Document:

Exhibit 10.1

ROYALTY AGREEMENT

THIS ROYALTY AGREEMENT (this "Agreement") dated as of December 31, 2015 is entered into by and among the parties listed on Schedule 1 attached hereto (collectively, together with their successors and permitted assigns, the "Obligors"), and YA Global Investments, L.P. (the "Lender"), a Cayman Island exempt limited partnership with an office at 1012 Springfield Avenue, Mountainside, New Jersey 07092, as collateral agent for itself and for certain other lenders (the "Other Lenders"), in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

WHEREAS, the Obligors entered into certain financing arrangements with the Lender and the Other Lenders;

WHEREAS, one or more defaults or events of default occurred under the terms and conditions of such financing arrangements between the Obligors and the Lender and the Other Lenders;

WHEREAS, in connection with such defaults and/or events of default, the Obligors and the Lender entered into a certain Second Global Forbearance Agreement dated as of February 29, 2012 (as amended and in effect from time to time, the "Forbearance Agreement").  Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Forbearance Agreement;

WHEREAS, the Lender, and such of the Other Lenders who opt to join in, and the Obligors have agreed to settle certain of the Obligations pursuant to the terms and conditions of a certain Settlement Agreement of even date herewith (the "Settlement Agreement"); and

WHEREAS, it is a condition to the Lender's agreements, and the agreements of the Other Lenders who opt into the Settlement Agreement, under the Settlement Agreement that the Obligors execute and deliver this Agreement to the Lender.

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in further consideration of the covenants and obligations expressed herein, and intending to be legally bound, the parties hereto agree as follows:

	
1.

	
DEFINITIONS

As used above and in this Agreement, the following terms shall have the meanings ascribed to them below:

	
1.1

	
"Affiliate" means, with respect to any Person, each other Person that directly or indirectly, through one or more intermediaries, owns or controls, is controlled by or is under common control with, such Person.  For the purpose of this Agreement, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies, whether through the ownership of voting securities, by contract or otherwise.

	
1.2

	
"Business Day" means any day (except Saturday and Sunday) on which commercial banking institutions in Mountainside, New Jersey are open for business.

	
1.3

	
 "Confidential Information" means all confidential and proprietary information or data, whether provided in written, oral, graphic, video, computer or other form, provided by one party hereto to another party hereto pursuant to this Agreement and designed as confidential, including information relating to the disclosing party's existing or proposed research, development efforts, patent applications, business or products, financial information, and the terms of this Agreement.  Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:

(a)    were already known to the receiving party (other than under an obligation of confidentiality) at the time of disclosure by the disclosing party;

(b)    were generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party;

(c)    became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, and other than through any act or omission of the receiving party in breach of such party's confidentiality obligations under this Agreement;

(d)    were subsequently lawfully disclosed to the receiving party by a Third Party who, to the receiving party's knowledge, had no obligation to the disclosing party not to disclose such information to others;

(e)    were independently discovered or developed by or on behalf of the receiving party without the use of the Confidential Information belonging to the disclosing party; or

(f)    are approved for release by the disclosing party in writing.

1.4 "Copyrights" shall mean all copyrights, copyright applications and like protections in each work of authorship or derivative work thereof of the Obligors, whether registered or unregistered, whether published or unpublished and whether or not constitute a trade secret, together with any goodwill of the business connected with, and symbolized by, any of the foregoing.

1.5 "Copyright Licenses" shall mean all agreements, whether written or oral, providing for the grant by or to the Obligors of any right under any Copyright.

1.6            "Excluded Items" means the license fees and other income generated from the specific existing license agreements listed on Schedule 2 attached hereto, as such license agreements are currently in effect as of the date hereof, as evidenced by copies of such license agreements provided to Lender on or before the date hereof, without giving effect to any amendments or modifications of such license agreements occurring from and after the date hereof.

1.7            "GAAP" means generally accepted accounting principles in the United States of America, consistently applied.

1.8            "General Intangibles" shall have the meaning set forth in Article 9 of the Uniform Commercial code as in effect from time to time in the State of New Jersey.

1.9            "Governmental Authority" means any court, tribunal, arbitrator, agency, ministry, legislative body, commission, department, bureau, official or other entity of the government of any country or any state, province, region, local, county, city or other political subdivision thereof, or any supranational body.

1.10            "Intellectual Property" means all of the following property, whether now owned or existing or hereafter acquired or arising, together with all products, proceeds, substitutions, and accessions of or to any of the following property;

(a)    All Copyrights and Copyright Licenses;

(b)    All Patents and Patent Licenses;

(c)    All Trademarks and Trademark Licenses;

(d)    All other Licenses;

(e)    All renewals of any of the foregoing;

(f)    All trade secrets, know-how and other proprietary information; works of authorship and other copyright works (including copyrights for computer programs), and all tangible and intangible property embodying the foregoing; inventions (whether or not patentable) and all improvements thereto; industrial design applications and registered industrial designs; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases, and other physical manifestations, embodiments or incorporations of any of the foregoing, and any Licenses in any of the foregoing, and all other proprietary rights;

(g)    All General Intangibles connected with the use of, or related to, any and all of the foregoing (including, without limitation, all goodwill of each Obligor and its business, products and services appurtenant to, associated with, or symbolized by, any and all of the foregoing and the use thereof);

(h)    The right to sue for past, present and future infringements, misappropriations, and dilutions of any of the foregoing; and

(i)    All of the Obligors' rights corresponding to any of the foregoing throughout the world.

 

1.11 "Intellectual Property Income" means all gross income, royalties, license fees, reimbursements, proceeds, settlements, damages, consulting fees, and payments or other consideration of every kind and nature (other than the Excluded Items), all calculated prior to any netting, deduction or set-off of any expenses, taxes, or other amounts, whether now and hereafter owed, due and/or payable under, or with respect to, or in connection with, any Intellectual Property, which is paid to or received by the Obligors or any one of them, whether directly or indirectly, including, without limitation, payments under all Licenses entered into in connection therewith and damages and payments for past or future infringements, misappropriations or dilutions thereof, provided, however, that with respect to settlements, awards, damages and the like for which an Obligor was required to retain outside counsel in order to obtain or secure, the actual, out of pocket costs and expenses of such outside counsel (provided that such outside counsel is an unrelated, third party), including a reasonable contingency fee, may be deducted from the amounts received from such settlements, awards, damages and the like before calculating the Royalty due in connection with the same.  Without limiting the generality of the foregoing, the term Intellectual Property Income shall include any payments, distributions, or other amounts paid to Genarex LLC by, or on account of or in connection with its ownership interest in, Genarex FD LLC.

1.12          "Legal Requirement" means any statute, law, treaty, rule, regulation, guidance, approval, order, decree, writ, injunction or determination of any Governmental Authority, court or arbitrator of competent jurisdiction; and, with respect to any Person, includes all such Legal Requirements applicable or binding upon such Person, its business or the ownership or use of any of its assets.

1.13          "Licenses" shall mean, collectively, the Copyright Licenses, Patent Licenses, Trademark Licenses, and any other license providing for the grant by or to the Obligors of any right under any Intellectual Property.

