Document:

Exhibit 4.2 Promissory Note

SECURED CONVERTIBLE PROMISSORY NOTE

Effective Date: July 7, 2015

U.S. $252,500.00

FOR VALUE RECEIVED, RVUE HOLDINGS, INC., a Nevada corporation (“Borrower”), promises to pay to TYPENEX CO-INVESTMENT, LLC, a Utah limited liability company, or its successors or assigns (“Lender”), $252,500.00 and any interest, fees, charges, and late fees on the date that is seventeen (17) months after the Purchase Price Date (the “Maturity Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance (including all Tranches (as defined below), both Conversion Eligible Tranches (as defined below) and Subsequent Tranches (as defined below) that have not yet become Conversion Eligible Tranches) at the rate of ten percent (10%) per annum from the Purchase Price Date until the same is paid in full. This Secured Convertible Promissory Note (this “Note”) is issued and made effective as of July 7, 2015 (the “Effective Date”). This Note is issued pursuant to that certain Securities Purchase Agreement dated July 7, 2015, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Note. Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.

This Note carries an OID of $22,500.00. In addition, Borrower agrees to pay $5,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), all of which amount is included in the initial principal balance of this Note. The purchase price for this Note shall be $225,000.00 (the “Purchase Price”), computed as follows: $252,500.00 original principal balance, less the OID, less the Transaction Expense Amount. The Purchase Price shall be payable by delivery to Borrower at Closing of the Investor Notes (as defined in the Purchase Agreement) and a wire transfer of immediately available funds in the amount of the Initial Cash Purchase Price (as defined in the Purchase Agreement). This Note shall be comprised of four (4) tranches (each, a “Tranche”), consisting of (i) an initial Tranche in an amount equal to $87,500.00 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (as defined in the Purchase Agreement) (the “Initial Tranche”), and (ii) three (3) additional Tranches, each in the amount of $55,000.00, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (each, a “Subsequent Tranche”). The Initial Tranche shall correspond to the Initial Cash Purchase Price, $7,500.00 of the OID and the Transaction Expense Amount, and may be converted any time subsequent to the Purchase Price Date. The first Subsequent Tranche shall correspond to Investor Note #1 and $5,000.00 of the OID, the second Subsequent Tranche shall correspond to Investor Note #2 and $5,000.00 of the OID, and the third Subsequent Tranche shall correspond to Investor Note #3 and $5,000.00 of the OID. Lender’s right to convert any portion of any of the Subsequent Tranches is conditioned upon Lender’s payment in full of the Investor Note corresponding to such Subsequent Tranche (upon the satisfaction of such condition, such Subsequent Tranche becomes a “Conversion Eligible Tranche”). In the event Lender exercises its Lender Offset Right (as defined below) with respect to a portion of an Investor Note and pays in full the remaining outstanding balance of such Investor Note, the Subsequent Tranche that corresponds to such Investor Note shall be deemed to be a Conversion Eligible Tranche only for the portion of such Tranche that was paid for in cash by Lender and the portion of such Investor Note that was offset pursuant to Lender’s exercise of the Lender Offset Right shall not be included in the applicable Conversion Eligible Tranche. For the avoidance of doubt, subject to the other terms and conditions hereof, the Initial Tranche shall be deemed a Conversion Eligible Tranche as of the Purchase Price Date for all purposes hereunder and may be converted in whole or in part at any time subsequent to the Purchase Price Date, and each Subsequent Tranche that becomes a Conversion Eligible Tranche may be converted in whole or in part at any time subsequent to the first date on which such Subsequent Tranche becomes a Conversion Eligible Tranche. For all purposes hereunder, Conversion Eligible Tranches shall be converted (or redeemed, as applicable) in order of the lowest-numbered Conversion Eligible Tranche and Conversion Eligible Tranches may be converted (or redeemed, as applicable) in one or more separate Conversions (as defined below), as determined in Lender’s sole discretion. At all times hereunder, the aggregate amount of any costs, fees or charges incurred by or assessable against Borrower hereunder, including, without limitation, any fees, charges or premiums incurred in connection with an Event of Default (as defined below), shall be added to the lowest-numbered then-current Conversion Eligible Tranche. 

1.

Payment; Prepayment. Provided there is an Outstanding Balance, on each Installment Date (as defined below), Borrower shall pay to Lender an amount equal to the Installment Amount (as defined below) due on such Installment Date in accordance with Section 8. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as defined below), as provided for herein, and delivered to Lender at the address furnished to Borrower for that purpose. All payments shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and unpaid interest, and thereafter, to (d) principal. Notwithstanding the foregoing, so long as Borrower has not received a Lender Conversion Notice (as defined below) or an Installment Notice (as defined below) from Lender where the applicable Conversion Shares have not yet been delivered and so long as no Event of Default has occurred since the Effective Date (whether declared by Lender or undeclared), then Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to Lender to prepay the Outstanding Balance of this Note, in full, in accordance with this Section 1. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to Lender at its registered address and shall state: (i) that Borrower is exercising its right to prepay this Note, and (ii) the date of prepayment, which shall be not less than five (5) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of Lender as may be specified by Lender in writing to Borrower. If Borrower exercises its right to prepay this Note, Borrower shall make payment to Lender of an amount in cash equal to 125% (the “Prepayment Premium”) multiplied by the then Outstanding Balance of this Note (the “Optional Prepayment Amount”). In the event Borrower delivers the Optional Prepayment Amount to Lender prior to the Optional Prepayment Date or without delivering an Optional Prepayment Notice to Lender as set forth herein without Lender’s prior written consent, the Optional Prepayment Amount shall not be deemed to have been paid to Lender until the Optional Prepayment Date. Moreover, in such event the Optional Prepayment Liquidated Damages Amount will automatically be added to the Outstanding Balance of this Note on the day Borrower delivers the Optional Prepayment Amount to Lender. In the event Borrower delivers the Optional Prepayment Amount without an Optional Prepayment Notice, then the Optional Prepayment Date will be deemed to be the date that is five (5) Trading Days from the date that the Optional Prepayment Amount was delivered to Lender. In addition, if Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to Lender within two (2) Trading Days following the Optional Prepayment Date, Borrower shall forever forfeit its right to prepay this Note.

2.

Security. This Note is secured by that certain Security Agreement of even date herewith, as the same may be amended from time to time (the “Security Agreement”), executed by Borrower in favor of Lender encumbering the Investor Notes, as more specifically set forth in the Security Agreement, all the terms and conditions of which are hereby incorporated into and made a part of this Note.

3.

Lender Optional Conversion.

3.1.

Lender Conversion Price. Subject to adjustment as set forth in this Note, the conversion price for each Lender Conversion (as defined below) shall be $0.08 (the “Lender Conversion Price”). However, in the event the Market Capitalization falls below $3,000,000.00 at any time, then in such event (a) the Lender Conversion Price for all Lender Conversions occurring after the first date of such occurrence shall equal the lower of the Lender Conversion Price and the Market Price as of any applicable date of Conversion, and (b) the true-up provisions of Section 11 below shall apply to all Lender Conversions that occur after the first date the Market Capitalization falls below $3,000,000.00, provided that all references to the “Installment Notice” in Section 11 shall be replaced with references to a “Lender Conversion Notice” for purposes of this Section 3.1, all references to “Installment Conversion Shares” in Section 11 shall be replaced with references to “Lender Conversion Shares” for purposes of this Section 3.1, and all references to the “Installment Conversion Price” in Section 11 shall be replaced with references to the “Lender Conversion Price” for purposes of this Section 3.1.

3.2.

Lender Conversions. Lender has the right at any time after the Purchase Price Date until the Outstanding Balance has been paid in full, including without limitation (a) until any Optional Prepayment Date (even if Lender has received an Optional Prepayment Notice) or at any time thereafter with respect to any amount that is not prepaid, and (b) during or after any Fundamental Default Measuring Period, at its election, to convert (each instance of conversion is referred to herein as a “Lender Conversion”) all or any part of the Outstanding Balance into shares (“Lender Conversion Shares”) of fully paid and non-assessable common stock, $0.001 par value per share (“Common Stock”), of Borrower as per the following conversion formula: the number of Lender Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by the Lender Conversion Price. Conversion notices in the form attached hereto as Exhibit A (each, a “Lender Conversion Notice”) may be effectively delivered to Borrower by any method of Lender’s choice (including but not limited to facsimile, email, mail, overnight courier, or personal delivery), and all Lender Conversions shall be cashless and not require further payment from Lender. Borrower shall deliver the Lender Conversion Shares from any Lender Conversion to Lender in accordance with Section 9 below. 

