Document:

Exhibit 4.1

 

 

 

 

 

 

 

 

REVOLVING PROMISSORY NOTE

 

 

Dated as of July 19, 2016

 

between

 

Walker
Innovation Inc.

 

and

 

Walker
Digital, LLC

 

 

 

 

 

 

    	 

     

    

 

TABLE OF CONTENTS

 

Page 

	ARTICLE I	DEFINITIONS	1
	 	 	 
	ARTICLE II	INTEREST PROVISIONS	7
	2.1	Interest Rate	7
	2.2	Computation of Interest	8
	2.3	Default Rate	8
	2.4	Payment Dates	8
	 	 	 
	ARTICLE III	LOANS, PRINCIPAL PAYMENTS AND PREPAYMENTS	8
	3.1	Commitment Amount	8
	3.2	Revolving Credit Commitment	8
	3.3	Request for Loans and Funding	8
	3.4	Monthly Loan Limit	9
	3.5	Principal Payments	9
	3.6	Voluntary Prepayment	9
	3.7	Mandatory Prepayment.	9
	3.8	Application of Certain Prepayments	9
	 	 	 
	ARTICLE IV	USE OF PROCEEDS	10
	 	 	 
	ARTICLE V	PAYMENTS	10
	5.1	Receipt of Payments	10
	5.2	Application and Allocation of Payments	10
	5.3	Accounting	10
	 	 	 
	ARTICLE VI	INDEMNITY	10
	 	 	 
	ARTICLE VII	REPRESENTATIONS, WARRANTIES AND AFFIRMATIVE COVENANTS	11
	7.1	Existence; Compliance with Law	11
	7.2	Executive Offices; Corporate or Other Names	12
	7.3	Corporate Power; Authorization; Enforceable Obligations	12
	7.4	Quarterly Statements; Books and Records	12
	7.5	Material Adverse Change	12
	7.6	Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness	12
	7.7	Government Regulation; Margin Regulations	13
	7.8	Taxes	13
	7.9	Payment of Obligations	13
	7.10	Litigation	13
	7.11	Full Disclosure	13
	7.12	Conduct of Business; Maintenance of Existence	13
	7.13	Further Assurances	14

 

 

    	 

    

    

 

 

TABLE OF CONTENTS

 

Page

	 	 	 
	ARTICLE VIII	FINANCIAL MATTERS; REPORTS	14
	8.1	Reports and Notices	14
	8.2	Financial Covenant of Lender	14
	8.3	Other Reports and Information	14
	8.4	Communication with Accountants	14
	 	 	 
	ARTICLE IX	NEGATIVE COVENANTS	15
	 	 	 
	ARTICLE X	EVENTS OF DEFAULT: RIGHTS AND REMEDIES	16
	10.1	Events of Default	16
	10.2	Remedies	17
	10.3	Waivers by Credit Parties	18
	 	 	 
	ARTICLE XI	MISCELLANEOUS	18
	11.1	Complete Agreement; Modification of Note	18
	11.2	Expenses	18
	11.3	Rules of Construction	18
	11.4	No Waiver	19
	11.5	Severability; Section Titles	19
	11.6	Notices	20
	11.7	Counterparts	20
	11.8	Successors and Assigns	20
	11.9	GOVERNING LAW	20
	11.10	SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.	21
	11.11	Reinstatement	21
	11.12	Advice of Counsel	21
	11.13	No Strict Construction	22
	 	 	 
	ARTICLE XII	REPLACEMENT OF NOTE	22
	 	 	 
	ARTICLE XIII	SECURITY INTEREST	22

 

 

 

    	 

     

    

 

 

REVOLVING PROMISSORY NOTE

 

$1,500,000.00

July 19, 2016

 

FOR VALUE RECEIVED,
WALKER INNOVATION INC., a Delaware Corporation (“Borrower”), hereby promises to pay to the order of WALKER DIGITAL,
LLC, a Delaware limited liability company (the “Lender”), or its registered assigns, on the Stated Expiry Date
(as hereinafter defined) or earlier as hereinafter provided the principal sum of up to ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000.00) (the “Commitment Amount”)

 

The parties agree as
follows:

 

ARTICLE
I

Definitions

 

Capitalized terms used
in this Note and the other Loan Documents shall have (unless otherwise provided elsewhere in this Note or such Loan Documents)
the following respective meanings:

 

1.1             
“Affiliate” means, with respect to any Person: (a) each other Person that controls, is controlled by
or is under common control with such Person or any Affiliate of such Person; or (b) each of such Person’s officers, directors,
joint venturers and partners. For the purpose of this Section 1.1, “control” of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise.

 

1.2             
“Annual Statements” means a copy of the most current 10-K of Borrower as required to be filed by the
U.S. Securities and Exchange Commission that gives a comprehensive summary of Borrower’s financial performance for the most
recently ended Fiscal Year.

 

1.3             
“Available Cash” means, as of any given date, the aggregate of (a) deposit and demand accounts maintained
by Borrower at any commercial bank organized under the laws of the United States of America or any state thereof or the District
of Columbia, (b) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United States of America or having a rating of at least A-1
or P-1 from either S&P or Moody’s held by Borrower; (b) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 180
days after the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from
either S&P or Moody’s and not listed in Credit Watch published by S&P; (c) commercial paper,
other than commercial paper issued by the Borrower or any Subsidiary of the Borrower or any of its Affiliates; and (d) domestic
and Eurodollar certificates of deposit or time deposits or bankers’ acceptances maturing within 180 days after the date of
acquisition thereof issued by any commercial bank organized under the laws of the United States of America or any state thereof
or the District of Columbia having combined capital and surplus of not less than $500,000,000.

 

    	 

     

    

 

 

1.4             
 “Availability Period” means any period after the Closing Date during which Borrower’s available
cash amount is below the Minimum Available Cash Threshold and ending upon the occurrence of any of the following events: (a) the
Stated Expiry Date, (b) at any time when an Event of Default has occurred and is continuing or (c) whenever the available cash
amount is at or above the Minimum Available Cash Threshold; provided that the Availability Period shall recommence once
the condition described in clause (c) is no longer in effect, and at Lender’s election, once the condition described
in clause (b) is no longer in effect.

 

1.5             
“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the State of New York.

 

1.6             
“Capital Lease Obligations” means, with respect to any Capital Lease, the amount of the obligation of
the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital
Lease or otherwise be disclosed in a note to such balance sheet.

 

1.7             
“Charges” means all federal, state, county, city, municipal, local, foreign or other governmental taxes
(including taxes owed to PBGC at the time due and payable), levies, customs or other duties, assessments, charges, liens, and all
additional charges, interest, penalties, expenses, claims or encumbrances upon or relating to (a) the Collateral, (b) the Obligations,
(c) the employees, payroll, income or gross receipts of Borrower, (d) the ownership or use of any assets by Borrower, or (e) any
other aspect of Borrower’s business.

 

1.8             
“Chattel Paper” means all “chattel paper,” as such term is defined in the Code, now owned
or hereafter acquired by any Person.

 

1.9             
“Closing Date” means the date on which this Note is executed by each party hereto.

 

1.10         
“Code” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State
of New York; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of, or remedies with respect to, Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions of this Note relating to such attachment, perfection, priority
or remedies and for purposes of definitions related to such provisions; provided further, that to the extent that the Code is used
to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall govern.

 

1.11         
“Collateral” means any and all assets in which Lender is granted a Lien to secure the Obligations.

 

1.12         
“Collection Account” means that certain account of Lender, account number 1255333231 at Citibank, N.A.,
ABA No. 221172610 or any account, bank and ABA number designated by Lender as the Collection Account upon written notice to Borrower.

 

 

    	 	2	 

     

    

 

 

1.13         
“Commitment Amount” is defined in the Preamble.

 

1.14         
“Contractual Obligation” means as to any Person, any provision of any security issued by such Person
or of any agreement, instrument, or other undertaking to which such Person is a party or by which it or any of its property is
bound.

 

1.15         
“Default” means any Event of Default or any event that, with the passage of time or notice or both, would,
unless cured or waived, become an Event of Default.

 

1.16         
“Default Rate” is defined in Section 2.3.

 

1.17         
“Documents” means all “documents,” as such term is defined in the Code, now owned or hereafter
acquired by any Person, wherever located, including all bills of lading, dock warrants, dock receipts, warehouse receipts, and
other documents of title, whether negotiable or non-negotiable.

 

1.18         
“Dollars” or “$” means lawful currency of the United States of America.

 

1.19         
 “Event of Default” is defined in Section 10.1.

 

1.20         
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

 

1.21         
“Fees” means any and all fees payable to Lender pursuant to this Note or any of the other Loan Documents
or at law.

 

1.22         
“Fiscal Quarter” means any of the quarterly accounting periods of Borrower.

 

1.23         
“Fiscal Year” means the twelve (12) month period of Borrower ending December 31st of each
year.

 

1.24         
“GAAP” means generally accepted accounting principles in the United States of America as in effect from
time to time, consistently applied.

 

1.25         
“Governmental Authority” means any nation or government, any state or other political subdivision thereof,
and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.

 

1.26         
“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person guaranteeing any indebtedness,
lease, dividend, or other obligation (“primary obligations”) of any other Person (the “primary obligor”)
in any manner, including any obligation or arrangement of such guaranteeing Person (whether or not contingent): (a) to purchase
or repurchase any such primary obligation; (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet condition of the primary obligor; (c) to purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation;
or (d) to indemnify the owner of such primary obligation against loss in respect thereof.

 

 

    	 	3	 

     

    

 

 

1.27         
“Indebtedness” of any Person shall mean: (a) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (including reimbursement and all other obligations with respect to surety bonds,
letters of credit and bankers’ acceptances, whether or not matured, but not including obligations to trade creditors incurred
in the ordinary course of business and not more than forty-five (45) days past due); (b) all obligations evidenced by notes, bonds,
debentures or similar instruments; (c) all indebtedness created or arising under any conditional sale or other title retention
agreements with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of such property); (d) all Capital Lease Obligations;
(e) all Guaranteed Indebtedness; (f) all Indebtedness referred to in clauses (a), (b), (c), (d) or (e) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (g) the Obligations.

 

1.28         
“Indemnified Liabilities” and “Indemnified Person” have the respective meaning assigned
to them in ARTICLE VI.

