Document:

Exhibit 10.2

 

[FORM OF AMENDMENT
NO. 1 TO GUARANTEE, PLEDGE AND SECURITY AGREEMENT]

 

AMENDMENT NO. 1 TO

GUARANTEE, PLEDGE AND SECURITY AGREEMENT

 

This AMENDMENT NO.
1 (this “Amendment”) dated as of June 16, 2017, is made with respect to the Guarantee, Pledge and Security Agreement,
dated as of October 17, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Security
Agreement”), among CAPITALA FINANCE CORP., a Maryland corporation (the “Borrower”), the Subsidiary
Guarantors from time to time party thereto, ING CAPITAL LLC (“ING”), as administrative agent for the Lenders
under the Credit Agreement (in such capacity, together with its successors in such capacity, the “Administrative Agent”),
each “Financing Agent” or “Designated Indebtedness Holder” (each as defined therein) from time to time
party thereto, and ING, as collateral agent for the Secured Parties (in such capacity, together with its successors in such capacity,
the “Collateral Agent”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to
them in the Security Agreement (as amended hereby).

 

WITNESSETH:

 

WHEREAS, reference
is made to that certain Senior Secured Revolving Credit Agreement, dated as of October 17, 2014 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the lenders from
time to time party thereto (the “Lenders”) and the Administrative Agent;

 

WHEREAS, to induce
the Lenders to make loans and other extensions of credit to the Borrower pursuant to the Credit Agreement, the Borrower entered
into the Security Agreement; and WHEREAS, the Borrower has requested that the Secured Parties and the Collateral Agent amend certain
provisions of the Security Agreement, and the Secured Parties signatory hereto and the Collateral Agent have agreed to do so on
the terms and subject to the conditions contained in this Amendment.

 

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

 

SECTION I AMENDMENTS TO SECURITY AGREEMENT

 

Effective as of the
Effective Date, and subject to the terms and conditions set forth below, the Security Agreement is hereby amended to delete the
stricken text (indicated textually in the same manner as the following example: stricken text
or stricken text) and to add the double-underlined text (indicated textually
in the same manner as the following example: doubled-underlined text
or double-underlined text)
as set forth in the Security Agreement attached hereto as Exhibit A.

 

     

     

    

 

SECTION II MISCELLANEOUS

 

2.1.         Conditions
to Effectiveness of Amendment. This Amendment shall become effective as of the date (such date, the “Effective Date”)
on which each of the following conditions precedent have been satisfied (unless a condition shall have been waived in accordance
with Section 9.02 of the Credit Agreement):

 

(a) Documents.
The Collateral Agent shall have received each of the following documents, each of which shall be reasonably satisfactory to the
Collateral Agent (and to the extent specified below to each Secured Party) in form and substance:

 

(1) Executed Counterparts. From the Required
Secured Parties, the Collateral Agent and the Borrower, either (1) a counterpart of this Amendment signed on behalf of such party
or (2) written evidence satisfactory to the Collateral Agent (which may include telecopy transmission or electronic mail of a signed
signature page to this Amendment) that such party has signed a counterpart of this Amendment.

 

(2) Amendment No. 2 to Credit Agreement. The
Amendment No. 2 to Senior Secured Revolving Credit Agreement, dated as of the date hereof, with respect to the Senior Secured Credit
Agreement, dated as of October 17, 2014 (as amended by that certain Amendment No. 1 to Senior Secured Revolving Credit Agreement),
by and among the Borrower, the Lenders and the Administrative Agent, duly executed and delivered by each of the parties thereto.

 

(b) Consents.
The Borrower shall have obtained and delivered to the Collateral Agent certified copies of all consents, approvals, authorizations,
registrations, or filings required to be made or obtained by the Borrower and all guarantors in connection with this Amendment,
such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable
waiting periods shall have expired and no investigation or inquiry by any Governmental Authority regarding this Amendment or any
transaction being financed with the proceeds of the Loans shall be ongoing.

 

2.2.         Representations
and Warranties. To induce the other parties hereto to enter into this Amendment, the Borrower represents and warrants to the
Collateral Agent and each of the Secured Parties that, as of the Effective Date and after giving effect to this Amendment:

 

(a)          This
Amendment has been duly authorized, executed and delivered by the Borrower, and constitutes a legal, valid and binding obligation
of the Borrower enforceable in accordance with its terms. The Security Agreement, as amended by this Amendment, constitutes the
legal, valid and binding obligation of the Borrower enforceable in accordance with its respective terms.

 

     

     

    

 

(b)          The
representations and warranties set forth in Section 2 of the Security Agreement as amended by this Amendment and the representations
and warranties in each other Loan Document are true and correct in all material respects (other than any representation or warranty
already qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) on and as of the
Effective Date or as to any such representations and warranties that refer to a specific date, as of such specific date, with the
same effect as though made on and as of the Effective Date.

 

2.3.         Counterparts.
This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract. This Amendment constitutes the
entire contract between and among the parties relating to the subject matter hereof and supersedes any and all previous agreements
and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of this Amendment
by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment.

 

2.4.         Payment
of Expenses. The Borrower agrees to pay and reimburse the Collateral Agent for all of its reasonable and documented out-of-pocket
costs and expenses incurred in connection with this Amendment, including, without limitation, the reasonable fees, charges and
disbursements of legal counsel to the Collateral Agent (but excluding, for the avoidance of doubt, the allocated costs of internal
counsel).

 

2.5.         GOVERNING
LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

 

2.6.         WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

2.7.         Incorporation
of Certain Provisions. The provisions of Sections 10.01, 10.07, 10.08 and 10.10 of the Security Agreement are hereby incorporated
by reference mutatis mutandis as if fully set forth herein.

 

     

     

    

 

2.8.         Effect
of Amendment. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit
Agreement, the Security Agreement or any other Loan Document or an accord and satisfaction in regard thereto. Except as expressly
set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect
the rights and remedies of the Secured Parties, the Administrative Agent, the Collateral Agent or the Borrower under the Security
Agreement or any other Loan Document, and, except as expressly set forth herein, shall not alter, modify, amend or in any way affect
any of the other terms, conditions, obligations, covenants or agreements contained in the Security Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall
be deemed to entitle any Person to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Security Agreement or any other Loan Document in similar or different circumstances.
This Amendment shall apply and be effective only with respect to the provisions amended herein of the Security Agreement. Upon
the effectiveness of this Amendment, each reference in the Security Agreement to “this Agreement,” “hereunder,”
“hereof,” “herein” or words of similar import shall mean and be a reference to the Security Agreement as
amended by this Amendment and each reference in any other Loan Document shall mean the Security Agreement as amended hereby. This
Amendment shall constitute a Loan Document.