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3.3.

Application to Installments. Notwithstanding anything to the contrary herein, including without limitation Section 8 hereof, Lender may, in its sole discretion, apply all or any portion of any Lender Conversion toward any Installment Conversion (as defined below), even if such Installment Conversion is pending, as determined in Lender’s sole discretion, by delivering written notice of such election (which notice may be included as part of the applicable Lender Conversion Notice) to Borrower at any date on or prior to the applicable Installment Date. In such event, Borrower may not elect to allocate such portion of the Installment Amount being paid pursuant to this Section 3.3 in the manner prescribed in Section 8.3; rather, Borrower must reduce the applicable Installment Amount by the Conversion Amount described in this Section 3.3. 

4.

Defaults and Remedies.

4.1.

Defaults. The following are events of default under this Note (each, an “Event of Default”); provided, however, that the occurrence of any event described in Section 4.1(d) – (q) shall not be considered an Event of Default if such event is cured within ten (10) Trading Days of its occurrence: (a) Borrower shall fail to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; or (b) Borrower shall fail to deliver any Lender Conversion Shares in accordance with the terms hereof; or (c) Borrower shall fail to deliver any Installment Conversion Shares (as defined below) or True-Up Shares (as defined below) in accordance with the terms hereof; or (d) a receiver, trustee or other similar official shall be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or (e) Borrower shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (f) Borrower shall make a general assignment for the benefit of creditors; or (g) Borrower shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (h) an involuntary proceeding shall be commenced or filed against Borrower; or (i) Borrower shall default or otherwise fail to observe or perform any covenant, obligation, condition or agreement of Borrower contained herein or in any other Transaction Document, other than those specifically set forth in this Section 4.1 and Section 4 of the Purchase Agreement; or (j) any representation, warranty or other statement made or furnished by or on behalf of Borrower to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this Note shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or (k) the occurrence of a Fundamental Transaction without Lender’s prior written consent; or (l) Borrower shall fail to maintain the Share Reserve as required under the Purchase Agreement; or (m) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days prior written notice to Lender; or (n) any money judgment, writ or similar process shall be entered or filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more than $100,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender; or (o) Borrower shall fail to deliver to Lender original signature pages to all Transaction Documents within five (5) Trading Days of the Purchase Price Date; or (p) Borrower shall fail to be DWAC Eligible; or (q) Borrower shall fail to observe or perform any covenant set forth in Section 4 of the Purchase Agreement.

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4.2.

Remedies. Upon the occurrence of any Event of Default, Borrower shall within one (1) Trading Day deliver written notice thereof via facsimile, email or reputable overnight courier (with next day delivery specified) (an “Event of Default Notice”) to Lender. At any time and from time to time after the earlier of Lender’s receipt of an Event of Default Notice and Lender becoming aware of the occurrence of any Event of Default, Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding the foregoing, at any time following the occurrence of any Event of Default, Lender may, at its option, elect to increase the Outstanding Balance by applying the Default Effect (subject to the limitation set forth below) via written notice to Borrower without accelerating the Outstanding Balance, in which event the Outstanding Balance shall be increased as of the date of the occurrence of the applicable Event of Default pursuant to the Default Effect, but the Outstanding Balance shall not be immediately due and payable unless so declared by Lender (for the avoidance of doubt, if Lender elects to apply the Default Effect pursuant to this sentence, it shall reserve the right to declare the Outstanding Balance immediately due and payable at any time and no such election by Lender shall be deemed to be a waiver of its right to declare the Outstanding Balance immediately due and payable as set forth herein unless otherwise agreed to by Lender in writing). Notwithstanding the foregoing, upon the occurrence of any Event of Default described in clauses (d), (e), (f), (g) or (h) of Section 4.1, the Outstanding Balance as of the date of acceleration shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender. At any time following the occurrence of any Event of Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser of 22% per annum or the maximum rate permitted under applicable law (“Default Interest”); provided, however, that no Default Interest shall accrue during the Fundamental Default Measuring Period. Additionally, following the occurrence of any Event of Default, Borrower may, at its option, pay any Lender Conversion in cash instead of Lender Conversion Shares by paying to Lender on or before the applicable Delivery Date (as defined below) a cash amount equal to the number of Lender Conversion Shares set forth in the applicable Lender Conversion Notice multiplied by the highest intra-day trading price of the Common Stock that occurs during the period beginning on the date the applicable Event of Default occurred and ending on the date of the applicable Lender Conversion Notice. In connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment pursuant to this Section 4.2. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of the Notes as required pursuant to the terms hereof.

4.3.

Fundamental Default Remedies. Notwithstanding anything to the contrary herein, in addition to all other remedies set forth herein, after giving effect to the Lender Offset Right (as defined below), which shall occur automatically upon the occurrence of any Fundamental Default, the Fundamental Liquidated Damages Amount shall be added to the Outstanding Balance upon Lender’s delivery to Borrower of a notice (which notice Lender may deliver to Borrower at any time following the occurrence of a Fundamental Default) setting forth its election to declare a Fundamental Default and the Fundamental Liquidated Damages Amount that will be added to the Outstanding Balance.

4.4.

Certain Additional Rights. Notwithstanding anything to the contrary herein, in the event Borrower fails to make any payment or otherwise to deliver any Conversion Shares as and when required under this Note, then (a) the Lender Conversion Price for all Lender Conversions occurring after the date of such failure to pay shall equal the lower of the Lender Conversion Price and the Market Price as of any applicable date of Conversion, and (b) the true-up provisions of Section 11 below shall apply to all Lender Conversions that occur after the date of such failure to pay, provided that all references to the “Installment Notice” in Section 11 shall be replaced with references to a “Lender Conversion Notice” for purposes of this Section 4.4, all references to “Installment Conversion Shares” in Section 11 shall be replaced with references to “Lender Conversion Shares” for purposes of this Section 4.4, and all references to the “Installment Conversion Price” in Section 11 shall be replaced with references to the “Lender Conversion Price” for purposes of this Section 4.4. For the avoidance of doubt, Lender’s exercise of the rights granted to it pursuant to this Section 4.4 shall not relieve Borrower of its obligation to continue paying the Installment Amount on all future Installment Dates.

4.5.

Cross Default. A breach or default by Borrower of any covenant or other term or condition contained in any Other Agreements shall, at the option of Lender, be considered an Event of Default under this Note, in which event Lender shall be entitled (but in no event required) to apply all rights and remedies of Lender under the terms of this Note.

5.

Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Borrower not subject to offset (except as set forth in Section 21 below), deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions called for herein in accordance with the terms of this Note.

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6.

Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

7.

Rights Upon Issuance of Securities. 

7.1.

Subsequent Equity Sales. Except with respect to Excluded Securities, if Borrower or any subsidiary thereof, as applicable, at any time this Note is outstanding, shall sell, issue or grant any Common Stock, option to purchase Common Stock, right to reprice, preferred shares convertible into Common Stock, or debt, warrants, options or other instruments or securities to Lender or any third party which are convertible into or exercisable for shares of Common Stock (collectively, the “Equity Securities”), including without limitation any Deemed Issuance, at an effective price per share less than the then effective Lender Conversion Price (such issuance is referred to herein as a “Dilutive Issuance”), then, the Lender Conversion Price shall be automatically reduced and only reduced to equal such lower effective price per share. If the holder of any Equity Securities so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options, or rights per share which are issued in connection with such Dilutive Issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than the Lender Conversion Price, such issuance shall be deemed to have occurred for less than the Lender Conversion Price on the date of such Dilutive Issuance, and the then effective Lender Conversion Price shall be reduced and only reduced to equal such lower effective price per share. Such adjustments described above to the Lender Conversion Price shall be permanent (subject to additional adjustments under this section), and shall be made whenever such Equity Securities are issued. Borrower shall notify Lender, in writing, no later than the Trading Day following the issuance of any Equity Securities subject to this Section 7.1, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price, or other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not Borrower provides a Dilutive Issuance Notice pursuant to this Section 7.1, upon the occurrence of any Dilutive Issuance, on the date of such Dilutive Issuance the Lender Conversion Price shall be lowered to equal the applicable effective price per share regardless of whether Borrower or Lender accurately refers to such lower effective price per share in any Installment Notice or Lender Conversion Notice.