 

1.29         
“Index Rate” means, for any day, a rate per annum equal to the rate last quoted by The Wall Street
Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate,
the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected
Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted
therein (as determined by Lender) or any similar release by the Federal Reserve Board (as determined by Lender). Any change in
the Index Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the “bank
prime loan” rate for such period.

 

1.30         
“Instruments” means all “instruments,” as such term is defined in the Code, now owned or
hereafter acquired by any Person.

 

1.31         
“Interest Rate” means a rate per annum equal to the Index Rate.

 

1.32         
“IRC” and “IRS” mean respectively, the Internal Revenue Code of 1986 and the Internal
Revenue Service, and any successor thereto.

 

1.33         
 “Lien” means any mortgage, security deed or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, security title, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement,
any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give,
any financing statement perfecting a security interest under the Code or comparable law of any jurisdiction).

 

1.34         
“Litigation” means any claim, lawsuit, litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority.

 

 

    	 	4	 

     

    

 

 

1.35         
“Loan Documents” means this Note, the Pledge Agreement and all security agreements, mortgages and all
other documents, instruments, certificates, and notices at any time delivered by any Person (other than Lender) in connection with
any of the foregoing.

 

1.36         
“Loan Request” is defined in Section 3.3.

 

1.37         
“Loans” means the loans evidenced by this Note and any renewals, extensions, revisions, modifications
or replacements therefor or thereof.

 

1.38         
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, prospects
or financial or other condition of Borrower, (b) Borrower’s ability to pay or perform the Obligations under the Loan Documents,
(c) the Collateral or Lender’s Liens on the Collateral or the priority of any such Lien, or (d) Lender’s rights and
remedies under this Note and the other Loan Documents.

 

1.39         
“Minimum Actionable Amount” means Three Hundred Thousand Dollars ($300,000.00).

 

1.40         
“Minimum Available Cash Threshold” means Available Cash in an amount equal to Two Million Dollars ($2,000,000.00).

 

1.41         
“Note” means this Promissory Note executed by Borrower in favor of Lender.

 

1.42         
“Obligations” means all loans, advances, debts, expense reimbursements, fees, liabilities, and obligations
for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required
or contingent, or amounts are liquidated or determinable) owing by Borrower to Lender, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, whether arising under any of the Loan Documents or under any
other agreement between Borrower and Lender, and all covenants and duties regarding such amounts. This term includes all principal,
interest (including interest accruing at the then applicable rate provided in this Note after the maturity of the Loans and interest
accruing at the then applicable rate provided in this Note after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding), Fees, Charges, expenses, attorneys’ fees and any other sum chargeable to any Borrower under any of the
Loan Documents, and all principal and interest due in respect of the Loans.

 

1.43         
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

 

    	 	5	 

     

    

 

 

1.44         
“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes or assessments or other
governmental Charges or levies, either not yet due and payable or to the extent that nonpayment thereof is permitted by the terms
of this Note; (b) pledges or deposits securing obligations under worker’s compensation, unemployment insurance, social security
or public liability laws or similar legislation; (c) pledges or deposits securing bids, tenders, contracts (other than contracts
for the payment of money) or leases to which Borrower is a party as lessee made in the ordinary course of business in an aggregate
amount, including the encumbrances listed in clause (i), not to exceed Five Hundred Thousand Dollars ($500,000.00); (d) deposits
securing public or statutory obligations of Borrower; (e) inchoate and unperfected workers’, mechanics’, or similar
liens arising in the ordinary course of business so long as such Liens attach only to Equipment, fixtures or real estate; (f) carriers’,
warehouseman’s’, suppliers’ or other similar possessory liens arising in the ordinary course of business and
securing indebtedness not yet due and payable in an outstanding aggregate amount not in excess of $100,000 at any time so long
as such Liens attach only to Inventory; (g) deposits of money securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which Borrower is a party; (h)  zoning restrictions, easements, licenses, or other restrictions on the use
of real property or other minor irregularities in title (including leasehold title) thereto, so long as the same do not materially
impair the use, value, or marketability of such real estate; (i) Purchase Money Liens securing Purchase Money Indebtedness
in an aggregate amount, including the encumbrances listed in clause (c), not to exceed Five Hundred Thousand Dollars ($500,000.00);
(j) Liens in existence on the Closing Date as disclosed on Schedule 1.44; and (k) Liens in favor of Lender securing
the Obligations.

 

1.45         
“Person” means any individual, sole proprietorship, partnership, limited liability partnership, joint
venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation,
entity or government (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency,
body or department thereof), and shall include such Person’s successors and assigns.

 

1.46         
“Pledge Agreement” means that certain Pledge Agreement, dated as of the date hereof, between Borrower
and Lender.

 

1.47         
“Purchase Money Indebtedness” means (a) any Indebtedness incurred for the payment of all or any
part of the purchase price of any fixed asset; (b) any Indebtedness incurred for the sole purpose of financing or refinancing
all or any part of the purchase price of any fixed asset; and (c) any renewals, extensions or refinancings thereof (but not
any increases in the principal amounts thereof outstanding at that time).

 

1.48         
“Purchase Money Lien” means any Lien upon any fixed assets that secures the Purchase Money Indebtedness
related thereto but only if such Lien shall at all times be confined solely to the asset the purchase price of which was financed
or refinanced through the incurrence of the Purchase Money Indebtedness secured by such Lien and only if such Lien secures only
such Purchase Money Indebtedness.

 

1.49         
“Quarterly Statements” means a copy of the most current 10-Q of Borrower as required to be filed by the
U.S. Securities and Exchange Commission that gives a comprehensive summary of Borrower’s financial performance for the most
recently ended Fiscal Quarter.

 

1.50         
“Requirement of Law” means as to any Person, the certificate or articles of incorporation and by-laws
or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator
or a court or other Governmental Authority, in each case binding upon such Person or any of its property or to which such Person
or any of its property is subject.

 

 

    	 	6	 

     

    

 

 

1.51         
“Restricted Payment” means: (a) the declaration or payment of any dividend or the incurrence of
any liability to make any other payment or distribution of cash or other property or assets on or in respect of Borrower’s
Stock; (b) any payment or distribution made in respect of any subordinated Indebtedness of Borrower in violation of any subordination
or other agreement made in favor of Lender; (c) any payment on account of the purchase, redemption, defeasance or other retirement
of Borrower’s Stock or Indebtedness or any other payment or distribution made in respect of any thereof, either directly
or indirectly; other than that arising under this Note; or (d) any payment, loan, contribution, or other transfer of funds
or other property to any Stockholder of such Person which is not expressly and specifically permitted in this Note; provided, that
no payment to Lender shall constitute a Restricted Payment.

 

1.52         
“Stated Expiry Date” means July 19, 2019.

 

1.53         
“Stock” means all certificated and uncertificated shares, options, warrants, membership interests, general
or limited partnership interests, participation or other equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock, or any other
“equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934).

 

1.54         
“Stockholder” means each holder of Stock of Borrower.

 

1.55         
“Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of more than
50% of the outstanding Stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, Stock of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person and/or
one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of
50% or more of such Stock whether by proxy, agreement, operation of law or otherwise; and (b) any partnership or limited liability
company in which such Person or one or more Subsidiaries of such Person has an equity interest (whether in the form of voting or
participation in profits or capital contribution) of more than 50% or of which any such Person is a general partner or manager
or may exercise the powers of a general partner or manager.

 

1.56         
“Taxes” shall means taxes, levies, imposts, deductions, Charges or withholdings, and all liabilities
with respect thereto, excluding taxes imposed on or measured by the net income of Lender.

 

1.57         
“Termination Date” means the date on which all Obligations are indefeasibly paid in full, in cash.

 

ARTICLE
II

Interest Provisions

 

2.1             
Interest Rate. Borrower promises to pay interest on the principal amount outstanding of this Note at the Interest
Rate. Interest on this Note shall accrue from the date of issuance until repayment of the principal amount and payment of all accrued
interest and Fees in full.

 

 

    	 	7	 

     

    

 

 

2.2             
Computation of Interest. All computations of interest shall be made by Lender on the basis of a three hundred and
sixty (360) day year, in each case for the actual number of days occurring in the period for which such interest is payable. Each
determination by Lender of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
In no event will Lender charge interest at a rate that exceeds the highest rate of interest permissible under any law that a court
of competent jurisdiction shall, in a final determination, deem applicable.

 

2.3             
Default Rate. Effective upon the occurrence of any Event of Default and for so long as any Event of Default shall
be continuing, the interest rates applicable to the Loans shall automatically be increased by four percentage points (4%) per annum
without any notice to Borrower or any other action of Lender (such increased rate, the “Default Rate”), and
all outstanding Obligations, including unpaid interest, shall continue to accrue interest from the date of such Event of Default
at the Default Rate.

 

2.4             
Payment Dates. If any interest or other payment (including Fees) to Lender under this Note becomes due and payable
on a day other than a Business Day, such payment date shall be extended to the next succeeding Business Day (and interest thereon
shall be payable at the then applicable rate during such extension).

 

ARTICLE
III

Loans, Principal Payments and Prepayments

 

3.1             
Commitment Amount. Subject to the terms and conditions herein set forth, Lender agrees, during the Availability Period,
to extend to Borrower a revolving line of credit as more fully set forth in Section 3.2 hereof in an aggregate amount not
to exceed the Commitment Amount.

 

3.2             
Revolving Credit Commitment. Subject to the terms and conditions herein set forth, Lender shall make, on any Business
Day during the Availability Period, Loans to Borrower at any time and from time to time in an aggregate outstanding principal amount
up to the Commitment Amount at any such time. Subject to the terms and conditions herein, Borrower may borrow, repay without penalty
or premium and re-borrow Loans hereunder, during the Availability Period and, for the avoidance of doubt, may repay without penalty
or premium notwithstanding the occurrence of an Availability Period.

 

3.3             
Request for Loans and Funding. Each Loan shall be made upon Borrower’s written notice to Lender (a “Loan
Request”) accompanied by a certificate of the chief financial officer or other officer of the Borrower, substantially
in the form provided in Exhibit A attached hereto (the “CFO Certificate”), stating the Available Cash
of the Borrower as of the date of the Loan Request and such Loan Request and CFO Certificate must be received by Lender not later
than thirty (30) days prior to the requested date of such Loan. On the requested day of such Loan, Lender shall deliver the proceeds
of such Loan in immediately available funds to an account designated by Borrower to Lender in writing.