1.14          "Patents" shall mean all patents and applications for patents of the Obligors, and the inventions and improvements therein disclosed, and any and all divisions, revisions, reissues and continuations, continuations-in-part, extensions, and reexaminations of said patents.

1.15          "Patent Licenses" shall mean all agreements, whether written or oral, providing for the grant by or to the Obligors of any right under any Patent.

1.16            "Person" means any individual, firm, corporation, partnership, limited liability company, trust, unincorporated organization or other entity or a government agency or political subdivision thereof, and shall include any successor (by merger or otherwise) of such Person.

1.17            "Subordination Agreement" means that certain Subordination Agreement dated as of December 31, 2015 entered into by, among others, TCA Global Credit Master Fund, LP and the Lender.

1.18             "Third Party" means any Person that is neither a party to this Agreement nor an Affiliate of a party to this Agreement.

1.19            "Trademarks" shall mean all trademarks, trade names, corporate names, company names, domain names, business names, fictitious business names, trade dress, trade styles, service marks, designs, logos and other source or business identifiers of the Obligors, whether registered or unregistered, together with any goodwill of the business connected with, and symbolized by, any of the foregoing.

1.20            "Trademark Licenses" shall mean all agreements, whether written or oral, providing for the grant by or to the Obligors of any right under any Trademark.

	
2.

	
ROYALTY

	
2.1

	
Royalty Agreement.

(a)    This Agreement and the royalties payable pursuant to the terms of this Agreement are entered into and agreed to in connection with, and as part of the consideration for, the Settlement Agreement.  The Obligors acknowledge and agree that they have received significant and immediate consideration for the Royalty (as defined below) granted herein in the form of debt being exchanged for the right to receive the Royalty.

(b)    Royalty Amount.  For good and valuable consideration, the Obligors agree from and after the date of this Agreement to pay to the Lender (at the times and in the manner set forth in Section 2.2 below) ongoing royalty payments equal to fifteen percent (15%) of all of the Obligors' Intellectual Property Income (the "Royalty").

	
2.2

	
Payment of the Royalty. The Royalty shall be payable as follows:

(a)    The Obligors hereby covenant and agree to instruct in advance (pursuant to the terms of a letter of direction in a form acceptable to Lender) all of their legal counsel handling any matters related to the Obligors' Intellectual Property (including, without limitation, Cantor Colburn LLP) to remit the Royalty from any settlement or litigation proceeds, payments, or other amounts obtained or received by Obligors' counsel directly to Lender upon such counsel's receipt of the same.  If notwithstanding the foregoing, such counsel fails to immediately remit the Royalty relating to such settlement or litigation proceeds to Lender, or if such settlement or litigation proceeds are delivered to or received by the Obligors, the Obligors shall immediately cause such counsel to remit the Royalty to the Lender, or in the case of proceeds delivered to or received by the Obligors, immediately remit the Royalty due therefrom to Lender.

(b)    With respect to Intellectual Property Income that is not generated from settlement or litigation proceeds, the Royalty due in connection therewith shall be payable quarterly.  No later than two (2) Business Days following the last day of each calendar quarter (commencing with the calendar quarter ending March 31, 2016), the Obligors shall pay to Lender the Royalty for such calendar quarter.  On the same day the Obligors make a Royalty payment pursuant to this Section 2.2, the Obligors shall deliver to Lender a written statement in reasonable detail showing all Intellectual Property Income by source and amount during such calendar quarter and the Obligors' computation of the Royalty for such calendar quarter.

(c)    All Royalty payments shall be made by wire transfer of immediately available funds to the account previously designated in writing to the Obligors by Lender, or such new or additional account(s) as Lender shall designate in writing to the Obligors at least five (5) Business Days prior to the date such Royalty payment shall be due.

	
2.3

	
Royalty Payments Following Termination. The termination of this Agreement shall not terminate the obligation of the Obligors, or its Affiliates, licensees or assignees, to pay any Royalty accrued prior to such termination.  Upon termination of this Agreement, Lender shall have the right to retain any Royalty already paid by the Obligors under this Agreement.

	
2.4

	
Defaulted Royalty Payments. Any Royalty not paid when due (including any Royalty not paid as a result of the provisions of the Subordination Agreement) shall bear interest at a rate equal to the lower of (i) the highest rate permitted by applicable law, and (ii) fourteen percent (14%) per annum.

	
2.5

	
Audit Right.

(a)    Upon not less than five (5) days' prior written notice, Lender shall have the right to audit the books and records of the Obligors (including those obtained from third parties) relating to sales or other transactions included in the definition of Intellectual Property Income for the purposes of determining the correctness of the Obligors' computation and payment of the Royalty. Such audit shall be conducted during normal business hours by a national public accounting firm selected by Lender and reasonably acceptable to the Obligors.  The cost and expense of one such audit each calendar year shall be paid by the Obligors. Lender may conduct more frequent audits, but any additional audits shall be at Lender's cost and expense.  The Obligors shall provide Lender and such accounting firm with access to all pertinent books and records and shall reasonably cooperate with such accounting firm's efforts to conduct such audit.  If such audit determines that there has been an underpayment of the aggregate Royalty due for the period being audited of more than $2,500 (an "Underpayment"), Lender shall notify the Obligors of the amount of such Underpayment (the "Underpayment Notice") and make the audit papers for the relevant period available to the Obligors.

(b)    Within five (5) Business Days after receipt of the Underpayment Notice, the Obligors may either inform Lender in writing that the Obligors agree with the calculation of the Underpayment or object to such calculation in writing, setting forth each of the Obligors' objections (the "Obligor Objections").  Any items included in the Underpayment Notice which are not disputed by the Obligors in the Obligor Objections shall be deemed agreed to by the Obligors.  If the Obligors deliver the Obligor Objections and the parties do not resolve all such Obligor Objections on a mutually agreeable basis within fifteen (15) Business Days after Lender's receipt of the Obligor Objections, any Obligor Objections as to which Lender and the Obligors cannot agree upon may be submitted by either Lender or the Obligors to a mutually acceptable national public accounting firm (the "Designated Accounting Firm") for resolution as provided herein.  If the Obligors and Lender are unable to agree on a mutually acceptable Designated Accounting Firm, then the Designated Accounting Firm shall be an independent accounting firm of nationally recognized reputation which shall be selected by lot after the Obligors and Lender have each proposed two (2) firms and excluded one (1) firm proposed by the other.  Subject to the limitations set forth below, the Designated Accounting Firm shall have the power, authority and duty to resolve any outstanding Obligor Objections and the decision of the Designated Accounting Firm shall be final and binding upon the parties.  Upon the agreement of the parties or the decision of the Designated Accounting Firm, the calculation of the Underpayment, as adjusted based on the parties' agreement or the decision of the Designated Accounting Firm, as applicable, shall be final and conclusive.  If the Obligors fail to deliver any Obligor Objections to Lender within the first five (5) Business Day period referred to above, the Underpayment Notice delivered by Lender and the calculations set forth therein shall be final and binding on the parties.  In resolving any disputed item, the Designated Accounting Firm (i) shall be bound by the provisions of this Section 2.5(b), (ii) may not assign a value to any item greater than the highest value claimed for such item or less than the lowest value for such item claimed by either Lender or the Obligors, (iii) shall restrict its decision to such items included in the Obligor Objections which are then in dispute, (iv) may review only the written presentations of Lender and the Obligors in resolving any matter which is in dispute and (v) shall render its decision in writing within thirty (30) calendar days after the disputed items have been submitted to it.  Upon the resolution of all Obligor Objections, the calculation of the Underpayment shall be revised to reflect the resolution.  If the Obligors make any Obligor Objections, the fees, costs and expenses of the Designated Accounting Firm shall be paid (i) by the Obligors if the Obligor Objections are resolved in favor of Lender, or (ii) by Lender if the Obligor Objections are resolved in favor of the Obligors.  If the Obligor Objections are resolved part in favor of the Obligors and part in favor of Lender, such fees, costs and expenses shall be shared by Lender and the Obligors in proportion to the aggregate amount of the Obligor Objections resolved in favor of the Obligors compared to the aggregate amount of the Obligor Objections resolved in favor of Lender.