7.2.

Adjustment of Lender Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision hereof, if Borrower at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Lender Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Lender Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7.2 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7.2 occurs during the period that a Lender Conversion Price is calculated hereunder, then the calculation of such Lender Conversion Price shall be adjusted appropriately to reflect such event.

7.3.

Other Events. In the event that Borrower (or any subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect Lender from dilution or if any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then Borrower’s board of directors shall in good faith determine and implement an appropriate adjustment in the Lender Conversion Price so as to protect the rights of Lender, provided that no such adjustment pursuant to this Section 7.3 will increase the Lender Conversion Price as otherwise determined pursuant to this Section 7, provided further that if Lender does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then Borrower’s board of directors and Lender shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses shall be borne by Borrower.

8.

Borrower Installments.

8.1.

Installment Conversion Price. Subject to the adjustments set forth herein, the conversion price for each Installment Conversion (the “Installment Conversion Price”) shall be the lesser of (a) the Lender Conversion Price, and (b) the Market Price. 

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8.2.

Installment Conversions. Beginning on the date that is six (6) months after the Purchase Price Date and on the same day of each month thereafter until the Maturity Date (each, an “Installment Date”), if paying in cash, Borrower shall pay to Lender the applicable Installment Amount due on such date subject to the provisions of this Section 8, and if paying in Installment Conversion Shares (as defined below), Borrower shall deliver such Installment Conversion Shares on or before the Delivery Date. Payments of each Installment Amount may be made (a) in cash; provided, however, that in the event Lender has paid off all or any portion of any Investor Note (such amount that is prepaid, the “Investor Note Prepayment Amount”), Borrower may not pay any portion of any Installment Amount in cash for a period of ninety (90) days following the date Investor delivered the applicable Investor Note Prepayment Amount to Borrower (the “Standstill Period”) and any payment in cash of any Installment Amount made during the Standstill Period shall be deemed to be a prepayment pursuant to Section 1 above and shall be subject to the Prepayment Premium provided in such section, or (b) by converting such Installment Amount into shares of Common Stock (“Installment Conversion Shares”, and together with the Lender Conversion Shares, the “Conversion Shares”) in accordance with this Section 8 (each an “Installment Conversion”) per the following formula: the number of Installment Conversion Shares equals the portion of the applicable Installment Amount being converted divided by the Installment Conversion Price, or (c) by any combination of the foregoing, so long as the cash is delivered to Lender on the applicable Installment Date and the Installment Conversion Shares are delivered to Lender on or before the applicable Delivery Date. Notwithstanding the foregoing, Borrower will not be entitled to elect an Installment Conversion with respect to any portion of any applicable Installment Amount and shall be required to pay the entire amount of such Installment Amount in cash if on the applicable Installment Date there is an Equity Conditions Failure, and such failure is not waived in writing by Lender. Moreover, in the event Borrower desires to pay all or any portion of any Installment Amount in cash, it must notify Lender in writing of such election and the portion of the applicable Installment Amount it elects to pay in cash not more than twenty-five (25) or less than fifteen (15) Trading Days prior to the applicable Installment Date. If Borrower fails to so notify Lender, it shall not be permitted to elect to pay any portion of such Installment Amount in cash unless otherwise agreed to by Lender in writing or proposed by Lender in an Installment Notice delivered by Lender to Borrower. Notwithstanding the foregoing or anything to the contrary herein, Borrower shall only be obligated to deliver Installment Amounts with respect to Tranches that have become Conversion Eligible Tranches and shall have no obligation to pay to Lender any Installment Amount with respect to any Tranche that has not become a Conversion Eligible Tranche. In furtherance thereof, in the event Borrower has repaid all Conversion Eligible Tranches pursuant to the terms of this Note, it shall have no further obligations to deliver any Installment Amount to Lender unless and until any Subsequent Tranche that was not previously a Conversion Eligible Tranche becomes a Conversion Eligible Tranche pursuant to the terms of this Note. Notwithstanding that failure to repay this Note in full by the Maturity Date is an Event of Default, the Installment Dates shall continue after the Maturity Date pursuant to this Section 8 until the Outstanding Balance is repaid in full, provided that Lender shall, in Lender’s sole discretion, determine the Installment Amount for each Installment Date after the Maturity Date.

8.3.

Allocation of Installment Amounts. Subject to Section 8.2 regarding an Equity Conditions Failure, for each Installment Date, Borrower may elect to allocate the amount of the applicable Installment Amount between cash and via an Installment Conversion, by email or fax delivery of a notice to Lender substantially in the form attached hereto as Exhibit B (each, an “Installment Notice”), provided, that to be effective, each applicable Installment Notice must be received by Lender not more than twenty-five (25) or less than fifteen (15) Trading Days prior to the applicable Installment Date. If Lender has not received an Installment Notice within such time period, then Lender may prepare the Installment Notice and deliver the same to Borrower by fax or email. Following its receipt of such Installment Notice, Borrower may either ratify Lender’s proposed allocation in the applicable Installment Notice or elect to change the allocation by written notice to Lender by email or fax on or before 12:00 p.m. New York time on the applicable Installment Date, so long as the sum of the cash payments and the amount of Installment Conversions equal the applicable Installment Amount, provided that Lender must approve any increase to the portion of the Installment Amount payable in cash. If Borrower fails to notify Lender of its election to change the allocation prior to the deadline set forth in the previous sentence (and seek approval to increase the amount payable in cash), it shall be deemed to have ratified and accepted the allocation set forth in the applicable Installment Notice prepared by Lender. If neither Borrower nor Lender prepare and deliver to the other party an Installment Notice as outlined above, then Borrower shall be deemed to have elected that the entire Installment Amount be converted via an Installment Conversion. Borrower acknowledges and agrees that regardless of which party prepares the applicable Installment Notice, the amounts and calculations set forth thereon are subject to correction or adjustment because of error, mistake, or any adjustment resulting from an Event of Default or other adjustment permitted under the Transaction Documents (an “Adjustment”). Furthermore, no error or mistake in the preparation of such notices, or failure to apply any Adjustment that could have been applied prior to the preparation of an Installment Notice may be deemed a waiver of Lender’s right to enforce the terms of any Note, even if such error, mistake, or failure to include an Adjustment arises from Lender’s own calculation. Borrower shall deliver the Installment Conversion Shares from any Installment Conversion to Lender in accordance with Section 9 below on or before each applicable Delivery Date.

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9.

Method of Conversion Share Delivery. On or before the close of business on the third (3rd) Trading Day following the Installment Date or the third (3rd) Trading Day following the date of delivery of a Lender Conversion Notice, as applicable (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via DWAC to the account designated by Lender in the applicable Lender Conversion Notice or Installment Notice. If Borrower is not DWAC Eligible, it shall deliver to Lender or its broker (as designated in the Lender Conversion Notice or Installment Notice, as applicable), via reputable overnight courier, a certificate representing the number of shares of Common Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless Lender or its broker, as applicable, has actually received the certificate representing the applicable Conversion Shares no later than the close of business on the relevant Delivery Date pursuant to the terms set forth above.

10.

Conversion Delays. If Borrower fails to deliver Conversion Shares or True-Up Shares in accordance with the timeframes stated in Sections 9 or 11, as applicable, Lender, at any time prior to selling all of those Conversion Shares or True-Up Shares, as applicable, may rescind in whole or in part that particular Conversion attributable to the unsold Conversion Shares or True-Up Shares, with a corresponding increase to the Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144 under the Securities Act of 1933, as amended (“Rule 144”)). In addition, for each Lender Conversion, in the event that Lender Conversion Shares are not delivered by the fourth Trading Day (inclusive of the day of the Lender Conversion), a late fee equal to the greater of (a) $500.00 and (b) 2% of the applicable Lender Conversion Share Value rounded to the nearest multiple of $100.00 (but in any event the cumulative amount of such late fees for each Lender Conversion shall not exceed 200% of the applicable Lender Conversion Share Value) will be assessed for each day after the third Trading Day (inclusive of the day of the Lender Conversion) until Lender Conversion Share delivery is made; and such late fee will be added to the Outstanding Balance (such fees, the “Conversion Delay Late Fees”). For illustration purposes only, if Lender delivers a Lender Conversion Notice to Borrower pursuant to which Borrower is required to deliver 100,000 Lender Conversion Shares to Lender and on the Delivery Date such Lender Conversion Shares have a Lender Conversion Share Value of $20,000.00 (assuming a Closing Trade Price on the Delivery Date of $0.20 per share of Common Stock), then in such event a Conversion Delay Late Fee in the amount of $500.00 per day (the greater of $500.00 per day and $20,000.00 multiplied by 2%, which is $400.00) would be added to the Outstanding Balance of the Note until such Lender Conversion Shares are delivered to Lender. For purposes of this example, if the Lender Conversion Shares are delivered to Lender twenty (20) days after the applicable Delivery Date, the total Conversion Delay Late Fees that would be added to the Outstanding Balance would be $10,000.00 (20 days multiplied by $500.00 per day). If the Lender Conversion Shares are delivered to Lender one hundred (100) days after the applicable Delivery Date, the total Conversion Delay Late Fees that would be added to the Outstanding Balance would be $40,000.00 (100 days multiplied by $500.00 per day, but capped at 200% of the Lender Conversion Share Value).