 

 

    	 	8	 

     

    

 

 

3.4             
Monthly Loan Limit. Subject to the terms and conditions herein set forth, the Lender shall not be obligated to advance
Loans to Borrower in any calendar month of more than a total of Two Hundred Thousand Dollars ($200,000.00).

 

3.5             
Principal Payments. Subject to acceleration following the occurrence of an Event of Default, Borrower shall pay the
principal amount due under this Note and all accrued and unpaid interest on the Stated Expiry Date.

 

3.6             
Voluntary Prepayment. Borrower may at any time on at least five (5) days’ prior written notice to Lender voluntarily
prepay all or part of the Loan; provided that any such prepayments shall be in a minimum amount of Five Thousand Dollars
($5,000.00) and integral multiples of Five Thousand Dollars ($5,000.00) in excess of such amount.

 

3.7             
Mandatory Prepayment.

 

(a)               
Immediately upon receipt by Borrower of any cash proceeds of any asset disposition, Borrower shall prepay the Loans in an
amount equal to all such proceeds, net of (i) commissions and other reasonable and customary transaction costs, fees and expenses
properly attributable to such transaction and payable by such Borrower in connection therewith, (ii) transfer taxes, (iii) amounts
payable to holders of senior Liens on such asset (to the extent such Liens constitute Permitted Encumbrances), if any, and (iv)
an appropriate reserve for income taxes in accordance with GAAP in connection therewith. The proceeds of sales of inventory in
the ordinary course of business, patent enforcement litigation and the sale of warrants or Class A Common Shares of Upside Commerce
Group, LLC (other than Pledged Warrant Shares (as defined in the Pledge Agreement)) subject to the Warrant Agreement (as defined
in the Pledge Agreement) shall not be subject to mandatory prepayment under this clause (a).

 

(b)              
If Borrower issues any Stock, no later than the Business Day following the date of receipt of the proceeds thereof, Borrower
shall prepay the Loans in an amount equal to all such proceeds, net of underwriting discounts and commissions and other reasonable
costs paid to non-Affiliates in connection therewith.

 

(c)               
Prepayments from insurance or condemnation proceeds shall be applied in accordance with Section 3.8.

 

(d)              
Nothing in this Section 3.7 shall be construed to constitute Lender’s consent to any transaction that is not
permitted by other provisions of this Note or the other Loan Documents.

 

3.8             
Application of Certain Prepayments. Any prepayments made by Borrower pursuant to Sections 3.6 and 3.7
above shall be applied as follows: first, to Fees and reimbursable expenses of Lender then due and payable pursuant to any
of the Loan Documents; second, to interest then due and payable on the Loan; and third, to prepay the principal of
the Loan until the Loans shall have been prepaid in full.

 

 

    	 	9	 

     

    

 

 

ARTICLE
IV

Use of Proceeds

 

Borrower shall use
the proceeds of the Loan for working capital and other general corporate purposes

 

ARTICLE
V

Payments

 

5.1             
Receipt of Payments. Borrower shall make each payment under this Note without set-off, counterclaim or deduction
and free and clear of all Taxes not later than 11:00 a.m. (New York City time) on the day when due in lawful money of the United
States of America in immediately available funds to the Collection Account. If Borrower shall be required by law to deduct any
Taxes from any payment to Lender under any Loan Document, then the amount payable to Lender shall be increased so that, after making
all required deductions, Lender receives an amount equal to that which it would have received had no such deductions been made.

 

5.2             
Application and Allocation of Payments. Any payments made by Borrower to the Lender shall be applied in the same
order as provided in Section 3.8 hereof.

 

5.3             
Accounting. Lender is authorized to record on its books and records the date and amount of the Loans and each payment
of principal thereof and such recordation shall constitute prima facie evidence of the accuracy of the information so recorded.
Lender shall provide Borrower on a quarterly basis a statement and accounting of such recordations but any failure on the part
of the Lender to keep any such recordation (or any errors therein) or to send a statement thereof to Borrower shall not in any
manner affect the obligation of Borrower to repay (with applicable interest) the Loans made to Borrower under this Note. Except
to the extent that Borrower shall, within thirty (30) days after such statement and accounting is sent, notify Lender in writing
of any objection Borrower may have thereto (stating with particularity the basis for such objection), such statement and accounting
shall be deemed final, binding and conclusive upon Borrower, absent manifest error.

 

ARTICLE
VI

Indemnity

 

Borrower agrees to
indemnify and hold Lender and its Affiliates, and their respective employees, attorneys and agents (each, an “Indemnified
Person”), harmless from and against any and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses of any kind or nature whatsoever (including attorneys’ fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) that may be instituted or asserted against or incurred by any such Indemnified
Person as the result of credit having been extended, suspended or terminated under this Note and the other Loan Documents or with
respect to the execution, delivery, enforcement, performance and administration of, or in any other way arising out of or relating
to, this Note and the other Loan Documents or any other documents or transactions contemplated by or referred to herein or therein
and any actions or failures to act with respect to any of the foregoing, including any and all product liabilities, Taxes and legal
costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Loan Documents
(collectively, “Indemnified Liabilities”), except to the extent that any such Indemnified Liability is finally
determined by a court of competent jurisdiction to have resulted solely from such Indemnified Person’s gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO BORROWER, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY
OR FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED
OR TERMINATED UNDER THIS NOTE OR ANY OTHER LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

 

 

    	 	10	 

     

    

 

 

ARTICLE
VII

Representations, Warranties And Affirmative Covenants

 

To induce Lender to
make the Loans, Borrower represents and warrants to Lender (each of which representations and warranties shall survive the execution
and delivery of this Note), and promise to and covenant and agree with Lender until the Termination Date as follows:

 

7.1             
Existence; Compliance with Law. Borrower: (a) is, as of the Closing Date, and will continue to be (i) a corporation,
duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization,
(ii) duly qualified to do business and in good standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected
to have a Material Adverse Effect, and (iii) in compliance with all Requirements of Law and Contractual Obligations, except to
the extent failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect; and (b) has and will continue to have (i) the requisite power and authority and the legal right to execute, deliver and
perform its obligations under the Loan Documents, and to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the property it operates under lease, and to conduct its business as now, heretofore or proposed to be conducted, and
(ii) all licenses, permits, franchises, rights, powers, consents or approvals from or by all Persons or Governmental Authorities
having jurisdiction over Borrower that are necessary or appropriate for the conduct of its business.

 

7.2             
Executive Offices; Corporate or Other Names. Schedule 7.2 sets forth (a) Borrower’s name as it appears
in official filings in the state of its incorporation or organization, (b) the type of entity of Borrower, (c) the organizational
identification number issued by Borrower’s state of incorporation or organization or a statement that no such number has
been issued, (d) Borrower’s state of organization or incorporation, and (e) the location of Borrower’s chief executive
office, corporate offices, warehouses, other locations of Collateral and locations where records with respect to Collateral are
kept (including in each case the county of such locations) and, except as set forth in such Schedule, such locations have not changed
during the preceding twelve (12) months. As of the Closing Date, during the prior five (5) years, except as set forth in Schedule
7.2, Borrower has not been known as or conducted business in any other name (including trade names). Borrower has only one
state of incorporation or organization.

 

 

    	 	11	 

     

    

 

 

7.3             
Corporate Power; Authorization; Enforceable Obligations. The execution, delivery and performance by Borrower of the
Loan Documents to which it is a party, and the creation of all Liens provided for in the Loan Documents: (a) are and will
continue to be within Borrower’s power and authority; (b) have been and will continue to be duly authorized by all necessary
or proper action; (c) are not and will not be in violation of any Requirement of Law or Contractual Obligation of Borrower;
(d) do not and will not result in the creation or imposition of any Lien (other than Permitted Encumbrances) upon any of the
Collateral; and (e) do not and will not require the consent or approval of any Governmental Authority or any other Person.
As of the Closing Date, each Loan Document shall have been duly executed and delivered on behalf Borrower, and each such Loan Document
upon such execution and delivery shall be and will continue to be a legal, valid and binding obligation of Borrower, enforceable
against it in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency and other similar
laws affecting creditors’ rights generally.

 

7.4             
Quarterly Statements; Books and Records. The Quarterly Statements delivered by Borrower to Lender for its most recently
ended Fiscal Quarter, are true, correct and complete and reflect fairly and accurately the financial condition of such Borrower
as of the date of each such Quarterly Statement in accordance with GAAP. Borrower shall keep adequate books and records with respect
to the Collateral and its business activities in which proper entries, reflecting all consolidated and consolidating financial
transactions, and payments and credits received on, and all other dealings with, the Collateral, will be made in accordance with
GAAP and all Requirements of Law and on a basis consistent with the Quarterly Statements. At any time when Borrower’s Available
Cash is less than $2,500,000.00, within forty-five (45) days of the end of each month, Borrower shall deliver a statement reflecting
the calculation of Available Cash as of the last Business Day of such month to Lender.

 

7.5             
Material Adverse Change. Except as set forth in the Schedules attached hereto, between the date of Borrower’s
most recently audited Quarterly Statements delivered to Lender and the Closing Date no events have occurred that alone or in the
aggregate has had or could reasonably be expected to have a Material Adverse Effect. No Requirement of Law or Contractual Obligation
of Borrower has or could reasonably be expected to have a Material Adverse Effect and Borrower is not in default, and to Borrower’s
knowledge no third party is in default, under or with respect to any of its Contractual Obligations, that alone or in the aggregate
has had or could reasonably be expected to have a Material Adverse Effect.

 

7.6             
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness. Except as set forth in Schedule 7.6,
as of the Closing Date, Borrower has no other Subsidiaries, is not engaged in any joint venture or partnership with any other Person,
or is an Affiliate of any other Person. All of the issued and outstanding Stock of the Borrower (including all rights to purchase,
options, warrants or similar rights or agreements pursuant to which Borrower may be required to issue, sell, repurchase or redeem
any of its Stock) as of the Closing Date is set forth in Schedule 7.6. All outstanding Indebtedness of Borrower in excess
of Two Hundred Fifty Thousand Dollars ($250,000.00) as of the Closing Date is described in Schedule 7.6. All Liens existing
against the Borrower or any of its assets, as of the Closing Date, are listed in Schedule 1.44.