 

2.9.         Consent
and Affirmation. Without limiting the generality of the foregoing, by its execution hereof, the Borrower hereby to the extent
applicable as of the Effective Date (i) consents to this Amendment and the transactions contemplated hereby, (ii) agrees that the
Security Agreement and each of the other Security Documents is in full force and effect, (iii) affirms its obligations under the
Security Agreement and confirms its grant of a security interest in its assets as Collateral for the Secured Obligations (as defined
in the Security Agreement), and (iv) acknowledges and affirms that such grant is in full force and effect in respect of, and to
secure, the Secured Obligations (as defined in the Security Agreement).

 

[Signature pages follow]

 

     

     

    

 

Execution Version

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

 

	 	CAPITALA FINANCE CORP.
	 	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	ING CAPITAL LLC,
	 	as Collateral Agent and a Secured Party
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	BANK OF NORTH CAROLINA,
	 	as a Secured Party
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	
        FIRST NATIONAL BANK OF PENNSYLVANIA,

        as a Secured Party

	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	
        PARK STERLING BANK,

        as a Secured Party

	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	
        CAPITAL BANK CORPORATION,

        as a Secured Party

	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	
        EVERBANK COMMERCIAL FINANCE, INC.,

        as a Secured Party

	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	
        FIRST BANK,

        as a Secured Party

	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature Page to the Amendment No. 1 to
Guarantee, Pledge and Security Agreement]

 

     

     

    

 

Exhibit A

 

[see attached]

 

     

     

    

 

 

 

GUARANTEE, PLEDGE AND SECURITY AGREEMENT

 

dated as of

 

October 17, 2014

 

and

 

as
amended by Amendment No. 1 to Guarantee, Pledge and Security Agreement dated as of June 16, 2017

 

among

 

CAPITALA FINANCE CORP.,

as Borrower,

 

the SUBSIDIARY GUARANTORS party hereto,

 

ING CAPITAL LLC,

as Revolving Administrative Agent for the
Revolving Lenders,

 

each FINANCING AGENT and

DESIGNATED INDEBTEDNESS HOLDER party hereto

 

and

 

ING CAPITAL LLC,

as Collateral Agent

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	Section 1.	Definitions, Etc.	2
	1.01	Certain Uniform Commercial Code Terms	2
	1.02	Additional Definitions	2
	1.03	Terms Generally	19
	 	 	 
	Section 2.	Representations and Warranties	20
	2.01	Organization	20
	2.02	Authorization; Enforceability	20
	2.03	Governmental Approvals; No Conflicts	20
	2.04	Title	20
	2.05	Names, Etc.	21
	2.06	Changes in Circumstances	21
	2.07	Pledged Equity Interests	21
	2.08	Promissory Notes	2122
	2.09	Deposit Accounts and Securities Accounts	22
	2.10	Commercial Tort Claims	22
	2.11	Intellectual Property and Licenses	22
	 	 	 
	Section 3.	Guarantee	2324
	3.01	The Guarantee	2324
	3.02	Obligations Unconditional	24
	3.03	Reinstatement	25
	3.04	Subrogation	25
	3.05	Remedies	25
	3.06	Continuing Guarantee	2526
	3.07	Instrument for the Payment of Money	2526
	3.08	Rights of Contribution	26
	3.09	General Limitation on Guarantee Obligations	2627
	3.10	Indemnity by Borrower	27
	3.11	Keepwell	27
	 	 	 
	Section 4.	Collateral	27
	 	 	 
	Section 5.	Certain Agreements Among Secured Parties	2829
	5.01	Priorities; Additional Collateral	2829
	5.02	Turnover of Collateral	29
	5.03	Cooperation of Secured Parties	29
	5.04	Limitation upon Certain Independent Actions by Secured Parties	2930
	5.05	No Challenges	30
	5.06	Rights of Secured Parties as to Secured Obligations	30
	 	 	 
	Section 6.	Designation of Designated Indebtedness; Recordkeeping, Etc.	3031

 

    	 	i	 

     

    

 

	6.01	Designation of Other Indebtedness	3031
	6.02	Recordkeeping	31
	 	 	 
	Section 7.	Covenants of the Obligors	3132
	7.01	Delivery and Other Perfection	32
	7.02	Name; Jurisdiction of Organization, Etc.	33
	7.03	Other Liens, Financing Statements or Control	33
	7.04	Transfer of Collateral	3334
	7.05	Additional Subsidiary Guarantors	3334
	7.06	Control Agreements	34
	7.07	Revolving Credit Agreement	3435
	7.08	Pledged Equity Interests	35
	7.09	Voting Rights, Dividends, Etc. in Respect of Pledged Interests	3536
	7.10	Commercial Tort Claims	3738
	7.11	Intellectual Property	38
	 	 	 
	Section 8.	Acceleration Notice; Remedies; Distribution of Collateral	3940
	8.01	Notice of Acceleration	3940
	8.02	Preservation of Rights	40
	8.03	Events of Default, Etc.	40
	8.04	Deficiency	41
	8.05	Private Sale	41
	8.06	Application of Proceeds	4142
	8.07	Attorney-in-Fact	43
	8.08	Grant of Intellectual Property License	43
	8.09	Authority	43
	 	 	 
	Section 9.	The Collateral Agent	4344
	9.01	Appointment; Powers and Immunities	4344
	9.02	Information Regarding Secured Parties	44
	9.03	Reliance by Collateral Agent	4445
	9.04	Rights as a Secured Party	45
	9.05	Indemnification	45
	9.06	Non-Reliance on Collateral Agent and Other Secured Parties	46
	9.07	Failure to Act	46
	9.08	Resignation of Collateral Agent	46
	9.09	Agents and Attorneys-in-Fact	47
	 	 	 
