Document:

goig_ex103

 

 
Exhibit 10.3

SECURITY AGREEMENT

 

This
SECURITY AGREEMENT, dated as of May 8, 2020 (this
“Agreement”), is among
GoIP Global, Inc., a Colorado corporation (the “Company”), the
Subsidiaries of the Company set forth on the signature pages hereto
(such subsidiaries, the “Subsidiaries” and,
together with the Company, the “Debtors”) and the holders
of the Company’s Original Issue Discount Senior Secured
Convertible Promissory Notes due twelve (12) months following their
issuance, in the aggregate principal amount of $3,000,000.00 (the
“Notes”) signatory hereto,
their endorsees, transferees and assigns (collectively, the
“Secured
Parties”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant
to the Purchase Agreement (as defined in the Notes), the Secured
Parties have severally agreed to extend the loans to the Company
evidenced by the Notes;

 

WHEREAS, in order
to induce the Secured Parties to extend the loans evidenced by the
Notes, each Debtor has agreed to execute and deliver to the Secured
Parties this Agreement and to grant the Secured
Parties, pari passu with each other
Secured Party and through the Agent (as defined in Section 18 hereof), a
security interest in certain property of such Debtor to secure the
prompt payment, performance and discharge in full of all of the
Company’s obligations under the Notes.

 

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

 

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

 

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

 

(i)

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

 

(ii)

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

 

(iii)

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

 

(iv)

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

 

(v)

All
commercial tort claims;

 

(vi)

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

 

(vii)

All
investment property;

  

 

 

 

(viii)

All
supporting obligations;

 

(ix)

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

 

(x) 

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

 

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

 

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

 

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

 

(c)  
“Necessary
Endorsement” means undated stock powers endorsed in
blank or other proper instruments of assignment duly executed and
such other instruments or documents as the Agent (as that term is
defined below) may reasonably request.

 

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

 

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

 

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

 

(h)  
“Purchase
Agreement” means the Securities Purchase Agreement,
dated as of May 8, 2020 among the Company and the original Holders,
as amended, modified or supplemented from time to time in
accordance with its terms.

 

 

 

 

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

 

3.      Delivery
of Certain Collateral.  Contemporaneously or prior
to the execution of this Agreement, each Debtor shall deliver or
cause to be delivered to the Agent (a) any and all certificates and
other instruments representing or evidencing the Pledged Securities
(if any), and (b) any and all certificates and other instruments or
documents representing any of the other Collateral, in each case,
together with all Necessary Endorsements.  The Debtors
are, contemporaneously with the execution hereof, delivering to
Agent, or have previously delivered to Agent, a true and correct
copy of each Organizational Document governing any of the Pledged
Securities. Notwithstanding anything contained herein, prior to any
Event of Default, the Company shall have the right vote any Pledged
Securities and receive dividends therefrom.

 

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

 

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

 

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

 

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

 

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

 

(e)  
This Agreement creates in favor of the Secured Parties a valid
first priority security interest in the Collateral, subject only to
Permitted Liens, securing the payment and performance of the
Obligations. Upon making the filings described in the immediately
following paragraph, all security interests created hereunder in
any Collateral which may be perfected by filing UCC financing
statements shall have been duly perfected. Except for (i) the
recordation of the Intellectual Property Security Agreement (as
defined in Section 4(dd) hereof) with respect to copyrights
and copyright applications referred to in paragraph (z) in the
United States Copyright Office, (ii) the recordation of the
Intellectual Property Security Agreement (as defined in
Section 4(dd) hereof) with respect to patents and trademarks
of the Debtors referred to in paragraph (bb) in the United States
Patent and Trademark Office, and (iii) the delivery of the
certificates and other instruments provided in Section 3, no
action is necessary to create, perfect or protect the security
interests created hereunder. Without limiting the generality of the
foregoing, except for the foregoing, no consent of any third
parties and no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for (x) the execution, delivery and performance of
this Agreement, (y) the creation or perfection of the Security
Interests created hereunder in the Collateral (to the extent such
Collateral can be perfected by the filing of a UCC financing
statement) or (z) the enforcement of the rights of the Agent
and the Secured Parties hereunder.

 

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

 

(g)   The
capital stock and other equity interests listed
on Schedule G hereto
(including all uncertificated equity interests consisting of
capital stock of any corporation as well as partnership or limited
liability company interests of any other entity) (the
“Pledged
Securities”) represent all of the capital stock and
other equity interests of the Guarantors, and represent all capital
stock and other equity interests owned, directly or indirectly, by
the Company.  All of the Pledged Securities are validly
issued, fully paid and nonassessable, and the Company is the legal
and beneficial owner of the Pledged Securities, free and clear of
any lien, security interest or other encumbrance except for the
security interests created by this Agreement and other Permitted
Liens.

 

 

 

 

(h)  
Except for Permitted Liens, each Debtor shall at all times maintain
the liens and Security Interests provided for hereunder as valid
and perfected, first priority (to the extent that such liens and
Security Interests can be perfected by the filing of a UCC
financing statement) liens and security interests in the Collateral
in favor of the Secured Parties until this Agreement and the
Security Interest hereunder shall be terminated pursuant to
Section 14
hereof.  Each Debtor hereby agrees to defend the same
against the claims of any and all persons and entities. Each Debtor
shall safeguard and protect all Collateral for the account of the
Secured Parties.  At the request of the Agent, each
Debtor will deliver to the Agent on behalf of the Secured Parties
at any time or from time to time one or more financing statements
pursuant to the UCC in form reasonably satisfactory to the Agent
and will pay the cost of filing the same in all public offices
wherever filing is, or is deemed by the Agent to be, necessary or
desirable to effect the rights and obligations provided for herein.
Without limiting the generality of the foregoing, each Debtor shall
pay all fees, taxes and other amounts necessary to maintain the
Collateral and the Security Interests hereunder, and each Debtor
shall obtain and furnish to the Agent from time to time, upon
demand, such releases and/or subordinations of claims and liens
which may be required to maintain the priority of the Security
Interests hereunder. In addition to the foregoing, each Debtor
shall promptly execute and deliver to the Agent such further deeds,
mortgages, assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and
take such further action as the Agent may from time to time request
and may in its sole discretion deem necessary to perfect, protect
or enforce the Secured Parties’ security interest in the
Collateral, including, without limitation, if applicable, the
execution and delivery of a separate security agreement with
respect to each Debtor’s Intellectual Property
(“Intellectual
Property Security Agreement”) in which the Secured
Parties have been granted a security interest hereunder,
substantially in a form reasonably acceptable to the Agent, which
Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions
hereof.

