) Each
Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule
D attached hereto, which Schedule D sets forth each Debtor’s organizational identification number or, if any Debtor
does not have one, states that one does not exist.

 

(z) (i)
The actual name of each Debtor is the name set forth in Schedule D attached hereto; (ii) no Debtor has any trade names except
as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other than that stated in the preamble hereto or
as set forth on Schedule E for the preceding five years; and (iv) no entity has merged into any Debtor or been acquired by any
Debtor within the past five years except as set forth on Schedule E.

 

(aa)
At any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require or
permit possession by the Secured Parties to perfect the security interest created hereby, the applicable Debtor shall deliver such Collateral
to the Secured Parties.

 

(bb)
Each Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Secured Parties regarding
the Pledged Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by Section
8-106 (or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement (or one that
would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

 

(cc)
Each Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Secured Parties, or, if such delivery
is not possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created
by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the underlying
chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).

 

(dd)
If there is any investment property or deposit account included as Collateral that can be perfected by “control” through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each case
satisfactory to the Secured Parties, to be entered into and delivered to the Secured Parties.

 

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(ee)
To the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds thereof to the Secured Parties.

 

(ff)
To the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Secured Parties
in notifying such third party of the Secured Parties’ security interest in such Collateral and shall use its best efforts to obtain
an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory
to the Secured Parties.

 

(gg)
If any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in a writing
signed by such Debtor of the particulars thereof and grant to the Secured Parties in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured
Parties.

 

(hh)
Each Debtor shall immediately provide written notice to the Secured Parties of any and all accounts which arise out of contracts with
any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such
accounts and proceeds thereof, shall execute and deliver to the Secured Parties an assignment of claims for such accounts and cooperate
with the Secured Parties in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar
federal, state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds
thereof.

 

(ii)
Each Debtor shall cause each subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”), by
executing and delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply with the
provisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtor shall deliver replacement schedules for, or
supplements to all other Schedules to (or referred to in) this Agreement, as applicable, which replacement schedules shall supersede,
or supplements shall modify, the Schedules then in effect. The Additional Debtor shall also deliver such opinions of counsel, authorizing
resolutions, good standing certificates, incumbency certificates, organizational documents, financing statements and other information
and documentation as the Secured Parties may reasonably request. Upon delivery of the foregoing to the Secured Parties, the Additional
Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors, for all purposes hereof as
fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations, warranties
and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all references herein
to the “Debtors” shall be deemed to include each Additional Debtor.

 

(jj)
Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Note.

 

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(kk)
Each Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each
issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on the books
of such issuer. Further, except with respect to certificated securities delivered to the Secured Parties, the applicable Debtor shall
deliver to Secured Parties an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant
UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement shall
confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by the Secured Parties during the
continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of the Secured
Parties or any designee of Secured Parties, will take such steps as may be necessary to effect the transfer, and will comply with all
other instructions of Secured Parties regarding such Pledged Securities without the further consent of the applicable Debtor.

 

(ll)
In the event that, upon an occurrence of an Event of Default, Secured Parties shall sell all or any of the Pledged Securities to another
party or parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged Securities,
each Debtor shall, to the extent applicable: (i) deliver to Secured Parties or the Transferee, as the case may be, the articles of incorporation,
bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books
of account, financial records and all other Organizational Documents and records of the Debtors and their direct and indirect subsidiaries;
(ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors and their direct
and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by any governmental
or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged
Securities by Secured Parties and allow the Transferee or Secured Parties to continue the business of the Debtors and their direct and
indirect subsidiaries.

 

(mm)
Without limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered
at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with respect
to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office to be duly
recorded at the applicable office, and (iii) give the Secured Parties notice whenever it acquires (whether absolutely or by license)
or creates any additional material Intellectual Property.

 

(nn)
Each Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments
and documents, and take all such further action as may be necessary or desirable, or as the Secured Parties may reasonably request, in
order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties to exercise
and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes of this Agreement.

 

    	12

     

    

 

(oo)
Schedule F attached hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights,
and domain names owned by any of the Debtors as of the date hereof. Schedule F lists all material licenses in favor of any Debtor
for the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and trademarks of the
Debtors have been duly recorded at the United States Patent and Trademark Office and all material copyrights of the Debtors have been
duly recorded at the United States Copyright Office.

 

(pp)
Except as set forth on Schedule G attached hereto, none of the account debtors or other persons or entities obligated on any of
the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local statute
or rule in respect of such Collateral.

 

(qq)
Until the Obligations shall have been paid and performed in full, the Company covenants that it shall promptly direct any direct or indirect
subsidiary of the Company formed or acquired after the date hereof to enter into a Subsidiary Guarantee in favor of the Secured Parties,
in the form of Exhibit C to the Purchase Agreement.

 

5. Effect
of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests upon the occurrence
of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets of the issuer), it is
agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement of any of Secured Parties’
rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights notwithstanding any provisions
in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor is party.

 

 6. Defaults. The following events shall be “Events of Default”:

 

(a) The
occurrence of an Event of Default (as defined in the Note) under the Note;

 

(b) Any
representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;

 

(c) The
failure by any Debtor to observe or perform any of its obligations hereunder for five (5) days after delivery to such Debtor of notice
of such failure by or on behalf of the Secured Parties unless such default is capable of cure but cannot be cured within such time frame
and such Debtor is using best efforts to cure same in a timely fashion; or

 

(d) If
any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof
shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having jurisdiction
over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any Debtor has any liability
or obligation purported to be created under this Agreement.

 

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7.
Duty To Hold In Trust.

 

(a) Upon
the occurrence of any Event of Default and at any time thereafter, each Debtor shall, upon receipt of any revenue, income, dividend,
interest or other sums subject to the Security Interests, whether payable pursuant to the Note or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Parties
and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Parties, pro-rata in proportion to their
respective then-currently outstanding principal amount of Note for application to the satisfaction of the Obligations.

 

(b) If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares
of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants, rights
or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification
or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of its direct or indirect
subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities
or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties; (ii) hold the same in trust on behalf of
and for the benefit of the Secured Parties; and (iii) to deliver any and all certificates or instruments evidencing the same to Secured
Parties on or before the close of business on the fifth business day following the receipt thereof by such Debtor, in the exact form
received together with the Necessary Endorsements, to be held by Secured Parties subject to the terms of this Agreement as Collateral.