	Section 10.	Miscellaneous	47
	10.01	Notices	47
	10.02	No Waiver	4748
	10.03	Amendments to Security Documents, Etc.	4748
	10.04	Expenses; Indemnity; Damage Waiver	49
	10.05	Successors and Assigns	5051
	10.06	Counterparts; Integration; Effectiveness; Electronic Execution	5051
	10.07	Severability	51
	10.08	Governing Law; Submission to Jurisdiction	51

 

    	 	ii	 

     

    

 

	10.09	Waiver of Jury Trial	52
	10.10	Headings	52
	10.11	Termination	52
	10.12	Confidentiality	52

 

	EXHIBIT A  –	Form of Notice of Designation
	EXHIBIT B  –	Form of Guarantee Assumption Agreement
	EXHIBIT C  –	Form of Intellectual Property Security Agreement
	EXHIBIT D  –	Form of Pledge Supplement

 

    	 	iii	 

     

    

 

GUARANTEE, PLEDGE AND
SECURITY AGREEMENT, dated as of October 17, 2014 (as amended, supplemented, or otherwise modified from time to time, this “Agreement”),
among CAPITALA FINANCE CORP., a corporation duly organized and validly existing under the laws of the State of Maryland (the “Borrower”),
and each entity that becomes a “SUBSIDIARY GUARANTOR” after the date hereof pursuant to Section 7.05 hereof (the “Subsidiary
Guarantors” and, together with the Borrower, the “Obligors”), ING CAPITAL LLC, as administrative agent
for the parties defined as “Lenders” under the Revolving Credit Agreement referred to below (in such capacity, together
with its successors in such capacity, the “Revolving Administrative Agent”), each “Financing Agent”
or “Designated Indebtedness Holder” that becomes a party hereto after the date hereof pursuant to Section 6.01 hereof
and ING CAPITAL LLC, as collateral agent for the Secured Parties hereinafter referred to (in such capacity, together with its successors
in such capacity, the “Collateral Agent”).

 

WITNESSETH:

 

WHEREAS, concurrently
with the execution and delivery of this Agreement, the Borrower, the Revolving Lenders and the Revolving Administrative Agent are
entering into the Revolving Credit Agreement (as hereinafter defined), pursuant to which such lenders have agreed to extend credit
(by means of revolving loans) to the Borrower from time to time and such lenders consented to the Borrower and the Revolving Administrative
Agent entering into this Agreement;

 

WHEREAS, the Borrower
may from time to time after the date hereof wish to incur additional indebtedness permitted by the Revolving Credit Agreement that
the Borrower designates as “Designated Indebtedness” under this Agreement, which indebtedness is to be entitled to
the benefits of this Agreement;

 

WHEREAS, to induce (i)
the Revolving Lenders to extend credit to the Borrower under the Revolving Credit Agreement and (ii) the holders of such “Designated
Indebtedness” to extend other credit to the Borrower, the Borrower wishes to provide (a) for certain of its Subsidiaries
from time to time to become parties hereto and to guarantee the payment of the Guaranteed Obligations (as hereinafter defined),
and (b) for the Borrower and the Subsidiary Guarantors to provide collateral security for the Secured Obligations (as hereinafter
defined);

 

WHEREAS, the Revolving
Administrative Agent (on behalf of itself and the Revolving Lenders), any Financing Agent (on behalf of itself and the holders
of the “Designated Indebtedness” for which it serves as agent or trustee) and each Designated Indebtedness Holder that
becomes a party hereto pursuant to Section 6.01 are or will be entering into this Agreement for the purpose of setting forth their
respective rights to the Collateral (as hereinafter defined); and

 

     

     

    

 

WHEREAS, the Obligors
and the Secured Parties agree that the Collateral Agent shall administer the Collateral, and the Collateral Agent is willing to
so administer the Collateral pursuant to the terms and conditions set forth herein.

 

NOW THEREFORE, the parties hereto agree as
follows:

 

Section 1.          Definitions,
Etc. 

 

1.01         Certain
Uniform Commercial Code Terms. As used herein, the terms “Account”,
“Chattel Paper”, “Commodity Account”, “Commodity Contract”, “Deposit Account”,
“Document”, “Electronic Chattel Paper”, “General Intangible”, “Goods”, “Instrument”,
“Inventory”, “Equipment”, “Investment Property”, “Letter-of-Credit Right”, “Money”,
“Proceeds”, “Promissory Note”, “Supporting Obligations” and “Tangible Chattel Paper”
have the respective meanings set forth in Article 9 of the NYUCC, and the terms “Certificated Security”, “Clearing
Corporation”, “Entitlement Holder”, “Financial Asset”, “Indorsement”, “Securities
Account”, “Securities Intermediary”, “Security”, “Security Entitlement” and “Uncertificated
Security” have the respective meanings set forth in Article 8 of the NYUCC.

 

1.02         Additional
Definitions. In addition, as used herein:

 

“Acceleration”
means the Revolving Credit Agreement Obligations or any other Secured Obligations of any Secured Party having been declared (or
become) due and payable in full in accordance with the applicable Debt Documents following the occurrence of an “event of
default” (as defined in the applicable Debt Documents) or an analogous event by the Borrower and expiration of any applicable
grace period with respect thereto.

 

“Acceleration Notice” has
the meaning assigned to such term in Section 8.01.

 

“Affiliate”
means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified. Anything herein to the contrary notwithstanding, the
term “Affiliate” of an Obligor shall not include any Person that constitutes an Investment held by any Obligor in the
ordinary course of business.

 

“Agent Members”
means members of, or participants in, a depositary, including the Depositary, Euroclear or Clearstream.

 

“Agreement”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Amendment
Effective Date” means June 16, 2017.

 

    	 	2	 

     

    

 

“Bank Loan”
means debt obligations (including term loans, revolving loans, debtor-in-possession financings, the funded portion of revolving
credit lines and letter of credit facilities and other similar loans and investments including interim loans, bridge loans and
senior subordinated loans) that are generally provided under a syndicated loan or credit facility or pursuant to any loan agreement
or other similar credit facility whether or not syndicated.

 

“Borrower”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Borrowing Base”
shall have the meaning ascribed thereto in the Revolving Credit Agreement.

 

“Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required
by law to remain closed.