 

 

    	 	12	 

     

    

 

 

7.7             
Government Regulation; Margin Regulations. Borrower is not subject to or regulated under any Federal or state statute,
rule or regulation that restricts or limits such Person’s ability to incur Indebtedness, pledge the Collateral, or to perform
its obligations under the Loan Documents. The making of the Loans, the application of the proceeds and repayment thereof, and the
consummation of the transactions contemplated by the Loan Documents do not and will not violate any Requirement of Law. Borrower
is not engaged, nor will it engage in the business of extending credit for the purpose of “purchasing” or “carrying”
any “margin security” as such terms are defined in Regulation U the Federal Reserve Board as now and hereafter in effect
(such securities being referred to herein as “Margin Stock”). Borrower does not own any Margin Stock, and none
of the proceeds of the Loans or other extensions of credit under this Note will be used, directly or indirectly, for the purpose
of purchasing or carrying any Margin Stock or reducing or retiring any Indebtedness that was originally incurred to purchase or
carry any Margin Stock. Borrower will not take or permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.

 

7.8             
Taxes. Except as disclosed in Schedule 7.8 all tax returns, reports and statements required by any Governmental
Authority to be filed by Borrower have, as of the Closing Date, been filed and will, until the Termination Date, be filed with
the appropriate Governmental Authority and no tax Lien has been filed against Borrower or any Borrower’s property.

 

7.9             
Payment of Obligations. Borrower will pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all of its Charges and other obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of Borrower and none of the Collateral is or could reasonably be expected to become subject
to any Lien or forfeiture or loss as a result of such contest.

 

7.10         
Litigation. No Litigation is pending or, to the knowledge of Borrower, threatened by or against Borrower or against
Borrower’s properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby
or thereby, or (b) that, except as set forth in Schedule 7.10, could reasonably be expected to have a Material Adverse Effect.
Except as set forth in Schedule 7.10, as of the Closing Date there is no Litigation pending or threatened against Borrower
that seeks damages in excess of the Minimum Actionable Amount or injunctive relief or alleges criminal misconduct of Borrower.
Borrower shall notify Lender promptly upon learning of the existence, threat or commencement of any Litigation against Borrower
or any allegation of criminal misconduct against Borrower.

 

7.11         
Full Disclosure. No information contained in any Loan Document, the Quarterly Statements or any written statement
furnished by or on behalf of Borrower under any Loan Document, or to induce Lender to execute the Loan Documents, contains any
untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein
not misleading in light of the circumstances under which they were made.

 

 

    	 	13	 

     

    

 

 

7.12         
Conduct of Business; Maintenance of Existence. Borrower (a) shall conduct its business substantially as now conducted
or as otherwise permitted hereunder and preserve all of its rights, privileges and franchises necessary and desirable in connection
therewith, and (b) shall at all times maintain, preserve and protect all of the Collateral and Borrower’s other property,
used or useful in the conduct of its business and keep the same in good repair, working order and condition (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices.

 

7.13         
Further Assurances. At any time and from time to time, upon the written request of Lender and at the sole expense
of Borrower, Borrower shall promptly and duly execute and deliver any and all such further instruments and documents and take such
further action as Lender may reasonably deem desirable (a) to obtain the full benefits of this Note and the other Loan Documents,
(b) to protect, preserve and maintain Lender’s rights in the Collateral, or any of it, or (c) to enable Lender to exercise
all or any of the rights and powers herein granted.

 

ARTICLE
VIII

Financial Matters; Reports

 

8.1             
Reports and Notices. Borrower represents, agrees and promises that from and after the Closing Date until the Termination
Date, Borrower shall deliver to Lender within forty-five (45) days following the end of each Fiscal Quarter, the Quarterly Statements
for such Fiscal Quarter certified by an independent certified accounting firm acceptable to Lender and, within ninety (90) days
following the end of each Fiscal Year, the annual public filings for such Fiscal Year, the Annual Statement for such Fiscal Year
certified by an independent certified accounting firm acceptable to Lender.

 

8.2             
Financial Covenant of Lender. At all times, during the term of this Note, Lender shall maintain an adequate amount
of capital sufficient to comply with its obligations to provide Loans to Borrower. Without limiting the foregoing, from September
1, 2016 until the Stated Expiry Date, Lender shall maintain capital not less than the lesser of Seven Hundred Fifty Thousand Dollars
($750,000.00) and the unborrowed Commitment Amount. The Lender shall notify Borrower within three (3) Business Days of Lender’s
knowledge that it is unable to comply with its obligations to provide Loans to Borrower or to otherwise comply with its obligations
under this Note. Notwithstanding the foregoing, Lender has no obligation to segregate any amount of the Commitment Amount except
for the purpose of funding a Loan pursuant to the terms of this Note.

 

8.3             
Other Reports and Information. Borrower shall advise Lender promptly, in reasonable detail, of: (a) any Lien, other
than Permitted Encumbrances, attaching to or asserted against any of the Collateral or any occurrence causing a material loss or
decline in value of any Collateral and the estimated (or actual, if available) amount of such loss or decline; and (b) the occurrence
of any Default or other event that has had or could reasonably be expected to have a Material Adverse Effect. Borrower shall, upon
request of Lender, furnish to Lender such other reports and information in connection with the affairs, business, financial condition,
operations, prospects or management of Borrower or the Collateral as Lender may request, all in reasonable detail.

 

 

    	 	14	 

     

    

 

 

8.4             
Communication with Accountants. Borrower authorizes Lender to communicate directly with its independent certified
public accountants and authorizes and shall instruct those accountants and advisors to communicate to Lender information relating
to Borrower with respect to the business, results of operations and financial condition of Borrower.

 

ARTICLE
IX

Negative Covenants

 

Borrower covenants
and agrees that, without Lender’s prior written consent, from the Closing Date until the Termination Date, it shall not,
directly or indirectly, by operation of law or otherwise:

 

(a)               
merge with, consolidate with, acquire all or substantially all of the assets of, or otherwise combine with or make any investment
in or loan or advance to, any Person or form any Subsidiary;

 

(b)              
make any changes in any of its business objectives, purposes, or operations that could reasonably be expected to adversely
affect repayment of the Obligations or could reasonably be expected to have a Material Adverse Effect or engage in any business
other than that presently engaged in or amend its charter or by-laws or other organizational documents;

 

(c)               
create or permit any Lien on any of its properties or assets, except for Permitted Encumbrances;

 

(d)              
sell, transfer, issue, convey, assign or otherwise dispose of any of its assets or properties or engage in any sale-leaseback,
synthetic lease or similar transaction (provided, that the foregoing shall not prohibit the sale of inventory, patents or obsolete
or unnecessary equipment in the ordinary course of its business);

 

(e)               
change (i) its name as it appears in official filings in the state of its incorporation or organization, (ii) its chief
executive office, corporate offices, warehouses or other Collateral locations, or location of its records concerning the Collateral,
(iii) the type of legal entity that it is, (iv) its organization identification number, if any, issued by its state of incorporation
or organization, or (v) its state of incorporation or organization;

 

(f)               
make or permit any Restricted Payment; or

 

(g)              
cancel any debt owing to it or create, incur, assume or permit to exist any Indebtedness, except: (i) the Obligations; (ii)
Indebtedness existing as of the Closing Date set forth in Schedule 7.6; (iii) deferred taxes; (iv) by endorsement of Instruments
or items of payment for deposit to the general account of Borrower; (v) for Guaranteed Indebtedness incurred for the benefit of
Borrower if the primary obligation is permitted by this Note; and (vi) additional Indebtedness (including Purchase Money Indebtedness)
incurred after the Closing Date in an aggregate outstanding amount for the Borrower not exceeding Five Hundred Thousand Dollars
($500,000.00);

 

 

    	 	15	 

     

    

 

 

ARTICLE
X

Events Of Default: Rights And Remedies

 

10.1         
Events of Default. The occurrence of any one or more of the following events (regardless of the reason therefor)
shall constitute an “Event of Default” hereunder which shall be deemed to be continuing until waived in writing by
Lender in accordance with the terms of this Note:

 

(a)               
Borrower shall fail to make any payment in respect of any Obligations when due and payable or declared due and payable;
or

 

(b)              
Borrower shall fail or neglect to perform, keep or observe any of the covenants, promises, agreements, requirements, conditions
or other terms or provisions contained in this Note or any of the other Loan Documents; or

 

(c)               
an event of default shall occur under any Contractual Obligation of Borrower (other than this Note and the other Loan Documents),
and such event of default (i) involves the failure to make any payment (whether or not such payment is blocked pursuant to the
terms of an intercreditor agreement or otherwise), whether of principal, interest or otherwise, and whether due by scheduled maturity,
required prepayment, acceleration, demand or otherwise, in respect of any Indebtedness (other than the Obligations) of such Person
in an aggregate amount exceeding the Minimum Actionable Amount, or (ii) causes (or permits any holder of such Indebtedness or a
trustee to cause) such Indebtedness, or a portion thereof, in an aggregate amount exceeding the Minimum Actionable Amount to become
due prior to its stated maturity or prior to its regularly scheduled dates of payment; or

 

(d)              
any representation or warranty in this Note or any other Loan Document, or in any written statement pursuant hereto or thereto,
or in any report, financial statement or certificate made or delivered to Lender by Borrower shall be untrue or incorrect as of
the date when made or deemed made; or

 

(e)               
there shall be commenced against any Borrower any Litigation seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief
that remains unstayed or undismissed for thirty (30) consecutive days; or Borrower shall have concealed, removed or permitted to
be concealed or removed, any part of its property with intent to hinder, delay or defraud its creditors or any of them or made
or suffered a transfer of any of its property or the incurring of an obligation that may be fraudulent under any bankruptcy, fraudulent
transfer or other similar law; or

 

(f)               
a case or proceeding shall have been commenced involuntarily against Borrower in a court having competent jurisdiction seeking
a decree or order: (i) under the United States Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or
other similar law, and seeking either (x) the appointment of a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for such Person or of any substantial part of its properties, or (y) the reorganization or winding up or
liquidation of the affairs of any such Person, and such case or proceeding shall remain undismissed or unstayed for sixty (60)
consecutive days or such court shall enter a decree or order granting the relief sought in such case or proceeding; or (ii) invalidating
or denying any Person’s right, power, or competence to enter into or perform any of its obligations under any Loan Document
or invalidating or denying the validity or enforceability of this Note or any other Loan Document or any action taken hereunder
or thereunder; or

 

 

    	 	16	 

     

    

 

 

(g)              
Borrower shall (i) commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it or seeking appointment of a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for it or any substantial part of its properties, (ii) make a general assignment for the benefit of creditors,
(iii) consent to or take any action in furtherance of, or, indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in paragraphs (e) or (f) of this Section or clauses (i) and (ii) of this paragraph (g), or (iv) shall admit in writing
its inability to, or shall be generally unable to, pay its debts as such debts become due; or

 

(h)              
a final judgment or judgments for the payment of money in excess of the Minimum Actionable Amount in the aggregate shall
be rendered against Borrower, unless the same shall be (i) fully covered by insurance and the issuer(s) of the applicable policies
shall have acknowledged full coverage in writing within fifteen (15) days of judgment, or (ii) vacated, stayed, bonded, paid or
discharged within a period of fifteen (15) days from the date of such judgment; or

 

(i)                
any other event shall have occurred that has had or could reasonably be expected to have a Material Adverse Effect and Lender
shall have given Borrower notice thereof; or

 

(j)                
any provision of any Loan Document shall for any reason cease to be valid, binding and enforceable in accordance with its
terms, or any Lien granted, or intended by the Loan Documents to be granted, to Lender shall cease to be a valid and perfected
Lien having the first priority (or a lesser priority if expressly permitted in the Loan Documents) in any of the Collateral.

