Document:

Exhibit 10.1

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY
AGREEMENT (the “Agreement”) made as of the 14th day of May, 2015 by and between LATTICE FUNDING, LLC, a Pennsylvania
limited liability company, its successors and assigns (the “Lender”), and LATTICE INCORPORATED, a Delaware corporation,
its successors and assigns (the “Borrower”). (The Lender and the Borrower are sometimes referred to collectively in
this Agreement as the “Parties” or singly as a “Party.”)

 

BACKGROUND

 

At the request of
and on behalf of the Borrower, the Lender proposes to extend to the Borrower a loan in the principal sum of One Million Five Hundred
Thousand Dollars ($1,500,000) (the “Loan”) to be used for commercial purposes, including repayment of short-term debt,
purchase of equipment and working capital and secured by the proceeds of Borrower’s services agreements with correctional
facilities (existing on this date or entered into during the term of the Loan, along with related equipment (as more specifically
defined below, the “Collateral”).

 

NOW THEREFORE, in consideration
of the promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to the legally bound, the Parties agree as follows:

 

1.            Definitions

 

The following terms
used in this Agreement shall have the meanings set forth below:

 

(a)            “Agreement” means
this Agreement.

 

(b)            “Business Day”
shall mean any day other than a Saturday, a Sunday, a United States federal government legal holiday or a day on which banking
institutions are authorized or required by law or other governmental action to close in the Commonwealth of Pennsylvania.

 

(c)            “Collateral”
means all of the Borrower’s right, title and interest in the revenues of all of its telecommunications contracts with correctional
facilities, existing on this date or entered into during the Term (as defined below), the telecommunications equipment associated
with such contracts and the proceeds from such contracts; including all insurance proceeds, and rights to refunds or indemnification
whatsoever owing, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising,
goods, equipment, which any of the same may represent, and all right, title, security and guaranties with respect to each contract.

 

(d)            “Conversion Shares”
shall have the meaning set forth in Section 2(c), below.

 

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(e)            “Loan Documents”
means this Agreement, the $1,500,000 Note of even date from Borrower to Lender (the “Note”), the UCC-1 Financing Statements
naming Borrower as debtor and Lender as secured party to be filed with the New Jersey Department of State and the Commonwealth
of Pennsylvania, an affidavit of business use and all other loan documents listed on the Closing Checklist attached as Exhibit
A, including all riders, supplements and addenda to such documents.

 

(f)            “Loan” means
the $1,500,000 Loan, as advanced, extended and otherwise made under this Agreement, including any over-allotment up to an additional
10%.

 

(g)            “Person” shall
mean any individual, sole proprietorship, partnership, joint venture, limited liability company, limited liability partnership,
trust, incorporated organization, association, corporation, institution, entity, party or government (including any division, agency
or department thereof), and, as applicable, the successors, heirs and assigns of each.

 

(h)            “Principal Amount”
initially means the principal amount of the Loan represented by the gross proceeds of subscriptions accepted by the Lender before
any deductions, in the maximum aggregate amount of $1,500,000, increased by any exercise of the over-allotment option (up to 10%)
and reduced by any payments of principal or conversion of principal into Conversion Shares by Borrower.

 

(i)            “Taxes” mean
any federal, state, local or foreign income sales, use, transfer, payroll, property, occupancy, franchise or other tax, levy, impost,
fee, imposition, assessment or similar charge, together with any interest or penalties thereon.

 

(j)            “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the State of New Jersey and the Commonwealth of Pennsylvania.

 

2.            Terms of the Loan

 

(a)            Lender agrees to extend the Loan
to Borrower for working capital purposes and for business purposes only. Borrower has executed an affidavit of business purpose
of even date. The term of the Loan (the “Term”) shall commence on the date of this Agreement and shall end no later
than April 30, 2020 (the “Due Date”), on which date all principal, interest and other amounts due under the Note will
be due and payable.

 

(b)            The Parties acknowledge that
the Loan will be funded in two or more tranches, with the first closing (a “Closing”) to be held on or about May 12,
2015 and the final Closing to be held no later than June 30, 2015 (the “Offering Termination Date”).

 

(c)            Borrower will pay interest
on the outstanding Principal Amount at 8% per annum (the “Interest Rate”), accruing upon initial funding until repaid
in full. Borrower will pay interest only accrued on the Principal Amount at the Interest Rate quarterly, in arrears, with the first
payment due July 30, 2015 and subsequent payments of interest due the 30th of October, January, April and July thereafter,
until the earlier of the Borrower’s payment of all Amounts Due under the Note or the conversion of the Principal Amount into
common stock of the Borrower (the “Conversion Shares”) under the conversion provisions of the Note and payment of all
other Amounts Due under the Note.

 

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(d)            Restricted Stock. For each
$1,000.00 in gross proceeds accepted at each Closing, the Borrower will issue to the Lender 2,500 shares of the Borrower’s
restricted common stock (“Restricted Stock”), for the benefit of its subscribers.

 

(e)            The Borrower hereby agrees
that Lender will have “piggyback” registration rights for all shares of Borrower Restricted Stock issued to the Lender
(for itself or for holders of participations) or any of its affiliates, including, but not limited to, Cantone Research, Inc. (the
“Placement Agent”), on any registration statement filed by the Borrower with the Securities and Exchange Commission
(the “Commission”) except for registration statements on forms S-4 (for merger transactions) or S-8 (for employee plans),
subject to customary proportional cutbacks if requested by an underwriter in connection with an underwritten public offering. If
the Borrower files such a registration statement, the Borrower undertakes to use commercially reasonable efforts to make the registration
statement effective within a reasonable time and to keep such registration statement effective until all of the shares of Restricted
Stock are sold.