 

8.
Rights and Remedies Upon Default.

 

(a) Upon
the occurrence of any Event of Default and at any time thereafter, the Secured Parties, shall have the right to exercise all of the remedies
conferred hereunder and under the Note, and the Secured Parties shall have all the rights and remedies of a secured party under the UCC.
Without limitation, the Secured Parties shall have the following rights and powers:

 

(i) The
Secured Parties shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of
any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall assemble
the Collateral and make it available to the Secured Parties at places which the Secured Parties shall reasonably select, whether at such
Debtor’s premises or elsewhere, and make available to the Secured Parties, without rent, all of such Debtor’s respective
premises and facilities for the purpose of the Secured Parties taking possession of, removing or putting the Collateral in saleable or
disposable form.

 

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(ii) Upon
notice to the Debtors by Secured Parties, all rights of each Debtor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise be authorized
to receive and retain, shall cease. Upon such notice, the Secured Parties shall have the right to receive any interest, cash dividends
or other payments on the Collateral and, at the option of Secured Parties, to exercise in such Secured Parties’ discretion all
voting rights pertaining thereto. Without limiting the generality of the foregoing, Secured Parties shall have the right (but not the
obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owner thereof, including, without
limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger, reorganization,
consolidation, recapitalization or other readjustment concerning or involving the Collateral or any Debtor or any of its direct or indirect
subsidiaries.

 

(iii) The
Secured Parties shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with
or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time
or times and at such place or places, and upon such terms and conditions as the Secured Parties may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any Debtor
or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral,
the Secured Parties, may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being
sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived and released.

 

(iv) The
Secured Parties shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts
to make payments directly to the Secured Parties, on behalf of the Secured Parties, and to enforce the Debtors’ rights against
such account debtors and obligors.

 

(v) The
Secured Parties may (but are not obligated to) direct any financial intermediary or any other person or entity holding any investment
property to transfer the same to the Secured Parties or its designee.

 

(vi) The
Secured Parties may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United
States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or any designee or any purchaser of any
Collateral.

 

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(b) The
Secured Parties shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral. The Secured Parties may sell the Collateral without
giving any warranties and may specifically disclaim such warranties. If the Secured Parties sell any of the Collateral on credit, the
Debtors will only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of the Secured Parties’ rights and remedies hereunder, including,
without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights
and remedies with respect thereto.

 

(c) For
the purpose of enabling the Secured Parties to further exercise rights and remedies under this Section 8 or elsewhere provided by agreement
or applicable law, each Debtor hereby grants to the Secured Parties, for the benefit of the Secured Parties, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense following an Event
of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including
in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs
used for the compilation or printout thereof.

 

9. Applications
of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments made on account
of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in
connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Parties in enforcing
the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction
of the Obligations pro rata among the Secured Parties (based on then-outstanding principal amounts of Note at the time of any such determination),
and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the applicable Debtor
any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay
all amounts to which the Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest
thereon, at the rate of the Default Interest (as defined in the Note), and the reasonable fees of any attorneys employed by the Secured
Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands against
the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence
or willful misconduct of the Secured Parties as determined by a final judgment (not subject to further appeal) of a court of competent
jurisdiction.

 

10. Securities
Law Provision. Each Debtor recognizes that Secured Parties may be limited in its ability to effect a sale to the public of all or
part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or state
securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more sales to a restricted
group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment and not with
a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorable than
if the Pledged Securities were sold to the public, and that Secured Parties have no obligation to delay the sale of any Pledged Securities
for the period of time necessary to register the Pledged Securities for sale to the public under the Securities Laws. Each Debtor shall
cooperate with Secured Parties in its attempt to satisfy any requirements under the Securities Laws (including, without limitation, registration
thereunder if requested by Secured Parties) applicable to the sale of the Pledged Securities by Secured Parties.

 

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11. Costs
and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Parties. The Debtors
shall also pay all other claims and charges which in the reasonable opinion of the Secured Parties is reasonably likely to prejudice,
imperil or otherwise affect the Collateral or the Security Interests therein. The Debtors will also, upon demand, pay to the Secured
Parties the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Parties may incur in connection with the creation, perfection, protection, satisfaction, foreclosure, collection
or enforcement of the Security Interest and the preparation, administration, continuance, amendment or enforcement of this Agreement
and pay to the Secured Parties the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise
or enforcement of any of the rights of the Secured Parties under the Note. Until so paid, any fees payable hereunder shall be added to
the principal amount of the Note and shall bear interest at the rate of the Default Interest (as defined in the Note).

 

12. Responsibility
for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall
in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability
for any reason. Without limiting the generality of the foregoing, (a) the Secured Parties do not (i) have any duty (either before or
after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral,
or (ii) have any obligation to clean- up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain obligated and
liable under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder. The Secured
Parties shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement
or the receipt by the Secured Parties of any payment relating to any of the Collateral, nor shall the Secured Parties be obligated in
any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry as to
the nature or sufficiency of any payment received by the Secured Parties in respect of the Collateral or as to the sufficiency of any
performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance
or to collect the payment of any amounts which the Secured Parties may be entitled at any time or times.

 

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13. Security
Interests Absolute. All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement, the Note or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Note or any
other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral, or
any release or amendment or waiver of or consent to departure from any other collateral for, or any guarantee, or any other security,
for all or any of the Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and cancel in its sole discretion
any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise
constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interests granted
hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Parties shall continue even if the
Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. Each Debtor
expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that
at any time any transfer of any Collateral or any payment received by the Secured Parties hereunder shall be deemed by final order of
a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws
of the United States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, each
Debtor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior
payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with
the terms and provisions hereof. Each Debtor waives all right to require the Secured Parties to proceed against any other person or entity
or to apply any Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy. Each
Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

 

14. Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Note have been
indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all indemnities of the Debtors
contained in this Agreement (including, without limitation, Annex B hereto) shall survive and remain operative and in full force and
effect regardless of the termination of this Agreement.

 

    	18

     

    

 

15.
Power of Attorney; Further Assurances.

 

(a) Each
Debtor authorizes the Secured Parties, and does hereby make, constitute and appoint the Secured Parties and its officers, agents, successors
or assigns with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the Secured
Parties or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts,
money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of
the Collateral that may come into possession of the Secured Parties; (ii) to sign and endorse any financing statement pursuant to the
UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications
and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt
for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual Property or provide licenses
respecting any Intellectual Property; and (vi) generally, at the option of the Secured Parties, and at the expense of the Debtors, at
any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts and things which the
Secured Parties deem necessary to protect, preserve and realize upon the Collateral and the Security Interests granted therein in order
to effect the intent of this Agreement and the Note all as fully and effectually as the Debtors might or could do; and each Debtor hereby
ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest
and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The designation
set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational Documents or other documents
or agreements to which any Debtor is subject or to which any Debtor is a party. Without limiting the generality of the foregoing, after
the occurrence and during the continuance of an Event of Default, the Secured Parties are specifically authorized to execute and file
any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property
with the United States Patent and Trademark Office and the United States Copyright Office.