 

“Capital Lease
Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“CFC”
means an entity that is a “controlled foreign corporation” of any Obligor within the meaning of Section 957 of the
Internal Revenue Code of 1986, as amended, but only to the extent the Obligor or a subsidiary thereof is a “United States
Shareholder” (within the meaning of Section 951(b) of the Internal Revenue Code of 1986, as amended) of such entity.

 

“Clearing Corporation
Security” means a security that is registered in the name of, or Indorsed to, a Clearing Corporation or its nominee or
is in the possession of the Clearing Corporation in bearer form or Indorsed in blank by an appropriate Person.

 

“Clearstream”
means Clearstream Banking, société anonyme, a corporation organized under the laws of the Grand Duchy of Luxembourg.

 

“Clearstream
Security” means a Security that (a) is a debt or equity security and (b) is capable of being transferred to an Agent
Member’s account at Clearstream pursuant to the definition of “Delivery”, whether or not such transfer has occurred.

 

“Closing Date”
means the date hereof.

 

“Collateral”
has the meaning assigned to such term in Section 4.

 

“Commercial
Tort Claims” means all “commercial tort claims” (as defined in Article 9 of the NYUCC) held by any Obligor,
including all commercial tort claims listed on Annex 2.10 hereto.

 

    	 	3	 

     

    

 

“Commodity Exchange
Act” shall mean the Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time, and any successor
statute.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

 

“Copyright Licenses”
means any and all agreements providing for the granting of any right in or to Copyrights (whether such Obligor is licensee or licensor
thereunder) including each agreement referred to in Annex 2.11 hereto.

 

“Copyrights”
shall mean all United States and foreign copyrights (including community designs), including but not limited to copyrights in software
and databases, and all “Mask Works” (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered
or unregistered, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor including the
registrations and applications referred to in Annex 2.11 hereto, (ii) all extensions and renewals thereof, (iii) all rights
corresponding thereto throughout the world, (iv) all rights to sue for past, present and future infringements thereof, and (v)
all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

 

“Custodian”
means U.S. Bank National Association, or any other financial institution mutually agreeable to the Collateral Agent and the Borrower,
as custodian holding documentation for Portfolio Investments, and accounts of the Obligors holding Portfolio Investments, on behalf
of the Obligors and, pursuant to the Custodian Agreement, the Collateral Agent. The term “Custodian” includes any agent
or sub-custodian acting on behalf of the Custodian.

 

“Custodian Agreement”
means a control agreement entered into by and among an Obligor, the Collateral Agent and a Custodian, in form and substance reasonably
acceptable to the Collateral Agent.

 

“Debt Documents”
means, collectively, the Revolving Loan Documents, the Designated Indebtedness Documents, any Hedging Agreement evidencing or relating
to any Hedging Agreement Obligations, and the Security Documents.

 

“Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

 

“Deliver”,
“Delivered” or “Delivery” (whether to the Collateral Agent or otherwise) means, with respect
to any Portfolio Investment of any Obligor or other Collateral, that such Portfolio Investment or other Collateral is held, registered
or covered by a recorded UCC-1 financing statement as described below, in each case in a manner reasonably satisfactory to the
Collateral Agent:

 

    	 	4	 

     

    

 

(a)          subject
to clause (l) below, in the case of each Certificated Security (other than a Special Equity Interest, U.S. Government Security,
Clearing Corporation Security, Euroclear Security or Clearstream Security), that such Certificated Security is either (i) in the
possession of the Collateral Agent and registered in the name of the Collateral Agent (or its nominee) or Indorsed to the Collateral
Agent or in blank, or (ii) in the possession of the Custodian and registered in the name of the Custodian (or its nominee) or Indorsed
in blank and the Custodian has either (A) agreed in documentation reasonably satisfactory to the Collateral Agent to hold such
Certificated Security as bailee on behalf of the Collateral Agent or (B) credited the same to a Securities Account for which the
Custodian is a Securities Intermediary and has agreed that such Certificated Security constitutes a Financial Asset and that the
Collateral Agent has NYUCC Control over such Securities Account;

 

(b)          subject
to clause (l) below, in the case of each Instrument, that such Instrument is either (i) in the possession of the Collateral Agent
and indorsed to the Collateral Agent or in blank, or (ii) in the possession of the Custodian and the Custodian has credited the
same to a Securities Account for which the Custodian is a Securities Intermediary and has agreed that such Instrument constitutes
a Financial Asset and that the Collateral Agent has NYUCC Control over such Securities Account;

 

(c)          subject
to clause (l) below, in the case of each Uncertificated Security (other than a Special Equity Interest, U.S. Government Security,
Clearing Corporation Security, Euroclear Security or Clearstream Security), that such Uncertificated Security is either (i) registered
on the books of the issuer thereof to the Collateral Agent (or its nominee), or (ii) registered on the books of the issuer thereof
to the Custodian (or its nominee) under an arrangement where the Custodian has credited the same to a Securities Account for which
the Custodian is a Securities Intermediary and has agreed that such Uncertificated Security constitutes a Financial Asset and that
the Collateral Agent has NYUCC Control over such Securities Account;

 

(d)          subject
to clause (l) below, in the case of each Clearing Corporation Security, that such Clearing Corporation Security is either (i) credited
to a Securities Account of the Collateral Agent at such Clearing Corporation (and, if such Clearing Corporation Security is a Certificated
Security, that the same is in the possession of such Clearing Corporation, or of an agent or custodian on its behalf), or (ii)
credited to a Securities Account of the Custodian at such Clearing Corporation (and, if a Certificated Security, so held in the
possession of such Clearing Corporation, or of an agent or custodian on its behalf) and the Security Entitlement of the Custodian
in such Clearing Corporation Securities Account has been credited by the Custodian to a Securities Account for which the Custodian
is a Securities Intermediary under an arrangement where the Custodian has agreed that such Clearing Corporation Security constitutes
a Financial Asset and that the Collateral Agent has NYUCC Control over such Securities Account;

 

    	 	5	 

     

    

 

(e)          in
the case of each Euroclear Security and Clearstream Security, that the actions described in clause (d) above have been taken with
respect to such Security as if such Security were a Clearing Corporation Security and Euroclear and Clearstream were Clearing Corporations;
provided, that such additional actions shall have been taken as shall be necessary under the law of Belgium (in the case
of Euroclear) and Luxembourg (in the case of Clearstream) to accord the Collateral Agent rights substantially equivalent to NYUCC
Control over such Security under the NYUCC;