(c)    If there is an Underpayment as finally determined in accordance with this Section 2.5, the Obligors shall pay an amount to Lender equal to such Underpayment and shall reimburse Lender for the reasonable out-of-pocket costs (including accountants' fees) incurred by Lender in connection with the audit contemplated in Section 2.5(a) above, in each case, within five (5) Business Days following the final determination of the Underpayment in accordance with this Section 2.5.

	
3.

	
SECURITY INTEREST

The Obligors' obligations under this Agreement are secured by a certain Intellectual Property Security Agreement dated as of January 8, 2008, entered into by and among the Obligors and the Lender, as such agreement may be amended from time to time and in effect.

	
4.

	
RESTRICTIONS ON DISTRIBUTIONS

At any time during the term of this Agreement during which Lender is blocked from receiving Royalty payments pursuant to the provisions of the Subordination Agreement, the Obligors shall not make or pay any distributions, dividends, bonuses, or other payments, remuneration, compensation, or consideration of any nature to their respective principals, shareholders, members, partners, managers, owners, or other equity holders or similar parties except for regular base salary payments and normal benefits at levels consistent with the Obligors' historical practices.

	
5.

	
REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS

The Obligors represent and warrant to the Lender, as of the date of this Agreement, that:

	
5.1

	
Organization.  Each of the Obligors is duly organized, validly existing and in good standing under the laws of the state of its incorporation or formation, as applicable, and each of the Obligors has all requisite power and authority to own, lease and operate its properties and to carry on its business as is now being conducted and as is currently contemplated to be conducted.

	
5.2

	
Authority; Execution; Enforceability.  (i) Each of the Obligors has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, (ii) no consent of any party is required for each of the Obligors to execute, deliver and perform its obligations under this Agreement, and (iii) the execution and delivery of this Agreement and the performance of all of its obligations hereunder have been duly authorized by each of the Obligors. This Agreement has been duly executed and delivered by each of the Obligors and constitutes the legal, valid and binding obligation of each of the Obligors, enforceable against each of the Obligors in accordance with its terms.

	
5.3

	
No Violation. The execution, delivery and performance of this Agreement by the Obligors, and the Obligors' compliance with the terms and conditions hereof, is not prohibited or limited by, and do not and will not conflict with or result in the breach of or a default under, any provision of the certificate of formation, operating agreement or other organizational or governance documents of any of the Obligors, any contract, agreement or instrument binding on or affecting any of the Obligors, or any Legal Requirement applicable to any of the Obligors.

	
5.4

	
Financial Condition. No insolvency proceeding of any character, including, without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, has been commenced by or against any of the Obligors or any of their respective assets or properties, nor has any such proceeding been threatened.  No Obligor has contemplated or taken any action in contemplation of the institution of any such proceeding.

	
5.5

	
No Brokers or Finders.  The Obligors have not incurred and will not incur, directly or indirectly, as a result of any action taken or permitted to be taken by or on behalf of the Obligors, any liability for brokerage or finders' fees or agents' commissions or similar charges in connection with the execution and performance of the transactions contemplated by this Agreement, or any other agreement or instrument to be entered into in connection with the transactions contemplated by any of the foregoing.

	
5.6

	
Tax Returns and Payments. The Obligors have timely filed, and will timely file, all tax returns and reports required by applicable Legal Requirements, and the Obligors have timely paid, and will timely pay, all applicable taxes, assessments, deposits and contributions now or in the future owed by each of the Obligors.

	
5.7

	
Compliance with Legal Requirements; Permits.

(a)    Borrower and its Subsidiaries have complied, and will comply, in all material respects, with all provisions of all applicable laws and regulations applicable to Borrower, including, but not limited to, those relating to their ownership of real or personal property, the conduct and licensing of their business, possession and maintenance of all permits required to operate their business, compensation and benefits payable or provided to their employees, and all environmental matters.

(b)    The Intellectual Property is being developed, tested, manufactured, distributed, promoted, advertised and otherwise commercialized, as applicable, in compliance with all applicable Legal Requirements.

	
5.8

	
Litigation.  Except as disclosed to Lender in writing, there is no claim, suit, litigation, proceeding or investigation pending or threatened against or affecting the Obligors.  The Obligors will promptly inform Lender in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted by or against any one or more of the Obligors.

	
5.9

	
Intellectual Property.  Except as has been previously disclosed in writing to Lender, the Obligors are not the holders of any Intellectual Property other than "shrink wrap" licenses that are not exclusive and are generally available on commercially reasonable terms.  No Obligor will, in the future, enter into any License as licensee that prohibits the Obligor from granting Lender a security interest in the same, unless the License is not exclusive and generally available on commercially reasonable terms.  The Obligors own or are a licensee of all intellectual property rights necessary for the conduct of its business or operations as currently conducted (and as currently contemplated to be conducted) and that are material to the financial condition, business or operations of the Obligors.  The use of such intellectual property by the Obligors does not and has not been alleged by any Person to infringe on the rights of any Person.

	
5.10

	
Undisclosed Liabilities.  The Obligors do not have any obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and regardless of when asserted) required to be disclosed in a balance sheet prepared in accordance with GAAP (including the notes thereto) arising out of transactions entered into at or prior to the date hereof other than liabilities set forth on the latest financial statements (including any notes thereto).

	
6.

	
COVENANTS OF THE OBLIGORS

At all times during the term of this Agreement, the Obligors shall comply with each of the following covenants:

	
6.1

	
Information Reporting.  The Obligors, at their own cost and expense, shall provide Lender with the following, in the same form which shall be in a form reasonably acceptable to Lender:

(a)    Quarterly reports detailing all Intellectual Property Income for the calendar quarter just ended within 10 days after the end of each calendar quarter;

(b)    Quarterly, consolidated financial statemen

ts within 45 days after the end of each calendar quarter;

(c)    Annual, unqualified consolidated financial statements, audited by independent certified public accountants reasonably acceptable to Lender, within 90 days after the end of each calendar year of the Obligors;

(d)    Such other reports and financial information as Lender may reasonably request.

	
6.2

	
Insurance.  The Obligors will maintain appropriate commercial, general liability, and product liability insurance coverage, which insurance shall be acceptable to Lender in all respects.