 

(b) On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing
and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C attached
hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested
by the Secured Parties, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Parties the grant or perfection of a perfected security interest in all the
Collateral under the UCC.

 

(c) Each
Debtor hereby irrevocably appoints the Secured Parties as such Debtor’s attorney-in-fact, with full authority in the place and
instead of such Debtor and in the name of such Debtor, from time to time in the Secured Parties’ discretion, to take any action
and to execute any instrument which the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement,
pertaining to the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative
to any of the Collateral without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe
the Collateral as “all assets” or “all personal property” or words of like import, and ratifies all such actions
taken by the Secured Parties. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be outstanding.

 

16. Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement
(as such term is defined in the Note).

 

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17. Other
Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity, then the Secured Parties shall have the right, in its
sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying
or affecting any of the Secured Parties’ rights and remedies hereunder.

 

 18. [Intentionally Omitted].

 

19.
Miscellaneous.

 

(a) No
course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the part
of the Secured Parties, any right, power or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

(b) All
of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Note or by any
other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.

 

(c) This
Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtors and the Secured
Parties holding 67% or more of the principal amount of Note then outstanding, or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought.

 

(d) If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void
or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

(e) No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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(f) This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company and the
Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Secured Parties
(other than by merger as provided in this Agreement and the Note). The Secured Parties may assign any or all of its rights under this
Agreement to any party to whom such Secured Parties assigns or transfers any Obligations, provided such transferee agrees in writing
to be bound, with respect to the transferred Obligations, by the provisions of this Agreement that apply to the “Secured Parties.”

 

(g) Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry
out the provisions and purposes of this Agreement.

 

(h) Except
to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal
laws of the State of Nevada, without regard to the principles of conflicts of law thereof. Except to the extent mandatorily governed
by the jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and the Note (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the Commonwealth of Massachusetts. Except to the extent mandatorily governed by the jurisdiction
or situs where the Collateral is located, each Debtor hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the Commonwealth of Massachusetts for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such proceeding is improper. Each party hereto hereby irrevocably
waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
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. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby.

 

(i) This
Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original thereof.

 

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(j) All
Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.

 

(k) Each
Debtor shall indemnify, reimburse and hold harmless the Secured Parties and their respective partners, members, shareholders, officers,
directors, employees and agents (and any other persons with other titles that have similar functions) (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, “Indemnitees”) from
and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including
fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee
in any way related to or arising from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities,
damages, penalties, suits, costs and expenses which result from the gross negligence or willful misconduct of the Indemnitee as determined
by a final, nonappealable decision of a court of competent jurisdiction. This indemnification provision is in addition to, and not in
limitation of, any other indemnification provision in the Note, the Purchase Agreement (as such term is defined in the Note) or any other
agreement, instrument or other document executed or delivered in connection herewith or therewith.

 

(l) Nothing
in this Agreement shall be construed to subject the Secured Parties to liability as a partner in any Debtor or any if its direct or indirect
subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries that is a limited liability
company, nor shall the Secured Parties be deemed to have assumed any obligations under any partnership agreement or limited liability
company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries or otherwise, unless and until any
such Secured Parties exercise its right to be substituted for such Debtor as a partner or member, as applicable, pursuant hereto.

 

(m) To
the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent, approval
or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or compliance with
any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and waive any such noncompliance
with the terms of said documents.

 

[SIGNATURE
PAGE FOLLOW]

 

    	22

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed on the day and year first above written.

 

	DATA443 RISK
    MITIGATION, INC.	 
	 	 	 
	By: 	 	 
	Name:	Jason Remillard	 
	Title:	Chief
Executive Officer	 
	 	 	 
	DATA443 RISK
    MITIGATION, INC. (a North Carolina corporation and wholly-owned subsidiary of the Company)	 
	 	 	 
	By: 	                       	 
	Name:	 	 
	Title:	 	 
	 	 	 
	AUCTUS FUND,
    LLC	 
	 	 	 
	By: 	 	 
	Name:	Lou Posner	 
	Title:	Managing
Director	 

 

    	23

     

    

 

SCHEDULE
A

 

Principal
Place of Business of Debtors: 101 J Morris Commons Lane, Suite 105, Morrisville, NC 27560

 

Locations
Where Collateral is Located or Stored: 101 J Morris Commons Lane, Suite 105, Morrisville, NC 27560

 

    	1

     

    

 

SCHEDULE
B

 

None

 

    	2

     

    

 

SCHEDULE
C

 

With
respect to Section 15(b) of this Agreement only, the State of Nevada and the State of North Carolina.

 

    	3

     

    

 

SCHEDULE
D

 

Data443
Risk Mitigation, Inc., a Nevada corporation; C10085-1998

 

Data443 Risk Mitigation, Inc., a North Carolina corporation; 1609324

 

    	4

     

    

 

SCHEDULE
E

 

Landstar,
Inc.

 

    	5

     

    

 

SCHEDULE
F

 

Trademarks:

 

ClassiDocs®

ARALOC®

DataExpressTM

Data443(R)

ArcMailTM

 

Patents:

 

8,347,313

8,843,997

 

    	6

     

    

 

SCHEDULE
G

 

None

 

    	7

     

    

 

SCHEDULE
H

 

100%
of all equity ownership of Data443 Risk Mitigation, Inc., a North Carolina corporation

 

    	8

     

    

 

ANNEX
A

to

SECURITY

AGREEMENT

 

FORM
OF ADDITIONAL DEBTOR JOINDER

 

Security
Agreement dated as of April 22, 2021 made by Data443 Risk Mitigation, Inc.

and
its subsidiaries party thereto from time to time, as Debtors to and in favor of

the
Secured Parties identified therein (the “Security Agreement”)

 

Reference
is made to the Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings
given to such terms in, or by reference in, the Security Agreement.

 

The
undersigned hereby agrees that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above, the undersigned
shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the Security
Agreement as fully and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made the
representations and warranties set forth therein as of the date of execution and delivery of this Additional Debtor Joinder. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL
AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

 

Attached
hereto are supplemental and/or replacement Schedules to the Security Agreement, as applicable.

 

An
executed copy of this Joinder shall be delivered to the Secured Parties, and the Secured Parties may rely on the matters set forth herein
on or after the date hereof. This Joinder shall not be modified, amended or terminated without the prior written consent of the Secured
Parties.