 

(f)          in
the case of each U.S. Government Security, that such U.S. Government Security is either (i) credited to a Securities Account of
the Collateral Agent at a Federal Reserve Bank, or (ii) credited to a Securities Account of the Custodian at a Federal Reserve
Bank and the Security Entitlement of the Custodian in such Federal Reserve Bank Securities Account has been credited by the Custodian
to a Securities Account for which the Custodian is a Securities Intermediary under an arrangement where the Custodian has agreed
that such U.S. Government Security constitutes a Financial Asset and that the Collateral Agent has NYUCC Control over such Securities
Account;

 

(g)          in
the case of any Tangible Chattel Paper, that the original of such Tangible Chattel Paper is either (i) in the possession of the
Collateral Agent in the United States or (ii) in the possession of the Custodian in the United States under an arrangement where
the Custodian has agreed to hold such Tangible Chattel Paper as bailee on behalf of the Collateral Agent, and in each case any
agreements that constitute or evidence such Tangible Chattel Paper is free of any marks or notations indicating that it is then
pledged, assigned or otherwise conveyed to any Person other than the Collateral Agent;

 

(h)          subject
to clause (m) below, in the case of each General Intangible (including any participation in a debt obligation) of an Obligor organized
in the United States, that such General Intangible falls within the collateral description of a UCC-1 financing statement, naming
the relevant Obligor as debtor and the Collateral Agent as secured party and filed (x) in the jurisdiction of organization of such
Obligor, in the case of an Obligor that is a “registered organization” (as defined in the NYUCC) or (y) in such other
filing office as may be required under the Uniform Commercial Code as in effect in any applicable jurisdiction, in the case of
any other Obligor; provided that in the case of a participation in a debt obligation where such debt obligation is evidenced
by an Instrument, either (i) such Instrument is in the possession of the applicable participating institution in the United States,
and such participating institution has agreed that it holds possession of such Instrument for the benefit of the Collateral Agent
(or for the benefit of the Custodian, and the Custodian has agreed that it holds the interest in such Instrument as bailee on behalf
of the Collateral Agent) or (ii) such Instrument is in the possession of the applicable participating institution outside of the
United States and such participating institution (and, if applicable, the obligor that issued such Instrument) has taken such actions
as shall be necessary under the law of the jurisdiction where such Instrument is physically located to accord the Collateral Agent
rights equivalent to NYUCC Control over such Instrument under the NYUCC;

 

    	 	6	 

     

    

 

(i)          subject
to clause (m) below, in the case of each General Intangible (including any participation in a debt obligation) of an Obligor not
organized in the United States, that such Obligor shall have taken such action as shall be necessary to accord the Collateral Agent
rights substantially equivalent to a perfected first-priority (subject to Liens permitted pursuant to the Debt Documents) security
interest in such General Intangible under the NYUCC;

 

(j)          in
the case of any Deposit Account or Securities Account, that the bank or Securities Intermediary at which such Deposit Account or
Securities Account, as applicable, is located has agreed that the Collateral Agent has NYUCC Control over such Deposit Account
or Securities Account, or that such Deposit Account or Securities Account is in the name of the Custodian and the Custodian has
credited its rights in respect of such Deposit Account or Securities Account (the “Underlying Accounts”) to
a Securities Account for which the Custodian is a Securities Intermediary under an arrangement where the Custodian has agreed that
the rights of the Custodian in such Underlying Accounts constitute a Financial Asset and that the Collateral Agent has NYUCC Control
over such Securities Account;

 

(k)          in
the case of any money (regardless of currency), that such money has been credited to a Deposit Account or a Securities Account
over which the Collateral Agent has NYUCC Control as described in clause (j) above;

 

(l)          in
the case of any Certificated Security, Uncertificated Security or Instrument or Special Equity Interest issued by a Person organized
outside of the United States, that such additional actions shall have been taken as shall be necessary under applicable law to
accord the Collateral Agent rights substantially equivalent to those accorded to a secured party under the NYUCC that has possession
or control of such Certificated Security, Uncertificated Security or Instrument or Special Equity Interest;

 

(m)          in
the case of each Portfolio Investment of any Obligor consisting of a Bank Loan, in addition to all other actions required to be
taken hereunder, that all actions shall have been taken as required by Section 5.08(c)(iv), (v) or (vi) of the Revolving Credit
Agreement;

 

    	 	7	 

     

    

 

(n)          subject
to clause (l) above, in the case of a Special Equity Interest constituting a Certificated Security, that the holder of the first
Lien on such Certificated Security has possession of such Certificated Security in the United States (which has been registered
in the name of such holder (or its nominee) or Indorsed to such holder or in blank) and has agreed to deliver the certificates
evidencing such Certificated Security directly to the Collateral Agent upon the discharge of such Lien and has acknowledged that
it holds such certificates for the Collateral Agent subject to such Lien (it being understood that, upon receipt of any such Certificated
Security, if so requested by the Borrower the Collateral Agent shall deliver the same to the Custodian to be held in accordance
with the provisions of clause (a) above) and, in the case of a Special Equity Interest constituting an Uncertificated Security,
that the holder of the first Lien on such Uncertificated Security has been registered as the holder thereof on the books of the
issuer thereof and acknowledged that it holds such Uncertificated Security for the Collateral Agent subject to such Lien; and

 

(o)          in
the case of each Portfolio Investment of any Obligor or other Collateral not of a type covered by the foregoing clauses (a) through
(n), that such Portfolio Investment or other Collateral has been transferred to the Collateral Agent in accordance with applicable
law and regulation.

 

“Depositary”
means The Depositary Trust Company, its nominees and their respective successors.

 

“Designated
Indebtedness” means any Indebtedness that has been designated by the Borrower at the time of the incurrence thereof as
“Designated Indebtedness” for purposes of this Agreement in accordance with the requirements of Section 6.01.

 

“Designated
Indebtedness Documents” means, in respect of any Designated Indebtedness, all documents or instruments pursuant to which
such Designated Indebtedness shall be incurred or otherwise governing the terms or conditions thereof.

 

“Designated
Indebtedness Holders” means, in respect of any Designated Indebtedness, the Persons from time to time holding such Designated
Indebtedness.