	
6.3

	
Accounting Practices.  The Obligors will not engage in (i) any sales loading practices or any other promotional sales or discount activity with any Persons with the intent to accelerate or delay sales to a period that would otherwise be expected to occur in another period, (ii) any practice intended to have the effect of accelerating or delaying to a period collections of receivables that would otherwise be expected to be made in another period or (iii) any practice intended to have the effect of accelerating or delaying to a period payments by the Obligors that would otherwise be expected to be made in another period.

	
7.

	
CONFIDENTIALITY, PUBLICATION AND PUBLIC ANNOUNCEMENTS

	
7.1

	
Confidentiality.  Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the parties agree that, during the term of this Agreement, each party shall, upon receiving or learning of any Confidential Information of the other party, keep such Confidential Information confidential.  The receiving party shall advise its Affiliates, employees and consultants who might have access to the disclosing party's Confidential Information of the confidential nature thereof.  The receiving party shall not disclose any Confidential Information of the disclosing party to any Affiliate, employee or consultant who does not have a need for such information, and in any event, the receiving party shall be liable for any breach of the obligations set forth in this Section 7 by the receiving party's Affiliates, employees and consultants.

	
7.2

	
Authorized Disclosure.  Notwithstanding the foregoing, each party may disclose Confidential Information of the other party to a Third Party to the extent such disclosure is required to be disclosed by the receiving party under a court order, is reasonably necessary to comply with applicable Legal Requirements or is otherwise disclosed in connection with required submissions of information to tax authorities or other Governmental Authorities; provided that if a party is required by law to make any such disclosure of the disclosing party's Confidential Information, to the extent it may legally do so, it will give reasonable advance notice to the disclosing party of such disclosure and will use its reasonable efforts to secure confidential treatment of such Confidential Information prior to its disclosure (whether through protective orders or otherwise).

	
7.3

	
Unauthorized Disclosure.  If either party becomes aware or has knowledge of any unauthorized disclosure of the other party's Confidential Information, it shall promptly notify the disclosing party of such unauthorized disclosure.

	
7.4

	
Public Announcements.  No party hereto shall make any public announcement regarding the terms of this Agreement, unless such disclosure is required by the order of a court, or to comply with applicable Legal Requirements, or consistent with any disclosure previously approved by the other party, or as authorized by the other party is writing.

	
8.

	
INDEMNIFICATION

	
8.1

	
Indemnification by the Obligors.  The Obligors shall, at the Obligors' sole cost and expense, defend, indemnify and hold Lender, its general partner, and its investment manager, the Other Lenders, and each of the foregoing parties' respective agents, servants, attorneys, advisors, administrators, officers, directors, employees, affiliates, partners, parents, subsidiaries, shareholders, members, managers, predecessors, successors, and assigns (each an "Indemnitee" and collectively, the "Indemnitees") harmless from and against any and all losses, costs, damages, fees or expenses (including reasonable attorney's fees and expenses) incurred in connection with or arising out of any claim relating to: (a) any breach by the Obligors, or any one of them, of any of their representations, warranties or obligations pursuant to this Agreement; (b) any gross negligence or willful misconduct of any one or more of the Obligors, any of their respective Affiliates, or any of their respective directors, officers, employees, agents and equity holders; (c) the development, use, and sale of any of the Intellectual Property, or any products or processes related thereto; (d) any violation of applicable Legal Requirements by any one or more of the Obligors, or any of their respective Affiliates, or any of their respective directors, officers, employees, agents and equity holders, and (e) any litigation, claims, or causes of action related to or arising out of the Intellectual Property.

	
8.2

	
Each Indemnitee shall be an express third party beneficiary of this Section 8, and shall be entitled to enforce the provisions of this Section 8 as if such Indemnitee were a party to this Agreement.

	
9.

	
GENERAL PROVISIONS

9.1          Notices.  All notices, consents, waivers, acceptances, rejections and other communications hereunder shall be in writing and shall be (i) delivered by hand or (ii) sent certified mail or by a nationally recognized overnight delivery service, charges prepaid, to the address set forth below (or such other address for a Party as shall be specified by like notice):

	
To the Obligors:

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, GA 30005

Attention:  Kevin Kreisler

		To Lender:	c/o Yorkville Advisors, LLC

1012 Springfield Avenue

Mountainside, NJ 07092

Attention: ________________

with a copy to:

Douglas K. Clarke, Esquire

Riemer & Braunstein LLP

3 Center Plaza

 Boston, MA 02108

Each such notice or other communication shall be deemed to have been duly given and to be effective (x) if delivered by hand, immediately upon delivery if delivered on a Business Day during normal business hours and, if otherwise, on the next Business Day; or (y) if sent by certified mail or a nationally recognized overnight delivery service, on the day of delivery if delivered during normal business hours on a Business Day and, if otherwise, on the first Business Day after delivery.

9.2            Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original with the same force and effect as if the signatures thereto and hereto were upon the same instrument.

9.3            Currency.  Unless otherwise expressly set forth in this Agreement, all payments hereunder shall be in United States Dollars.

9.4            Governing Law.  The validity, construction and effect of this Agreement shall be governed by the internal laws of the State of New Jersey but excluding any principles of conflicts of law or other rule of law that would result in the application of the law of any jurisdiction other than the laws of the State of New Jersey.

9.5            Complete Agreement.  This Agreement is intended by the parties as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement.

9.6            Assignment.  No Obligor shall assign its rights or obligations under this Agreement to any Person, nor shall any Obligor merge with, or be sold or transferred to, a non-Obligor, without the prior written consent of the Lender.  The Lender may assign its rights and obligations hereunder by delivering written notice of such assignment to the Obligors.

9.7            Expenses.  Except as set forth in the Settlement Agreement, each party hereto will be responsible for and bear all of its respective costs and expenses incurred in connection with the transactions contemplated by this Agreement.

9.8            No Third Parties Benefitted.  Except as expressly provided in Sections 4 and 9, this Agreement is solely for the benefit of the parties hereto and their respective successors and permitted assigns, and no other Person shall have any right, benefit or interest under, or because of the existence of, this Agreement.

9.9            Remedies.                          The Obligors agree that if this Agreement is breached, without limiting any other remedy available herein, at law or in equity, an injunction, restraining order, specific performance, and other forms of equitable relief or money damages or any combination thereof shall be available to Lender (without any requirement of posting a bond as a condition to obtaining such relief).

9.10            Term.  This Agreement is a continuing agreement and shall remain in full force and effect until terminated upon the mutual written agreement of the Obligors and Lender. The terms and provisions of Sections 2.4, 2.5, 7, 8 and 9 shall expressly survive any termination of this Agreement.

[SIGNATURES ON FOLLOWING PAGE]

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

 THE "OBLIGORS"

VIRIDIS CAPITAL LLC

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GREENSHIFT CORPORATION

 (f/k/a GS CleanTech Corporation)

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

GS CLEANTECH CORPORATION

 (f/k/a GS Ethanol Technologies, Inc.)

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

GS COES (YORKVILLE I), LLC

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GREENSHIFT ENGINEERING, INC.

 (f/k/a GS Carbon Dioxide Technologies, Inc.)

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

GS GLOBAL BIODIESEL, LLC,

By GS COES (Yorkville I), its sole member

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GS AGRIFUELS CORPORATION

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

NEXTGEN ACQUISITION, INC.