 

(f)            The outstanding unpaid Principal
Amount of the Loan (to the extent not converted into Conversion Shares) and all accrued but unpaid interest shall be paid in full
on the Due Date. The Borrower has no right to prepay the Principal Amount and accrued interest before the Due Date except as specifically
provided in the Note. If any Event of Default (as defined in the Note) occurs, then upon such occurrence and continuing until such
Event of Default is cured, the interest rate shall increase to 12% per annum (the “Default Rate”) and the Borrower
will pay the Lender a penalty of $50,000 as a default penalty and not as interest, which, if not paid immediately in cash will
be added to the Principal Amount and accrue interest at the then-applicable rate.

 

(g)            To evidence the obligation
of Borrower to Lender to repay the Loan with interest at the applicable rate in accordance with the provisions of this Agreement,
Borrower shall execute and deliver to Lender at Closing the Note, a form of which is attached as Exhibit B.

 

(h)            To secure the Note, Borrower
shall execute and deliver to Lender at Closing and cause to be filed UCC-1 Financing Statements, which grants to Lender a perfected
first security interest in the Collateral (the “Financing Statements”), which the Lender will file with the State of
New Jersey and the Commonwealth of Pennsylvania.

 

3.            Fees

 

(a)            The Borrower will reimburse the
Lender for all of its fees and expenses of Cantone Research, Inc. (the “Placement Agent”); including an 8% sales commission,
legal fees of 1% and a 1% non-accountable expense allowance, paid at each Closing. Borrower will also issue to the Placement Agent
1,000 shares of Restricted Stock for each $1,000.00 in gross proceeds accepted at each Closing. This Restricted Stock will have
the same registration rights as Restricted Stock issued to the Lender for the account of its subscribers.

 

(b)            Borrower will also pay the Lender
an annual administration fee (“Administration Fee”) of 2% of the Principal Amount, payable quarterly in arrears at
the same time the Borrower pays interest on the Note. If an Event of Default occurs, the Administration Fee immediately increases
to 3%. If the Borrower fails to pay any Administration Fee when due, the amount of any unpaid Administration Fee will be added
to the Principal Amount of the Note and accrue interest at the then-applicable rate and payment thereof shall be secured by the
Collateral. In addition, as part of the Administration Fee, the Borrower will issue the Lender 1,000,000 shares of Restricted Stock
as a one-time issuance within thirty (30) days of the initial Closing.

 

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4.            Collateral for the Loan

 

(a)            The Parties agree that the collateral
and security for the Loan shall be a first priority security interest in the Collateral, including all revenues and other proceeds
thereof.

 

(b)            The Parties, by an agreement of
even date, have agreed as to certain procedures upon a default by the Borrower. Any such election of remedies shall not limit the
Lender’s rights under the Note, nor act as a waiver of any of the Lender’s rights under the Note or this Agreement.

 

5.            Covenants
of Borrower. In addition to the covenants and agreements of the Borrower contained in the other Loan Documents, and as
long as the Loan is outstanding, the Borrower hereby covenants and agrees as follows:

 

(a)            Borrower shall promptly give
notice in writing to Lender of the occurrence of any material litigation, arbitration or governmental proceeding affecting Borrower,
and of any governmental investigation or labor dispute pending or, to the knowledge of Borrower, threatened which could reasonably
be expected to interfere substantially with normal operations of the business of Borrower or materially adversely, affect the financial
condition of Borrower.

 

(b)            Borrower shall promptly give
notice in writing to Lender of the occurrence of any Event of Default (as defined in the Note) and of any condition, event, act
or omission which, with the giving of notice or the lapse of time or both, would constitute an event of default under this Agreement
or under the Loan Documents.

 

(c)            Any and all payments by the
Borrower hereunder or under the Note to or for the benefit of Lender shall be made free and clear of and without deduction for
any and all present or future Taxes, deductions, charges or withholdings

 

(d)            The Borrower may not reduce
the exercise or conversion price of any options, warrants or convertible securities outstanding on or after May 1, 2015 without
prior approval from Lender.

 

(e)            Except as required by its
certificate of incorporation in effect on the date of this Agreement, the Borrower shall not pay or declare any dividends or make
any distributions to equity holders (common or preferred) while this Loan is outstanding.

 

(f)            Unless, and only to the extent,
required by law, until after the final Closing, Borrower shall not make any public statements about the contemplated transaction
without the prior written consent of the Lender, which shall not be unreasonably withheld.

 

(g)            Borrower
will impose a black-out period (trading restriction) on all of its officers and directors such that they will be precluded from
trading in the Borrower’s Common Stock to the same extent as the Placement Agent’s brokers are restricted from trading
the Borrower’s Common stock. The Placement Agent shall advise the Borrower of the trading restrictions it imposes on its
brokers, from time to time. This restriction shall apply only during periods that it is actively offering the Borrower’s
securities and shall not apply beyond June 30, 2015, and shall be in addition to any other black-out period the Borrower imposes
on its officers and directors.

 

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(h)            Borrower will seek approval
from Lender before effecting a change in control or acquisition of the Borrower.

 

6.            Construction of this Agreement

 

(a)            Time is of the essence in
connection with any act, undertaking or matter to be performed under this Agreement.