 

    	 	 

     

    

 

IN
WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.

 

	 	[Name of Additional Debtor]
	 	 	 
	 	By:	 
	 	Name: 	 
	 	Title:	 
	 	 	                             
	 	Address:	 

 

Dated:hzo-ex101_251.htm

Exhibit 10.1

KEY EXECUTIVE RETENTION AGREEMENT

This Key  Executive Retention Agreement (this “Agreement”), dated as of February 25, 2021 is by and between MarineMax, Inc., a Florida corporation (the “Company”), and Anthony Cassella (the “Executive”). 

Background

The Company is in the business of selling and servicing new and used recreational boats and marine products and services; it also provides yacht brokerage, yacht management, crew placement, financing and insurance services and charter services.  The geographical scope of its services is, as of the date of this Agreement, throughout North America, the Caribbean, Europe and parts of Asia.  The Executive desires either:  (a) to continue employment with the Company or (b) to become employed by the Company and has represented to the Company that the Executive does not have any agreements or obligations with any entity (including any prior employer) that would limit the Executive’s ability to provide services to the Company.  The Company desires to employ (or continue to employ) the Executive provided that, as an express condition of such employment, the Executive enters into this Agreement with the Company.

The Executive acknowledges that the Company’s confidential information, its relationships with its customers and vendors and, in particular, its trade secrets (including, without limitation, its sales procedures, arrangements with vendors and marketing strategies), have significant economic value to the Company, whether actual or potential, and should be protected from disclosure to or use by the Company’s competitors.  The Executive further acknowledges that the Company has provided, or will provide, specialized training of significant value to the Executive.  In the course of this training, the Executive has been, or will be, exposed to a great deal of confidential information about the Company, including its trade secrets.

The parties agree that: (a) this Agreement is supported by valuable consideration, receipt of which is acknowledged; (b) mutual promises and obligations are being made and undertaken by them; and (c) the Agreement is entered into voluntarily by them.

Accordingly, in consideration of the above and the mutual covenants and agreements set forth below, the parties agree as follows:

Terms

1.Consideration.  In exchange for the promises made by the Executive in this Agreement, the Company will provide to the Executive valuable consideration, including: (a) employment or continued employment, in an at-will capacity and (b) eligibility for severance in the event of the termination of the Executive.  

2.Duty of Loyalty; Best Efforts.   The Executive agrees to provide services to the Company using reasonable care and with loyalty and honesty.  During employment, the Executive agrees to devote the Executive’s best efforts, energies and skill in the performance of services to the Company and to devote full working time and attention exclusively to the business and affairs of the Company.  The Executive agrees not to engage in any activity to the Company’s detriment (whether reputational or otherwise), such as but not limited to working for (or providing any consulting services to) a Company competitor in any capacity during employment.

 

 

3.Company Documents and Property.  The Executive agrees that all memoranda, books, papers, letters, documents and data (including all duplicates and electronic versions of those materials as well as other electronically created, generated, stored or transmitted information), as well as all computer hardware and software, credit cards, keys, telephones/mobile devices and similar items/property provided to the Executive by the Company, used by the Executive in providing services to the Company, or relating to the Company’s business and affairs (the “Company Documents/Property”) belong to the Company. The Executive agrees that all Company Documents/Property will be used by the Executive only in the course of providing services to the Company and only in its best interests.  The Executive agrees to return to the Company all Documents/Property (including all duplicates and electronic versions) either at its request or at the end of the Executive’s employment (irrespective of the reason(s) for its end), with all Documents/Property being returned in good condition (ordinary wear and tear excepted), unencrypted and not password protected.

4.Confidential Information.  The Company will provide the Executive, or permit the Executive to acquire, be exposed to, and/or have access to, documents, data, and information of the Company and/or its customers or vendors which is sensitive, confidential, proprietary and/or a trade secret (“Confidential Information”).  The Executive acknowledges that the Company has a unique method of doing business consisting of a variety of trade secrets and other Confidential Information and that the Executive has had, or will have, access to these valuable trade secrets.  Such Confidential Information will include specialized training delivered or provided to the Executive.  At all times, both during and after employment, the Executive shall retain all Confidential Information in confidence and not disclose it or use it other than in the Company’s best interests and only when such disclosure or use is required for the Executive’s performance of services for the Company (subject at all times to the Executive’s compliance with all applicable laws, rules and regulations, including, without limitation, the United States securities laws, rules and regulations).  As used in this Agreement, Confidential Information includes but is not limited to: 

(a)The Company’s standard operating and sales/marketing procedures, training materials, computer software and/or programs, forms, processes, know-how, scientific, technical, or product information, whether patentable or not, which is of value to the Company and not generally known outside the Company;

(b)Confidential information about or obtained from third parties, including the Company’s customers and vendors concerning their products, business, business needs, equipment specifications, terms of supply or service contracts;

(c)Personnel information, including information about the Company’s Executive’s personal or medical histories, compensation, benefits, terms and conditions of employment, evaluations, actual/proposed promotions and personnel actions, Executive training methods and materials; 

(d)Confidential business information of the Company, including financial information, marketing and business plans, strategies, projections, business opportunities, customer identities or lists or contact information (including, without limitation, the identity of any past, present and prospective customers), sales techniques, sales and cost information, internal 

2

 

 

financial statements or reports, profit, loss, or margin information, and customer and vendor pricing information;

(e)Trade secrets of the Company; and

(f)Other information designated by the Company as Confidential Information, or that would otherwise appear to a reasonable person to be Confidential Information in the context and circumstances in which the information is disclosed or used, or that is deemed by law to be Confidential Information.

 “Confidential Information” does not include information which has become generally known through no act or omission of the Executive.

5.Noncompetition and Nonsolicitation.  

(a)The Executive agrees that, during employment by the Company (or by any Company parent, affiliate or subsidiary), and for a period of 24 months after the termination of such employment (irrespective of the reason(s) for the end of employment), the Executive will not engage in a business, directly or indirectly, that sells, rents, brokers, provides storage for, or leases boating products or services or finance and insurance products or services anywhere in the United States and any other country in which the Company is doing business at the time of the termination of employment.  The Executive acknowledges that the Company has operations throughout the United States and other countries and that his duties will involve, from time to time, interactions with customers, supplies and other employees throughout the United States and other countries.  The term “engage in” shall include, but shall not be limited to, activities, whether direct or indirect, as proprietor, partner, shareholder, member, officer, director, landlord, principal, agent, Executive, consultant, independent contractor, joint venturer, investor or lender; provided, however, that the ownership of not more than one percent (1%) in the aggregate by the Executive of the stock of a publicly held corporation shall not be included in such term.