 

(i)   No
Debtor will transfer, pledge, hypothecate, encumber, license, sell
or otherwise dispose of any of the Collateral (except for Permitted
Liens or non-exclusive licenses granted by a Debtor in its ordinary
course of business, sales of inventory by a Debtor in its ordinary
course of business and the replacement of worn-out or obsolete
equipment by a Debtor in its ordinary course of business) without
the prior written consent of the Secured Party.

 

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

 

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

 

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

 

(m)  
Upon reasonable prior notice (so long
as no Event of Default has occurred or continuing, which in either
such event, no prior notice is required), each Debtor shall
permit the Agent and its representatives and agents to inspect the
Collateral during normal business hours and to make copies of
records pertaining to the Collateral as may be reasonably requested
by the Agent from time to time.

 

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

 

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

 

(p)   The
Debtors shall at all times preserve and keep in full force and
effect their respective valid existence and good standing and any
rights and franchises material to its business. No Debtor will
change its name, type of organization, jurisdiction of
organization, organizational identification number (if it has one),
legal or corporate structure, or identity, or add any new
fictitious name unless it provides at least thirty (30) days’
prior written notice to the Secured Parties of such change and, at
the time of such written notification, such Debtor provides any
financing statements or fixture filings necessary to perfect and
continue the perfection of the Security Interests granted and
evidenced by this Agreement.

 

 

 

 

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

 

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

 

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

 

(t)   (i)
The actual name of each Debtor is the name set forth
in Schedule D attached
hereto; (ii) no Debtor has any trade names except as set forth
on Schedule E attached
hereto; (iii) no Debtor has used any name other than that
stated in the preamble hereto or as set forth on Schedule E for the
preceding five (5) years; and (iv) no entity has merged into any
Debtor or been acquired by any Debtor within the past five years
except as set forth on Schedule E.

 

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

 

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

 

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

 

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

 

(y)   In
the event that, upon an occurrence of an Event of Default, Agent
shall sell all or any of the Pledged Securities to another party or
parties (herein called the “Transferee”) or shall
purchase or retain all or any of the Pledged Securities, each
Debtor shall, to the extent applicable: (i) deliver to Agent or the
Transferee, as the case may be, the articles of incorporation,
bylaws, minute books, stock certificate books, corporate seals,
deeds, leases, indentures, agreements, evidences of indebtedness,
books of account, financial records and all other Organizational
Documents and records of the Debtors and their direct and indirect
subsidiaries (but not including any items subject to the
attorney-client privilege related to this Agreement or any of the
transactions hereunder); (ii) use its best efforts to obtain
resignations of the persons then serving as officers and directors
of the Debtors and their direct and indirect subsidiaries, if so
requested; and (iii) use its best efforts to obtain any approvals
that are required by any governmental or regulatory body in order
to permit the sale of the Pledged Securities to the Transferee or
the purchase or retention of the Pledged Securities by Agent and
allow the Transferee or Agent to continue the business of the
Debtors and their direct and indirect subsidiaries.

 

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

 

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

 

 

 

 

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

 

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

 

(dd) 
Each Debtor
will not transfer, pledge, hypothecate, encumber, license, sell or
otherwise dispose of any of the Collateral (except for
non-exclusive licenses granted by a Debtor in its ordinary course
of business and sales of inventory by a Debtor in its ordinary
course of business) without the prior written consent of the
Agent.

 

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

 

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

 

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

 

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

 

(c)   The
failure by any Debtor to observe or perform any of its obligations
hereunder for fifteen (15) days after delivery to such Debtor of
notice of such failure by or on behalf of a Secured Party unless
such default is capable of cure but cannot be cured within such
time frame and such Debtor is using best efforts to cure same in a
timely fashion; or

 

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

 

7.      Duty
to Hold in Trust.

 

(a)  
Upon the occurrence and during the continuance of any Event of
Default, each Debtor shall upon receipt of any revenue, income,
dividend, interest or other sums subject to the Security Interests,
whether payable pursuant to the Notes or otherwise, or of any
check, draft, note, trade acceptance or other instrument evidencing
an obligation to pay any such sum, hold the same in trust for the
Secured Parties and shall forthwith endorse and transfer any such
sums or instruments, or both, to the Agent, pro-rata in proportion
to their respective then-currently outstanding principal amount of
Notes for application to the satisfaction of the Obligations (and
if any Notes is not outstanding, pro-rata in proportion to the
initial purchases of the remaining Notes).

 

(b)   If
any Debtor shall become entitled to receive or shall receive any
material securities or other property (including, without
limitation, shares of Pledged Securities or instruments
representing Pledged Securities acquired after the date hereof, or
any options, warrants, rights or other similar property or
certificates representing a dividend, or any distribution in
connection with any recapitalization, reclassification or increase
or reduction of capital, or issued in connection with any
reorganization of such Debtor or any of its direct or indirect
subsidiaries) in respect of the Pledged Securities (whether as an
addition to, in substitution of, or in exchange for, such Pledged
Securities or otherwise), such Debtor agrees to (i) accept the same
as the agent of the Secured Parties; (ii) hold the same in trust on
behalf of and for the benefit of the Secured Parties; and (iii) to
deliver any and all certificates or instruments evidencing the same
to Agent on or before the close of business on the fifth
(5th)
business day following the receipt thereof by such Debtor, in the
exact form received together with the Necessary Endorsements, to be
held by Agent subject to the terms of this Agreement as
Collateral.

 

 

 

 

8.      Rights
and Remedies Upon Default.

 

(a)  
Upon the occurrence and during the continuance of any Event of
Default, the Secured Parties, acting through the Agent, shall have
the right to exercise all of the remedies conferred hereunder and
under the Notes, and the Secured Parties shall have all the rights
and remedies of a secured party under the UCC.  Without
limitation, the Agent, for the benefit of the Secured Parties,
shall have the following rights and powers:

 

(i)

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

 

(ii)

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

 

(iii)

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

 

(iv)

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

 

(v)

The
Agent, for the benefit of the Secured Parties, may (but is not
obligated to) direct any financial intermediary or any other person
or entity holding any investment property to transfer the same to
the Agent, on behalf of the Secured Parties, or its
designee.