 

(b)            This Agreement is intended
as a separate agreement between the Parties enforceable in accordance with its terms and is in addition to any other agreements
between the Parties including but not limited to the Loan Documents, and this Agreement shall not be deemed to replace, modify,
substitute for, be merged with or into or amend or alter the Loan Documents in any way except to the extent expressly provided
for herein.

 

(c)            Unless otherwise specified
herein or unless the context otherwise indicates, all capitalized terms used in this Agreement shall have the same definitions
and meanings as used in and defined in the Loan Documents.

 

(d)            Borrower acknowledges that
it was represented by legal counsel in connection with this Agreement and the Loan Documents and that it was under no economic
duress or other compulsion in entering into this Agreement.

 

7.            Representations and Warranties
of Borrower

 

(a)            Borrower hereby represents
and warrants that:

 

(i)            Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified and authorized
to do business and is in good standing wherever the nature of the business conducted by Borrower makes such qualification necessary.

 

(ii)           Borrower has the corporate
power and authority to own its property and to conduct its business and holds such licenses and certificates as may be applicable
and required for the conduct of its business; and Borrower has the corporate power and authority to enter into this Agreement and
to consummate all transactions contemplated in this Agreement.

 

(iii)          This Agreement and
the Loan Documents constitute valid, continuing, legal and binding obligations of Borrower and are enforceable against Borrower
in accordance with their terms, subject however, to creditors’ rights generally.

 

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(iv)          The making of this Agreement
has been duly authorized by all necessary corporate action on the part of Borrower, including Board of Directors approval, does
not require the approval of, or the giving of notice to, any other entity or third person; and will not violate any provision of
law or of Borrower’s Articles of Incorporation or Bylaws, or result in the breach of, constitute a default under, contravene
any provision of, or result in the creation of any lien, charge, encumbrance or security interest upon any property or assets of
Borrower.

 

(v)            The individual executing
this Agreement on behalf of Borrower is a duly authorized officer of Borrower and is authorized to execute this Agreement and to
take any and all other actions contemplated or required by this Agreement.

 

(vi)           There are no suits or
proceedings pending or, to the knowledge of Borrower, threatened, in any court or before any regulatory commission (including the
Commission or any state securities regulatory body), board or other administrative or governmental agency against Borrower, which
if adversely determined would have a material adverse effect on the financial condition of Borrower or the business of Borrower
or which if determined adversely to the Borrower would result in the inability of Borrower to perform this Agreement.

 

(vii)          The Financing Statements
constitute valid and enforceable security interests in the Collateral described therein.

 

(ix)            There are no mortgages,
pledges, security interests, liens, charges, leases, encumbrances or claims on or with respect to the Collateral, or any part thereof,
or any title interest therein or any proceeds thereof, which have a priority superior to the lien and priority positions of the
Lender’s security interest.

 

(x)             As of the date of this
Agreement, Borrower is not insolvent as defined by the United States Bankruptcy Code, the Delaware Fraudulent Conveyances Act,
by the insolvency provisions of the Delaware Business Corporation Law or by law or usage of any court of law or equity of the State
of Delaware.

 

(xi)            As of the date of this
Agreement, Borrower has complied with all the terms and conditions of this Agreement.

 

(xii)           The execution, delivery
and performance of this Agreement and the Loan Documents will not violate any provisions of any indenture, agreement, or other
instrument to which Borrower or any of Borrower’ s properties or assets are bound, and will not be in conflict with, result
in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement, or other instrument,
or result in the creation or imposition of any lien, charge, or encumbrance of any nature whatsoever upon any of the properties
or assets of Borrower.

 

(xiii)          No authorization,
consent, approval, license or exemption of, and no registration, qualification, designation, declaration or filing with any court
or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign is necessary to the valid
execution and delivery of this Agreement, the Loan Documents or any other documents evidencing or relating to the Loan.

 

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(xiv)         The most recent financial
statements of Borrower delivered to the Lender represent fairly its financial position as of the date thereof; and the results
of its operations for the period indicated; and show all known liabilities, direct or contingent, of Borrower as of the date thereof.
Since the date of such financial statements, there has been no material adverse change in the condition, financial or otherwise,
of Borrower or in the business and properties of Borrower and, since such date, Borrower has not incurred, other than in the ordinary
course of business, any indebtedness, liabilities, obligations or commitments, contingent or otherwise.

 

(xv)          Neither this Agreement
nor any other document, statement, financial statement, or certificate furnished to Lender by or on behalf of Borrower in connection
herewith, including, but not limited to, the Borrower’s filings with the Commission, contains an untrue statement of a material
fact with respect to the financial condition or properties of Borrower or omits to state a material fact necessary to make the
statements contained therein not misleading or, insofar as Borrower can now foresee, may in the future materially adversely affect
the financial condition or properties of Borrower which has not been set forth in this Agreement or in a document, statement, financial
statement or certificate furnished to Lender in connection herewith.

 

(xvi)         The Borrower is in
compliance with all laws, rules, regulations, judgments, decrees, orders, agreements and requirements which affect in any material
way the Borrower, its assets or the operation of its business and has not received, and has no knowledge of, any order or notice
of any governmental investigation or of any violation or claim of violation of any law, regulation, judgment, decree, order, agreement,
or other governmental requirement. The Borrower is not in material default under any term of any indenture, contract, lease, agreement,
instrument or other commitment to which any of them is a party or by which any of them is bound. The Borrower knows of no dispute
regarding any indenture, contract, lease, agreement, instrument or other commitment which could reasonably be expected to have
a material adverse effect on the Borrower’s financial condition.