(b)In furtherance of, and without in any way limiting the restriction in Section 5(a) above, for the period specified in Section 5(a) above, the Executive shall not, directly or indirectly:

(i)Request any past, present, or future customers, suppliers or vendors of the Company (or any Company parent, affiliate or subsidiary), directly or indirectly, to curtain or cancel their business with the Company (or any Company parent, affiliate or subsidiary);

(ii)Solicit, canvas, or accept, or authorize any other person to solicit, canvas, or accept, from any past, present, or future customers, suppliers or vendors of the Company (or any Company parent, affiliate or subsidiary), any business for any other person, firm or entity engaged in a business the same as, similar to, or in general competition with the business of the Company (or any Company parent, affiliate or subsidiary) being conducted within the territorial limits described in Section 5(a) above;

(iii)solicit for employment, employ or agree to employ any Executive, contractor or consultant of the Company (or of any Company parent, affiliate or subsidiary);

3

 

 

(iv)Induce or attempt to influence any Executive, contractor or consultant of the Company (or of any Company parent, affiliate or subsidiary) to terminate or change the nature of such Executive’s employment; or

(v)make material preparations to engage in the activities prohibited by Section 5(a)(i)-(iv) above.

As used in this Section 5(b), “future customer” shall mean a customer with whom business will have been transacted between the date of this Agreement and the end of the term specified in Section 5(a) above.

6.Severance. 

(a)Definitions.  The following terms shall have the meanings set forth below:

(i)“Change in Control” shall mean the occurrence of any of the following:

(i)A merger, consolidation, sale of stock or assets, or other corporate transaction or disposition (in one transaction or a series of transactions) to any person or group (as defined in Rule 13d-5 under the Securities Exchange Act) other than an affiliate of the Company, but excluding any assignment as security for indebtedness, after which the stockholders of the Company immediately prior to the consummation of such transaction would not own more than 50% of the combined voting power of the surviving or resulting entity immediately following the consummation of such transaction;

(ii)the sale, liquidation, distribution, or other disposition of 50% or more of the consolidated assets of the Company to any person or group (as defined in Rule 13d-5 under the Securities Exchange Act) other than an affiliate of the Company;

(iii)a majority of the members of Company’s board of directors is replaced during any 12-month period by directors whose appointment is not endorsed by a majority of the members of the Company’s board of directors prior to the date of appointment or election; or

(iv)approval by the Company’s shareholders of a definitive agreement or plan to liquidate or dissolve the Company.

(ii)“Good Cause,” as it applies to the determination by the Company to terminate the employment of the Executive, shall mean any one or more of the following: (A) the Executive’s breach of the Executive’s duties to the Company to the extent not cured within 10 days after notice of such breach is delivered to the Executive, if such breach is curable, otherwise termination shall be immediate; (B) the Executive’s negligence in the performance or intentional nonperformance of any of the Executive’s material duties and responsibilities to the Company (including acts of insubordination); (C) the Executive’s dishonesty, fraud, or misconduct with respect to the business or affairs of the Company, which materially and adversely affects the operations or reputation of the Company (including acts of insubordination); (D) the Executive’s commission of any act constituting a felony crime or the commission of any act involving moral 

4

 

 

turpitude or material dishonesty (including theft of Company property); (E) the Executive’s act or omission which causes or potentially could cause material harm to the Company’s reputation; (F) a confirmed positive illegal drug test result or (G) abuse of alcohol or prescription drugs on Company business.  In the event of a termination by the Company for Good Cause, the Executive shall have no right to any severance under this Section 6.

(iii)“Good Reason,” as it applies to the determination by the Executive to terminate the Executive’s employment with the Company shall mean that:  (A) without the Executive’s prior written approval, the Executive’s annual base salary for a fiscal year is reduced to a level that is less than 80% of the base salary paid to the Executive during the prior fiscal year unless such reduction does not exceed the average of the reductions for all other  persons designated by the Company as the executive officers or (B) a material breach of this Agreement by the Company.  In order for an event to justify termination for Good Reason, the Executive must give written notice to the Company of such event within 90 days of its first occurrence and the Company must have 30 days to cure, if possible.

(iv)“Employment Termination” shall mean the Executive no longer being an executive officer of the Company as a result of a termination by:  (A) the Company without Good Cause or (B) by the Executive with Good Reason.

(v)“Securities Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.  

(b)The following provisions shall apply should: (A) the Company terminate the Executive’s employment without Good Cause or (B) the Executive terminate the Executive’s employment with Good Reason:

(i)The Company shall pay to the Executive a bi-weekly payment (less applicable withholdings and deductions) for eighteen (18) consecutive months following the Employment Termination each payment equal to the average of the base salary and cash bonus paid to the Executive for the two prior full fiscal years divided by 26 yearly payments, and payable on such dates as would otherwise be paid by the Company.

(ii)All options to purchase Common Stock of the Company held by the Executive shall continue to vest and shall be exercisable for eighteen (18) months following Employment Termination, up to their full term, to the extent that such vesting or exercise will not cause the Executive with respect to such options to be subject to any excise tax under Section 409A notwithstanding the Employment Termination.

(iii)All time-based restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the Executive that, as of Employment Termination, are not then subject to any performance conditions for vesting, shall vest and shall not be subject to any risk of forfeiture or repurchase. 

(iv)The Executive shall be entitled to receive all other accrued but unpaid benefits relating to vacations and other Executive perquisites through the date of Employment Termination, except that the Executive shall not continue to accrue vacation benefits or other Executive perquisites after the date of Employment Termination.

5

 

 

(c)In the event that the Executive suffers an Employment Termination within twelve (12) months following a Change of Control, the Company shall pay to the Executive a bi-weekly payment (less applicable withholdings and deductions) for eighteen (18) consecutive months following the Employment Termination, each payment equal to the average of the base salary and cash bonus paid to the Executive for the three prior full fiscal years divided by 26 yearly payments, and payable on such dates as would otherwise be paid by the Company. Additionally, all time-based restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the Executive that, as of Employment Termination, are not then subject to any performance conditions for vesting, shall vest and shall not be subject to any risk of forfeiture or repurchase.