 

10.2         
Remedies. If any Event of Default shall have occurred and be continuing, Lender may, without notice, take any one
or more of the following actions: (i) declare all or any portion of the Obligations to be forthwith due and payable, including
contingent liabilities, whereupon such Obligations shall become and be due and payable; or (ii) exercise any rights and remedies
provided to Lender under the Loan Documents or at law or equity, including all remedies provided under the Code; provided,
that upon the occurrence of any Event of Default specified in Sections 10.1(e), (f) or (g), the Obligations
shall become immediately due and payable without any action on the part of the Lender. Lender’s rights and remedies under
this Note shall be cumulative and nonexclusive of any other rights and remedies that Lender may have under any Loan Document or
at law or in equity. Recourse to the Collateral shall not be required. All provisions of this Note are intended to be subject to
all applicable mandatory provisions of law that may be controlling and to be limited, to the extent necessary, so that they do
not render this Note invalid or unenforceable, in whole or in part.

 

 

    	 	17	 

     

    

 

 

10.3         
Waivers by Credit Parties. Except as otherwise provided for in this Note and to the fullest extent permitted by applicable
law, Borrower waives: (a) presentment, demand and protest, and notice of presentment, dishonor, intent to accelerate, acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all Loan Documents, and
hereby ratifies and confirms whatever Lender may do in this regard; (b) all rights to notice and a hearing prior to Lender’s
taking possession or control of, or to Lender’s replevy, attachment or levy upon, any Collateral or any bond or security
that might be required by any court prior to allowing Lender to exercise any of its remedies; and (c) the benefit of all valuation,
appraisal and exemption laws. Borrower acknowledges that it has been advised by counsel of its choices and decisions with respect
to this Note, the other Loan Documents and the transactions evidenced hereby and thereby.

 

ARTICLE
XI

Miscellaneous

 

11.1         
Complete Agreement; Modification of Note. This Note and the other Loan Documents constitute the complete agreement
between the parties with respect to the subject matter hereof and thereof, supersede all prior agreements, commitments, understandings
or inducements (oral or written, expressed or implied), and no Loan Document may be modified, altered or amended except by a written
agreement signed by Lender, and Borrower. Borrower shall have all duties and obligations under this Note and such other Loan Document
from the date of its execution and delivery, regardless of whether the Loan has been funded at that time.

 

11.2         
Expenses. Borrower agrees to pay or reimburse Lender for all costs and expenses (including the fees and expenses
of all special counsel, advisors, consultants, incurred in connection with: (a) the preparation, negotiation, execution, delivery,
performance and enforcement of the Loan Documents and the preservation of any rights thereunder; (b) collection, including deficiency
collections; (c) the forwarding to Borrower or any other Person on behalf of Borrower by Lender of the proceeds of any Loan (including
a wire transfer fees); (d) any amendment, extension, modification or waiver of, or consent with respect to any Loan Document or
advice in connection with the administration of the Loans or the rights thereunder; (e) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by or between any combination of Lender, Borrower or any other Person or Persons), and
an appeal or review thereof, in any way relating to the Collateral, any Loan Document, or any action taken or any other agreements
to be executed or delivered in connection therewith, whether as a party, witness or otherwise; and (f) any effort (i) to monitor
the Loans, (ii) to evaluate, observe or assess Borrower, and (iii) to verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of the Collateral.

 

11.3         
Rules of Construction. Any accounting term used in this Note or the other Loan Documents shall have, unless otherwise
specifically provided therein, the meaning customarily given such term in accordance with GAAP, and all financial computations
thereunder shall be computed, unless otherwise specifically provided therein, in accordance with GAAP consistently applied; provided,
that all financial covenants and calculations in the Loan Documents shall be made in accordance with GAAP as in effect on the Closing
Date unless Borrower and Lender shall otherwise specifically agree in writing. That certain items or computations are explicitly
modified by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing. All other undefined
terms contained in this Note or the other Loan Documents shall, unless the context indicates otherwise, have the meanings provided
for by the Code. The words “herein,” “hereof” and “hereunder” or other words of similar import
refer to this Note as a whole, including the exhibits and schedules thereto, as the same may from time to time be amended, modified
or supplemented, and not to any particular section, subsection or clause contained in this Note. For purposes of this Note and
the other Loan Documents, the following additional rules of construction shall apply, unless specifically indicated to the contrary:
(a) wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the
singular and the plural; (b) the term “or” is not exclusive; (c) the term “including” (or any form
thereof) shall not be limiting or exclusive; (d) all references to statutes and related regulations shall include any amendments
of same and any successor statutes and regulations; and (e) all references to any instruments or agreements, including references
to any of the Loan Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals
thereof.

 

 

    	 	18	 

     

    

 

 

11.4         
No Waiver. Neither Lender’s failure, at any time or times, to require strict performance by Borrower of any
provision of any Loan Document, nor Lender’s failure to exercise, nor any delay in exercising, any right, power or privilege
hereunder, (a) shall waive, affect or diminish any right of Lender thereafter to demand strict compliance and performance
therewith, or (b) shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or future exercise thereof or the exercise of any other right, power or privilege. Any suspension or waiver
of a Default or other provision under the Loan Documents shall not suspend, waive or affect any other Default under any Loan Document,
whether the same is prior or subsequent thereto and whether of the same or of a different type, and shall not be construed as a
bar to any right or remedy that Lender would otherwise have had on any future occasion. None of the undertakings, indemnities,
agreements, warranties, covenants and representations of Borrower to Lender contained in any Loan Document and no Default by Borrower
under any Loan Document shall be deemed to have been suspended or waived by Lender, unless such waiver or suspension is by an instrument
in writing signed by an officer or other authorized employee of Lender and directed to Borrower specifying such suspension or waiver
(and then such waiver shall be effective only to the extent therein expressly set forth), and Lender shall not, by any act (other
than execution of a formal written waiver), delay, omission or otherwise, be deemed to have waived any of its rights or remedies
hereunder.

 

11.5         
Severability; Section Titles. Wherever possible, each provision of the Loan Documents shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of any Loan Document shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of such Loan Document. Except as otherwise expressly provided for in
the Loan Documents, no termination or cancellation (regardless of cause or procedure) of any financing arrangement under the Loan
Documents shall in any way affect or impair the Obligations, duties, covenants, representations and warranties, indemnities, and
liabilities of Borrower or the rights of Lender relating to any unpaid Obligation (due or not due, liquidated, contingent or unliquidated),
or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is not required
until after the Termination Date, all of which shall not terminate or expire, but rather shall survive such termination or cancellation
and shall continue in full force and effect until the Termination Date; provided, that all indemnity obligations of Borrower under
the Loan Documents shall survive the Termination Date. The Section titles contained in any Loan Document are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

 

 

    	 	19	 

     

    

 

 

11.6         
Notices. Except as otherwise provided herein, whenever any notice, demand, request or other communication shall or
may be given to or served upon any party by any other party, or whenever any party desires to give or serve upon any other party
any communication with respect to this Note, each such notice, demand, request or other communication shall be in writing and shall
be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three (3) days after deposit
in the United States mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission,
when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States mail as otherwise provided in this Section), (c) one (1) Business Day after deposit
with a reputable overnight courier with all charges prepaid or (d) when hand-delivered, all of which shall be addressed to the
party to be notified and sent to the address or facsimile number indicated in Schedule A or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request or other
communication to any Person (other than any Borrower or Lender) designated in Schedule A to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request or other communication.

 

11.7         
Counterparts. Any Loan Document may be authenticated in any number of separate counterparts by any one or more of
the parties thereto, and all of said counterparts taken together shall constitute one and the same instrument. Any Loan Document
may be authenticated by manual signature, facsimile or, if approved in writing by Lender, electronic means, all of which shall
be equally valid.

 

11.8         
Successors and Assigns. Each Loan Document shall be binding on and shall inure to the benefit of Borrower, Lender,
and their respective successors and assigns, except as otherwise provided herein or therein. Borrower may not assign, transfer,
hypothecate, delegate or otherwise convey its rights, benefits, obligations or duties under any Loan Document without the prior
express written consent of Lender. Any such purported conveyance by Borrower or without the prior express written consent of Lender
shall be void. There shall be no third party beneficiaries of any of the terms and provisions of any of the Loan Documents. Lender
reserves the right at any time to create and sell participations in the Loans and the Loan Documents and to sell, transfer or assign
any or all of its rights in the Loans and under the Loan Documents.

 

11.9         
GOVERNING LAW. THE LOAN DOCUMENTS AND THE OBLIGATIONS ARISING UNDER THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

 

    	 	20	 

     

    

 

 

11.10     
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

 

(a)               
BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND LENDER PERTAINING TO THIS NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT
LENDER AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK;
AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM BRINGING
SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER. BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION
THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE
OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET
FORTH IN SCHEDULE A OF THIS NOTE AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER’S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

 

(b)              
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN LENDER
AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH
THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

 

11.11     
Reinstatement. This Note shall continue to be effective, or be reinstated, as the case may be, if at any time payment
of all or any part of the Obligations is rescinded or must otherwise be returned or restored by Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Borrower, or otherwise, all as though such payments had not been made.