 

(vi)

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

  

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

 

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

 

9.      Applications
of Proceeds. Upon the occurrence and during the continuance
of any Event of Default, the proceeds of any sale, lease or other
disposition by the Agent of the Collateral hereunder or from
payments made to the Agent on account of any insurance policy
insuring any portion of the Collateral shall be applied first, to
the expenses of retaking, holding, storing, processing and
preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection
therewith) of the Collateral, to the reasonable attorneys’
fees and expenses incurred by the Agent in enforcing the Secured
Parties’ rights hereunder and in connection with collecting,
storing and disposing of the Collateral, and then to satisfaction
of the Obligations pro rata among the Secured Parties (based on
then-outstanding principal amounts of Notes at the time of any such
determination), and to the payment of any other amounts required by
applicable law, after which the Secured Parties shall pay to the
applicable Debtor any surplus proceeds. If, upon the sale, license
or other disposition of all of the Collateral, the proceeds thereof
are insufficient to pay all amounts to which the Secured Parties
are legally entitled, the Debtors will be liable for the
deficiency, together with interest thereon, at the rate of 18% per
annum or the lesser amount permitted by applicable law (the
“Default
Rate”), and the reasonable fees of any attorneys
employed by the Secured Parties to collect such
deficiency.  To the extent permitted by applicable law,
each Debtor waives all claims, damages and demands against the
Secured Parties arising out of the repossession, removal, retention
or sale of the Collateral, unless due solely to the gross
negligence or willful misconduct of the Secured Parties as
determined by a final judgment (not subject to further appeal) of a
court of competent jurisdiction.

 

 

 

 

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

 

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

 

12.           Responsibility
for Collateral. The Debtors assume all liabilities and
responsibility in connection with all Collateral, and the
Obligations shall in no way be affected or diminished by reason of
the loss, destruction, damage or theft of any of the Collateral or
its unavailability for any reason.  Without limiting the
generality of the foregoing and except as required by applicable
law, (a) neither the Agent nor any Secured Party (i) has any duty
(either before or after an Event of Default) to collect any amounts
in respect of the Collateral or to preserve any rights relating to
the Collateral, or (ii) has any obligation to clean-up or otherwise
prepare the Collateral for sale, and (b) each Debtor shall remain
obligated and liable under each contract or agreement included in
the Collateral to be observed or performed by such Debtor
thereunder.  Neither the Agent nor any Secured Party
shall have any obligation or liability under any such contract or
agreement by reason of or arising out of this Agreement or the
receipt by the Agent or any Secured Party of any payment relating
to any of the Collateral, nor shall the Agent or any Secured Party
be obligated in any manner to perform any of the obligations of any
Debtor under or pursuant to any such contract or agreement, to make
inquiry as to the nature or sufficiency of any payment received by
the Agent or any Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such
contract or agreement, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any
amounts which may have been assigned to the Agent or to which the
Agent or any Secured Party may be entitled at any time or
times.

 

13.           Security
Interests Absolute. All rights of the Secured Parties and
all obligations of each Debtor hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Notes or any agreement
entered into in connection with the foregoing, or any portion
hereof or thereof, against any other Debtor or Guarantor; (b) any
change in the time, manner or place of payment or performance of,
or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from
the Notes or any other agreement entered into in connection with
the foregoing; (c) any exchange, release or nonperfection of any of
the Collateral, or any release or amendment or waiver of or consent
to departure from any other collateral for, or any guarantee, or
any other security, for all or any of the Obligations; (d) any
action by the Secured Parties to obtain, adjust, settle and cancel
in its sole discretion any insurance claims or matters made or
arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or
equitable defense available to a Debtor, or a discharge of all or
any part of the Security Interests granted hereby.  Until
the Obligations shall have been paid and performed in full (other
than contingent obligations for which no claim has been made), the
rights of the Secured Parties shall continue even if the
Obligations are barred for any reason, including, without
limitation, the running of the statute of
limitations.  Each Debtor expressly waives presentment,
protest, notice of protest, demand, notice of nonpayment and demand
for performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Parties hereunder
shall be deemed by final order of a court of competent jurisdiction
to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be
deemed to be otherwise due to any party other than the Secured
Parties, then, in any such event, each Debtor’s obligations
hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and
binding obligation enforceable in accordance with the terms and
provisions hereof.  Each Debtor waives all right to
require the Secured Parties to proceed against any other person or
entity or to apply any Collateral which the Secured Parties may
hold at any time, or to marshal assets, or to pursue any other
remedy. Each Debtor waives any defense arising by reason of the
application of the statute of limitations to any obligation secured
hereby.

 

14.           Term
of Agreement. This Agreement and the Security Interests
shall terminate on the date on which all payments under the Notes
have been indefeasibly paid in full and all other Obligations
(other than contingent obligations for which no claim has been
made) have been paid or discharged; provided, however, that all indemnities
of the Debtors contained in this Agreement (including, without
limitation, Annex B hereto) shall survive and remain operative and
in full force and effect regardless of the termination of this
Agreement.

 

 

 

 

15.           Power
of Attorney; Further Assurances.

 

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

 

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

 

16.             Notices.
All notices, requests, demands and other communications hereunder
shall be subject to the notice provision of the Purchase
Agreement.

 

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

 

18.           Appointment
of Agent.  If and as applicable, the Secured
Parties hereby appoint Arena Investors LP to act as their agent
(“Agent”) for purposes of
exercising any and all rights and remedies of the Secured Parties
hereunder. Such appointment shall continue until revoked in writing
by the Secured Parties, at which time the Secured Parties shall
appoint a new Agent. The Agent shall have the rights,
responsibilities and immunities set forth in Annex
B hereto.

 

19.           Miscellaneous.

 

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

 

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

 

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

 

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

 

 

 

 

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

 

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

 

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

 

(h)   
Except to the extent mandatorily governed by the jurisdiction or
situs where the Collateral is located, all questions concerning the
construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law
thereof.  Except to the extent mandatorily governed by
the jurisdiction or situs where the Collateral is located, each
Debtor agrees that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this
Agreement and the Notes (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan.  Except to the extent
mandatorily governed by the jurisdiction or situs where the
Collateral is located, each Debtor hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any proceeding, any
claim that it is not personally subject to the jurisdiction of any
such court, that such proceeding is improper.   Each
party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby.