(d)The Company may terminate Executive’s employment in the event the Executive is disabled.  The Executive shall be disabled if the Executive is unable to engage in any substantial gainful activity by reason of a medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if applicable, for at least three months the Executive is receiving income replacement benefits under a Company sponsored plan by reason of any medically determined physical or mental impairment expected to last at least twelve consecutive months or result in death, or if the Executive is determined to be disabled under a Company disability plan with a similar definition of disability.  In the event Executive’s employment under this Agreement is terminated as a result of Executive’s disability, Executive shall receive from the Company, in a lump-sum payment due within ten (10) days of the effective date of termination, an amount equal to the average of the base salary and cash bonus paid to Executive for the two (2) prior full fiscal years, for one (1) year.  In the event of such termination, all options to purchase Common Stock of the Company held by Executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause Executive with respect to such options to be subject to any excise tax under Section 409A notwithstanding the termination of employment.  All restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the Executive which, as of the date of the disability of Executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of Executive’s termination due to disability (as defined in this paragraph).

(e)The employment of Executive shall terminate immediately upon Executive’s death provided that the Company shall pay to the estate of Executive an amount equal one and a half times (1.5x) the Executive’s base salary at that time.  In the event of such termination, all options to purchase Common Stock of the Company held by Executive shall thereupon vest and shall be exercisable for the maximum period of time, up to their full term, that will not cause Executive with respect to such options to be subject to any excise tax under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) notwithstanding the termination of employment.  All restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) held by the Executive which, as of the date of the death of Executive, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as of the date of Executive’s death.  The payment described in this Section, if payable, will be paid within ten (10) days after the Executive’s death.

6

 

 

(f)The Company’s obligations under this Section 6 are contingent upon the Executive’s executing (and not revoking during any applicable revocation period) a valid, enforceable, full and unconditional release of all claims the Executive may have against the Company (whether known or unknown) as of the date of Employment Termination in the form (with any blanks in Exhibit A being appropriately filled in) as provided by the Company no later than 60 days after the date of Employment Termination. If the above release is executed and delivered and no longer subject to revocation within 60 days after the date of Employment Termination, then the following shall apply:

(i)To the extent any payments due to the Executive under this Section 6 are not “deferred compensation” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, then such payments shall commence upon the first scheduled payment date immediately after the date the release is executed and no longer subject to revocation (the “Release Effective Date”). The first such cash payment shall include payment of all amounts that otherwise would have been due prior to the Release Effective Date under the terms of this Section 6 had such payments commenced after the date of Employment Termination, and any payments to be made thereafter shall continue as provided in this Agreement. The delayed payments shall in any event expire at the time such payments would have expired had such payments commenced after the date of Employment Termination.

(ii)To the extent any payments due to the Executive under this Section 6 above are “deferred compensation” for purposes of Section 409A, then such payments shall commence upon the 60th day following the date of Employment Termination. The first such cash payment shall include payment of all amounts that otherwise would have been due prior to such date under the terms of this Section 6 had such payments commenced after the date of Employment Termination, and any payments to be made thereafter shall continue as provided in this Agreement.  The delayed payments shall in any event expire at the time such payments would have expired had such payments commenced immediately following the date of Employment Termination.

7

 

 

(g)Notwithstanding  any provisions in this Section 6 to the contrary, if at the time of the Employment Termination the Executive is a “specified employee” as defined in Section 409A and the deferral of the commencement of any payments or benefits otherwise payable as a result of such Employment Termination is necessary to avoid the additional tax under Section 409A, the Company will defer the payment or commencement of the payment of any such payments or benefits (without any reduction in such payments or benefits ultimately paid or provided to the Executive) until the date that is six months following the Employment Termination.  Any monthly payment amounts deferred will be accumulated and paid to the Executive (without interest) six months after the date of Employment Termination in a lump sum, and the balance of payments due to the Executive will be paid as otherwise provided in this Section 6. Each monthly payment described in this Section 6 is designated as a “separate payment” for purposes of Section 409A and, subject to the six month delay, if applicable, and the first monthly payment shall commence on the payroll date as in effect on termination following the termination. For purposes of this Section 6, a termination of employment means a separation from service as defined in Section 409A.  No reimbursement payable to the Executive pursuant to any provisions of this Section 6 or pursuant to any plan or arrangement of the Company shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, and no such reimbursement during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409A. This Section 6 will be interpreted, administered and operated in accordance with Section 409A, although nothing in this Agreement will be construed as an entitlement to or guarantee of any particular tax treatment to the Executive.

(h)This Agreement is intended to comply with Section 409A or an exemption under Section 409A.  Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. This Section 6 will be interpreted, administered and operated in accordance with Section 409A, although nothing in this Agreement will be construed as an entitlement to or guarantee of any particular tax treatment to the Executive.  The Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A.

(i)For the avoidance of doubt, no severance shall be payable under this Agreement or otherwise if the Company terminates the Executive for Good Cause or the Executive resigns without Good Reason.  

7.Enforcement and Severability.  The Executive agrees that the restrictions on the Executive’s activities contained in this Agreement, particularly those in Section 5 above, are reasonable and necessary to protect the Company, including its property, rights and goodwill.  If any of the restrictions on the Executive’s activities are deemed to be invalid or unenforceable based upon their duration or extent or otherwise, the parties agree that such provisions shall be modified to make them enforceable to the fullest extent permitted by law (in recognition of the parties’ intention that the restrictions are intended to provide the Company with the maximum protections permitted by law).  Whenever possible, each term and covenant of this Agreement shall be 

8

 

 

interpreted in such a manner as to be effective and valid under applicable law, but if any term or covenant of this Agreement shall be prohibited by or be invalid under applicable law, such term or covenant shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such term or covenant or the remaining terms or covenants of this Agreement.  The parties expressly agree that this Agreement if and as modified in accordance with this paragraph shall be binding and enforceable against each of them.  The parties also acknowledge that the “Background” section is true and accurate in all respects and is an integral part of this Agreement.

8.Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Company, its subsidiaries, affiliates, successors, and assigns.  The Company may assign this Agreement to a successor without further notice to or consent of the Executive. 

9.Injunctive Relief in Event of Breach.  The Executive agrees that the Executive’s breach of this Agreement would irreparably harm the Company, that damages from such breach would be difficult or impossible to estimate, and that monetary damages would be an insufficient remedy to the Company.  Therefore, the Executive consents to the enforcement of this Agreement by means of a temporary or permanent injunction which may be issued without notice to the Executive and without the posting of bond, and other appropriate equitable relief in any competent court, in addition to any other remedies the Company may have under this Agreement or otherwise, as well as an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.  If it is determined that the Executive breached the non-competition or non-solicitation provisions set forth in Section 5 of this Agreement, the Executive agrees that the applicable period of the Executive’s restricted activities under the breached provision shall be extended by one day for each day the Executive is found to have violated the restriction.

10.Applicable Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Florida without giving effect to its conflict of laws provisions.  