 

“Designated
Indebtedness Obligations” means, collectively, in respect of any Designated Indebtedness, all obligations of the Borrower
to any Designated Indebtedness Holder or Financing Agent under the Designated Indebtedness Documents relating to such Designated
Indebtedness, including in each case in respect of the principal of and interest on loans made, letters of credit issued and any
notes or other instruments issued thereunder, all reimbursement obligations, fees, indemnification payments and other amounts whatsoever,
whether direct or indirect, absolute or contingent, now or hereafter from time to time owing to any Designated Indebtedness Holder
or any Financing Agent or any of them under such Designated Indebtedness Documents, and including all interest and expenses accrued
or incurred subsequent to the commencement of any bankruptcy or insolvency proceeding with respect to the Borrower, whether or
not such interest or expenses are allowed as a claim in such proceeding, provided that Designated Indebtedness Obligations shall
not include any Excluded Swap Obligation.

 

“Disqualified
Equity Interests” means Equity Interests of any issuer that after issuance are subject to any agreement between the holder
of such Equity Interests and the issuer thereof where the issuer is required to purchase, redeem, retire, acquire, cancel or terminate
such Equity Interests, other than (x) as a result of a change of control, or (y) in connection with any purchase, redemption, retirement,
acquisition, cancellation or termination with, or in exchange for, shares of Equity Interests that are not Disqualified Equity
Interests.

 

    	 	8	 

     

    

 

“Eligible Liens”
means those Liens on the Collateral included in the Borrowing Base permitted by each Debt Document (for the avoidance of doubt
in the event of any conflict or difference among the Debt Documents, the most restrictive provisions that are in effect (after
taking into account any modification, supplement, amendment or waiver to such provisions) shall apply against the Obligors hereunder).

 

“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests
in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof
to purchase or acquire any such equity interest. As used in this Agreement, “Equity Interests” shall not include convertible
debt unless and until such debt has been converted to capital stock.

 

“Excluded Assets”
means, individually and collectively, (i) any Excluded Equity Interest, (ii) any payroll accounts so long as such payroll account
is coded as such, withholding tax accounts, pension fund accounts, 401(k) accounts, and other deposit accounts specifically and
exclusively used for employee wage, health and benefit payments, (iii) any fiduciary accounts or any account for which any Obligor
is the servicer for another Person, including any accounts in the name of the Borrower in its capacity as servicer for a Financing
Subsidiary or any “Agency Account” pursuant to Section 5.08(c)(v) of the Revolving Credit Agreement, (iv) any applications
for trademarks or service marks filed in the United States Patent and Trademark Office pursuant to 15 U.S.C. § 1051 Section
(b)(1) unless and until evidence of use of the mark in interstate commerce is submitted to and accepted by the United States Patent
and Trademark Office pursuant to 15 U.S.C. §1051 Section (c) or Section (d), at which point such trademark or service mark
application shall be considered automatically included in the Collateral, (v) any Equity Interest in a Portfolio Investment that
is issued as an “equity kicker” to holders of subordinated debt and such Equity Interest is pledged to secure senior
debt of such Portfolio Investment to the extent required thereby, (vi) any assets that are held, directly or indirectly, by a CFC
or Transparent Subsidiary, and (vii) any assets with respect to which applicable law prohibits the creation or perfection of such
security interests therein (other than to the extent that any such prohibition is rendered ineffective by Section 9-406, 9-407,
9-408 or 9-409 of the Uniform Commercial Code as in effect in the relevant jurisdiction (or any successor provision) or any other
applicable law or principles of equity; provided, however, that such security interest shall attach immediately at
such time as such law is not effective or applicable, and, to the extent severable, shall attach immediately to any portion of
the Collateral that does not result in such consequences).

 

“Excluded Equity
Interest” means (a) any Equity Interest issued by any Financing Subsidiary; provided, that if any such Financing
Subsidiary shall at any time cease to be a Financing Subsidiary pursuant to the definition thereof in the Revolving Credit Agreement,
the Equity Interests issued by such Person shall no longer constitute Excluded Equity Interests and shall become part of the Collateral
hereunder, and (b) all Equity Interests in any Transparent Subsidiary or CFC, other than 65% of the Equity Interests of a First
Tier Foreign Subsidiary.

 

    	 	9	 

     

    

 

“Excluded Swap
Obligation” shall mean, with respect to any Subsidiary Guarantor, any Swap Obligation if, and to the extent that, all
or a portion of the Guarantee of such Subsidiary Guarantor, or the grant by such Subsidiary Guarantor of a security interest to
secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation
or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of
such Subsidiary Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined
in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Subsidiary Guarantor or the grant
of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement
governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps
for which such Guarantee or security interest is or becomes illegal.

 

“Euroclear” means Euroclear
Bank, S.A., as operator of the Euroclear system.

 

“Euroclear Security”
means a Security that (a) is a debt or equity Security and (b) is capable of being transferred to an Agent Member’s account
at Euroclear, whether or not such transfer has occurred.

 

“Event of Default”
means any Event of Default under and as defined in the Revolving Credit Agreement and any event of default (however designated)
that enables or permits (after giving effect to any applicable grace or cure periods) the holder or holders of any Designated Indebtedness
Obligations or Hedging Agreement Obligations or any trustee or agent on its or their behalf to cause any Designated Indebtedness
Obligations or Hedging Agreement Obligations to become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity.

 

“Financing Agent”
means, in respect of any Designated Indebtedness, any trustee, representative or agent for the holders of such Designated Indebtedness.

 

“Financing Subsidiary”
means (a) any SBIC Subsidiary or (b) any Structured Subsidiary.

 

“First Tier
Foreign Subsidiary” means any Transparent Subsidiary or CFC whose Equity Interests are directly owned by any Obligor.

 

“GAAP”
means generally accepted accounting principles in the United States of America.

 

    	 	10	 

     

    

 

“Governmental
Authority” means the government of the United States of America, or of any other nation, or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee”
of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property securities
or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit
or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business or customary indemnification agreements entered into in the ordinary
course of business in connection with obligations that do not constitute Indebtedness. The amount of any Guarantee at any time
shall be deemed to be an amount equal to the maximum stated or determinable amount of the primary obligation in respect of which
such Guarantee is incurred, unless the terms of such Guarantee expressly provide that the maximum amount for which such Person
may be liable thereunder is a lesser amount (in which case the amount of such Guarantee shall be deemed to be an amount equal to
such lesser amount).