 

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

 

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

 

(k)  
Each Debtor agrees to indemnify, pay and hold harmless the Agent
and the Secured Parties and their respective assignees and
affiliates and their respective officers, directors, employees,
agents, consultants, auditors, and attorneys of any of them
(collectively, “Indemnitees”) from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel for such Indemnitees
in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Purchaser
Indemnitee shall be designated a party thereto) imposed on,
incurred by or asserted against such Indemnitee in any way related
to or arising from or alleged to arise from this Agreement or the
Collateral, except any such losses, claims, liabilities, damages,
penalties, suits, costs and expenses which result from the gross
negligence or willful misconduct of the Indemnitee as determined by
a final, nonappealable decision of a court of competent
jurisdiction; provided that the Debtors shall not be obligated to
indemnify the Indemnitees, or have any liability, in excess of the
aggregate Purchase Price (as defined in the Purchase
Agreement).  This indemnification provision is in
addition to, and not in limitation of, any other indemnification
provision in the Notes, the Purchase Agreement or any other
agreement, instrument or other document executed or delivered in
connection herewith or therewith.

 

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

 

(m)  To the
extent that the grant of the security interest in the Collateral
and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any
Debtor or any direct or indirect subsidiary of any Debtor or
compliance with any provisions of any of the Organizational
Documents, the Debtors hereby represent that all such consents and
approvals have been obtained.

 

[SIGNATURE
PAGE OF DEBTORS FOLLOWS]

 

 

 

 

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

 

 

 

GOIP GLOBAL, INC.

 

 

 

By:__________________________________________

 

      Name:

 

      Title:

 

 

 

TRANSWORLD ENTERPRISES INC.

 

 

 

By:__________________________________________

 

      Name:

 

      Title:

 

 

 

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

 

 

 

[SIGNATURE
PAGE OF HOLDERS TO SECURITY AGREEMENT]

 

 

 

Name of
Investing Entity: __________________________

 

Signature of Authorized Signatory of Investing entity:
_________________________

 

Name of
Authorized Signatory: _________________________

 

Title
of Authorized Signatory: _________________________

 

 

 

 

 

 

ANNEX A

to

SECURITY AGREEMENT

 

FORM OF ADDITIONAL DEBTOR JOINDER

 

Security
Agreement dated as of May 8, 2020 made by GoIP Global, Inc. and its
subsidiaries party thereto from time to time, as Debtors to and in
favor of the Secured Parties identified therein (the
“Security
Agreement”).

 

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

 

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

 

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

 

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

 

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

 

 

 

[Name of Additional Debtor]

 

By:__________________________________________

 

      Name:

 

      Title:

 

      Address:

 

Dated:

 

 

 

 

ANNEX B

to

SECURITY AGREEMENT

 

THE AGENT

 

1.           Appointment.
 The Secured Parties
(all capitalized terms used herein and not otherwise defined shall
have the respective meanings provided in the Security Agreement to
which this Annex B is attached (the “Agreement”)), by their
acceptance of the benefits of the Agreement, hereby designate Arena
Investors LP (“Agent”) as the Agent to
act as specified herein and in the Agreement.  Each
Secured Party shall be deemed irrevocably to authorize the Agent to
take such action on its behalf under the provisions of the
Agreement and any other Transaction Document (as such term is
defined in the Purchase Agreement) and to exercise such powers and
to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental
thereto.  The Agent may perform any of its duties
hereunder by or through its agents or employees.

 

2.           Nature
of Duties.  The Agent shall have no
duties or responsibilities except those expressly set forth in the
Agreement.  Neither the Agent nor any of its partners,
members, shareholders, officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such under
the Agreement or hereunder or in connection herewith or therewith,
be responsible for the consequence of any oversight or error of
judgment or answerable for any loss, unless caused solely by its or
their gross negligence or willful misconduct as determined by a
final judgment (not subject to further appeal) of a court of
competent jurisdiction.  The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have
by reason of the Agreement or any other Transaction Document a
fiduciary relationship in respect of any Debtor or any Secured
Party; and nothing in the Agreement or any other Transaction
Document (as defined in the Purchase Agreement), expressed or
implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of the Agreement or any other
Transaction Document except as expressly set forth herein and
therein.

 

3.           Lack
of Reliance on the Agent.  Independently and
without reliance upon the Agent, each Secured Party, to the extent
it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and
affairs of the Company and its subsidiaries in connection with such
Secured Party’s investment in the Debtors, the creation and
continuance of the Obligations, the transactions contemplated by
the Transaction Documents, and the taking or not taking of any
action in connection therewith, and (ii) its own appraisal of the
creditworthiness of the Company and its subsidiaries, and of the
value of the Collateral from time to time, and the Agent shall have
no duty or responsibility, either initially or on a continuing
basis, to provide any Secured Party with any credit, market or
other information with respect thereto, whether coming into its
possession before any Obligations are incurred or at any time or
times thereafter.  The Agent shall not be responsible to
the Debtors or any Secured Party for any recitals, statements,
information, representations or warranties herein or in any
document, certificate or other writing delivered in connection
herewith, or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, collectability, priority or
sufficiency of the Agreement or any other Transaction Document, or
for the financial condition of the Debtors or the value of any of
the Collateral, or be required to make any inquiry concerning
either the performance or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction
Document, or the financial condition of the Debtors, or the value
of any of the Collateral, or the existence or possible existence of
any default or Event of Default under the Agreement, the Notes or
any of the other Transaction Documents.

 

4.      Certain
Rights of the Agent.  The Agent shall have the
right to take any action with respect to the Collateral, on behalf
of all of the Secured Parties.  To the extent practical,
the Agent shall request instructions from the Secured Parties with
respect to any material act or action (including failure to act) in
connection with the Agreement or any other Transaction Document,
and shall be entitled to act or refrain from acting in accordance
with the instructions of the Secured Party; if such instructions
are not provided despite the Agent’s request therefor, the
Agent shall be entitled to refrain from such act or taking such
action, and if such action is taken, shall be entitled to
appropriate indemnification from the Secured Parties in respect of
actions to be taken by the Agent; and the Agent shall not incur
liability to any person or entity by reason of so
refraining.  Without limiting the foregoing, (a) no
Secured Party shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting
hereunder in accordance with the terms of the Agreement or any
other Transaction Document, and the Debtors shall have no right to
question or challenge the authority of, or the instructions given
to, the Agent pursuant to the foregoing and (b) the Agent shall not
be required to take any action that the Agent believes (i) could
reasonably be expected to expose it to personal liability or (ii)
is contrary to this Agreement, the Transaction Documents or
applicable law.