 

(b)            Borrower hereby confirms,
represents and warrants that the representations and warranties set out in the Loan Documents are true and correct as of the date
of this Agreement.

 

8.            Further Events of Default
- Remedies

 

(a)            The following events shall
be an Event of Default under the Loan and in addition to the Events of Default as defined in the Note; and Lender shall thereupon
have the option (which is not intended to diminish, alter or limit Lender’s rights described in this Agreement, the Loan
Documents or any related instruments, agreements and documents) to declare Borrower in default under this Agreement and the Loan
Documents, and all other agreements with Lender, and declare all existing and future liabilities, indebtedness and obligations
accelerated and immediately due and payable, including, but not limited to, interest, principal, expenses, advances to protect
Lender’s position and reasonable counsel fees to enforce this Agreement, the Loan Documents, and all related instruments,
agreements and documents, and all of Lender’s rights hereunder and thereunder, all without demand, notice, presentment or
protest, or further action of any kind, except as specified herein.

 

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(i)            If Lender shall discover
evidence that any warranty, representation or statement made or furnished to Lender by or on behalf of Borrower in connection with
this Agreement or otherwise, or to induce Lender to enter into this Agreement, was false or misleading in any material respect
when made or furnished.

 

(ii)           If any action, suit
or proceeding is brought in law or in equity or in any bankruptcy or receivership proceeding by Borrower or any of its creditors
or any other party to enjoin or set aside this Agreement.

 

(iii)          If Borrower shall fail
to pay any principal, interest, costs and fees when due under the Loan Documents or this Agreement within ten (10) days after the
date such payment is due.

 

(iv)          The dissolution, termination
of existence, business failure, appointment of a receiver of, or of any part of the property of, Borrower.

 

(v)            If Borrower shall fail
to observe or perform any obligation or covenant to be observed or performed by Borrower hereunder or under any of the Loan Documents,
which are not cured within ten (10) days following written notice from Lender to Borrower.

 

(vi)           If any financial statement,
material representation, warranty, statement or certificate made or furnished to Lender in, or in connection with, this Agreement,
or as inducement to Lender to enter into this Agreement, or in any separate statement or document to be delivered hereunder to
Lender, shall be materially false, incorrect, or misleading when made;

 

(vii)          If Borrower shall admit
an inability to pay its debts as they mature, or shall make a general assignment for the benefit of its or any of its creditors.

 

(viii)         If proceedings in
bankruptcy, or for reorganization of Borrower, or for the readjustment of any of its debts, under the Bankruptcy Code, as amended,
or any part thereof, or under any other laws, whether state or federal, for the relief of debtors, now or hereafter existing, shall
be commenced by Borrower, or shall be commenced against Borrower and shall not be dismissed within sixty (60) days of its commencement.

 

(ix)            If a receiver or trustee
shall be appointed for Borrower or for any substantial part of its assets, or any proceedings shall be instituted for the dissolution
or the full or partial liquidation of Borrower, and if such appointment or proceedings are involuntary, such receiver or trustee
shall not be discharged within sixty (60) days of appointment, or such proceedings shall not be discharged within sixty (60) days
of its commencement, or Borrower shall discontinue its businesses or materially change the nature of its businesses.

 

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(b)            After any acceleration of
the Loan, Lender shall have in addition to the rights and remedies given it by this Agreement and the Loan Documents, all those
allowed by all applicable laws including, without limitation, the UCC as enacted in a jurisdiction in which any Collateral may
be located.

 

9.            No Agency, Partnership or Joint
Venture

 

Neither this Agreement
nor the Loan Documents nor the exercise by Lender of any of its rights or remedies hereunder or thereunder shall create, or shall
be deemed to have created (i) a relationship of principal and agent between Borrower and Lender, or (ii) a partnership or joint
venture, as between Lender and Borrower, or (iii) to render Lender in any way responsible for the debts, losses or liabilities
of Borrower, or (iv) to render Lender a principal of, an insider in, or in any manner in control of Borrower or its business affairs.

 

10.            Notices

 

All notices to be
given pursuant to this Agreement shall be given by the parties hereto either by certified mail, postage pre-paid, with return receipt
requested or by expedited delivery service or by hand delivery, with a receipt being obtained therefor, at the following addresses,
or at such other addresses as to which the parties hereto may be notified in accordance herewith from time to time.

 

	If to the Borrower:	Lattice Incorporated
	 	7150 N. Park Drive
	 	Suite 500
	 	Pennsauken, NJ 08109
	 	Phone: (856) 910-1166
	 	Facsimile: (856) 910-1811
	 	 
	With copies to:	Mitchell Nussbaum, Esq.
	 	Loeb & Loeb, LLP
	 	345 Park Avenue
	 	New York, NY 10154
	 	Telephone: (212) 407-4159
	 	Facsimile: (212) 504-3013
	 	 
	If to the Lender:	Lattice Funding, LLC
	 	c/o Cantone Research, Inc.
	 	766 Shrewsbury Ave.
	 	Suite E401
	 	Tinton Falls, NJ 07724
	 	Telephone: 732-450-3500
	 	Facsimile: 732-450-3520
	 	Attention: Anthony
    Cantone

 

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	With copies to:	Christopher P. Flannery, Esq. 
	 	4 Hillman Drive
	 	Suite 104
	 	Chadds Ford, PA 19317
	 	Telephone: (610) 361-8016
	 	Facsimile: (610) 558-4882

 

Notice shall be effective upon receipt.