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

NEXTGEN FUEL INC.

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

SUSTAINABLE SYSTEMS, INC.

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

SUSTAINABLE SYSTEMS LLC

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GS DESIGN, INC.

 (f/k/a Warnecke Design Service, Inc.)

By /s/ Kevin Kreisler

 Name: Kevin Kreisler

Title:  Chief Executive Officer

GS RENTALS, LLC

(f/k/a Warnecke Rentals, LLC),

 by GS Design, Inc., its sole member

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

ECOSYSTEM TECHNOLOGIES, LLC,

 by Adarna Energy Corporation, its sole member

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GS BIG MANAGEMENT, LLC,

by GS COES (Yorkville I), LLC, its sole member

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GS COES (ADRIAN I), LLC

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

  

GS TECHNOLOGY, LLC,

 by GS COES (Yorkville I), LLC, its sole member

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

GENAREX LLC

By /s/ Kevin Kreisler

Name: Kevin Kreisler

Title: Manager

"SECURED PARTY"

YA GLOBAL INVESTMENTS, L.P.

By: Yorkville Advisors, LLC,

 its Investment Manager

By /s/ Mark Angelo

Name:                           Mark Angelo

Title:             Managing Member

SCHEDULE "1"

Obligors

	
Name

	
Address

	
Viridius Capital LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GreenShift Corporation (f/k/a GS CleanTech Corporation)

	
5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS CleanTech Corporation (f/k/a GS Ethanol Technologies, Inc.)

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS COES (Yorkville I), LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS Design, Inc. (f/k/a Warnecke Design Service, Inc.)

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS Rentals, LLC (f/k/a Warnecke Rentals, LLC)

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GreenShift Engineering, Inc.

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS AgriFuels Corporation

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

 

 

 

  

	
NextGen Acquisition, Inc.

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
NextGen Fuel Inc.

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
Sustainable Systems, Inc.

 

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
Sustainable Systems LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS Global Biodiesel, LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS Big Management, LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS COES (Adrian I), LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
GS Technology, LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
EcoSystem Technologies, LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

	
Genarex LLC

	
c/o GreenShift Corporation

5950 Shiloh Road East, Suite N

Alpharetta, Georgia 30005

 

SCHEDULE "2"

Obligor's Existing License Agreements

	
1.

	
Early Adopter License Agreement dated April 16, 2012 between GS CleanTech Corporation and ABE South Dakota LLC.

	
2.

	
Early Adopter License Agreement dated July 8, 2011 between GS CleanTech Corporation and The Andersons Clymers Ethanol, LLC.

	
3.

	
Early Adopter License Agreement dated July 19, 2011 between GS CleanTech Corporation and The Andersons Marathon Ethanol LLC.

	
4.

	
Early Adopter License Agreement dated December 1, 2010 between GS CleanTech Corporation and Pixley Ethanol, LLC (Calgren).

	
5.

	
Early Adopter License Agreement dated July 1, 2010 between GS CleanTech Corporation and Center Ethanol Company, LLC.

	
6.

	
Early Adopter License Agreement dated October 1, 2011 between GS CleanTech Corporation and Chief Ethanol Fuels, Inc.

	
7.

	
Early Adopter License Agreement dated December 7, 2010 between GS CleanTech Corporation and Patriot Renewable Fuels, LLC, as amended (CHS Annawan).

	
8.

	
Early Adopter License Agreement dated August 3, 2010 between GS CleanTech Corporation and Corn, LP.

	
9.

	
License Agreement dated July 6, 2011 between GS CleanTech Corporation and Abe Fairmont, LLC, as amended (Flint Hills Resources – Fairmont LLC).

	
10.

	
License Agreement dated June 1, 2013 between GS CleanTech Corporation and Platinum Ethanol LLC, as amended (Flint Hills Resources – Arthur LLC).

	
11.

	
Early Adopter License Agreement dated July 19, 2010 between GS CleanTech Corporation and Green Plains Renewable Energy, Inc., as amended.

	
12.

	
Early Adopter License Agreement dated February 15, 2011 between GS CleanTech Corporation and Green Plains Commodities, LLC (LAKOTA).

	
13.

	
Early Adopter License Agreement dated February 15, 2011 between GS CleanTech Corporation and Green Plains Commodities, LLC (RIGA).

	
14.

	
Early Adopter License Agreement dated January 29, 2014 between GS CleanTech Corporation and Illinois Corn Processing LLC.

	
15.

	
Early Adopter License Agreement dated July 10, 2012 between GS CleanTech Corporation and GTL Resource USA, Inc. (IL River Energy).

	
16.

	
Early Adopter License Agreement dated April 1, 2010 between GS CleanTech Corporation and Marquis Energy, LLC, as amended January 1, 2011.

	
17.

	
Early Adopter License Agreement dated April 1, 2010 between GS CleanTech Corporation and Marquis Energy – Wisconsin, LLC.

	
18.

	
Early Adopter License Agreement dated October 2, 2012 between GS CleanTech Corporation and MGPI Processing, Inc.

	
19.

	
License Agreement dated May 31, 2011 between GS CleanTech Corporation and Sunoco, Inc.

	
20.

	
Early Adopter License Agreement dated June 11, 2010 between GS CleanTech Corporation and United Ethanol, LLC, as amended.Exhibit 10.2

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (as may be amended, restated or modified from time to time, this "Pledge Agreement"), dated as of November 30, 2015 but made effective as of December 31, 2015, is made by and between [PLEDGOR], a [corporation incorporated / limited liability company organized and existing] under the laws of the State of [●], as pledgor (the "Pledgor"), and TCA GLOBAL CREDIT MASTER FUND, LP, a limited partnership organized and existing under the laws of the Cayman Islands, as pledgee (the "Pledgee").

W I T N E S S E T H:

WHEREAS, pursuant to that certain Senior Secured Revolving Credit Facility Agreement, dated as of November 30, 2015 and effective as of the date hereof (as may be amended, restated or modified from time to time, the "Credit Agreement"), by and among Bitzio Inc., a corporation incorporated under the laws of the State of Nevada, as borrower (the "Borrower"), additional Credit Parties, and the Pledgee, as lender, the Pledgee has agreed to advance an aggregate principal amount of up to Five Million and No/100 United States Dollars (US$5,000,000) (the "Loan") to the Borrower, which Loan is further evidenced by revolving convertible promissory notes issued by the Borrower in favor of the Pledgee (as may be amended, restated or modified from time to time, the "Notes");;

WHEREAS, as of the date hereof, the Pledgor is the registered and beneficial owner of [●] ([●])of the issued and outstanding [membership interests / shares of common stock] (equal to [●]% of the total issued and outstanding shares of common stock) (the "Pledged Interests / Shares") of [Subsidiary], a [corporation incorporated / limited liability company organized and existing] under the laws of the State of [●] (in such capacity, the "Pledged Company"), and the [Pledged Interests / Shares] are represented by a certificate bearing certificate number [●] (the "Certificate");

WHEREAS, it is a condition precedent to the Pledgee making the Loan available to the Borrower under the Credit Agreement that the Pledgor execute and deliver to the Pledgee, as security for the obligations of the Borrower to the Pledgee, a pledge of all of the Pledgor's right, title and interest in and to the Pledged [Shares / Interests];

NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Pledgor and the Pledgee agree as set forth below:

SECTION 1.                                          Defined Terms.  Except as otherwise defined herein, terms defined in the Credit Agreement shall have the same meaning when used herein.