 

5.      Reliance.  The
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, statement,
certificate, telex, teletype or facsimile message, cablegram,
radiogram, order or other document or telephone message signed,
sent or made by the proper person or entity, and, with respect to
all legal matters pertaining to the Agreement and the other
Transaction Documents and its duties thereunder, upon advice of
counsel selected by it and upon all other matters pertaining to
this Agreement and the other Transaction Documents and its duties
thereunder, upon advice of other experts selected by
it.  Anything to the contrary notwithstanding, the Agent
shall have no obligation whatsoever to any Secured Party to assure
that the Collateral exists or is owned by the Debtors or is cared
for, protected or insured or that the liens granted pursuant to the
Agreement have been properly or sufficiently or lawfully created,
perfected, or enforced or are entitled to any particular
priority.

 

6.      Indemnification.  To
the extent that the Agent is not reimbursed and indemnified by the
Debtors, the Secured Parties will jointly and severally reimburse
and indemnify the Agent, in proportion to their initially purchased
respective principal amounts of Notes, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in performing its duties hereunder or under the
Agreement or any other Transaction Document, or in any way relating
to or arising out of the Agreement or any other Transaction
Document except for those determined by a final judgment (not
subject to further appeal) of a court of competent jurisdiction to
have resulted solely from the Agent’s own gross negligence or
willful misconduct.  Prior to taking any action hereunder
as Agent, the Agent may require each Secured Party to deposit with
it sufficient sums as it determines in good faith is necessary to
protect the Agent for costs and expenses associated with taking
such action.

 

 

 

 

7.      Resignation
by the Agent.

 

(a)   The
Agent may resign from the performance of all its functions and
duties under the Agreement and the other Transaction Documents at
any time by giving 30 days’ prior written notice (as provided
in the Agreement) to the Debtors and the Secured
Parties.  Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c)
below.

 

(b)   
Upon any such notice of resignation, the Secured Parties shall
appoint a successor Agent hereunder.

 

(c)   
If a successor Agent shall not have been so appointed within said
thirty (30)-day period, the Agent shall then appoint a successor
Agent who shall serve as Agent until such time, if any, as the
Secured Parties appoint a successor Agent as provided
above.  If a successor Agent has not been appointed
within such thirty (30)-day period, the Agent may petition any
court of competent jurisdiction or may interplead the Debtors and
the Secured Parties in a proceeding for the appointment of a
successor Agent, and all fees, including, but not limited to,
extraordinary fees associated with the filing of interpleader and
expenses associated therewith, shall be payable by the Debtors on
demand.

 

8.      Rights
with respect to Collateral.  Each Secured Party agrees
with all other Secured Parties and the Agent (i) that it shall not,
and shall not attempt to, exercise any rights with respect to its
security interest in the Collateral, whether pursuant to any other
agreement or otherwise (other than pursuant to this Agreement), or
take or institute any action against the Agent or any of the other
Secured Parties in respect of the Collateral or its rights
hereunder (other than any such action arising from the breach of
this Agreement) and (ii) that such Secured Party has no other
rights with respect to the Collateral other than as set forth in
this Agreement and the other Transaction Documents.  Upon
the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its
duties and obligations under the Agreement.  After any
retiring Agent’s resignation or removal hereunder as Agent,
the provisions of the Agreement including this Annex B shall inure
to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.goig_ex104

 

 Exhibit 10.4

SUBORDINATION AGREEMENT

 

SUBORDINATION
AGREEMENT (this “Agreement”), dated as of May 8,
2020, among the purchasers signatory to the Securities Purchase
Agreement (as defined below) (together with its respective
successors and assigns, including, any future holder of Senior Debt
(as defined below), the “Senior Creditors”), KORR Value
L.P. (collectively, the “Subordinated Creditors” and each,
individually, a “Subordinated
Creditor”), and GoIP Global, Inc., a Colorado
corporation (the “Company”).

 

WHEREAS, pursuant
to a Securities Purchase Agreement, dated as of May 8, 2020 (as
amended and in effect from time to time, including any replacement
agreement therefor, the “Securities Purchase Agreement”),
among the Company and the Senior Creditors, the Senior Creditors
has extended credit to the Company as evidenced by certain Senior
Secured Convertible Notes due May 8, 2021 in the aggregate
principal amount of $3,000,000.00 issued by the Company to the
Senior Creditors (together with any notes issued in exchange
therefor or replacement thereof or any additional investment made
by the Senior Creditors and as the same may be amended,
supplemented, restated or otherwise modified from time to time, the
“Senior Notes”);
and

 

WHEREAS, each
Subordinated Creditor has extended or agreed to extend credit to
the Company pursuant to certain promissory notes, dated on or about
the date hereof, issued by the Company in favor of such
Subordinated Creditor (as amended with the consent of the Senior
Creditors as provided herein and in effect from time to time,
collectively, the “Subordinated Agreements” and each,
individually, a “Subordinated
Agreement”); and

 

WHEREAS, in order
to induce the Senior Creditors to purchase Senior Notes and
otherwise extend credit to the Company pursuant to the Securities
Purchase Agreement, the Company and the Subordinated Creditors have
agreed to enter into this Agreement with and the Senior
Creditors.

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual agreements
herein contained and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as
follows:

 

1. Definitions. Terms not otherwise
defined herein have the same respective meanings given to them in
the Securities Purchase Agreement. In addition, the following terms
shall have the following meanings:

 

“Senior Debt” shall mean all
principal, interest, fees, costs, enforcement expenses (including
legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations created or evidenced
by the Securities Purchase Agreement, the Senior Notes or any of
the other Transaction Documents or any prior, concurrent, or
subsequent notes, instruments or agreements of indebtedness,
liabilities or obligations of any type or form whatsoever relating
thereto in favor of the Senior Creditors (including without
limitation, the Senior Creditors’ respective successors,
assigns and participants). Without limiting any term contained in
the immediately preceding sentence, Senior Debt shall expressly
include any and all interest accruing or out of pocket costs or
expenses incurred after the date of any filing by or against any
Credit Party of any petition under any Bankruptcy Law regardless of
whether the Senior Creditors’ claim therefor is allowed or
allowable in the case or proceeding relating thereto.

 

“Subordinated Debt” shall mean all
principal, interest, fees, costs, enforcement expenses (including
legal fees and disbursements), collateral protection expenses and
other reimbursement and indemnity obligations of the Company to
each Subordinated Creditor created or evidenced by the applicable
Subordinated Agreement or any prior, concurrent or subsequent
guaranty, notes, instruments or agreements of indebtedness,
liabilities or obligations of any type or form whatsoever relating
thereto executed and delivered by the Company in favor of such
Subordinated Creditor.