 

11.12     
Advice of Counsel. Each of the parties represents to each other party hereto that it has discussed this Note and,
specifically, the provisions of Sections 11.10 and 11.11, with its counsel.

 

 

    	 	21	 

     

    

 

 

11.13     
No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Note.
In the event an ambiguity or question of intent or interpretation arises, this Note shall be construed as if drafted jointly by
the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Note.

 

ARTICLE
XII 

 

Replacement
of Note

 

On receipt by Borrower
of an affidavit of an authorized representative of Lender stating the circumstances of the loss, theft, destruction or mutilation
of this Note (and in the case of any such mutilation, on surrender and cancellation of this Note), Borrower, at Lender’s
expense, will promptly execute and deliver, in lieu thereof, a new Note of like tenor.

 

ARTICLE
XIII

Security Interest

 

The obligations under
this Note are secured by a security interest granted to the Lender in the Collateral as more fully described in the Loan Documents.

 

[Signature Page Follows]

 

 

    	 	22	 

     

    

 

 

IN WITNESS WHEREOF,
Borrower has caused this Promissory Note to be duly executed as of the date first written above.

 

Walker
Innovation Inc.

 

By:  /s/ Jonathan Ellenthal

Name: Jonathan Ellenthal

Title: CEO

 

Walker
Digital, LLC

 

By:  /s/
Jay S. Walker

Name: Jay S. Walker

Title: Chairman

 

 

 

    	 

     

    

 

EXHIBIT A

 

CFO Certificate

 

Walker Digital, LLC

2 High Ridge Park

Stamford, CT 06905

Jay S. Walker

(203) 461-7111

 

		Re:	Loan Request dated [●]

 

Ladies and Gentlemen:

 

Reference is made to
that certain Revolving Promissory Note (the “Note”), dated as of July 19, 2016, between Walker Innovation Inc.,
as Borrower, and Walker Digital, LLC, as Lender. Capitalized terms used but no otherwise defined herein shall have the meanings
assigned to such terms in the Note.

 

In connection with
the Loan Request dated [________], 20[__], please note that as of the date of such Loan Request the Available Cash of the Borrower
was [_____________] Dollars ($[___________]).

 

 

 

WALKER INNOVATION
INC.

 

By: _______________________

Name:

Title:

 

    	 

     

    

 

 

SCHEDULE
A

 

LENDER’S AND BORROWER’S
ADDRESSES FOR NOTICES

 

	Lender’s Address:
	Name:	Walker Digital, LLC
	Address:	
        2 High Ridge Park

        Stamford, CT 06905

	Attn:	Jay S. Walker
	Telephone:	(203) 461-7111
	 	 
	 	with a copy to:
	Name:	Walker Digital, LLC
	Address:	
        2 High Ridge Park

        Stamford, CT 06905

	Attn:	Karen Romaine
	Tel:	(203) 461-7121
	 	 
	Borrower’s Address:	 
	Name:	Walker Innovation Inc.
	Address:	
        2 High Ridge Park

        Stamford, CT 06905

	Attn:	Chief Financial Officer
	Telephone:	(203) 461-7360
	 	 
	 	with a copy to:
	Name:	Walker Innovation Inc.
	Address:	
        2 High Ridge Park

        Stamford, CT 06905

	Attn:	General Counsel
	Tel:	(203) 461-7353

 

 

    	 

     

    

 

 

SCHEDULE 1.44

 

LIENS

 

None.

 

    	 

     

    

 

 

SCHEDULE 7.2

 

ORGANIZATIONAL INFORMATION

 

 

	WALKER INNOVATION INC.	 
	Federal Tax Identification Number	30-0342273
	Organization Identification Number	4245993
	 	 
	Or Statement that no such number has been issued	 
	 	 
	State of Incorporation or Organization	Delaware
	 	 
	Chief Executive Office	2 High Ridge Park, Stamford, CT 06905
	 	 
	Locations of Inventory and other Collateral	2 High Ridge Park, Stamford, CT 06905
	 	 
	Other Corporate Names:	
        Patent Properties, Inc.

        Global Options Group, Inc.

	 	 
	Other Trade Names:	
        Life Stages

        Haystack IQ

        The United States Patent Utility

 

 

 

    	 

     

    

 

SCHEDULE 7.6

 

STOCK, AFFILIATES AND INDEBTEDNESS

 

SUBSIDIARIES

 

	Name	Type	Percentage owned by Borrower
	Inventor Holdings, LLC 	Delaware limited liability company	100%
	Certified Measurement, LLC     	Delaware limited liability company	100% owned by Inventor Holdings, LLC

 

 

AFFILIATES

 

Walker Digital, LLC

 

Jay S. Walker

 

Other companies that are affiliates of
Jay S. Walker or Walker Digital, LLC.

 

 

 

Issued
and Outstanding Stock

 

	Class of Stock	Number of Stock
	Preferred stock, $0.001 par value	15,000,000 shares authorized
	Series B Convertible Preferred stock, $0.001 par value	14,999,000 shares designated, issued and outstanding, as of July 19, 2016
	Common stock, $0.001 par value	
        100,000,000 shares authorized

         

        21,134,744 shares issued, as of July 19, 2016

         

	Treasury stock	393,172, at cost, as of July 19, 2016
	Shares reserved for issuance under employee stock option plans	5,607,342, as of July 19, 2016
	Warrant to purchase Class A Common Shares in Upside Commerce Group, LLC at $0.06 per share	16,400,000 Class A Common Shares

 

INDEBTEDNESS

 

None.

 

    	 

     

    

 

 

SCHEDULE 7.8

 

TAXES

 

None

 

    	 

     

    

 

SCHEDULE 7.10

 

LITIGATION

 

Bed Bath & Beyond

 

On April 8, 2014, Inventor Holdings, LLC
(“IH LLC”), a subsidiary of Walker Innovation Inc. (the “Company”), filed suit alleging infringement
by Bed Bath & Beyond (“Bed Bath”) of one or more claims of U.S. Patent 6,381,582 in the United States District
Court for the District of Delaware, Docket 14-448. The complaint seeks damages for past, present and future infringement. On August
21, 2015, the District Court granted a Motion for Judgment on the Pleadings by Bed Bath, finding US Patent No. 6,381,582 invalid
under 35 U.S.C. Section 101. IH LLC subsequently filed an appeal with the Federal Circuit challenging the District Court’s
Section 101 Ruling. On April 7, 2016, the Federal Circuit affirmed the District Court’s ruling invalidating the patent. Bed
Bath sought its fees and costs for both the District Court and Federal Circuit proceedings from IH LLC. On May 31, 2016, the Court
granted, in part, Bed Bath’s motion for attorney’s fees and costs. Pursuant to that order, Bed Bath was ordered to
recalculate its costs and fees by June 14, 2016. In response, Bed Bath requested fees and costs of approximately $953,000.00 for
both the District Court and Federal Circuit proceedings from IH LLC. The District Court approved fees and costs in the amount of
$953,000.00 on July 14, 2016. IH LLC is evaluating its options in this regard, including further appeal, a negotiated settlement
with Bed Bath or payment of the full amount.

 

Alstom Grid, Inc.

 

On January 22, 2015, Alstom Grid, Inc.
(“Alstom”) filed a complaint for declaratory judgment of non-infringement of U.S. Patents 5,828,751, 6,282,648,
6,289,453 and 8,549,310 against Certified Measurement LLC, a subsidiary of IH, LLC, in the United States District Court for the
District of Delaware, Docket No. 15-072. On February 5, 2015, Certified Measurement LLC filed a counterclaim alleging infringement
of one or more claims of such patents seeking damages for past, present and future infringement. On July 22, 2016, the Court will
hold a claim construction hearing and a hearing on Alstom Grid’s motion to invalidate the patents under section 101. A decision
on claim construction and the section 101 motion is expected in Fall 2016.

 

Camera Auto

 

On April 12, 2011, Walker Digital, LLC
(“Walker Digital”) filed suit alleging infringement of one or more claims of U.S. Patent 7,924,323 in the United
States District Court for the District of Delaware, Docket No. 11-326. The complaint was filed against Canon U.S.A, Inc., Casio
America, Inc., Eastman Kodak Co., Eye-Fi, Inc., Fujifilm U.S.A., Inc., Nikon, Inc., Olympus America, Inc., Pentax of America, Inc.,
Ricoh Americas Corporation, Samsung Electronics America, Sanyo North America Corporation, Sony Corporation of America and Sony
Electronics, Inc. The complaint seeks damages and a permanent injunction. Walker Digital entered into a settlement agreement with
Nikon, Inc. on December 19, 2011, Samsung Electronics America on June 14, 2012 and Canon U.S.A. Inc. on March 5, 2013. Walker Digital
dismissed each settling party from this suit. On December 29, 2014, Sony Electronics, Inc. filed a request for Ex Parte Reexamination
before the United States Patent and Trademark Office of US Patent 7,924,323. On August 12, 2015, a final rejection of all challenged
claims in the Ex Parte Reexamination was received from the United States Patent and Trademark Office. IH LLC, as assignee of the
patent the subject of the litigation and successor to Walker Digital in the litigation, has reached settlement with Ricoh America’s
Corporation and Casio America, Inc. involving the asserted patent and related patents, and is attempting to negotiate settlements
with the remaining defendants.

 

    	 

     

    

 

Third Party Settlement.

 

The Company was engaged in a legal action
arising from claims related to certain patent families the Company and IH LLC received from Walker Digital by recorded assignment
at the time of a September 18, 2013 merger involving GlobalOptions Group, Inc and Walker Digital (the “Merger”).
The legal action arose due to an adverse judicial decision relating to interpretation of the terms of a settlement agreement
entered into by Walker Digital with a third party prior to the Merger. Although the judicial decision does not specifically address
the Company’s patents, the Company was notified by the Third Party and its assignee (collectively, “Third Party”),
that they believe the court's decision supports the Third Party’s claim that a large number of patents had been conveyed
to the Third Party by assignment under the settlement agreement.  The Third Party also indicated it may seek damages against
the Company arising from that same set of facts.