11.

True-Up. On the date that is twenty (20) Trading Days (a “True-Up Date”) from each date that the Installment Conversion Shares delivered by Borrower to Lender become Free Trading, there shall be a true-up where Borrower shall deliver to Lender additional Installment Conversion Shares (“True-Up Shares”) if the Installment Conversion Price as of the True-Up Date is less than the Installment Conversion Price used in the applicable Installment Notice. In such event, Borrower shall deliver to Lender within three (3) Trading Days of the True-Up Date (the “True-Up Share Delivery Date”) a number of True-Up Shares equal to the difference between the number of Installment Conversion Shares that would have been delivered to Lender on the True-Up Date based on the Installment Conversion Price as of the True-Up Date and the number of Installment Conversion Shares originally delivered to Lender pursuant to the applicable Installment Notice. For the avoidance of doubt, if the Installment Conversion Price as of the True-Up Date is higher than the Installment Conversion Price set forth in the applicable Installment Notice, then Borrower shall have no obligation to deliver True-Up Shares to Lender, nor shall Lender have any obligation to return any excess Installment Conversion Shares to Borrower under any circumstance. For the convenience of Borrower only, Lender may, in its sole discretion, deliver to Borrower a notice (pursuant to a form of notice substantially in the form attached hereto as Exhibit C) informing Borrower of the number of True-Up Shares it is obligated to deliver to Lender as of any given True-Up Date, provided that if Lender does not deliver any such notice, Borrower shall not be relieved of its obligation to deliver True-Up Shares pursuant to this Section 11. Notwithstanding the foregoing, if Borrower fails to deliver any required True-Up Shares on or before any applicable True-Up Share Delivery Date, then in such event the Outstanding Balance of this Note will automatically increase by a sum equal to the number of True-Up Shares deliverable as of the applicable True-Up Date multiplied by the Market Price for the Common Stock as of the applicable True-Up Date (under Lender’s and Borrower’s expectations that any such increase will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144).

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12.

Ownership Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, if at any time Lender shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would cause Lender (together with its affiliates) to beneficially own a number of shares exceeding 4.99% of the number of shares of Common Stock outstanding on such date (including for such purpose the shares of Common Stock issuable upon such issuance) (the “Maximum Percentage”), then Borrower must not issue to Lender shares of Common Stock which would exceed the Maximum Percentage. For purposes of this section, beneficial ownership of Common Stock will be determined pursuant to Section 13(d) of the 1934 Act. The shares of Common Stock issuable to Lender that would cause the Maximum Percentage to be exceeded are referred to herein as the “Ownership Limitation Shares”. Borrower will reserve the Ownership Limitation Shares for the exclusive benefit of Lender. From time to time, Lender may notify Borrower in writing of the number of the Ownership Limitation Shares that may be issued to Lender without causing Lender to exceed the Maximum Percentage. Upon receipt of such notice, Borrower shall be unconditionally obligated to immediately issue such designated shares to Lender, with a corresponding reduction in the number of the Ownership Limitation Shares. Notwithstanding the forgoing, the term “4.99%” above shall be replaced with “9.99%” at such time as the Market Capitalization is less than $10,000,000.00. Notwithstanding any other provision contained herein, if the term “4.99%” is replaced with “9.99%” pursuant to the preceding sentence, such increase to “9.99%” shall remain at 9.99% until increased, decreased or waived by Lender as set forth below. By written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.

13.

Terms of Future Financings.  So long as this Note is outstanding, upon any issuance by Borrower of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Lender in this Note, then Borrower shall notify Lender of such additional or more favorable term and such term, at Lender’s option, shall become a part of the Transaction Documents. Additionally, if Borrower fails to notify Lender of any such additional or more favorable term, but Lender becomes aware that Borrower has granted such a term to any third party, Lender may notify Borrower of such additional or more favorable term and such term shall become a part of the Transaction Documents retroactive to the date on which such term was granted to the applicable third party. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, conversion lookback periods, interest rates, OIDs, stock sale price, conversion price per share, and warrant coverage.  

14.

Payment of Collection Costs. If this Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Lender otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note, then Borrower shall pay the costs incurred by Lender for such collection, enforcement or action including, without limitation, attorneys’ fees and disbursements. Borrower also agrees to pay for any costs, fees or charges of its transfer agent that are charged to Lender pursuant to any Conversion or issuance of shares pursuant to this Note.

15.

Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any such opinion provided by its counsel. Lender also has the right to have any such opinion provided by Borrower’s counsel.

16.

Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

17.

Resolution of Disputes. 

17.1.

Arbitration of Disputes. By its acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

17.2.

Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any Calculation (as defined in the Purchase Agreement), such dispute will be resolved in the manner set forth in the Purchase Agreement.

18.

Cancellation. After repayment or conversion of the entire Outstanding Balance (including without limitation delivery of True-Up Shares pursuant to the payment of the final Installment Amount, if applicable), this Note shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.

19.

Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.

8

20.

Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower.

21.

Offset Rights. Notwithstanding anything to the contrary herein or in any of the other Transaction Documents, (a) the parties hereto acknowledge and agree that Lender maintains a right of offset pursuant to the terms of the Investor Notes that, under certain circumstances, permits Lender to deduct amounts owed by Borrower under this Note from amounts otherwise owed by Lender under the Investor Notes (the “Lender Offset Right”), and (b) at any time Borrower shall be entitled to deduct and offset any amount owing by the initial Lender under the Investor Notes from any amount owed by Borrower under this Note (the “Borrower Offset Right”). In order to exercise the Borrower Offset Right, Borrower must deliver to Lender (a) a completed and signed Borrower Offset Right Notice in the form attached hereto as Exhibit D, (b) the original Investor Note being offset marked “cancelled” or, in the event the applicable Investor Note has been lost, stolen or destroyed, a lost note affidavit in a form reasonably acceptable to Lender, and (c) a check payable to Lender in the amount of $250.00. In the event that Borrower’s exercise of the Borrower Offset Right results in the full satisfaction of Borrower’s obligations under this Note, Lender shall return the original Note to Borrower marked “cancelled” or, in the event this Note has been lost, stolen or destroyed, a lost note affidavit in a form reasonably acceptable to Borrower. For the avoidance of doubt, Borrower shall not incur any Prepayment Premium set forth in Section 1 hereof with respect to any portions of this Note that are satisfied by way of a Borrower Offset Right.

22.

Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Note and the documents and instruments entered into in connection herewith.

23.

Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the Purchase Agreement titled “Notices.”

24.

Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s and Borrower’s expectations that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144).

25.

Waiver of Jury Trial. EACH OF LENDER AND BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

[Remainder of page intentionally left blank; signature page follows]

9

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Effective Date. 

BORROWER:

RVUE HOLDINGS, INC.

By: /s/ Mark Pacchini                    

Name: Mark Pacchini

Title: Chief Executive Officer

ACKNOWLEDGED, ACCEPTED AND AGREED:

LENDER:

TYPENEX CO-INVESTMENT, LLC

By: Red Cliffs Investments, Inc., its Manager

By:

/s/ John M. Fife               

John M. Fife, President

[Signature Page to Secured Convertible Promissory Note]

ATTACHMENT 1

DEFINITIONS

For purposes of this Note, the following terms shall have the following meanings: 

A1.

“Adjusted Outstanding Balance” means the Outstanding Balance of this Note as of the date the applicable Fundamental Default occurred less any Conversion Delay Late Fees included in such Outstanding Balance.

A2.