 

“Subordinated Documents” shall mean
collectively, the Subordinated Agreements and any and all other
guaranties and security interests, mortgages and other liens
directly or indirectly guarantying or securing any of the
Subordinated Debt, and any and all other documents or instruments
evidencing or further guarantying or securing directly or
indirectly any of the Subordinated Debt, whether now existing or
hereafter created, copies of which Subordinated Documents are
attached hereto as Exhibit
A.

 

2. General. The Subordinated Debt and
any and all Subordinated Documents shall be and hereby are
subordinated and the Company is not permitted to pay, and no
Subordinated Creditor is permitted to receive, any payment on its
Subordinated Debt until the full and final payment in cash of the
Senior Debt, whether now or hereafter incurred or owed by the
Company. Notwithstanding the immediately preceding sentence, the
Company shall be permitted to pay, and each Subordinated Creditor
shall be permitted to receive,

 

3. Enforcement. No Subordinated Creditor
will take or omit to take any action or assert any claim with
respect to its Subordinated Debt or otherwise which is inconsistent
with the provisions of this Agreement. Without limiting the
foregoing, no Subordinated Creditor will assert, collect or enforce
its Subordinated Debt or any part thereof or take any action to
foreclose or realize upon its Subordinated Debt or any part thereof
or enforce any of its Subordinated Documents except to the extent
(but only to such extent) that the commencement of a legal action
may be required to toll the running of any applicable statute of
limitation. Until the Senior Debt has been finally paid in full in
cash, no Subordinated Creditor shall have any right of subrogation,
reimbursement, restitution, contribution or indemnity whatsoever
from any assets of the Company or any guarantor of or provider of
collateral security for the Senior Debt. Each Subordinated Creditor
further waives any and all rights with respect to
marshalling.

 

4. Payments Held in Trust. No
Subordinated Creditor will hold in trust and immediately pay over
to the Senior Creditors in the same form of payment received, with
appropriate endorsements, for application to the Senior Debt any
cash amount that the Company pays to such Subordinated Creditor
with respect to its Subordinated Debt, or as collateral for the
Senior Debt any other assets of the Company that such Subordinated
Creditor may receive with respect to its Subordinated Debt, except
with respect to payments expressly permitted pursuant to
Section 2. The Senior Creditors is irrevocably authorized to
supply any required endorsement or assignment which may have been
omitted.

 

 

 

 

5. Evidence of Subordination. The
Company and each Subordinated Creditor shall make appropriate
notations in their books to show the subordinate character of all
applicable Subordinated Debt which may now or hereafter be carried
on open account. Until the Senior Debt has been indefeasibly paid
in full, the Company shall not issue any instrument, security or
other writing evidencing any part of its Subordinated Debt except
as described in this Section 5 or at the request of and in the
manner requested by the Senior Creditors; and no Subordinated
Creditor shall subordinate any part of its Subordinated Debt except
to or in favor of the Senior Creditors.

 

6. Defense to Enforcement. If any
Subordinated Creditor, in contravention of the terms of this
Agreement, shall commence, prosecute or participate in any suit,
action or proceeding against the Company, then the Company may
interpose as a defense or plea the making of this Agreement, and
the Senior Creditors may intervene and interpose such defense or
plea in its name or in the name of the Company. If any Subordinated
Creditor, in contravention of the terms of this Agreement, shall
attempt to collect any of its Subordinated Debt or enforce any of
its Subordinated Documents, then the Senior Creditors or the
Company may, by virtue of this Agreement, restrain the enforcement
thereof in the name of the Senior Creditors or in the name of the
Company. If any Subordinated Creditor, in contravention of the
terms of this Agreement, obtains any cash or other assets of the
Company as a result of any administrative, legal or equitable
actions, or otherwise, such Subordinated Creditor agrees forthwith
to pay, deliver and assign to the Senior Creditors with appropriate
endorsements, any such cash for application to the Senior Debt and
any such other assets as collateral for the Senior
Debt.

 

7.
Bankruptcy, Etc.

 

(a)
Until all Senior Debt shall have been indefeasibly paid in full in
cash, no Subordinated Creditor will commence or join with any other
creditor or creditors of the Company in commencing any bankruptcy,
reorganization or insolvency proceedings against the
Company.

 

(b) At
any meeting of creditors of the Company or in the event of any case
or proceeding, voluntary or involuntary, for the distribution,
division or application of all or part of the assets of the Company
or the proceeds thereof, whether such case or proceeding be for the
liquidation, dissolution or winding up of the Company or its
businesses, a receivership, insolvency or bankruptcy case or
proceeding, an assignment for the benefit of creditors or a
proceeding by or against the Company for relief under any
bankruptcy law or any other law relating to the relief of debtors,
readjustment of indebtedness, reorganization, arrangement,
composition or extension or marshalling of assets or otherwise, the
Senior Creditors is hereby irrevocably authorized on behalf of each
Subordinated Creditor at any such meeting or in any such
proceeding:

 

(i) to
enforce claims comprising the Subordinated Debt either in its own
name or in the name of such Subordinated Creditor, by proof of
debt, proof of claim, suit or otherwise;

 

(ii) to
receive or collect any cash or other assets of the Company
distributed, divided or applied by way of dividend or payment, or
any securities issued on account of any Subordinated Debt, and
apply such cash to or to hold such other assets or securities as
collateral for the Senior Debt, and to apply to the Senior Debt any
cash proceeds of any realization upon such other assets or
securities that the Senior Creditors elects to effect, until all of
the Senior Debt shall have been paid in full in cash, rendering to
such Subordinated Creditor any surplus to which such Subordinated
Creditor is then entitled;

 

(iii)
to vote claims comprising the Subordinated Debt, to accept or
reject any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension; and

 

(iv) to
take generally any action in connection with any such meeting or
proceeding which such Subordinated Creditor might otherwise
take.