 

“Guarantee Assumption
Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit B, between the Collateral
Agent and an entity that, pursuant to Section 7.05, is required to become a “Subsidiary Guarantor” hereunder (with
such changes as the Collateral Agent shall reasonably request, consistent with the requirements of Section 7.05, or to which the
Collateral Agent shall otherwise consent in its sole discretion).

 

“Guaranteed
Obligations” means, collectively, the Revolving Credit Agreement Obligations, the Designated Indebtedness Obligations
and the Hedging Agreement Obligations.

 

“Hedging Agreement”
means any interest rate protection agreement, foreign currency exchange protection agreement, commodity price protection agreement
or other interest or currency exchange rate or commodity price hedging arrangement entered into in the ordinary course of business
and not for speculative purposes. For the avoidance of doubt, in no event shall a Hedging Agreement include a total return swap.

 

    	 	11	 

     

    

 

“Hedging Agreement
Obligations” means, collectively, all obligations of any Obligor to any Revolving Lender (or any Affiliate thereof) under
any Hedging Agreement that is an interest rate protection agreement or other interest rate hedging arrangement and has been designated
by the Borrower by notice to the Collateral Agent as being secured by this Agreement, including in each case all fees, indemnification
payments and other amounts whatsoever, whether direct or indirect, absolute or contingent, now or hereafter from time to time owing
to such Revolving Lender (or any Affiliate thereof) under such Hedging Agreement, and including all interest and expenses accrued
or incurred subsequent to the commencement of any bankruptcy or insolvency proceeding with respect to such Obligor, whether or
not such interest or expenses are allowed as a claim in such proceeding, provided that Hedging Agreement Obligations shall not
include any Excluded Swap Obligation.

 

For purposes hereof,
it is understood that any obligations of any Obligor to a Person arising under a Hedging Agreement entered into at the time such
Person (or an Affiliate thereof) is a “Revolving Lender” party to the Revolving Credit Agreement (as applicable) shall
nevertheless continue to constitute Hedging Agreement Obligations for purposes hereof, notwithstanding that such Person (or its
Affiliate) may have assigned all of its Loans and other interests in the Revolving Credit Agreement and, therefore, at the time
a claim is to be made in respect of such obligations, such Person (or its Affiliate) is no longer a “Revolving Lender”
party to the Revolving Credit Agreement, provided that neither such Person nor any such Affiliate shall be entitled to the
benefits of this Agreement (and such obligations shall not constitute Hedging Agreement Obligations hereunder) unless, at or prior
to the time it ceased to be a Revolving Lender hereunder, it shall have notified the Collateral Agent in writing of the existence
of such agreement. Subject to and without limiting the preceding sentence, any Affiliate of a Revolving Lender that is a party
to a Hedging Agreement shall be included in the term “Revolving Lender” for purposes of this Agreement solely for purposes
of the rights and obligations arising hereunder in respect of such Hedging Agreement and the Hedging Agreement Obligations thereunder.

 

The designation of any
Hedging Agreement as being secured by this Agreement in accordance with the first paragraph under this definition of “Hedging
Agreement Obligations” shall not create in favor of any Revolving Lender or any Affiliate thereof that is a party thereto
(i) any rights in connection with the management or release of any Collateral or of the obligations of any Subsidiary Guarantor
under this Agreement or (ii) any rights to consent to any amendment, waiver, or other matter under this Agreement or any other
Loan Document. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, as applicable, no provider
or holder of any Hedging Agreement Obligations (other than in its capacity as Revolving Administrative Agent, Collateral Agent
or Revolving Lender to the extent applicable) has any individual right to enforce this Agreement or bring any remedies with respect
to any Lien on Collateral granted pursuant to the Loan Documents. By accepting the benefits of this Agreement, such party shall
be deemed to have appointed the Collateral Agent as its agent and agreed to be bound by this Agreement as a Secured Party, subject
to the limitations set forth in the preceding sentence.

 

    	 	12	 

     

    

 

“Indebtedness”
of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits, loans
or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar debt instruments,
(c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by
such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade
accounts payable and accrued expenses in the ordinary course of business not past due for more than 90 days after the date on which
such trade account payable was due), (e) all Indebtedness of others secured by any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed (with the value of such debt being the lower of the outstanding
amount of such debt and the fair market value of the property subject to such Lien), (f) all Guarantees by such Person of Indebtedness
of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (i) the net amount such Person would be obligated for under
any Hedging Agreement if such Hedging Agreement was terminated at the time of determination, (j) all obligations, contingent or
otherwise, with respect to Disqualified Equity Interests, and (k) all obligations, contingent or otherwise, of such Person in respect
of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor (or such Person is not otherwise liable for such Indebtedness). Notwithstanding the foregoing,
“Indebtedness” shall not include (x) purchase price holdbacks arising in the ordinary course of business in respect
of a portion of the purchase price of an asset or Investment to satisfy unperformed obligations of the seller of such asset or
Investment or (y) a commitment arising in the ordinary course of business to make a future Portfolio Investment or fund the delayed
draw or unfunded portion of any existing Portfolio Investment.

 

“Indorsed”
means, with respect to any Certificated Security, that such Certificated Security has been assigned or transferred to the applicable
transferee pursuant to an effective Indorsement.

 

“ING” means ING Capital
LLC.

 

“Intellectual
Property” means, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks,
the Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses.

 

“Investment”
means, for any Person: (a) Equity Interests, bonds, notes, debentures or other securities of any other Person (including convertible
securities) or any agreement to acquire any Equity Interests, bonds, notes, debentures or other securities of any other Person
(including any “short sale” or any sale of any securities at a time when such securities are not owned by the Person
entering into such sale); (b) deposits, advances, loans or other extensions of credit made to any other Person (including purchases
of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such
Person); or (c) Hedging Agreements.

 

    	 	13	 

     

    

 

“Lien”
means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease
or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such
securities, except in favor of the issuer thereof (and, in the case of Portfolio Investments that are equity securities, excluding
customary drag-along, tag-along, right of first refusal and other similar rights in favor of other equity holders of the same issuer).