“Approved Stock Plan” means any stock option plan which has been approved by the board of directors of Borrower and is in effect as of the Purchase Price Date, pursuant to which Borrower’s securities may be issued to any employee, officer or director for services provided to Borrower.

A3.

“Bloomberg” means Bloomberg L.P. (or if that service is not then reporting the relevant information regarding the Common Stock, a comparable reporting service of national reputation selected by Lender and reasonably satisfactory to Borrower).

A4.

“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and last closing trade price, respectively, for the Common Stock on its principal market, as reported by Bloomberg, or, if its principal market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of the Common Stock prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the Common Stock, the last closing bid price or last trade price, respectively, of the Common Stock on the principal securities exchange or trading market where the Common Stock is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of the Common Stock in the over-the-counter market on the electronic bulletin board for the Common Stock as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for the Common Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for the Common Stock as reported by OTC Markets Group, Inc., and any successor thereto. If the Closing Bid Price or the Closing Trade Price cannot be calculated for the Common Stock on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of the Common Stock on such date shall be the fair market value as mutually determined by Lender and Borrower. If Lender and Borrower are unable to agree upon the fair market value of the Common Stock, then such dispute shall be resolved in accordance with the procedures in Section 17.2. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

A5.

“Conversion” means a Lender Conversion under Section 3 or an Installment Conversion under Section 8.

A6.

“Conversion Eligible Outstanding Balance” means the Outstanding Balance of this Note less the sum of each Subsequent Tranche that has not yet become a Conversion Eligible Tranche (i.e., Lender has not yet paid the outstanding balance of the Investor Note that corresponds to such Subsequent Tranche).

A7.

“Conversion Factor” means 70%, subject to the following adjustments. If at any time the average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding any date of measurement is below $0.02, then in such event the then-current Conversion Factor shall be reduced by 10% for all future Conversions (subject to other reductions set forth in this section). Additionally, if at any time after the Effective Date, Borrower is not DWAC Eligible, then the then-current Conversion Factor will automatically be reduced by 5% for all future Conversions. If at any time after the Effective Date, the Conversion Shares are not DTC Eligible, then the then-current Conversion Factor will automatically be reduced by an additional 5% for all future Conversions. Finally, in addition to the Default Effect, if any Major Default occurs after the Effective Date, the Conversion Factor shall automatically be reduced for all future Conversions by an additional 5% for each of the first three (3) Major Defaults that occur after the Effective Date (for the avoidance of doubt, each occurrence of any Major Default shall be deemed to be a separate occurrence for purposes of the foregoing reductions in Conversion Factor, even if the same Major Default occurs three (3) separate times). For example, the first time Borrower is not DWAC Eligible, the Conversion Factor for future Conversions thereafter will be reduced from 70% to 65% for purposes of this example. Following such event, the first time the Conversion Shares are no longer DTC Eligible, the Conversion Factor for future Conversions thereafter will be reduced from 65% to 60% for purposes of this example. If, thereafter, there are three (3) separate occurrences of a Major Default pursuant to Section 4.1(c), then for purposes of this example the Conversion Factor would be reduced by 5% for the first such occurrence, and so on for each of the second and third occurrences of such Major Default.

A8.

“Deemed Issuance” means an issuance of Common Stock that shall be deemed to have occurred on the latest possible permitted date pursuant to the terms hereof in the event Borrower fails to deliver Conversion Shares as and when required pursuant to Section 9 of the Note. For the avoidance of doubt, if Borrower has elected or is deemed under Section 8.3 to have elected to pay an Installment Amount in Installment Conversion Shares and fails to deliver such Installment Conversion Shares, such failure shall be considered a Deemed Issuance hereunder even if an Equity Conditions Failure exists at that time or other relevant date of determination.

Exhibit D to Secured Convertible Promissory Note, Page 1

A9.

“Default Effect” means multiplying the Conversion Eligible Outstanding Balance as of the date the applicable Event of Default occurred by (a) 15% for each occurrence of any Major Default, or (b) 5% for each occurrence of any Minor Default, and then adding the resulting product to the Outstanding Balance as of the date the applicable Event of Default occurred, with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Event of Default occurred; provided that the Default Effect may only be applied three (3) times hereunder with respect to Major Defaults and three (3) times hereunder with respect to Minor Defaults; and provided further that the Default Effect shall not apply to any Event of Default pursuant to Section 4.1(b) hereof.

A10.

“DTC” means the Depository Trust Company.

A11.

“DTC Eligible” means, with respect to the Common Stock, that such Common Stock is eligible to be deposited in certificate form at the DTC, cleared and converted into electronic shares by the DTC and held in the name of the clearing firm servicing Lender’s brokerage firm for the benefit of Lender.

A12.

“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer program.

A13.

“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.

A14.

“DWAC Eligible” means that (a) Borrower’s Common Stock is eligible at DTC for full services pursuant to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system, (b) Borrower has been approved (without revocation) by the DTC’s underwriting department, (c) Borrower’s transfer agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares are otherwise eligible for delivery via DWAC; (e) Borrower has previously delivered all Conversion Shares to Lender via DWAC; and (f) Borrower’s transfer agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

A15.

“Equity Conditions Failure” means that any of the following conditions has not been satisfied during any applicable Equity Conditions Measuring Period (as defined below): (a) with respect to the applicable date of determination all of the Conversion Shares would be freely tradable under Rule 144 or without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of this Note); (b) on each day during the period beginning one month prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), the Common Stock is listed or designated for quotation (as applicable) on any of NYSE, NASDAQ, OTCQX, OTCQB, or OTC Pink Current Information (each, an “Eligible Market”) and shall not have been suspended from trading on any such Eligible Market (other than suspensions of not more than two (2) Trading Days and occurring prior to the applicable date of determination due to business announcements by Borrower); (c) on each day during the Equity Conditions Measuring Period, Borrower shall have delivered all shares of Common Stock issuable upon conversion of this Note on a timely basis as set forth in Section 9 hereof and all other shares of capital stock required to be delivered by Borrower on a timely basis as set forth in the other Transaction Documents; (d) any shares of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating Section 12 hereof (Lender acknowledges that Borrower shall be entitled to assume that this condition has been met for all purposes hereunder absent written notice from Lender); (e) any shares of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating the rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (f) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned, terminated or consummated; (g) Borrower shall have no knowledge of any fact that would reasonably be expected to cause any of the Conversion Shares to not be freely tradable without the need for registration under any applicable state securities laws (in each case, disregarding any limitation on conversion of this Note); (h) on each day during the Equity Conditions Measuring Period, Borrower otherwise shall have been in material compliance with each, and shall not have breached any, term, provision, covenant, representation or warranty of any Transaction Document; (i) without limiting clause (j) above, on each day during the Equity Conditions Measuring Period, there shall not have occurred an Event of Default or an event that with the passage of time or giving of notice would constitute an Event of Default; (k) on each Installment Date, the average and median daily dollar volume of the Common Stock on its principal market for the previous twenty (20) Trading Days shall be greater than $7,500.00; (l) the ten (10) day average VWAP of the Common Stock is greater than $0.01, and (m) the Common Stock shall be DWAC Eligible as of each applicable Installment Date or other date of determination.

A16.

“Excluded Securities” means any shares of Common Stock, options, or convertible securities issued or issuable in connection with any Approved Stock Plan; provided that the option term, exercise price or similar provisions of any issuances pursuant to such Approved Stock Plan are not amended, modified or changed on or after the Purchase Price Date.

A17.

“Free Trading” means that (a) the shares or certificate(s) representing the applicable shares of Common Stock have been cleared and approved for public resale by the compliance departments of Lender’s brokerage firm and the clearing firm servicing such brokerage, and (b) such shares are held in the name of the clearing firm servicing Lender’s brokerage firm and have been deposited into such clearing firm’s account for the benefit of Lender.

Exhibit D to Secured Convertible Promissory Note, Page 2

A18.

“Fundamental Default” means that Borrower either fails to pay the entire Outstanding Balance to Lender on or before the Maturity Date or fails to pay the Mandatory Default Amount within three (3) Trading Days of the date Lender delivers any notice of acceleration to Borrower pursuant to Section 4.2 of this Note.

A19.

“Fundamental Default Conversion Value” means the Adjusted Outstanding Balance multiplied by the highest Fundamental Default Ratio that occurs during the Fundamental Default Measuring Period.

A20.