 

8.
Lien Subordination.

 

(a) The
Subordinated Debt shall be unsecured and the Company shall not
grant any Liens to secure any of the Subordinated Debt. To the
extent any Lien is ever granted, the Senior Debt, the Securities
Purchase Agreement and the other Transaction Documents and any and
all other documents and instruments evidencing or creating the
Senior Debt and all guaranties, mortgages, security agreements,
pledges and other collateral guarantying or securing the Senior
Debt or any part thereof shall be senior to the Subordinated Debt
and the Subordinated Documents irrespective of the time of the
execution, delivery or issuance of any thereof or the filing or
recording for perfection of any thereof or the filing of any
financing statement or continuation statement relating to any
thereof. Each Subordinated Creditor hereby agrees, upon request of
the Senior Creditors at any time and from time to time, to execute
such other documents or instruments as may be requested by the
Senior Creditors further to evidence of public record or otherwise
the senior priority of the Senior Debt as contemplated hereby. Each
Subordinated Creditor further agrees to maintain on its books and
records such notations as the Senior Creditors may reasonably
request to reflect the subordination contemplated hereby and to
perfect or preserve the rights of the Senior Creditors
hereunder.

 

 

 

 

(b)
Each Subordinated Creditor agrees that, within two (2) days
following the Senior Creditors’s written request therefor,
such Subordinated Creditor will execute, deliver and file any and
all such termination statements, mortgage discharges, lien releases
and other agreements and instruments as the Senior Creditors
reasonably deems necessary or appropriate in order to give effect
to the preceding sentence. Each Subordinated Creditor hereby
irrevocably appoints the Senior Creditors, and its successors and
assigns, and their respective officers, with full power of
substitution, the true and lawful attorney(s) of such Subordinated
Creditor for the purpose of effecting any such executions,
deliveries and filings if and to the extent that such Subordinated
Creditor shall have failed to perform such obligations pursuant to
the foregoing provisions of this Section 8(b) within such
period.

 

9. Senior Creditors’ Freedom of
Dealing. Each Subordinated Creditor agrees, with respect to
the Senior Debt and any and all collateral therefor or guaranties
thereof, that the Company and the Senior Creditors, as applicable,
may agree to increase the amount of the Senior Debt or otherwise
modify, in any respect whatsoever, the terms of any of the Senior
Debt, and the Senior Creditors may grant extensions of the time of
payment or performance to and make compromises, including releases
of collateral or guaranties, and settlements with the Company and
all other Persons, in each case without the consent of such
Subordinated Creditor or the Company and without affecting the
agreements of such Subordinated Creditor or the Company contained
in this Agreement; provided, however, that nothing contained in
this Section 9 shall constitute a waiver of the right of the
Company itself to agree or consent to a settlement or compromise of
a claim which the Senior Creditors may have against the Company. To
the extent any Senior Creditors sells or assigns any of its Senior
Debt, each Subordinated Creditor agrees to execute and deliver any
and all documents and/or agreements reasonably requested by such
Senior Creditors to reflect the continued subordination by such
Subordinated Creditor of its Subordinated Debt in favor of such
purchaser or assignee of such Senior Debt.

 

10. Modification or Sale of the Subordinated
Debt. No Subordinated Creditor will, at any time while this
Agreement is in effect, modify any of the terms of any of its
Subordinated Debt or any of its Subordinated Documents; nor will
such Subordinated Creditor sell, transfer, pledge, assign,
hypothecate or otherwise dispose of any or all of its Subordinated
Debt unless such Subordinated Creditor provides prior written
notice of such event to the Senior Creditors and the person or
entity acquiring such interest in such Subordinated Debt enters
into a subordination agreement with the Senior Creditors in the
form of this Agreement along with any other documents and/or
agreements reasonably requested by the Senior Creditors. Any
transfer in violation of this Agreement shall be void ab
initio.

 

11. Company’s Obligations
Absolute. Nothing contained in this Agreement shall impair,
as between the Company and any Subordinated Creditor, the
obligation of the Company to pay to such Subordinated Creditor all
amounts payable in respect of its Subordinated Debt as and when the
same shall become due and payable in accordance with the terms
thereof, or prevent such Subordinated Creditor (except as expressly
otherwise provided in Section 3 or Section 6) from
exercising all rights, powers and remedies otherwise permitted by
its Subordinated Documents and by applicable law upon a default in
the payment of its Subordinated Debt or under its Subordinated
Documents, all, however, subject to the rights of the Senior
Creditors as set forth in this Agreement.

 

12. Termination of Subordination. This
Agreement shall continue in full force and effect, and the
obligations and agreements of each Subordinated Creditor and the
Company hereunder shall continue to be fully operative, until all
of the Senior Debt shall have been paid and satisfied in full in
cash and such full payment and satisfaction shall be final and not
avoidable. To the extent that the Company or any guarantor of or
provider of collateral for the Senior Debt makes any payment on the
Senior Debt that is subsequently invalidated, declared to be
fraudulent or preferential or set aside or is required to be repaid
to a trustee, receiver or any other party under any bankruptcy,
insolvency or reorganization act, state or federal law, common law
or equitable cause (such payment being hereinafter referred to as a
“Voided
Payment”), then to the extent of such Voided Payment,
that portion of the Senior Debt that had been previously satisfied
by such Voided Payment shall be revived and continue in full force
and effect as if such Voided Payment had never been made. In the
event that a Voided Payment is recovered from the Senior Creditors,
an Event of Default shall be deemed to have existed and to be
continuing under the Securities Purchase Agreement from the date of
the Senior Creditors’ initial receipt of such Voided Payment
until the full amount of such Voided Payment is restored to the
Senior Creditors. During any continuance of any such Event of
Default, this Agreement shall be in full force and effect with
respect to all of the Subordinated Debt. To the extent that any
Subordinated Creditor has received any payments with respect to its
Subordinated Debt subsequent to the date of the Senior
Creditors’ initial receipt of such Voided Payment and such
payments have not been invalidated, declared to be fraudulent or
preferential or set aside or are required to be repaid to a
trustee, receiver, or any other party under any bankruptcy act,
state or federal law, common law or equitable cause, such
Subordinated Creditor shall be obligated and hereby agrees that any
such payment so made or received shall be deemed to have been
received in trust for the benefit of the such Senior Creditors, and
such Subordinated Creditor hereby agrees to pay to the Senior
Creditors, upon demand, the full amount so received by such
Subordinated Creditor during such period of time to the extent
necessary fully to restore to the Senior Creditors the amount of
such Voided Payment. Upon the payment and satisfaction in full in
cash of all of the Senior Debt, which payment shall be final and
not avoidable, this Agreement will automatically terminate without
any additional action by any party hereto.