 

Walker Digital and the Company and its
subsidiaries commenced arbitration on March 31, 2015 against the Third Party seeking reformation of the settlement agreement between
the Third Party and Walker Digital. As a result of negotiations among the parties during pendency
of the arbitration, the parties entered into a settlement agreement dated June 10, 2016, under which Walker Digital paid the Third
Party $250,000.00 and assigned 10 patent assets to the Third Party and the Company and IH LLC assigned 111 patent assets to the
Third Party. Pursuant to the settlement agreement, Walker Digital and the Company retain clean title to their remaining patent
assets. The parties have exchanged mutual releases. None of the patents assigned to the Third Party in the settlement are
currently being enforced in the Company’s licensing and enforcement litigation

 

The Company and its subsidiaries and Walker
Digital entered into a tolling agreement dated June 9, 2015 with respect to claims the Company and its subsidiaries may have against
Walker Digital in the event they are required to assign to the Third Party patent assets originally assigned to the Company and
IH LLC by Walker Digital at the time of the Merger or if the Company and its subsidiaries are required to pay damages.  The
Company is presently evaluating its rights to indemnification from Walker Digital as a consequence of the Third Party settlement.Exhibit 10.1

 

PLEDGE AGREEMENT

 

This PLEDGE AGREEMENT, dated as of July
19, 2016 (as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”),
is between WALKER INNOVATION INC., a Delaware corporation (the “Pledgor”), in favor of WALKER DIGITAL, LLC,
a Delaware limited liability company (the “Secured Party”).

 

WHEREAS, on the date hereof, the Secured
Party has made and may make loans to the Pledgor in an aggregate unpaid principal amount not exceeding One Million Five Hundred
Thousand Dollars ($1,500,000.00) (the “Loans”), evidenced by that certain Revolving Promissory Note of even
date herewith (as amended, supplemented or otherwise modified from time to time, the “Note”) made by the Pledgor
and payable to the order of the Secured Party. Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Note;

 

WHEREAS, this Agreement is given by the
Pledgor in favor of the Secured Party to secure the payment and performance of all of the Secured Obligations; and

 

WHEREAS, it is a condition to the obligations
of the Lender to make the Loans under the Note that the Pledgor execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the
mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

		1.	Definitions.

 

(a)               
Unless otherwise specified herein, all references to Sections and Schedules herein are to Sections and Schedules
of this Agreement.

 

(b)              
Unless otherwise defined herein, terms used herein that are defined in the UCC shall have the meanings assigned to
them in the UCC. However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term
has the meaning specified in Article 9.

 

(c)               
For purposes of this Agreement, the following terms shall have the following meanings:

 

“Collateral” has
the meaning set forth in Section 2.

 

“Event of Default” has
the meaning set forth in the Note.

 

“JSW” means Jay S. Walker.

 

“Issuer” means Upside
Commerce Group, LLC (f/k/a Flexible Travel Company, LLC), a Delaware limited liability company.

 

    	 	1	 

     

    

 

 

“Pledged Warrant Shares” means
shares of stock described in Schedule 1 hereto that are subject to the right to purchase by the Pledgor in accordance with the
Warrant Agreement and the certificates, instruments and agreements representing such shares and includes any securities or other
interests, howsoever evidenced or denominated, received by the Pledgor in exchange for or as a dividend or distribution on or otherwise
received in respect of such shares.

 

“Proceeds” means
“proceeds” as such term is defined in Section 9-102 of the UCC and, in any event, shall include, without limitation,
all dividends or other income from the Pledged Warrant Shares, collections thereon or distributions with respect thereto.

 

“Secured Obligations” has
the meaning set forth in Section 3.

 

“UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New York or, when the laws of any other state govern the
method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code
as in effect from time to time in such state.

 

“Warrant Agreement” means
that certain Warrant, dated December 4, 2015, among JSW, the Pledgor and the Issuer entitling Pledgor to purchase from JSW 16,400,000
Class A Common Shares of the Issuer pursuant to terms of such Warrant.

 

2.                 
Pledge. The Pledgor hereby pledges, assigns and grants to the Secured Party, and hereby creates a continuing
first priority lien and security interest in favor of the Secured Party in and to all of its right, title and interest in and to
the following, wherever located, whether now existing or hereafter from time to time arising or acquired (collectively, the “Collateral”):

 

(a)               
 the Pledged Warrant Shares and any ancillary rights in respect of the Pledged Warrant Shares set forth in the Warrant
Agreement; and

 

(b)              
all Proceeds and products of the foregoing.

 

		3.	Secured Obligations. The Collateral secures the
due and prompt payment and performance of:

 

(a)               
the obligations of the Pledgor from time to time arising under the Note, this Agreement or otherwise with respect
to the due and prompt payment of (i) the principal of and premium, if any, and interest on the Loans (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable
in such proceeding), when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise
and (ii) all other monetary obligations, including fees, costs, attorneys’ fees and disbursements, reimbursement obligations,
contract causes of action, expenses and indemnities, whether primary, secondary, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding),
of the Pledgor under or in respect of the Note and this Agreement; and

 

    	 	2	 

     

    

 

 

(b)              
all other covenants, duties, debts, obligations and liabilities of any kind of the Pledgor under or in respect of
the Note, this Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether
evidenced by a note or other writing, whether allowed in any bankruptcy, insolvency, receivership or other similar proceeding,
whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
and whether primary, secondary, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising,
fixed or otherwise (all such obligations, covenants, duties, debts, liabilities, sums and expenses set forth in Section 3
being herein collectively called the “Secured Obligations”).

 

		4.	Perfection of Pledge.

 

(a)               
The Pledgor shall, from time to time, as may be required by the Secured Party with respect to all Collateral, take
all reasonable actions as may be requested by the Secured Party to perfect the security interest of the Secured Party in the Collateral.
All of the foregoing shall be at the sole cost and expense of the Pledgor.

 

(b)              
The Pledgor hereby irrevocably authorizes the Secured Party at any time and from time to time to file in any relevant
jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each
applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, without the signature
of the Pledgor where permitted by law. The Pledgor agrees to provide all information required by the Secured Party pursuant to
this Section promptly to the Secured Party upon request.

 

		5.	Representations and Warranties of the Pledgor.
The Pledgor represents and warrants as follows:

 

(a)               
It has the requisite power and authority to perform its obligations and to enforce its rights under the Warrant Agreement.

 

(b)              
All information set forth in Schedule 1 relating to the Pledged Warrant Shares is accurate and complete. The Pledged
Warrant Shares are presently uncertificated.

 

(c)               
At the time the Collateral becomes subject to the lien and security interest created by this Agreement, the Pledgor
will be the sole, direct, legal and beneficial owner of the Collateral, free and clear of any lien, security interest, encumbrance,
claim, option or right of others except for the security interest created by this Agreement.

 

(d)              
The pledge of the Collateral pursuant to this Agreement creates a valid and perfected first priority security interest
in the Collateral, securing the payment and performance when due of the Secured Obligations.

 

(e)               
It has full power, authority and legal right to borrow the Loans and pledge the Collateral pursuant to this Agreement.

 

(f)               
Each of this Agreement and the Note has been duly authorized, executed and delivered by the Pledgor and constitutes
a legal, valid and binding obligation of the Pledgor enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to equitable
principles (regardless of whether enforcement is sought in equity or at law).

 

    	 	3	 

     

    

 

 

(g)              
No authorization, approval, or other action by, and no notice to or filing with, any governmental authority, regulatory
body or any other entity is required for the borrowing of the Loans and the pledge by the Pledgor of the Collateral pursuant to
this Agreement or for the execution and delivery of the Note and this Agreement by the Pledgor or the performance by the Pledgor
of its obligations thereunder.

 

(h)              
The execution and delivery of the Note and this Agreement by the Pledgor and the performance by the Pledgor of its
obligations thereunder, will not violate any provision of any applicable law or regulation or any order, judgment, writ, award
or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to the Pledgor or any of its property,
or the organizational or governing documents of the Pledgor or any agreement or instrument to which the Pledgor is party or by
which it or its property is bound.

 

		6.	Representations and Warranties of JSW. JSW represents
and warrants as follows:

 

(a)               
The Pledged Warrant Shares have been duly authorized and validly issued, and are fully paid and non assessable and
are subject to no options to purchase or similar rights, except as provided in the Warrant Agreement or as set forth in the Limited
Liability Company Agreement of Issuer, as amended to date

 

		7.	Further Assurances.

 

(a)               
The Pledgor shall, at its own cost and expense, defend its rights to the Collateral and the first priority lien and
security interest of the Secured Party therein against the claim of any person claiming against or through the Pledgor such person’s
rights to the Collateral and shall maintain and preserve such perfected first priority security interest for so long as this Agreement
shall remain in effect. Without limiting the generality of the foregoing and subject to Section 7(b), the
Pledgor shall promptly notify Secured Party in the event the Pledged Warrant Shares become certificated.

 

(b)              
JSW shall, at the cost and expense of the Pledgor, defend his title to the Pledged Warrant Shares against the claim
of any person claiming against or through JSW such person’s title to the Pledged Warrant Shares for so long as this Agreement
shall remain in effect. JSW shall promptly notify Pledgor in the event the Pledged Warrant Shares become certificated.

 

(c)               
The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action,
that may be necessary or desirable, or that the Secured Party may reasonably request, in order to perfect and protect any security
interest granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder or under any other
agreement with respect to any Collateral.

 

(d)              
JSW agrees that at any time and from time to time, at the expense of the Pledgor, JSW will promptly execute and deliver
all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary
or desirable, or that the Secured Party may reasonably request to enable the Secured Party to exercise and enforce its rights and
remedies hereunder or under any other agreement with respect to any Collateral.

 

    	 	4	 

     

    

 

 

(e)               
The Pledgor will not, without providing at least 30 days’ prior written notice to the Secured Party, change
its legal name, identity, type of organization, jurisdiction of organization, corporate structure, location of its chief executive
office or its principal place of business or its organizational identification number. The Pledgor will, prior to any change described
in the preceding sentence, take all actions reasonably requested by the Secured Party to maintain the perfection and priority of
the Secured Party’s security interest in the Collateral.

 

8.                 
Transfers and Other Liens.

 

(a)               
The Pledgor agrees that it will not sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant
any option with respect to, restrict, or grant, create, permit or suffer to exist any mortgage, pledge, lien, security interest,
option, right of first offer, encumbrance or other restriction or limitation of any nature whatsoever on, any of the Collateral
or any interest therein except as expressly provided for herein or with the prior written consent of the Secured Party.