11.All disputes arising out of this Agreement shall be resolved as set forth in this Section 11.  If any party hereto desires to make any claim arising out of this Agreement (“Claimant”), then such party shall first deliver to the other party (“Respondent”) written notice (“Claim Notice”) of Claimant’s intent to make such claim explaining Claimant’s reasons for such claim in sufficient detail for Respondent to respond.  Respondent shall have ten (10) business days from the date the Claim Notice was given to Respondent to object in writing to the claim (“Notice of Objection”), or otherwise cure any breach hereof alleged in the Claim Notice.  Any Notice of Objection shall specify with particularity the reasons for such objection.  Following receipt of the Notice of Objection, if any, Claimant and Respondent shall immediately seek to resolve by good faith negotiations the dispute alleged in the Claim Notice, and may at the request of either party, utilize the services of an independent mediator.  If Claimant and Respondent are unable to resolve the dispute in writing within ten (10) business days from the date negotiations began, then without the necessity of further agreement of Claimant or Respondent, the dispute set forth in the Claim Notice shall be submitted to binding arbitration (except for claims arising out of Sections 3 or 7 hereof), initiated by either Claimant or Respondent pursuant to this Section.  Such arbitration shall be conducted before a panel of three (3) arbitrators in Tampa, Florida, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration 

9

 

 

Association (“AAA”) then in effect provided that the parties may agree to use arbitrators other than those provided by the AAA.  The arbitrators shall not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party.  The arbitrators shall have the authority to order back-pay, severance compensation, vesting of options (or cash compensation in lieu of vesting of options), vesting and the removal of restrictions on restricted stock and/or restricted stock units (or comparable forms of equity compensation, if any) that, as of the effective date of the termination of Executive, are not then subject to any performance conditions for vesting, reimbursement of costs, including those incurred to enforce this Agreement, and interest thereon in the event the arbitrators determine that Executive was terminated without disability or without Good Cause, as defined above, respectively, or that the Company has otherwise materially breached this Agreement.  A decision by a majority of the arbitration panel shall be final and binding.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  The direct expense of any mediation or arbitration proceeding and, to the extent Executive prevails, all reasonable legal fees shall be borne by the Company.

12.Waiver.  The waiver or acceptance by the Company of any Executive breach of any term or condition in this Agreement shall not be deemed to be a waiver of any other term or condition, or any prior or subsequent breach of the same term or condition.

13.Entire Agreement.  The Executive may be asked, during employment, to sign additional or updated agreements.  This Agreement, and any such subsequent agreements, represent the entire agreement between the Company and the Executive as to their subject matters and supersede all prior and contemporaneous employment agreements between the Company (or its parent, subsidiaries or affiliates) and the Executive.  This Agreement may not be modified other than by a writing signed by both parties.  

14.Protected Rights of the Executive.  Nothing in this Agreement is intended to nor does it, in any way, restrict or impede the Executive from exercising protected rights to the extent such rights cannot be waived by agreement, or from complying with any applicable law or regulation or valid order of a court of competent jurisdiction or an authorized government agency, provided that such Executive compliance does not exceed that required by the law, regulation or order.

The Executive acknowledges having read this Agreement in its entirety.  The Executive agrees that the Executive fully understands the terms, conditions and obligations of the Agreement, that in deciding to sign the Agreement the Executive has not relied on any representation or statement not set forth in this Agreement, that the Executive is competent to execute this Agreement, that the Executive’s decision to sign the Agreement was not been obtained by any duress, that the Executive freely and voluntarily enters this Agreement with the Company, and that the Executive is being employed by the Company at-will.  The Executive either has retained counsel in connection with this Agreement or has voluntarily declined to retain counsel.

 

 

 

10

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth under their respective signatures.

 

		
	
 
	
MARINEMAX, INC.

 

 

By:

 

Its:

 

Date:

	
 
	
 

	
 
	
EXECUTIVE:

 

 

 

 

Date:

 

 

11

 

 

 

EXHIBIT A

 

DATE

 

 

NAME

ADDRESS

Dear NAME:

This letter agreement and release (this “Agreement”) contains all understandings between us with respect to your separation from employment with MarineMax Inc., MarineMax Services, Inc. and any subsidiaries or affiliates(referred to throughout this Agreement as the “Employer” or the “Company”). You may be referred to throughout this Agreement as “you” or the “Employee”. By signing this Agreement you are resolving any and all issues and claims related to your employment at the Employer and your separation from such employment.  This Agreement has already been signed on behalf of the Employer.  There are no other written or oral agreements regarding your separation from employment at the Employer aside from what is written in this letter agreement and release.

Your last day of employment with the Employer was _____________.  In consideration for your signing this Agreement and being bound by its terms, the Employer agrees to pay as contemplated in the Key Executive Retention Agreement dated _________, 20___, in the amount of $________, $_______ (per month over the next ___ months) minus all applicable customary withholdings and deductions,  starting within ten (10) days from the date you sign and return this Agreement.   As provided in the Policy, all existing stock [option’s and RSU’s] not otherwise subject to performance requirements, will continue to vest over the same ____-month period. Any unused vacation days through your last day of employment will also be paid to you.  You will also receive information regarding your alternatives for a lump sum distribution or direct rollover of your 401(k) account, if applicable. You agree that no other benefits or monies are owed to you or will be paid to you arising out of your employment at the Employer.

In consideration for the above, you agree to release and discharge the Employer, its shareholders, any related companies, affiliates, successors and assigns, and their respective directors, officers, employees and agents, insurers, benefit plans (including any pension or profit-sharing, savings, health, trusts or other benefit plans of any nature) as well as the plans’ respective trustees and administrators (the “Releasees”) from any and all causes of action, suits, claims, obligations, promises, administrative actions, complaints and demands, whatsoever, whether known or unknown, in law or in equity, that you or any other person on your behalf ever had, has, or may have as of the date you sign this Agreement (the “Released Claims”). The Released Claims include, but are not limited to, any rights or claims you may have under Title VII of the Civil Rights Act of 1964, the American with Disabilities Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act (the “OWBPA”), and any other federal, state or local laws, ordinances or regulations pertaining to employment (including laws relating to harassment, discrimination or retaliation/whistleblowing), employee benefits or compensation; and any common law claims for wrongful discharge, breach of contract 

 

 

or implied contract, or bad faith/unfair dealings. However, the Released Claims do not include: (i) any claims arising out of or related to events occurring after you sign this Agreement; (ii) any claims for vested benefits under any Employer benefit plan; (iii) any claims which by law cannot be released by you and (iv) any claims related to the Employer’s performance under this Agreement.