“Fundamental Default Measuring Period” means a number of months equal to the Outstanding Balance as of the date the Fundamental Default occurred divided by the Installment Amount, with such number being rounded up to the next whole month; provided, however, that if Borrower repays the entire Outstanding Balance prior to the conclusion of the Fundamental Default Measuring Period, the Fundamental Default Measuring Period shall end on the date of repayment. For illustration purposes only, if the Outstanding Balance were equal to $125,000.00 as of the date a Fundamental Default occurred and if the Installment Amount were $28,500.00, then the Fundamental Default Measuring Period would equal five (5) months calculated as follows: $125,000.00/$28,500.00 equals 4.386, rounded up to five (5).

A21.

“Fundamental Default Ratio” means a ratio that will be calculated on each Trading Day during the Fundamental Default Measuring Period by dividing the Closing Trade Price for the Common Stock on a given Trading Day by the Lender Conversion Price (as adjusted pursuant to the terms hereof) in effect for such Trading Day.

A22.

“Fundamental Liquidated Damages Amount” means the greater of (a) (i) the quotient of the Outstanding Balance on the date the Fundamental Default occurred divided by the then-current Conversion Factor, minus (ii) the Outstanding Balance on the date the Fundamental Default occurred, or (b) the Fundamental Default Conversion Value.

A23.

“Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or (b) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.

A24.

“Installment Amount” means $21,041.67 ($252,500.00 ÷ 12), plus the sum of any accrued and unpaid interest on all Conversion Eligible Tranches as of the applicable Installment Date, and accrued and unpaid late charges, if any, under this Note as of the applicable Installment Date, and any other amounts accruing or owing to Lender under this Note as of such Installment Date; provided, however, that, if the remaining amount owing under all then-existing Conversion Eligible Tranches or otherwise with respect to this Note as of the applicable Installment Date is less than the Installment Amount set forth above, then the Installment Amount for such Installment Date (and only such Installment Amount) shall be reduced (and only reduced) by the amount necessary to cause such Installment Amount to equal such outstanding amount.

A25.

“Lender Conversion Share Value” means the product of the number of Lender Conversion Shares deliverable pursuant to any Lender Conversion multiplied by the Closing Trade Price of the Common Stock on the Delivery Date for such Lender Conversion.

A26.

“Major Default” means any Event of Default occurring under Sections 4.1(a) (payments), or 4.1(c) (delivery of Installment Conversion Shares or True-Up Shares), or 4.1(l) (Share Reserve), or 4.1(q) (breach of certain covenants) of this Note.

Exhibit D to Secured Convertible Promissory Note, Page 3

A27.

“Mandatory Default Amount” means the greater of (a) the Outstanding Balance (including all Tranches, both Conversion Eligible Tranches and Subsequent Tranches that have not yet become Conversion Eligible Tranches) divided by the Installment Conversion Price on the date the Mandatory Default Amount is demanded, multiplied by the VWAP on the date the Mandatory Default Amount is demanded, or (b) the Outstanding Balance following the application of the Default Effect.

A28.

“Market Capitalization” means the product equal to (a) the average VWAP of the Common Stock for the immediately preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding shares of Common Stock as reported on Borrower’s most recently filed Form 10-Q or Form 10-K.

A29.

“Market Price” means the Conversion Factor multiplied by the average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding the applicable Conversion.

A30.

“Minor Default” means any Event of Default that is not a Major Default or a Fundamental Default.

A31.

“OID” means an original issue discount.

A32.

“Optional Prepayment Liquidated Damages Amount” means an amount equal to the difference between (a) the product of (i) the number of shares of Common Stock obtained by dividing (1) the applicable Optional Prepayment Amount by (2) the Lender Conversion Price as of the date Borrower delivered the applicable Optional Prepayment Amount to Lender, multiplied by (ii) the Closing Trade Price of the Common Stock on the date Borrower delivered the applicable Optional Prepayment Amount to Lender, and (b) the applicable Optional Prepayment Amount paid by Borrower to Lender. For illustration purposes only, if the applicable Optional Prepayment Amount were $50,000.00, the Lender Conversion Price as of the date the Optional Prepayment Amount was paid to Lender was equal to $0.75 per share of Common Stock, and the Closing Trade Price of a share of Common Stock as of such date was equal to $1.00, then the Optional Prepayment Liquidated Damages Amount would equal $16,666.67 computed as follows: (a) $66,666.67 (calculated as (i) (1) $50,000.00 divided by (2) $0.75 multiplied by (ii) $1.00) minus (b) $50,000.00.

A33.

“Other Agreements” means, collectively, (a) all existing and future agreements and instruments between, among or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing agreement or a material agreement that affects Borrower’s ongoing business operations.

A34.

“Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, plus the OID, the Transaction Expense Amount, accrued but unpaid interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees) incurred under this Note.

A35.

“Purchase Price Date” means the date the Initial Cash Purchase Price is delivered by Lender to Borrower.

A36.

“Trading Day” means any day on which the Common Stock is traded or tradable for any period on the Common Stock’s principal market, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

A37.

“VWAP” means the volume weighted average price of the Common stock on the principal market for a particular Trading Day or set of Trading Days, as the case may be, as reported by Bloomberg.

Exhibit D to Secured Convertible Promissory Note, Page 4Exhibit 10.1

 

Execution Version

 

CUSTODIAL AGREEMENT

 

THIS CUSTODIAL AGREEMENT
(this “Agreement”) dated as of July 8, 2015, is entered into between AUDAX CREDIT BDC INC. (the “Company”)
and WELLS FARGO BANK, NATIONAL ASSOCIATION, as custodian (the “Custodian”).

 

WITNESSETH:

 

WHEREAS, the Company
is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end management investment
company, which has elected to do business as a business development company and is authorized to issues shares of common stock;

 

WHEREAS, the Company
desires to retain Wells Fargo Bank, National Association to act as custodian for the Company;

 

WHEREAS, the Company
has acquired or will acquire, from time to time, certain securities, loans, cash or other assets, which together make up the investment
portfolio of the Company, (the “Assets”) and desires to deposit the Assets with the Custodian to hold on the
Company’s behalf and to direct the Custodian with respect to the transfer and release thereof;

 

WHEREAS, the Company
represents and warrants to the Custodian that it has the power and authority to enter into and perform its obligations under
this Agreement, and

 

WHEREAS, the Custodian represents and warrants
to the Company that: (i) it is a “bank” as defined in the 1940 Act; (ii) it has the power and authority to enter into
and perform its obligations under this Agreement; and (iii) it maintains business continuity policies and standard that comply
with regulatory requirements applicable to the Custodian.

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

1.           (a)          The
Company hereby appoints the Custodian as custodian of the Assets pursuant to the terms of this Agreement and the Custodian accepts
such appointment. The Custodian hereby agrees to accept the Assets delivered to the Custodian by the Company pursuant to the terms
hereof, and agrees to hold, release and transfer the same in accordance with the provisions of this Agreement. There shall be,
and hereby is, established by the Company with the Custodian a non-interest bearing securities account which will be designated
the “[Audax Credit BDC Inc.]-
Custodial Account” (referred to herein as the “Custody Account”) and into which the Assets shall be held and
which shall be governed by and subject to this Agreement. In addition, on and after the date hereof, the Custodian may establish
any number of subaccounts to the Custody Account deemed necessary or appropriate by the Custodian and Company in administering
the Custody Account (each such subaccount, a “Subaccount” and collectively with the Custody Account, the “Account”).
All Assets to be delivered in physical form to the Custodian shall be delivered to the address set forth in Section 12 hereof and
all assets to be delivered in book-entry form to the Custodian shall be delivered in accordance with delivery instructions separately
provided by the Custodian. The Custodian shall not be responsible for any other assets of the Company held or received by the Company
or others or any assets not delivered to Custodian as set forth herein and accepted by the Custodian as hereinafter provided. 
The Custodian shall have no obligation to accept or hold any security or other asset pursuant to the terms of this agreement to
the extent it reasonably determines that such security or asset does not fall within the definition of “Asset” or holding
such security or asset would violate any law, rule, regulation or internal policy applicable to the Custodian. Assets or proceeds
thereof shall be withdrawn from and credited to the Account only upon Proper Instructions pursuant to Section 4 hereof.

 

    	 

    	 

    

 

(b)          Any
Assets and other property held by the Custodian in physical form for the account of the Company shall be physically segregated
from other assets and non-cash property in the possession of the Custodian and shall be identified as subject to this Agreement.