 

11.            Remedies Are Cumulative

 

Lender’s rights and
remedies under this Agreement, the Note and any other Loan Documents, are cumulative and not alternative. Neither the failure nor
any delay on the part of Lender in exercising any right, power or privilege under any of the Loan Documents or this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or privilege. No claim or right arising out of this Agreement
or the Loan Documents can be discharged by Lender in whole or in part, by a waiver or renunciation of the claim or right unless
in writing signed by Lender.

 

12.            Entire Agreement

 

This Agreement and
the Loan Documents are intended by the Parties as a final expression of their agreements with respect to the subject matter thereof,
and are intended as a complete and exclusive statement of the terms and conditions of that agreement. This Agreement and the Loan
Documents may not be modified, rescinded, or terminated orally, and no modification, rescission, termination or attempted waiver
of any of the provisions thereof shall be valid unless in writing, supported by consideration, and signed by the Party against
whom the same is sought to be enforced.

 

13.            Assignments,
Successors and No Third Party Rights

 

This Agreement shall
apply to and shall be binding in all respects upon, and shall inure to the benefit of, the successors and assigns of Lender and
Borrower. Except as explicitly stated herein, nothing expressed or referred to in this Agreement is intended or shall be construed
to give any person or entity other than the Parties any legal or equitable right, remedy or claim under or with respect to this
Agreement, or any provision hereof, it being the intention of the Parties that this Agreement, and all of its provisions and conditions,
are for the sole and exclusive benefit of the Parties and for the benefit of no other person or entity and are personal to the
Parties unless otherwise expressly provided. This Agreement may not be assigned or otherwise transferred by Lender to any person
or entity that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

 

14.            Action Taken at Closing

 

The execution and
delivery of this Agreement at Closing and all other actions to be taken and transactions to occur in connection with this Agreement
at Closing, and the consummation at Closing of certain acts and transactions to which reference is made in this Agreement, are
to be and were considered effected simultaneously as part of a number of interrelated transactions, and all deliveries of documents
and other acts are to be deemed in escrow until all transactions referred to in, and relating to, this Agreement have been completed.

 

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15.            Survival of Representation,
Warranties and Covenants

 

The representations,
warranties and covenants set forth in this Agreement shall survive the execution and delivery of this Agreement and the Closing.

 

16.            Section Headings, etc.

 

The headings of
Sections contained in this Agreement are provided for convenience only and form no part of this Agreement, and shall not affect
its construction or interpretation. All references to Sections and paragraphs refer to the corresponding Sections and paragraphs
in Sections of this Agreement. All words used herein shall be construed to be of such gender or number as the circumstances require.
This “Agreement” shall mean this Agreement as a whole and as the same may, from time to time hereafter, be amended,
supplemented or modified. The words “herein”, “hereof”, “hereby”, “hereto”, “hereunder,
and words of similar import, refer to this Agreement as a whole and not to any particular Section, paragraph, clause or other subdivision
hereof, unless otherwise specifically noted.

 

17.            Counterparts

 

This Agreement may
be executed in one or more counterparts, each of which shall be deemed to be an original copy of this Agreement.

 

18.            Governing Law

 

This Agreement shall
be governed by and construed under the laws of the Commonwealth of Pennsylvania, all rights and remedies being governed by such
laws, and any provision hereof which may prove to be unenforceable shall not affect the validity of any other provision of this
Agreement.

 

19.            Amendments

 

This Agreement may
not be amended, revised, altered or terminated except by an Agreement in writing executed by all of the Parties.

 

20.            Term of Agreement and
Reinstatement. This Agreement and the Loan Documents shall remain in full force and effect until all obligations of Borrower
under the Loan are paid in full. If any sums paid to Lender on account of the Loan are required to be returned or refunded by Lender,
this Agreement and the Loan Documents shall be revived and reinstated as to all such sums, including the liens of the Financing
Statements.

 

[Signatures on following Page]

 

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IN WITNESS WHEREOF,
the undersigned, intending to be legally bound hereby, have duly executed this Agreement, under seal the day and year first, above
written.

 

	SIGNED, SEALED AND	LENDER:
	DELIVERED IN THE	LATTICE FUNDING, LLC
	PRESENCE OF:	 
	 	 
	_______________________	By: /s/ Anthony
J. Cantone (SEAL)
	Witness	       Anthony J. Cantone, Managing
Member
	 	 
	 	 
	 	BORROWER:
	 	LATTICE INCORPORATED
	 	a Delaware corporation
	 	 
	 	 
	_______________________	By: /s/
Paul Burgess (SEAL)
	Witness	       Paul Burgess, President
	 	 
	 	[CORPORATE SEAL]

 

    	12Exhibit 10.2

 

THIS 8% SENIOR SECURED PROMISSORY
NOTE, AND UNDERLYING COMMON STOCK INTO WHICH IT IS CONVERTIBLE, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“1933 ACT”), PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION PROVIDED BY SECTION 4(a)(2) OF THE 1933 ACT, OR THE SECURITIES
LAWS OF ANY STATE. NEITHER THIS 8% SENIOR SECURED PROMISSORY NOTE NOR THE UNDERLYING COMMON STOCK CAN BE RESOLD UNLESS (A) SUBSEQUENTLY
REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS, OR (B) EXEMPTIONS FROM SUCH REGISTRATIONS ARE AVAILABLE.