You understand and acknowledge that various federal, state and local laws, provide you with the right to bring actions against the Employer if, among other things, you believe you have been discriminated against or harassed on the basis of race, ancestry, color, age, religion, sex, national origin, disability, sexual orientation, veterans’ status or benefit eligibility or if you have been subject to retaliation for complaining of discrimination/harassment.  With full understanding of the rights afforded under those laws, you state that you have not filed any such claims against the Employer, you agree that you will not file any action in the future against the Releasees based upon any alleged violation of these Acts or based on any other theory of law.  Further, you waive any rights to assert a claim for relief available under those laws or under any other theory of law or statute, including, but not limited to, back pay, front pay, attorneys’ fees, damages, interest, waiting time penalties, reinstatement, or injunctive relief.  This Agreement will not preclude you from filing a lawsuit to enforce this Agreement or to file a charge of discrimination with a federal, state or local civil agency (but you agree to waive any right to any monetary recovery if such an agency successfully pursues any claim on your behalf).  If, contrary to this Agreement, you initiate any type of legal action, except as provided herein, this Agreement shall serve as a complete bar to any such action, and you agree to pay any and all costs involved, including attorneys’ fees and expenses, for both yourself and the Employer, at all levels of proceedings.

By signing below, you acknowledge that this Agreement provides you with severance benefits in addition to those to which you would otherwise be entitled if you do not sign this Agreement.

The Employer, by entering into this Agreement, does not admit and expressly denies any liability to you except for the obligations set forth in this Agreement.

You acknowledge and agree that you will continue to be bound by the Confidentiality and Non-solicitation Agreement (the “Confidentiality Agreement”) executed by you on __________, in accordance with the terms and time period stated in the Confidentiality Agreement.  Further, you agree not to disclose any confidential or proprietary information and you will immediately return all such information along with any Employer materials you obtained in the course of your employment, including originals and any copies, along with any other items of the Employer property in your possession, including but not limited to, access cards, cellular telephones, beepers, computers, and keys.  For purposes of this Agreement, “confidential or proprietary information” means the identity of the Employer’s customers, information regarding the Employer’s customers, including but not limited to customer lists, methods of doing business, marketing and promotion of the Employers’ business, and any information disclosed to you or known by you as a consequence of or through your employment by the Employer (including information conceived, originated, discovered or developed by you or the Employer) during your employment with the Employer or its business or predecessor business.  To the extent that there is any conflict between the terms of this Agreement and the Confidentiality Agreement, the conflict will be resolved so as to provide the greatest protection to the Employer.

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You agree that you have not and will not at any time disparage the Employer, its current and former directors, officers or employees in any manner.  You agree that you have not, directly or indirectly, made negative statements or comments in any form, manner or medium about the Employer or its current or former officers, directors or employees orally, in writing or in any other manner (such as through the use of emails, blogs, photographs, social media (e.g., Facebook or Twitter), or any other electronic or web-based media) and that in the future you will not engage in such conduct.  If you identify the Employer as the reference for your potential future employers, persons who contact the Employer will be given only your dates of employment and last job title.

You agree that you shall not disclose the terms of this Agreement other than as required by law. However, it will not be a violation of this paragraph for you to show this Agreement to a lawyer in the course of obtaining legal advice about it, to report on your tax returns  the monies being paid by the Employer pursuant to this Agreement or to inform any spouse or professional legal or tax advisor of the amount/nature of those payments if you take reasonable steps to ensure that the information will not be further disclosed, including you informing any lawyer, spouse or professional advisor that such information is confidential and must not be disclosed to others except as required by law.  

You agree that you have had a full and fair opportunity to review, consider and understand this Agreement and that you are signing it freely and voluntarily and not as a result of any coercion, duress or undue influence.  You also understand that you have at least twenty-one (21) days to consider this letter agreement prior to signing it.  You agree that the Employer is hereby advising you in writing that you have the opportunity to consult with an attorney at your own expense prior to signing this Agreement and that the Employer is recommending that you do so.  You also understand that you must sign this Agreement and deliver it to the Employer no later than 5:00 pm eastern time on (the “Policy”) __________________________ [21 days], or the offer of severance benefits in this Agreement is withdrawn.

You understand that, pursuant to the OWBPA:  (i) this Agreement be revocable by you for seven (7) days following you signing it and (ii) this Agreement is not effective or enforceable until that seven-day period expires and you have not revoked it.  If you decide to revoke it, you shall not be entitled to the severance benefits provided by this Agreement.  If you wish to revoke, you must provide the Employer with timely written notice of revocation of this Agreement by sending it to the Employer’s Chief Executive Officer and Chief Financial Officer at 2600 McCormick Drive, Suite 200, Clearwater, Florida 33759, so that it is received by the close of business on the seventh day after you have signed the Agreement.

You agree that no statements or representations other than those contained in writing in this Agreement have been made to you to induce you to sign the Agreement, that the Agreement supersedes any other agreement or representation as to the terms of your separation whether in writing or oral (but that the Confidentiality Agreement survives your signing of this Agreement), and that this Agreement may not be changed except upon the express, prior written consent of both you and the Employer.  

The terms of this Agreement shall remain confidential. Notwithstanding the above, the Confidentiality Agreement executed by you shall remain in full force and effect in accordance with its terms for the time periods prescribed in the Confidentiality Agreement.

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The Employer’s execution and performance of its obligations under this Agreement are specifically conditioned on:  (a) you signing, delivering to the Employer and not revoking this Agreement within the required time period described above; (b) you keeping confidential (other than as expressly provided in this Agreement) the existence and terms of this Agreement from the time you first learns of its terms until you sign this Agreement; (c) your satisfactory performance of your duties until the Separation Date and (d) your compliance with the terms of this Agreement.

You agree that this Agreement shall be governed by and interpreted in accord with the laws of the State of Florida and that any claims arising out of this Agreement must be brought in either the relevant court having jurisdiction in Pinellas County, Florida, or the United States District Court for the Middle District of Florida (Tampa Division).

You agree that, in the event that any one or more provisions of this Agreement shall be deemed illegal or unenforceable for any reason, such provision shall be modified or deleted in such manner as to make this Agreement and/or the Release, as modified, legal and enforceable to the fullest extent permitted under applicable law.

Please indicate your agreement with all of the terms and conditions of this Agreement by signing both the original and copy of this Agreement, having them notarized, and then returning the original to me.  The copy is for your files.

I wish you well in your future endeavors. 

Very truly yours,

 

By

 

Title:

 

 

 

I acknowledge that I have read and understand the above Agreement, that I freely and voluntarily enter into it, and that I accept and agree to all terms and conditions.

 

 

NAMEDate

 

 

Witnessed this  day of , 20__.

 

My commission expires , .

 

Signature of Notary Public:

 

 
 
4

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