SECTION 2.                                          Grant of Security.  As security for the Obligations (as defined in the Credit Agreement), the Pledgor hereby pledges, assigns, transfers and delivers to the Pledgee the [Pledged Interests / Shares] and hereby grants to the Pledgee a first priority lien on and a first priority security interest in the following (collectively, the "Pledged Collateral"):

(i)                        the [Pledged Interests / Shares] and all capital, revenue, profit, income, gain or other property or proceeds, return on contribution or otherwise with respect to the [Pledged Interests / Shares];

(ii)                        all securities, moneys or property representing dividends or interest on any of the [Pledged Interests / Shares], or representing a distribution in respect of the [Pledged Interests / Shares], or resulting from a split-up, revision, reclassification or other like change of the [Pledged Interests / Shares] or otherwise received in exchange therefor, and any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the [Pledged Interests / Shares] (exclusive of any equity holder loan);

(iii)                        all right, title and interest of Pledgor in, to and under any policy of insurance payable by reason of loss or damage to the [Pledged Interests / Shares] and any other Pledged Collateral;

(iv)                        all other payments due or to become due to the Pledgor in respect of the [Pledged Interests / Shares] whether under any organizational document or otherwise, whether as contractual obligations, damages or otherwise;

(v)                        all "accounts", "general intangibles", "instruments" and "investment property" (in each case as defined in the UCC) constituting or relating to the foregoing;

(vi)                        all Proceeds of any of the foregoing property of Pledgor (including, without limitation, any proceeds of insurance thereon, all "accounts", "general intangibles", "instruments" and "investment property", in each case as defined in the UCC, constituting or relating to the foregoing); and

(vii)                        all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof.

SECTION 3.                                          Pledge Documents.  Concurrently with the execution of this Pledge Agreement and upon the circumstances described in Section 6 hereof, the Pledgor shall execute and deliver to the Pledgee an irrevocable proxy in favor of the Pledgee in respect of the [Pledged Interests / Shares] of the Pledged Company in the form set out in Exhibit A hereto (the "Irrevocable Proxy") and shall deliver to the Pledgee the Certificate together with a signed, undated instrument of transfer in the form set out in Exhibit B hereto (an "Instrument of Transfer") pertaining thereto duly executed in blank.

SECTION 4.                                          Representations and Warranties.  The Pledgor represents and warrants that:

(a)                        it is the legal and beneficial owner of, and has good and marketable title to, the Pledged Collateral, subject to no pledge, lien, mortgage, hypothecation, security interest, charge, option or other encumbrance whatsoever, except the lien and security interest created and contemplated by this Pledge Agreement;

(b)                        it has full power, authority and legal right to execute, deliver and perform its obligations under this Pledge Agreement and to create the lien and security interest contemplated by this Pledge Agreement;

(c)                        the [Pledged Interests / Shares] of the Pledged Company (i) have been duly and validly created pursuant to the relevant organizational documents of the Pledged Company, (ii) constitute [●]% of the total issued and outstanding capital stock of the Pledged Company; and (iii) are evidenced by the Certificate;

(d)                        the [Pledged Interests / Shares] are "securities" governed by Article 8 of the UCC;

(e)                        as of the date hereof, no Person has entered into any options, warrants or other agreements to acquire additional capital stock in the Pledged Company and there are no voting trusts or other member agreements or arrangements relating to any Pledged Collateral;

(f)                        this Pledge Agreement constitutes a valid obligation of the Pledgor, legally binding upon it and enforceable in accordance with its terms;

(g)                        the pledge, hypothecation, assignment of the Pledged Collateral and the delivery of the [Pledged Interests / Shares] (together with the Instrument of Transfers) pursuant to and/or described in this Pledge Agreement create a valid and perfected first priority security interest in the Pledged Collateral;

(h)                        no consent of any other party (including equity interest holders of the Pledgor) is required in connection with the execution, delivery, performance, validity, enforceability or enforcement of this Pledge Agreement, and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery, performance, validity, enforceability or enforcement of this Pledge Agreement;

(i)                        the execution, delivery and performance of this Pledge Agreement will not violate or contravene any provision of any existing law or regulation or decree of any court, governmental authority, bureau or agency having jurisdiction in the premises or of the organizational documents of the Pledgor or of any mortgage, indenture, security agreement, contract, undertaking or other agreement to which the Pledgor is a party or which purports to be binding upon it or any of its properties or assets and will not result in the creation or imposition of any lien, charge or encumbrance on, or security interest in, any of its properties or assets pursuant to the provisions of any such mortgage, indenture, security agreement, contract, undertaking or other agreement;

(j)                        its chief executive office is located at [●]; and

(k)                        the representations and warranties set forth in the Credit Agreement insofar as they relate to the Pledgor are true and complete and the Pledgor shall comply with each of the covenants set forth in the Credit Agreement which are applicable thereto.

SECTION 5.                                          Covenants.  The Pledgor hereby covenants that during the continuance of this Pledge Agreement:

(a)                        it shall warrant and defend the right and title of the Pledgee conferred by this Pledge Agreement in and to the Pledged Collateral at the cost of the Pledgor against the claims and demands of all persons whomsoever;

(b)                        it shall not sell, assign, transfer, charge, pledge or encumber in any manner any part of the Pledged Collateral or suffer to exist any encumbrance on the Pledged Collateral

(c)                        it shall not amend or modify any organizational document of the Pledged Company;

(d)                        it shall not vote the [Pledged Interests / Shares] of the Pledged Company in favor of the consolidation, merger, dissolution, liquidation or any other corporate reorganization of the Pledged Company;

(e)                        it shall not take from the Pledged Company any undertaking or security in respect of its liability hereunder or in respect of any other liability of the Pledged Company to the Pledgor and the Pledgor shall not prove nor have the right of proof, in competition with the Pledgee, for any monies whatsoever owing from the Pledged Company to the Pledgor, in any insolvency or liquidation, or analogous proceedings under any applicable law, of the Pledgor;

(f)                        subject to the terms and conditions contained in the Credit Agreement, there shall not be issued any additional [membership interests / shares of capital stock] in the Pledged Company nor any options, warrants or other agreements to do so issued or entered into, provided however that if such [membership interests / shares of capital stock] are issued, they shall immediately be pledged to the Pledgee hereunder;

(g)                        it shall not release, transfer or otherwise dispose of any [membership interests / shares of capital stock] held by the Pledged Company as treasury stock or otherwise;

(h)                        it shall furnish to Pledgee from time to time statements and schedules further identifying and describing the Pledged Collateral as Pledgee reasonably requests, all in reasonable detail;

(i)                        it shall give at least ninety (90) days' prior written notice to Pledgee of any (i) change of the location of Pledgor's chief executive office from that specified in Section 4(j) hereof, (ii) change of Pledgor's name, identity or structure or (iii) reorganization or reincorporation of Pledgor under the laws of another jurisdiction; and; and

(j)                        it shall indemnify the Pledgee from, and hold it harmless against, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Pledged Collateral or in connection with the transaction contemplated by this Pledge Agreement.