8% SENIOR SECURED CONVERTIBLE NOTE

 

Thompson, Pennsylvania

 

	Up To $1,500,000.00	May 14, 2015

1.            Obligation. For value received and intending to be legally bound, Lattice Incorporated, a Delaware corporation
(“Maker”), hereby promises to pay on or before the Due Date (as defined below) to the order of Lattice Funding, LLC
(including its successors and assigns, collectively, the “Payee”), the principal sum of up to ONE MILLION FIVE HUNDRED
Thousand Dollars ($1,500,000.00) (the “Principal Sum”), lawful money of the United States of America together with
interest thereon in the amount of eight percent annual simple interest (the “Rate”) on the terms and conditions stated
in this Note. The Principal Sum will equal the gross proceeds of subscriptions accepted by the Payee for investment in this Note,
expected to be in two or more tranches from time to time and may be amended to reflect an up to 10% over-allotment at the option
of the Payee. The Principal Sum added to the accrued but unpaid interest (including Default Interest, defined below), fees and
penalties (if any) is referred to in this Note as the “Amount Due.” By signing this Note, the Maker acknowledges that
proceeds of this Note are to be used for business purposes only. Any term capitalized herein and not defined shall have the same
meaning as in the Loan and Security Agreement between the Maker and the Payee of even date.

The payments under
this Note shall be made in funds immediately available to Payee at its office at Thompson, Pennsylvania, or at such other location
as the Payee shall designate. In the event the due date of any payment under this Note is a Saturday, Sunday or legal holiday in
the Commonwealth of Pennsylvania, such payment shall be due on the next succeeding date which is not a Saturday, Sunday or such
legal holiday, provided that the principal sum shall continue to accrue interest until paid.

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Interest at the Rate
shall accrue beginning May 15, 2015. Interest on the outstanding Principal Sum hereunder shall be paid quarterly in arrears beginning
on the 30th of July, 2015 and on the 30th day of October, January, April and July thereafter for as long as the Amount
Due, or any part thereof, remains outstanding. If any payment of interest or principal is not paid when due, interest will accrue
at the rate of 12% per annum (the “Default Rate”). Interest payable at the Default Rate shall be known as “Default
Interest” under this Note. Also upon the occurrence of a Default (as defined below), there shall be added to the principal
sum an additional $50,000.00 as a penalty for such default and not as interest. On the same dates that the Maker pays interest
to the Payee, the Maker will also pay Payee an administration fee (“Administration Fee”) of 0.5% on the outstanding
principal balance hereunder (2% on an annual basis). If a Default (as defined below) under this Note shall have occurred and then
be in existence, such Administration Fee shall be increased to 3% on an annual basis as of the date of occurrence of such Default
and shall continue at such increased rate until the Default is cured or otherwise waived by Payee. In the event any Administration
Fee is not paid when due, the amount of such unpaid Administration Fee will be added to the Amount Due and will be secured by the
collateral on the same basis as unpaid principal or interest.

The Amount Due is
due and payable on April 30, 2020 (the “Due Date”).

2.            Conversion Rights. 

(a)               
Beginning six months after the issuance of this Note, the Payee, in its sole and absolute discretion, at any time
or from time to time, may elect to convert some or all of the outstanding Principal Sum of the Note into common stock of the Maker
(the “Conversion Shares”) at the Conversion Price, as defined below, by sending a conversion notice to the Maker (a
“Conversion Notice”) in the form attached as Exhibit A. Electronic delivery via facsimile or electronic mail addressed
to the Maker’s president shall constitute good delivery of such Conversion Notice.

(b)              
The initial Conversion Price will be $0.15 per Conversion Share. The Conversion Price shall be proportionally adjusted
for any stock splits, reverse stock splits, reorganizations, stock dividends and any other corporate action that has a similar
effect.

(c)               
Forced Conversion. If the Maker’s common stock trades above twice the Conversion Price (as adjusted under Section
2(b)) for twenty consecutive trading days with average daily trading volume greater than 300,000 shares over such period, then
Maker has the right to call the Note at face value (plus accrued but unpaid interest, penalties and fees, if any) in order to force
conversion into Conversion Shares. The Maker will give the Payee sixty days written notice of a call of the Note under this Section,
during which time the Payee may convert some or all of the Principal Sum into Conversion Shares in its discretion. Notwithstanding
the foregoing, Maker may not force a conversion unless the underlying Conversion Shares are registered for resale under the Securities
Act of 1933, as amended and the Maker can deliver Conversion Shares registered for resale within five business days of the Conversion
Notice.

3.            No Prepayment. The Maker may not prepay the Amount Due unless the Maker is acquired or engages in a similar
transaction, including without limitation in a stock sale, asset sale, merger and/or acquisition (an “Acquisition Transaction”).
If the Maker is so acquired, the Maker (or its successor in interest) may prepay this Note either for the 125% of the outstanding
Principal Sum plus all accrued but unpaid interest, or on an “as-converted” basis, simultaneously with the closing
of the Acquisition Transaction, at the sole option of Payee. For clarity, an “as-converted basis” shall mean that immediately
before the Acquisition Transaction, the Payee will calculate the number of Conversion Shares issuable to the Payee on the conversion
of the total Amount Due and the Payee will receive the same consideration as received by other stockholders of Maker.

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4.            Application of Payments. All payments on this Note shall be applied first to accrued and unpaid interest at
the Rate, then to accrued and unpaid Default Interest, then to all other sums due hereunder, and the balance thereof to principal
or, if a Default shall have occurred and be continuing, in such other order as Payee may elect.