 

13. Specific Performance. The Senior
Creditors is hereby authorized to demand specific performance of
this Agreement, whether or not the Company shall have complied with
the provisions hereof applicable to it, at any time when any
Subordinated Creditor shall have failed to comply with any
provision hereof. Each Subordinated Creditor hereby irrevocably
waives any defense based on the adequacy of a remedy at law which
might be asserted as a bar to the remedy of specific performance
hereof in any action brought therefor by the Senior Creditors.
Except as required hereunder or under any of the other Transaction
Documents, each Subordinated Creditor further waives presentment,
notice and protest in connection with all negotiable instruments
evidencing Senior Debt to which it may be a party, notice of the
acceptance of this Agreement by the Senior Creditors, notice of any
loan made, extension granted or other action taken in reliance
hereon and all demands and notices of every kind in connection with
this Agreement or the Senior Debt.

 

14. Representations and Warranties. Each
Subordinated Creditor represents and warrants as
follows:

 

(a)
Such Subordinated Creditor which is not an individual is duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation and has all
requisite corporate or limited liability company, as applicable,
power and authority to enter into and perform this
Agreement.

 

(b) The
execution, delivery and performance by such Subordinated Creditor
of this Agreement and the transactions contemplated hereby
(i) have been duly authorized by all necessary corporate or
limited liability company, as applicable, action (except in the
case of individual Subordinated Creditors), and (ii) do not
(A) contravene such Subordinated Creditor’s constituent
documents, if applicable, (B) violate any requirement of law
to which such Subordinated Creditor is subject, or
(C) conflict with or result in the breach of, or constitute a
default under, any contractual obligation binding on such
Subordinated Creditor.

 

 

 

 

(c) No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery,
recordation, filing or performance by such Subordinated Creditor of
this Agreement.

 

(d)
This Agreement has been duly executed and delivered by such
Subordinated Creditor. This Agreement is the legal, valid and
binding obligation of such Subordinated Creditor, enforceable
against such Subordinated Creditor in accordance with its
terms.

 

15. Accuracy of Representations and
Warranties. If any representation or warranty contained
herein shall prove to have been materially false when made or in
the event of any breach by the Company or any Subordinated Creditor
in the performance of any of the terms hereof, the Senior Creditors
may, at their option, declare all Senior Debt to be due and
payable, without presentment, demand, protest, or notice of any
kind, notwithstanding any time or credit otherwise
allowed.

 

16. Additional Documents. The Company
and each Subordinated Creditor shall execute and deliver to the
Senior Creditors such further instruments and shall take such
further action as the Senior Creditors may at any time or times
request in order to carry out the provisions and intent of this
Agreement.

 

17. Legends. Any instrument or agreement
evidencing the Subordinated Debt shall specifically provide by an
appropriate legend conspicuously placed thereon that payment of any
and all amounts thereunder has been subordinated to prior payment
of Senior Debt in the manner and to the extent set forth in this
Subordination Agreement.

 

18. Notices. All notices and other
communications which are required and may be given pursuant to the
terms of this Agreement shall be in writing and shall be sufficient
and effective in all respects if given in writing or telecopied,
delivered or mailed by registered or certified mail, postage
prepaid, as follows:

 

(a)           if
to a Senior Creditors or the Company, at the address set forth in
the Securities Purchase Agreement; and

 

(b)           if
to the Subordinated Creditor, at:

 

KORR
Value, LP

1400
Old Country Road

Westbury New York
11590

 

or such
other address or addresses as any party hereto shall have
designated by written notice to the other parties hereto. Notices
shall be deemed given and effective upon the earlier to occur of
(x) the third day following deposit thereof in the U.S. mail
or (y) receipt by the party to whom such notice is
directed.

 

19. Governing Law. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF NEW
YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE
THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.

 

20. Waiver of Jury Trial. EACH OF THE
SUBORDINATED CREDITORS AND THE COMPANY IRREVOCABLY WAIVE ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR THE ACTIONS OF THE
SENIOR CREDITORS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF OR THEREOF.

 

 

 

 

21.
Personal Jurisdiction.

 

(a)
Each of the Subordinated Creditors and the Company irrevocably
submits to the non-exclusive jurisdiction of any New York state or
federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or
relating to this Agreement or any of the agreements, documents or
instruments delivered in connection herewith or therewith. To the
fullest extent permitted by applicable law, each of the
Subordinated Creditors irrevocably waives and agrees not to assert,
by way of motion, as a defense or otherwise, any claim that it is
not subject to the jurisdiction of any such court, any objection
that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.

 

(b)
Nothing in this Section 21 shall affect the right of the
Senior Creditors to serve process in any manner permitted by law,
or limit any right that the Senior Creditors may have to bring
proceedings against any Subordinated Creditor or the Company in the
courts of any appropriate jurisdiction or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other
jurisdiction.

 

22. Expenses. Each of the Subordinated
Creditors and the Company jointly and severally agree to pay upon
demand to any of the Senior Creditors the amount of any and all
out-of-pocket expenses, including the reasonable fees and expenses
of their counsel and of any experts or agents, which any Senior
Creditors may incur in connection with the exercise or enforcement
of any of the rights of any Senior Creditors
hereunder.

 

23. Miscellaneous. This Agreement may be
executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be
an original, and all of which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier or pdf shall be effective as
delivery of a manually executed counterpart of this Agreement. In
proving this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by the party
against which enforcement is sought. The Senior Creditors may, in
their sole and absolute discretion, waive any provisions of this
Agreement benefiting the Senior Creditors; provided, however, that
such waiver shall be effective only if in writing and signed by the
Senior Creditors and shall be limited to the specific provision or
provisions expressly so waived. This Agreement shall be binding
upon the successors, assigns and participants of each Subordinated
Creditor and the Company and shall inure to the benefit of the
Senior Creditors and its respective successors, assigns and
participants, any purchaser or purchasers refunding or refinancing
any of the Senior Debt and their respective successors, assigns and
participants, but shall not otherwise create any rights or benefits
for any third party.

 

[Remainder
of page intentionally left blank; Next page is signature
page.]

 

 

 

 

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

 

	

MT. WHITNEY SECURITIES, LLC

 

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:

	
 

	
 

	
 

 

	

ARENA ORIGINATING CO., LLC

 

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:

	
 

	
 

	
 

 

	

ARENA SPECIAL OPPORTUNITIES FUND, LP

 

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:

	
 

	
 

	
 

 

	

ARENA SPECIAL OPPORTUNITIES PARTNERS I, LP

 

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:

	
 

	
 

	
 

 

	

GOIP GLOBAL, INC.

 

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:

	
 

	
 

	
 

 

	

KORR VALUE, LP

By: KORR Acquisitions Group, Inc., its General Partner

 

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:

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