SECTION 6.                                          Delivery of Additional Collateral.  If the Pledgor shall become entitled to receive or shall receive any equity interests, option or rights, whether as an addition to, in substitution of, or in exchange for any of the [Pledged Interests / Shares], the Pledgor agrees to accept the same as the agent of the Pledgee and to hold the same in trust for the benefit of the Pledgee and to deliver the same forthwith to the Pledgee in the exact form received, with the endorsement of the Pledgor when necessary and/or appropriate undated Instruments of Transfer duly executed in blank, and Irrevocable Proxies for any [membership interests / shares of capital stock] so received, in substantially the forms attached hereto to be held by the Pledgee, subject to the terms hereof, as additional collateral security for the Obligations.

SECTION 7.                                          General Authority.  The Pledgor hereby consents that, without the necessity of any reservation of rights against the Pledgor, and without notice to or further assent by the Pledgor, any demand for payment of any of the Obligations made by the Pledgee may be rescinded by the Pledgee and any of the Obligations continued, and the Obligations, or the liability of the Pledgor and/or the Pledged Company upon or for any part thereof, or any other collateral security (including, without limitation, any collateral security held pursuant to any of the other Loan Documents) or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, modified, accelerated, compromised, waived, surrendered, or released by the Pledgee, and the Loan Documents, any guarantees and any other collateral security documents executed and delivered by the Pledgor and/or the Pledged Company or any other obligors in respect of the Obligations may be amended, modified, supplemented or terminated, in whole or in part, as the Pledgee may deem advisable, from time to time, and any other collateral security at any time held by the Pledgee for the payment of the Obligations (including, without limitation, any collateral security held pursuant to any other collateral security document executed and delivered pursuant to the Loan Documents) may be sold, exchanged, waived, surrendered or released, all without notice to or further assent by the Pledgor or the Pledged Company, which shall remain bound hereunder, notwithstanding any such renewal, extension, modification, acceleration, compromise, amendment, supplement, termination, sale, exchange, waiver, surrender or release.  The Pledgor waives any and all notices of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Pledgee upon this Pledge Agreement, and the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Pledge Agreement, and all dealings between the Pledged Company and the Pledgee shall likewise be conclusively presumed to have been had or consummated in reliance upon this Pledge Agreement.  The Pledgor waives diligence, presentment, protest, demand for payment and notice of default or non-payment to or upon the Pledgor or the Pledged Company with respect to the Obligations.

SECTION 8.                                          Voting Rights.  The Pledgee shall, as the Pledgee and as the holder of the Irrevocable Proxies, receive notice and have the right (but not the obligation) to vote the [Pledged Interests / Shares] at its own discretion at, any annual or special meeting, as the case may be, of the shareholders of the Pledged Company, provided, however, that the Pledgee shall not be entitled to receive notice, or to exercise such right to vote until the occurrence of and continuing of an Event of Default or any of the security created by or pursuant to this Pledge Agreement shall be deemed imperiled or jeopardized in a manner by the Pledgee in its sole discretion.

SECTION 9.                                          UCC Filings.  The Pledgor does hereby authorize the Pledgee to do all things the Pledgee may reasonably deem to be necessary or advisable in order to perfect or maintain the security interest granted by this Pledge Agreement including, but not limited to, filing any and all Uniform Commercial Code financing statements or renewals thereof.

SECTION 10.                                          Remedies.  At any time after the occurrence of an Event of Default or in the event any of the security created by or pursuant to this Pledge Agreement shall be imperiled or jeopardized in a manner deemed material by the Pledgee in its sole discretion, the Pledgee shall be entitled, without further notice to the Pledgor:

(a)                        subject to the limitations of Sections 9-610 and 9-615 of the UCC (to the extent applicable), to sell, assign, transfer and deliver at any time the whole, or from time to time any part, of the Pledged Collateral or any rights or interests therein, at public or private sale or in any other manner, at such price or prices and on such terms as the Pledgee may deem appropriate, and either for cash, on credit, for other property or for future delivery, at the option of the Pledgee, upon not less than 10 days' written notice (which 10 day notice is hereby acknowledged by the Pledgor to be reasonable) addressed to the Pledgor at its last address provided to the Pledgee pursuant to this Pledge Agreement, but without demand, advertisement or other notice of any kind (all of which are hereby expressly waived by the Pledgor).  If any of the Pledged Collateral or any rights or interests thereon are to be disposed of at a public sale, the Pledgee may, without notice or publication, adjourn any such sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, occur at the time and place identified in such announcement.  If any of the Pledged Collateral or any rights or interests therein shall be disposed of at a private sale, the Pledgee shall be relieved from all liability or claim for inadequacy of price.  At any such public sale the Pledgee may purchase the whole or any part of the Pledged Collateral or any rights or interests therein so sold.  Each purchaser, including the Pledgee should it acquire the Pledged Collateral, at any public or private sale, shall hold the property sold free from any claim or right of redemption, stay, appraisal or reclamation on the part of the Pledgor which are hereby expressly waived and released to the extent permitted by applicable law.  If any of the Pledged Collateral or any rights or interests therein shall be sold on credit or for future delivery, the Pledged Collateral or rights or interests so sold may be retained by the Pledgee until the selling price thereof shall be paid by the purchaser, but the Pledgee shall not incur any liability in case of failure of the purchaser to take up and pay for the Pledged Collateral or rights or interests therein so sold.  In case of any such failure, the Pledged Collateral or rights or interests therein may again be sold on not less than 10 days' written notice as aforesaid; and

(b)                        to exercise all voting and other equity interest rights at any meeting of any Pledged Company and exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the [Pledged Interests / Shares] of the Pledged Company as if it was the absolute owner thereof, including, without limitation, the right to exchange at its discretion, such [Pledged Interests / Shares] upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Pledged Company or, upon the exercise by the Pledged Company or the Pledgee of any right, privilege or option pertaining to such Pledged Share, and in connection therewith, to deposit and deliver such [Pledged Interests / Shares] with any committee, depository, transfer agent, registrar or other designated agency upon such terms and conditions as it may determine, all without liability except to account for property actually received by it.

SECTION 11.                                          No Duty on Pledgee.  The Pledgee shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing.

SECTION 12.                                          Application of Proceeds.  All moneys collected or received by the Pledgee pursuant to this Pledge Agreement shall be applied as provided in the Credit Agreement.

SECTION 13.                                          Miscellaneous.

13.1              Further Assurances.  The Pledgor agrees that if this Pledge Agreement shall, in the reasonable opinion of the Pledgee, at any time be deemed by the Pledgee, for any reason, insufficient in whole or in part to carry out the true intent and spirit hereof, it shall execute or cause to be executed such other documents or deliver or cause to be delivered such further assurances as in the opinion of the Pledgee may be required in order to more effectively accomplish the purposes of this Pledge Agreement including, without limitation, an alternative pledge or such other alternative security as the Pledgee shall reasonably require.