5.            Late Charge, Warrant Issuance. If any payment of interest or Administrative Fee payable under Section 1, above,
is not made within ten days of the date such payment is due, or if the Amount Due is not paid when due under the terms of this
Note and remains unpaid ten (10) days after the Due Date, then, in either case, there shall also be immediately due and payable
a late charge at the rate of Five Percent (5%) of such delinquent payment. The amount of any such late charge not paid promptly
following demand therefor shall be deemed outstanding and payable pursuant to the Note.

6.            Collateral. The payment of the Amount Due on the Due Date shall be secured by a first lien on the revenues
and other proceeds of all of the Maker’s service contracts with correctional facilities outstanding on the date of this Note
or otherwise entered into during the term of this Note, and the equipment used for such contracts, to be evidenced by a filing
on form UCC-1.

7.            Default;
Acceleration; Remedies.

(a)          Should there occur and exist any Default (as defined below in Section 7 b), then Payee, at its option, may declare
immediately due and payable the entire unpaid balance of Amount Due and accrued interest by Maker hereunder, together with interest
accrued thereon at the Rate to the date of Default and thereafter at 12% simple annual interest (the “Default Rate”),
anything herein to the contrary notwithstanding. Payment of the Amount Due may be enforced and recovered in whole or in part at
any time by one or more of the remedies provided Payee in this Note. If Payee employs counsel to enforce this Note by suit or otherwise,
Maker will reimburse Payee for all reasonable and documented costs of suit and other reasonable and documented expenses in connection
therewith, whether or not suit is actually instituted, together with a reasonable attorney’s fee for collection of Ten Percent
(10%) of the total amount then due by Maker to Payee but in no event less than five Thousand Dollars ($5,000.00) together, to the
extent permitted by applicable law, with interest on any judgment obtained by Payee at the Default Rate, including interest at
the Default Rate from and after the date of execution, judicial or foreclosure sale until actual payment is made to Payee of the
full amount due Payee.

(b)          As used in this Note, “Default” shall mean the occurrence of any of the following events:

(1)          Any default in the payment when due of interest or the Amount Due on the Due Date, or any other sums due, under this
Note, which default is not cured within ten (10) business days;

(2)          Any default in the performance of any of the provisions of this Note, which is not cured within ten (10) business
days;

(3)          Any default in any other indebtedness of the Maker, which default is not cured within ten (10) days of the date of
such default;

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(4)          The making by Maker in writing of any representation to Payee which is false or misleading in any material respects;

(5)          The appointment of a committee of Maker’s creditors;

(6)          The making by Maker of a general assignment or offer of settlement for the benefit of creditors;

(7)          The voluntary or involuntary application for, or appointment of, a receiver, custodian, guardian, trustee, or other
personal representative for Maker or its property;

(8)          The filing of a voluntary or involuntary (to the extent not dismissed within 30 days) petition under any of the provisions
of the Federal Bankruptcy Code or any similar state statute;

(9)          The occurrence of any other act of insolvency (however expressed or indicated);

(10)        The issuance of a warrant of attachment or for distraint, or the notice of tax lien against Maker’s assets;

(11)        An entry of judgments against Maker or its assets;

(12)        The failure to pay, withhold, collect or remit any taxes or tax deficiency when assessed or due, unless such taxes
are being diligently contested in good faith by appropriate proceedings; or

(13)        The general failure of Maker to pay its debts and obligations as the same become due and payable.

8.            Remedies
Cumulative, Etc.

(a)          The remedies of Payee provided in this Note shall be cumulative and concurrent, may be pursued singly, successively,
or together at the sole discretion of Payee, and may be exercised as often as occasion therefor shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

(b)          The recovery of any judgment by Payee shall not affect in any manner or to any extent any rights, remedies or powers
of Payee under this Note, but such rights, remedies and powers of Payee shall continue unimpaired as before. The exercise by Payee
of its rights and remedies and the entry of any judgment by Payee shall not adversely affect in any way the interest rate payable
hereunder on any amounts due to Payee but interest shall continue to accrue on such amounts at the rates specified herein.

(c)          Maker agrees that any action or proceeding against it to enforce this Note may be commenced in the Superior Court
of any county in the State of New Jersey, or in any federal court in the State of New Jersey. Maker also consents to venue in any
federal court having subject matter jurisdiction located in the State of New Jersey. The provisions of this Section shall not limit
or otherwise affect the right of Payee to institute and conduct action in any other appropriate manner, jurisdiction or court.

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9.            Additional Waivers. Maker hereby waives presentment for payment, demand, demand for payment, notice of demand,
notice of nonpayment or dishonor, notice of acceleration, protest and notice of protest of this Note, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of the payment of the Note. Maker agrees that its
liability shall be unconditional without regard to the liability of any other party, and shall not be affected in any manner by
any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee. Maker consents to any and
all extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to payment or other provisions
of this Note.

10.          Costs and Expenses. Maker shall pay upon demand all reasonable and documented costs and expenses incurred
by Payee in the exercise of any of its rights, remedies or powers under this Note and any amount thereof not paid within ten (10)
business days following demand therefor shall be added to the Principal Sum hereunder and shall bear interest at the Default Rate
from the date of such demand until paid in full.

11.          Severability. If any provision of this Note is held to be invalid or unenforceable by a court of competent
jurisdiction, the other provisions of this Note shall remain in full force and effect and shall be liberally construed in favor
of Payee in order to effectuate the provisions of this Note.