 

(c)          For
the avoidance of doubt, the Account (including income, if any, earned on the investments of funds in such account) will be owned
by the Company, for federal income tax purposes. Such Company is required to provide to the Custodian (i) an IRS Form W-9 or appropriate
IRS Form W-8 no later than the Closing Date, and (ii) any additional IRS forms (or updated versions of any previously submitted
IRS forms) or other documentation at such time or times required by applicable law or upon the reasonable request of the Custodian
as may be necessary (i) to reduce or eliminate the imposition of U.S. withholding taxes and (ii) to permit Custodian to fulfill
its tax reporting obligations under applicable law with respect to the Account or any amounts paid to Company. If any IRS form
or other documentation previously delivered becomes obsolete or inaccurate in any respect, the Company shall timely provide to
the Custodian accurately updated and complete versions of such IRS forms or other documentation. Wells Fargo Bank, National Association,
both in its individual capacity and in its capacity as Custodian, shall have no liability to Company or any other person in connection
with any tax withholding amounts paid or withheld from the Account pursuant to applicable law arising from Company’s failure
to timely provide an accurate, correct and complete IRS Form W-9, an appropriate IRS Form W-8 or such other documentation contemplated
under this paragraph. For the avoidance of doubt, no funds shall be invested with respect to such Account absent the Custodian
having first received (i) the requisite Proper Instructions, and (ii) the IRS forms and other documentation required by this paragraph.

 

2.          The
Custodian shall not invest immediately available funds held hereunder in the absence of Proper Instructions and shall not be liable
for not investing or reinvesting funds in accordance with this Agreement in the absence Proper Instructions. In connection with
investments of available cash pursuant to Proper Instructions, the Custodian may without liability use a broker-dealer of its own
selection, including a broker-dealer owned by or affiliated with the Custodian or any of its affiliates. The Custodian is not responsible
for the assets of the Company which have been placed in accounts with brokers, prime brokers, counterparties, futures commission
merchants and other intermediaries. The Custodian or any of its affiliates may receive reasonable compensation with respect to
any such investment. It is expressly agreed and understood by the parties hereto that the Custodian shall not in any way whatsoever
be liable for losses on any investments, including, but not limited to, losses from market risks due to premature liquidation or
resulting from other actions taken pursuant to this Agreement.

 

3.          [Reserved]

 

4.          The
Custodian shall hold the Assets in safekeeping and shall release and transfer same only in accordance with Proper Instructions.
“Proper Instructions” shall mean written instructions or cabled, telexed, facsimile or electronically transmitted instructions
in respect of any of the matters referred to in this Agreement purported to be signed (except in the case of electronically transmitted
instructions) by one or more persons duly authorized to sign on behalf of the Company as set forth in the Authorized Signers List
on Exhibit A hereto (each such person (an “Authorized Signer”) and, in the case of electronically transmitted instructions,
in accordance with such authentication procedures as may be agreed by the Custodian and the Company from time to time, and in the
case of any instructions to credit an Asset to the Accounts or to release any Asset from the Accounts, in accordance with the terms
hereof. Any electronically delivered instructions, including by email or facsimile, received from or on behalf of any Authorized
Signer, or any email or facsimile received from another individual on behalf of the Company in which any Authorized Signers are
also identified as copied, shall constitute Proper Instructions.

 

    	 

    	 

    

 

5.          (a)          The
Custodian shall be obligated only for the performance of such duties as are specifically set forth in this Agreement and the Custodian
shall satisfy those duties expressly set forth herein so long as it acts in good faith and without gross negligence or willful
misconduct. The Custodian may rely and shall be protected in acting or refraining from acting on any written notice, request, waiver,
consent or instrument believed by it to be genuine and to have been signed or presented by the proper party or parties. The Custodian
shall have no duty to determine or inquire into the happening or occurrence of any event or contingency, and it is agreed that
its duties are purely ministerial in nature. The Custodian may consult with and obtain advice from legal counsel as to any provision
hereof or its duties hereunder and shall not be liable for action taken or omitted by it in good faith and the advice of such counsel
or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by
it hereunder in good faith and in reliance thereon. The Custodian shall not be liable for any action taken or omitted by it in
good faith and reasonably believed by it to be authorized hereby, except for actions arising from the gross negligence or willful
misconduct of the Custodian. The Custodian shall have no liability for loss arising from any cause beyond its control, including
but not limited to, the act, failure or neglect of any agent or correspondent selected with due care by the Custodian, any delay,
error, omission or default of any mail, telegraph, cable or wireless agency or operator; or the acts or edicts of any government
or governmental agency or other group or entity exercising governmental powers. Notwithstanding anything in this Agreement to the
contrary, in no event shall the Custodian be liable for special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits).

 

(b)          Without
limiting the generality of the foregoing, the Custodian shall not be subject to any fiduciary or other implied duties and the Custodian
shall not be required to exercise any discretion hereunder and shall have no investment or management responsibility and, accordingly,
shall have no duty to, or liability for its failure to, provide investment recommendations or investment advice to the parties
hereto. It is the intention of the parties hereto that the Custodian shall never be required to use, advance or risk its own funds
or otherwise incur financial liability in the performance of any of its duties or the exercise of any of its rights and powers
hereunder.

 

(c)          The
Custodian is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of this
Agreement or any part hereof (except with respect to the Custodian's obligations hereunder) or for the transaction or transactions
requiring or underlying the execution of this Agreement, the form or execution hereof or for the identity or authority of any person
executing this Agreement or any part hereof (except with respect to the Custodian) or depositing the Assets.

 

(d)          The
Custodian assumes no duty, obligation or responsibility whatsoever to exercise any voting or consent powers with respect to the
Assets held by it from time to time hereunder. The Company, pursuant to Proper Instructions, shall have the right to (a) the exercise
of any rights or remedies with respect to the Assets, including, without limitation, waivers and voting rights, and (b) taking
any other action in connection with the Assets, including, without limitation, any purchase, sale, conversion, redemption, exchange,
retention or other transaction relating to the Assets. In the absence of any Proper Instructions provided to the Custodian by the
Company, the Custodian shall have no obligation to take any action with respect to the Assets. The Custodian shall forward to the
Company in a reasonably timely manner all notices of shareholder meetings, proxy statements, annual reports, conversion notices,
call notices, or other notices or written materials of any kind (excluding share certificates and dividend, principal and interest
payments) sent to the Custodian, in relation to any Assets held by the Custodian hereunder. Notwithstanding anything herein to
the contrary, under no circumstances shall the Custodian be obligated to bring legal action or institute proceedings against any
person on behalf of the Company.

 

    	 

    	 

    

 

(e)          The
Custodian shall create and maintain complete and accurate records relating to the Assets or other property held pursuant to this
Agreement with respect to Assets or other property held for the Company under this Agreement. All such records shall be the property
of the Company and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized
officers, employees or agents of the Company and employees and agents of the Securities and Exchange Commission, upon reasonable
request and prior notice and at the Company's expense. The Custodian shall, at the Company's request, supply the Company with a
report indicating the Assets held by the Custodian under this Agreement and shall, when requested to do so by the Company and for
such compensation as shall be agreed upon between the Company and the Custodian, include, to the extent applicable, the certificate
numbers in such report, to the extent such information is available to the Custodian.

 

(f)          For
the avoidance of doubt and notwithstanding anything herein to the contrary, the Company agrees that the Custodian shall not have
nor shall be implied to have any duties with respect to furnishing reports of the Company or another information as contemplated
by the 1940 Act or the Investment Advisors Act of 1940 or Rule 206(4)-2 thereof and the Company agrees that, the Custodian shall
only be obligated to furnish information and reports to the Company or to any third party to the extent directed by the Company
pursuant to Proper Instructions as set forth in this Agreement and agreed to by the Custodian, or as the Company and Custodian
may otherwise agree.