13.2              Remedies Cumulative and Not Exclusive; No Waiver.  Each and every right, power and remedy herein given to the Pledgee shall be cumulative and shall be in addition to every other right, power and remedy of the Pledgee now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy, whether herein given or otherwise existing, may be exercised from time to time, in whole or in part, and as often and in such order as may be deemed expedient by the Pledgee, and the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.  No failure, delay or omission by the Pledgee in the exercise of any right or power or in the pursuance of any remedy accruing upon any breach or default by the Pledgor or any Credit Party shall impair any such right, power or remedy or be construed to be a waiver of any such right, power or remedy or to be an acquiescence therein; nor shall the acceptance by the Pledgee of any security or of any payment of or on account of any of the amounts due from the Pledgor or any Credit Party to the Pledgee and maturing after any breach or default or of any payment on account of any past breach or default be construed to be a waiver of any right with respect to any future breach or default or of any past breach or default not completely cured thereby.  In addition to the rights and remedies granted to it in this Pledge Agreement and in any other instrument or agreement securing, evidencing or relating to any of the Obligations, the Pledgee shall have rights and remedies of a secured party under the UCC.

13.3              Successors and Assigns. This Pledge Agreement and all obligations of the Pledgor hereunder shall be binding upon the successors and assigns of the Pledgor and shall, together with the rights and remedies of the Pledgee hereunder, inure to the benefit of the Pledgee, its respective successors and assigns.

13.4              Waiver; Amendment.  None of the terms and conditions of this Pledge Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Pledgor and the Pledgee.

13.5              Invalidity.  If any provision of this Pledge Agreement shall at any time, for any reason, be declared invalid, void or otherwise inoperative by a court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions of this Pledge Agreement, or the validity of this Pledge Agreement as a whole and, to the fullest extent permitted by law, the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Pledgee in order to carry out the intentions of the parties hereto as nearly as may be possible.  The invalidity and unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

13.6              Notices.  All notices of request, demand and other communications hereunder shall be addressed, sent and deemed delivered in accordance with the Purchase Agreement, including delivery of any such notices or communications to the Pledged Company on behalf of the Pledgor, which Pledgor hereby agrees and acknowledges shall be valid and effective notice to the Pledgor hereunder.

13.7              Counterparts; Electronic Delivery.  This Pledge Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.  Delivery of an executed counterpart of this Pledge Agreement by facsimile or electronic transmission shall be deemed as effective as delivery of an originally executed counterpart.  In the event that the Pledgor delivers an executed counterpart of this Pledge Agreement by facsimile or electronic transmission, the Pledgor shall also deliver an originally executed counterpart as soon as practicable, but the failure of the Pledgor to deliver an originally executed counterpart of this Pledge Agreement shall not affect the validity or effectiveness of this Pledge Agreement.

13.8              References.  References herein to Sections, Exhibits and Schedules are to be construed as references to sections of, exhibits to, and schedules to, this Pledge Agreement, unless the context otherwise requires.

13.9              Headings.  In this Pledge Agreement, Section headings are inserted for convenience of reference only and shall not be taken into account in the interpretation of this Pledge Agreement.

13.10              Termination.  When all of the Obligations shall have been fully satisfied, the Pledgee agrees that it shall forthwith release the Pledgor from its Obligations hereunder and the Pledgee, at the request and expense of the Pledgor, shall promptly execute and deliver to the Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Pledge Agreement, and the Irrevocable Proxies shall terminate forthwith and be delivered to the Pledgor forthwith together with the other items furnished to the Pledgee pursuant to this Pledge Agreement.

SECTION 14.                                          Applicable Law, Jurisdiction and Waivers.

14.1              Governing Law.  Except in the case of the Mandatory Forum Selection clause set forth in Section 14.2 hereof, this Pledge Agreement shall be governed by and construed in accordance with the laws of the Nevada, without regard to principles of conflicts of laws thereof.

14.2              MANDATORY FORUM SELECTION.  ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH THE AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THE AGREEMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN BROWARD COUNTY, FLORIDA.  THIS PROVISION IS INTENDED TO BE A "MANDATORY" FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH FLORIDA LAW.

14.3              WAIVER OF IMMUNITY. TO THE EXTENT THAT THE PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.

14.4              WAIVER OF JURY TRIAL.  EACH OF THE PLEDGOR AND THE PLEDGEE HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS PLEDGE AGREEMENT.

[-signature page follows-]

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

PLEDGOR:

[PLEDGOR]

By:            ___________________________

Name:

Title:

STATE OF ________________                                                                      )

)  SS.

COUNTY OF ______________                                                                      )

The undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that ______________, the _______________________ of ___________________, a __________________ corporation, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein set forth.

GIVEN under my hand and notarial seal this _____ day of ________________, 20____.

______________________________________

Notary Public

My Commission Expires:

______________________________________

[ signature page to Pledge Agreement ]

PLEDGEE

TCA GLOBAL CREDIT MASTER FUND, LP

By:            TCA Global Credit Fund GP, Ltd.

Its:            General Partner

By:            ___________________________

Name:            Robert Press

Title:            Director

 

 

[ signature page to Pledge Agreement ]

EXHIBIT A

IRREVOCABLE PROXY

The undersigned, the registered and beneficial owner of the below described [membership interests / shares of capital stock] of [SUBSIDIARY], a [corporation incorporated / limited liability company organized and existing] under the laws of the State of [●] ("Pledged Company"), hereby makes, constitutes and appoints, TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (the "Pledgee"), with full power to appoint a nominee or nominees to act hereunder from time to time, the true and lawful attorney and proxy of the undersigned to vote one hundred percent (100%) of the [membership interests / shares of capital stock] of the Pledged Company, at all annual and special meetings of the Pledged Company or take any action by written consent with the same force and effect as the undersigned might or could do, hereby ratifying and confirming all that the said attorney or its nominee or nominees shall do or cause to be done by virtue hereof.

The said [membership interests / shares of capital stock] have been pledged (the "Pledge") to the Pledgee pursuant and subject to a Pledge Agreement, dated as of November 30, 2015 and effective as of December 31, 2015, by and between the undersigned and the Pledgee.

This power and proxy is coupled with an interest and is irrevocable and shall remain irrevocable so long as the Pledge is outstanding and is in full force and effect.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly executed on December 31, 2015.

[PLEDGOR]

By:            ___________________________

Name:

Title:

EXHIBIT B

INSTRUMENT OF TRANSFER

	
FOR VALUE RECEIVED:

	 
	 
	 
	 	
PLEASE INSERT SOCIAL SECURITY OR OTHER

 IDENTIFYING NUMBER OR ASSIGNEE

	 
	
hereby sells, assigns and transfers unto _____

	 	 	 	 
	 
	 
	 	 	 	
Of

	 
	 	
standing in my (our) name(s)

	
on the books of said corporation represented by Certificate(s) No.(s).

	 
	
herewith, and do hereby irrevocably constitute and appoint

	 
	 	
attorney to transfer the

	
said stock on the books of said corporation with full power of substitution in the premises, This Instrument is given for collateral purposes only pursuant to  that certain Pledge Agreement between the undersigned and VOD Global Credit Master Fund, LP dated as of November 30, 2015 and made effective as of December ______, 2015.

	
Dated

	 	 
	 	 	 
	 	 	 	 	 
	
In presence of

	 	 	 	 
	 	 	
Name:

 Title:

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