 

(b)              
JSW agrees that it will not sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant any option
with respect to, restrict, or grant, create, permit or suffer to exist any mortgage, pledge, lien, security interest, option, right
of first offer, encumbrance or other restriction or limitation of any nature whatsoever on, any of the Pledged Warrant Shares or
any interest therein except as expressly provided for herein or with the prior written consent of the Secured Party.

 

9.                 
Secured Party Appointed Attorney-in-Fact. The Pledgor hereby appoints the Secured Party the Pledgor’s
attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time
to time during the continuance of an Event of Default in the Secured Party’s discretion to take any action and to execute
any instrument which the Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, to enforce Pledgor’s rights under the Warrant Agreement. Such appointment, being coupled with an interest,
shall be irrevocable. The Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.

 

10.             
Secured Party May Perform. If the Pledgor fails to perform any of its obligations contained in this Agreement,
the Secured Party may itself perform, or cause performance of, such obligation, and the expenses of the Secured Party incurred
in connection therewith shall be payable by the Pledgor; provided that the Secured Party shall not be required to perform
or discharge any obligation of the Pledgor.

 

11.             
Reasonable Care. The Secured Party shall have no duty with respect to the care and preservation of the Collateral
beyond the exercise of reasonable care. The Secured Party shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the
Secured Party accords its own property, it being understood that the Secured Party shall not have any responsibility for taking
any necessary steps to preserve rights against any parties with respect to any Collateral. Nothing set forth in this Agreement,
nor the exercise by the Secured Party of any of the rights and remedies hereunder, shall relieve the Pledgor from the performance
of any obligation on the Pledgor’s part to be performed or observed in respect of any of the Collateral.

 

    	 	5	 

     

    

 

 

		12.	Remedies Upon Default. If any Event of Default
shall have occurred and be continuing:

 

(a)               
The Secured Party may, without any other notice to or demand upon the Pledgor, assert all rights and remedies of
a secured party under the UCC or other applicable law, including, without limitation, the right to take possession of, hold, collect,
sell, lease, deliver, grant options to purchase or otherwise retain, liquidate or dispose of all or any portion of the Pledged
Warrant Shares; provided that such actions are permitted under the Warrant Agreement. If notice prior to disposition of
the Pledged Warrant Shares or any portion thereof is necessary under applicable law, written notice mailed to the Pledgor at its
notice address as provided in Section 15 hereof ten (10) days prior to the date of such disposition shall constitute
reasonable notice, but notice given in any other reasonable manner shall be sufficient. So long as the sale of the Pledged Warrant
Shares is made in a commercially reasonable manner, the Secured Party may sell such Pledged Warrant Shares on such terms and to
such purchaser(s) as the Secured Party in its absolute discretion may choose, without assuming any credit risk and without any
obligation to advertise or give notice of any kind other than that necessary under applicable law; provided that such actions
are permitted under the Warrant Agreement. Without precluding any other methods of sale, the sale of the Pledged Warrant Shares
or any portion thereof shall have been made in a commercially reasonable manner if conducted in conformity with reasonable commercial
practices of creditors disposing of similar property and in conformity with any obligations imposed on the Secured Party under
the Warrant Agreement. To the extent permitted by applicable law, the Pledgor waives all claims, damages and demands it may acquire
against the Secured Party arising out of the exercise by it of any rights hereunder. At any such sale, unless prohibited by applicable
law, the Secured Party or any custodian may bid for and purchase all or any part of the Pledged Warrant Shares so sold free from
any such right or equity of redemption. Neither the Secured Party nor any custodian shall be liable for failure to collect or realize
upon any or all of the Pledged Warrant Shares or for any delay in so doing, nor shall it be under any obligation to take any action
whatsoever with regard thereto.

 

(b)              
JSW shall, upon notice by the Secured Party of the Secured Party’s exercise of its right to purchase the Pledged
Warrant Shares pursuant to this Agreement and the terms of the Warrant Agreement, perform its obligations to consummate the sale
of the Pledged Warrant Shares to the Secured Party in the same manner in which it would have consummated such sale with the Pledgor.

 

(c)               
Any cash held by the Secured Party as Collateral and all cash Proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the Pledged Warrant Shares shall be applied in whole
or in part by the Secured Party to the payment of expenses incurred by the Secured Party in connection with the foregoing or incidental
to the care or safekeeping of any of the Pledged Warrant Shares or in any way relating to the Collateral or the rights of the Secured
Party hereunder, including reasonable attorneys’ fees, and the balance of such proceeds shall be applied or set off against
all or any part of the Secured Obligations in such order as the Secured Party shall elect. Any surplus of such cash or cash Proceeds
held by the Secured Party and remaining after payment in full of all the Secured Obligations shall be paid over to the Pledgor
or to whomsoever may be lawfully entitled to receive such surplus. The Pledgor shall remain liable for any deficiency if such cash
and the cash Proceeds of any sale or other realization of the Pledged Warrant Shares are insufficient to pay the Secured Obligations
and the fees and other charges of any attorneys employed by the Secured Party to collect such deficiency.

 

    	 	6	 

     

    

 

 

(d)              
If the Secured Party shall determine to exercise its rights to sell all or any of the Pledged Warrant Shares pursuant
to this Section, the Pledgor agrees that, upon request of the Secured Party, the Pledgor will, at its own expense, do or cause
to be done all such acts and things as may be necessary to make such sale of the Pledged Warrant Shares or any part thereof valid
and binding and in compliance with applicable law.

 

13.             
No Waiver and Cumulative Remedies. The Secured Party shall not by any act (except by a written instrument
pursuant to Section 14), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default. All rights and remedies herein provided are cumulative and are not exclusive
of any rights or remedies provided by law.

 

14.             
Amendments. None of the terms or provisions of this Agreement may be amended, modified, supplemented, terminated
or waived, and no consent to any departure by the Pledgor therefrom shall be effective unless the same shall be in writing and
signed by the Secured Party and the Pledgor, and then such amendment, modification, supplement, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which made or given.

 

15.             
Addresses For Notices. All notices and other communications provided for in this Agreement shall be in writing
and shall be given in the manner and become effective as set forth in the Note, and addressed to the respective parties at their
addresses as specified on the signature pages hereof or as to either party at such other address as shall be designated by such
party in a written notice to each other party.

 

16.             
Continuing Security Interest; Further Actions. This Agreement shall create a continuing first priority lien
and security interest in the Collateral and shall (a) subject to Section 18, remain in full force and effect until
payment and performance in full of the Secured Obligations, (b) be binding upon the Pledgor, its successors and assigns, and (c)
inure to the benefit of the Secured Party and its successors, transferees and assigns; provided that the Pledgor may not
assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Secured
Party. Without limiting the generality of the foregoing clause (c), any assignee of the Secured Party’s interest in any agreement
or document which includes all or any of the Secured Obligations shall, upon assignment, in accordance with Section 11.8 of the
Note, become vested with all the benefits granted to the Secured Party herein with respect to such Secured Obligations.

 

17.             
Termination; Release. On the date on which all Loans and other Secured Obligations have been paid and performed
in full, the Secured Party will, at the request and sole expense of the Pledgor, (a) duly assign, transfer and deliver to or at
the direction of the Pledgor (without recourse and without any representation or warranty) such of the Collateral as may then remain
in the possession of the Secured Party, together with any monies at the time held by the Secured Party hereunder, and (b) execute
and deliver to the Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement.

 

    	 	7	 

     

    

 

 

18.             
GOVERNING LAW. This Agreement and any claim, controversy, dispute or cause of action (whether in contract
or tort or otherwise) based upon, arising out of or relating to this Agreement and the transactions contemplated hereby and thereby
shall be governed by, and construed in accordance with, the laws of the State of New York. The other provisions of Sections 11.9
and 11.10 of the Note are incorporated herein, mutatis mutandis, as if a part hereof.

 

19.             
Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all taken
together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Agreement by facsimile
or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart
of this Agreement. This Agreement constitutes the entire contract among the parties with respect to the subject matter hereof and
supersede all previous agreements and understandings, oral or written, with respect thereto.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	8	 

     

    

 

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.

 

WALKER INNOVATION INC., as Pledgor

 

By:  /s/ Kara Jenny

Chief Financial Officer

2 High Ridge Park

Stamford, CT 06905

 

with a copy to:

 

General Counsel

2 High Ridge Park

Stamford, CT 06905

 

WALKER DIGITAL, LLC, as Secured Party

 

By:  /s/ Jay S. Walker

Chairman

Jay S. Walker

2 High Ridge Park

Stamford, CT 06905

Tel: (203) 461-7111

Email: spectacle124@gmail.com

 

with a copy to:

 

Harry E. Peden III

Whitman Breed Abbott & Morgan LLC

500 West Putnam Avenue

Greenwich, CT 06830

E-mail: hpeden@wbamct.com

 

 

 

 

SIGNATURE
PAGE TO

PLEDGE AGREEMENT

    	 

     

    

 

ACKNOWLEDGED AND AGREED:

 

/s/ Jay S. Walker

Jay S. Walker

 

Jay S. Walker

2 High Ridge Park

Stamford, CT 06905

Tel: (203) 461-7111

Email: spectacle124@gmail.com

 

with a copy to:

Harry Peden

Whitman Breed Abbott & Morgan LLC

500 W. Putnam Avenue

Greenwich, CT 06830

Tel: (203) 862-2470

Email: hpeden@wbamct.com

 

Upside Commerce Group, LLC (f/k/a Flexible Travel Company, LLC)

 

 

By: /s/ Jay S. Walker

Jay S. Walker, Chairman

 

Upside Commerce Group, LLC

Jay S. Walker. Chairman

2 High Ridge Park

Stamford, CT 06905

Tel: (203) 461-7111

Email: spectacle124@gmail.com

 

with a copy to:

Harry Peden

Whitman Breed Abbott & Morgan LLC

500 W. Putnam Avenue

Greenwich, CT 06830

Tel: (203) 862-2470

Email: hpeden@wbamct.com

 

 

SIGNATURE
PAGE TO

PLEDGE AGREEMENT

    	 

     

    

 

 

THE SCHEDULE

 

PLEDGED WARRANT SHARES

 

3,280,000 Class A Common Shares of Issuer.

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