 

6.          (a)          The
Company agrees to indemnify, defend and hold the Custodian, its officers, directors, employees and agents (collectively, “Indemnified
Persons”) harmless from and against any and all losses, claims, damages, demands, expenses, costs, causes of action,
judgments or liabilities that may be incurred by any Indemnified Person arising directly or indirectly out of or in connection
with this Agreement, including the reasonable legal costs and expenses as such expenses are incurred (including, without limitation,
the expenses of any experts, counsel or agents) of investigating, preparing for or defending itself against any action, claim or
liability in connection with its performance hereunder or thereunder. The Company also hereby agrees to hold the Custodian harmless
from any liability or loss resulting from any taxes or other governmental charges, and any expense related thereto, which may be
imposed, or assessed with respect to any Assets in the Account and also agrees to hold the Custodian and its respective nominees
harmless from any liability as record holder of Assets in the Account. The Company may remit payment for expenses and indemnities
owed to the Custodian hereunder or, in the absence thereof, the Custodian may from time to time deduct payment of such amounts
from the Account. In no event, however, shall the Company be obligated to indemnify any Indemnified Person and hold any Indemnified
Person harmless from any losses, claims, damages, demands, expenses, costs, causes of action, judgments or liabilities incurred
by any Indemnified Person as a result of its own bad faith, willful misfeasance or gross negligence or reckless disregard
of the Custodian’s duties. The provisions of this section shall survive the termination of this Agreement.

 

(b)          It
is expressly agreed that the obligations of the Company shall not be binding upon any of the directors, officers, agents, employees
or shareholders of the Company personally, but shall only bind the assets and property of the Company, as provided in the Company’s
certificate of incorporation or bylaws. The execution and delivery of this Agreement have been authorized by the board of directors
of the Company, and this agreement has been executed and delivered by an authorized officer of the Company acting as such; neither
such authorization by such directors nor such execution and delivery by such officer shall be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but shall bind only the assets and property of the Company,
as provided in its certificate of incorporation or bylaws.

 

    	 

    	 

    

 

7.          The
Custodian shall be entitled to be paid by the Company a fee as compensation for its services as set forth in the separate Fee Letter
(the “Fee Letter”) agreed to by the parties hereto. Except as otherwise noted, this fee covers account acceptance,
set up and termination expenses, plus usual and customary related administrative services such as safekeeping, investment, collection
and distribution of assets, including normal record-keeping/reporting requirements. Any additional services beyond those specified
in this Agreement, or activities requiring excessive administrator time or out-of-pocket expenses, shall be performed only after
reasonable prior notice is given to the Custodian by the Company and shall be deemed extraordinary expenses for which related costs,
transaction charges and additional fees will be billed at the Custodian's standard charges for such items. The Company agrees to
pay or reimburse the Custodian for all out-of-pocket costs and expenses (including without limitation reasonable fees and expenses
of legal counsel) incurred, and any disbursements and advances made, in connection with the preparation, negotiation or execution
of this Agreement, or in connection with or pursuant to consummation of the transactions contemplated hereby, or the administration
of this Agreement or performance by the Custodian of its duties and services under this Agreement.

 

8.          The
Company hereby grants to the Custodian a lien on all Assets for all indebtedness that may become owing to the Custodian hereunder,
which lien may be enforced by the Custodian by set-off or appropriate foreclosure proceedings. In this regard, if the Company is
unwilling or unable to pay the Custodian any amounts due hereunder or to indemnify any indemnified party hereunder, the Custodian
may, in its sole discretion, withdraw any cash in the account, or, if insufficient, liquidate a portion of the Assets, and the
Custodian shall use such cash or deduct from such proceeds any fees, expenses and indemnities that it (or any indemnified party)
may be due hereunder. The Company hereby consents to and authorizes such action by the Custodian, and the Custodian shall have
no liability for any action taken pursuant to this authorization. The Custodian agrees to provide Company with written notice prior
to taking any action pursuant to this Section 8.

 

9.          (a)          The
Custodian may at any time resign hereunder by giving written notice of its resignation to the Company at least sixty (60) days
prior to the date specified for such resignation to take effect, and upon the effective date of such resignation, the Assets hereunder
shall be delivered by it to such person as may be designated in writing by the Company, whereupon all the Custodian’s obligations
hereunder shall cease and terminate. If no such person shall have been designated by such date, all obligations of the Custodian
hereunder shall, nevertheless, cease and terminate. The Custodian’s sole responsibility thereafter shall be to keep safely
all Assets then held by it and to deliver the same to a person designated by the Company or in accordance with the direction of
a final order or judgment of a court of competent jurisdiction.

 

(b)          The
Company may remove the Custodian at any time by giving the Custodian at least sixty (60) days’ prior written notice. Upon
receipt of the identity of the successor Custodian as designated by the Company in writing, the Custodian shall either deliver
the Assets then held hereunder to the successor Custodian, less the Custodian’s fees, costs and expenses or other obligations
owed to the Custodian, or hold such Assets (or any portion thereof), pending distribution, until all such fees, costs and expenses
or other obligations are paid. Upon delivery of the Assets to successor Custodian, the Custodian shall have no further duties,
responsibilities or obligations hereunder.

 

    	 

    	 

    

 

10.         This
Agreement shall be construed in accordance with, and governed by, the laws of the State of New York, without giving effect to the
conflict of law principles thereof.

 

11.         This
Agreement may not be assigned or transferred by the Company. This Agreement shall remain in full force and effect until the earlier
to occur of (a) the transfer or release of all of the Assets in accordance with the written instructions of the Company in respect
thereto and (b) the transfer by the Company of its rights and interests in the Assets. The parties hereto shall not be bound by
any modification, amendment, termination, cancellation, recission or supersession of this Agreement unless the same shall be in
writing and signed by the Custodian and the Company.

 

12.         Any
delivery of physical Assets or any notices or other communications hereunder (including Proper Instructions delivered to the Custodian)
shall be in writing and given at the addresses stated below, by prepaid first class mail, overnight courier or facsimile.

 

If to the Company:

 

Audax Credit BDC Inc.

101 Huntington Avenue

Boston, MA 02199

Attn: General Counsel and Secretary

Fax: 617.859.1600

Email: dweintraub@audaxgroup.com

 

If to the Custodian:

 

Wells Fargo Bank, N.A.

9062 Old Annapolis Rd.

Columbia, Maryland 21045

Attn: CDO Trust Services— Audax
Credit BDC Inc.

Fax: (410) 715-3748

Email: [ ]

 

13.         [Reserved]

 

14.         (a)          This
Agreement constitutes the complete and exclusive agreement of the parties with regard to the matters addressed herein and supersedes
and terminates as of the date hereof, all prior agreements, agreements or understandings, oral or written between the parties to
this Agreement relating to such matters.

 

(b)          The
terms of this Agreement are hereby declared to be severable, such that if any term hereof is determined to be invalid or unenforceable,
such determination shall not affect the remaining terms.

 

(c)          This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument. This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Facsimile signatures and signature pages provided in the form of a “pdf”
or similar imaged document transmitted by electronic mail shall be deemed original signatures for all purposes hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 

    	 

    

 

Executed as of the date
first above written.

 

	 	AUDAX CREDIT BDC INC
	 	 	 
	 	By:	/s/ Byron Pavano
	 	Name: Byron Pavano
	 	Title: Chief Compliance Officer 
	 	 
	 	WELLS FARGO BANK, NATIONAL

 ASSOCIATION, as Custodian
	 	 
	 	By:	/s/ José M. Rodríguez
	 	Name: José M. Rodríguez
	 	Title: Vice President

 

    	 

    	 

    

 

Exhibit A

 

Authorized Signers List

 

Each of the following
named officers is authorized to act for, and bind, Audax Credit BDC Inc. (the “Company”) with respect to matters concerning
that certain Custody Agreement dated as of July 8, 2015, between Wells Fargo Bank, National Association and the Company. :

 

	/s/ Michael McGonigle	 	Michael McGonigle	 	CEO
	Signature	 	Name of Officer	 	Title

 

	320 Park Avenue, 19th Floor, New York, NY 10022
	Business Address

 

	/s/ Richard Joseph	 	Richard Joseph	 	CFO
	Signature	 	Name of Officer	 	Title

 

	101 Huntington Avenue, Boston, MA 02199
	Business Address

 

	/s/ Byron Pavano	 	Byron Pavano	 	CCO
	Signature	 	Name of Officer	 	Title

 

	101 Huntington Avenue, Boston, MA 02199
	Business Address

 

	/s/ Joseph Taveira	 	Joseph Taveira	 	Senior Vice President
	Signature	 	Name of Officer	 	Title

 

	101 Huntington Avenue, Boston, MA 02199
	Business Address

 

	/s/ Aileen Keaney	 	Aileen Keaney	 	Senior Vice President
	Signature	 	Name of Officer	 	Title

 

	101 Huntington Avenue, Boston, MA 02199
	Business Address

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