12.           Limitation of Interest to Maximum Lawful Rate. In no event shall the rate of interest payable hereunder exceed
the maximum rate of interest permitted to be charged by applicable law (including choice of law rules) and any interest paid in
excess of the permitted rate shall be refunded to Maker. Such refund shall be made by application of the excessive amount of interest
paid against any sums outstanding under this Note and shall be applied on such order as Payee may determine. If the excessive amount
of interest paid exceeds the sums outstanding under this Note, the portion exceeding the sums outstanding under this Note shall
be refunded in cash by Payee. Any such crediting or refund shall not cure or waive any default by Maker hereunder. Maker agrees,
however, that in determining whether or not any interest payable under this Note exceeds the highest rate permitted by law, any
non-principal payment, including without limitation prepayment fees and late charges, shall be deemed to the extent permitted by
law to be an expense, fee, premium or penalty rather than interest.

13.           Limitation on Payee’s Waivers. Payee shall not be deemed, by any act or omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent
specifically set forth in the writing. A waiver as to one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy to a subsequent event.

14.           No Offset. The obligations of Maker under this Note shall not be subject to any abatement or offset as a consequence
of any claim, event or transaction otherwise occurring or arising between Maker, Payee and/or any affiliate of any of them, except
as Maker and Payee may otherwise agree.

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15.           Applicable Law. This instrument shall be governed by and construed according to the laws of the Commonwealth
of Pennsylvania.

16.           Captions. The captions or headings of the paragraphs in this Note are for convenience only and shall not control
or affect the meaning or construction of any of the terms or provisions of the Note.

17.           Pronouns. Pronouns used herein shall be deemed to include the masculine, feminine or neuter, singular or plural,
as their contexts may require. The words “Payee” and “Maker” shall be deemed to include the respective
heirs, personal representatives, successors and assigns of Payee and Maker.

18.           Construction. The language in this Agreement shall be construed as a whole according to its fair meaning,
strictly neither for nor against any party, and without implying a presumption that its terms shall be more strictly construed
against one party by reason of the rule of construction that a document is to be construed more strictly against the person who
drafted it.

19.           Computation. The unpaid principal amount of this Note, the unpaid interest accrued thereon, the interest rate
or rates applicable to such unpaid principal amount, the duration of such applicability, and all other Amounts Due owing by Maker
to Payee pursuant to this Note shall at all times be ascertained from the records of Payee, which shall be conclusive absent manifest
error.

20.           Assignment. This Note may not be assigned or otherwise transferred by Maker without the prior written consent
of Payee. This Note may not be assigned or otherwise transferred by Payee to any person or entity that is not a “U.S. Person”
as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

21.           Stamp Taxes. Maker shall pay the cost of any revenue, tax or other stamps now or hereafter required by the
laws of the Commonwealth of Pennsylvania or the State of New Jersey (or any of their political subdivisions) or the United States
of America to be affixed to this note, and if any taxes are imposed under the laws of the Commonwealth of Pennsylvania or the State
of New Jersey (or any of their political subdivisions) or the United States of America with respect to evidences of indebtedness,
Maker shall pay or reimburse Payee upon demand the amount of such taxes without credit against any indebtedness evidenced by this
Note.

22.           Notices. All notices, requests, waivers, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given, made and received when hand delivered against receipt, or on the day after it is sent
by United States certified or registered mail, postage prepaid, return receipt requested, by nationally recognized overnight courier
service, or by facsimile, to:

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If to Maker:

Lattice Incorporated

7150 N. Park Drive

Suite 500

Pennsauken, NJ 08109

Telephone (856) 910-1166

Facsimile: (856) 910-1811

If to Payee:

Lattice Funding, LLC

766 Shrewsbury Ave, Suite E401

Tinton Falls, NJ 07724

Telephone: 732-450-3500

Facsimile: 732-450-3520

Attention: Anthony Cantone

Or such other address as shall be specified
from time to time (in compliance with the requirements of this Section 22 for the giving of notice) by the parties entitled to
receive such notices.

IN WITNESS WHEREOF,
Maker, intending to be legally bound hereby, has caused this Note to be duly executed the day and year first above written.

MAKER:

LATTICE INCORPORATED

By: /s/ Paul
Burgess
        Paul Burgess, President

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EXHIBIT A

FORM OF CONVERSION NOTICE

Reference is made
to the 8% Senior Secured Convertible Note (the “Note”) issued to the undersigned by Lattice Incorporated (the “Company”).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the amount of the outstanding Principal (as
defined in the Note) of the Note indicated below into shares of common stock of the Company (the “Conversion Shares”)
of the Company, as of the date specified below. Capitalized terms used herein but not otherwise defined herein shall have the meanings
ascribed to them in the Note.

		1.	Date of Conversion: ______________________

		2.	Amount of outstanding Principal to be converted: ______________________

		3.	Amount of accrued and unpaid Interest on such outstanding Principal: ______________

		4.	Total Conversion Amount (Sum of lines 2 and 3): ______________________

		5.	Please confirm the following information:

Conversion Price: ______________________

Number of Shares to be issued in
respect of the Conversion Amount: _______________

		6.	Please issue the Shares into which the Note is being converted in the following name and to the
following address:

 

	Name of Holder:	______________________
	Address:	______________________
	Facsimile Number:	______________________
	Telephone Number:	______________________

 

		By:	____________________________

Name:

Title:

Dated: _________________

Holder Requests Delivery to be made:
(check one)

		o	By Delivery of Physical Certificates to the Above Address

		o	Through Depository Trust Corporation

(Account ____________________

 

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