 

“Loans” means the revolving
loans made by the Revolving Lenders to the Borrower pursuant to the Revolving Credit Agreement.

 

“Notice of Designation”
has the meaning assigned to such term in Section 6.01.

 

“NYUCC”
means the Uniform Commercial Code as in effect from time to time in the State of New York.

 

“NYUCC Control”
means “control” as defined in Section 9-104, 9-105, 9-106 or 9-107 of the NYUCC.

 

“Obligors”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Patent Licenses”
means all agreements providing for the granting of any right in or to Patents (whether such Obligor is licensee or licensor thereunder)
including each agreement referred to in Annex 2.11 hereto.

 

“Patents”
means all United States and foreign patents and certificates of invention, or similar industrial property rights, and applications
for any of the foregoing, including, but not limited to: (i) each patent and patent application referred to in Annex 2.11
hereto, (ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii)
all rights corresponding thereto throughout the world, (iv) all inventions and improvements described therein, (v) all rights to
sue for past, present and future infringements thereof, and (vi) all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages, and proceeds of suit.

 

“Permitted Liens”
means those Liens on the Collateral (other than Collateral included in the Borrowing Base) permitted by each Debt Document (for
the avoidance of doubt in the event of any conflict or difference among the Debt Documents, the most restrictive provisions that
are in effect (after taking into account any modification, supplement, amendment or waiver of such provisions) shall apply against
the Obligors hereunder).

 

    	 	14	 

     

    

 

“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

 

“Pledge Supplement”
means a supplement to this Agreement substantially in the form of Exhibit D.

 

“Pledged Debt”
means all indebtedness owed to any Obligor (other than Portfolio Investments (unless issued by a Subsidiary)), the instruments
(if any) evidencing such indebtedness (including the instruments described on Annex 2.08 hereto) and all interest, cash,
instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness.

 

“Pledged Equity
Interests” means all Equity Interests (other than Excluded Equity Interests) owned by any Obligor issued by any Subsidiary
of such Obligor (including the Equity Interests described on Annex 2.07 hereto) and the certificates, if any, representing
such Equity Interests and any interest of such Obligor in the entries on the books of the issuer of such Equity Interests or on
the books of any Securities Intermediary pertaining to such Equity Interests, and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Equity Interests.

 

“Pledged Interests”
means all Pledged Debt and Pledged Equity Interests.

 

“Portfolio Investment”
means any Investment held by the Borrower and its Subsidiaries in their asset portfolio.

 

“Qualified ECP
Guarantor” shall mean, in respect of any Swap Obligation, each Subsidiary Guarantor that has total assets exceeding $10,000,000
at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation
or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible contract participant” by entering into
a keepwell under section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person’s Affiliates.

 

“Required Secured
Parties” means, (a) so long as no Trigger Event has occurred and is continuing, “Required Lenders” under
and as defined in the Revolving Credit Agreement or (b) if a Trigger Event shall have occurred and be continuing, Secured Parties
holding more than 50% of the aggregate amount of the sum of the Revolving Credit Agreement Obligations and the Designated Indebtedness
Obligations.

 

    	 	15	 

     

    

 

“Revolving Administrative Agent”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Revolving Credit
Agreement” means the Senior Secured Revolving Credit Agreement, dated as of the date hereof, by and among the Borrower,
the Revolving Lenders from time to time party thereto, and the Revolving Administrative Agent.

 

“Revolving Credit
Agreement Obligations” means, collectively, all obligations of the Borrower and the Subsidiary Guarantors to the Revolving
Lenders and the Revolving Administrative Agent under the Revolving Credit Agreement and the other Loan Documents (as defined in
the Revolving Credit Agreement), including in each case in respect of the principal of and interest on the loans made thereunder,
and all fees, indemnification payments and other amounts whatsoever, whether direct or indirect, absolute or contingent, now or
hereafter from time to time owing to the Revolving Administrative Agent or the Revolving Lenders or any of them under or in respect
of the Revolving Credit Agreement and the other Loan Documents (as defined in the Revolving Credit Agreement), and including all
interest and expenses accrued or incurred subsequent to the commencement of any bankruptcy or insolvency proceeding with respect
to the Borrower, whether or not such interest or expenses are allowed as a claim in such proceeding; provided that Revolving
Credit Agreement Obligations shall not include any Excluded Swap Obligation.

 

“Revolving Lender”
means any “Lender” (as defined in the Revolving Credit Agreement) that is from time to time party to the Revolving
Credit Agreement.

 

“Revolving Loan
Documents” has the meaning assigned to the term “Loan Documents” in the Revolving Credit Agreement.

 

“Revolving Loans”
means the revolving loans made by the Revolving Lenders to the Borrower pursuant to the Revolving Credit Agreement.

 

“SBIC Subsidiary”
means any Subsidiary of the Borrower designated by the Borrower as an “SBIC Subsidiary” under the applicable Debt Documents
and pursuant to the procedures specified in such Debt Documents (with notice to the Collateral Agent to the extent required thereunder).

 

“Secured Obligations”
means, collectively, (a) in the case of the Borrower, the Revolving Credit Agreement Obligations, the Designated Indebtedness Obligations
and the Hedging Agreement Obligations, (b) in the case of the Subsidiary Guarantors, the obligations of the Subsidiary Guarantors
in respect of the Guaranteed Obligations pursuant to Section 3.01 and (c) in the case of all Obligors, all present and future obligations
of the Obligors to the Secured Parties, or any of them, hereunder or under any other Security Document, provided that Secured Obligations
shall not include any Excluded Swap Obligation.

 

    	 	16	 

     

    

 

“Secured Party”
means, collectively, the Revolving Lenders (including those holding Hedging Agreement Obligations), the Revolving Administrative
Agent, each Designated Indebtedness Holder, each Financing Agent and each Person that is not a Revolving Lender and is owed a Hedging
Agreement Obligation of the type described in, and subject to the conditions set forth in, the second paragraph of the definition
of “Hedging Agreement Obligations” and the Collateral Agent.

 

“Security Documents”
means, collectively, this Agreement, each Custodian Agreement, all Uniform Commercial Code financing statements filed with respect
to the security interests in the Collateral created pursuant hereto and all other assignments, pledge agreements, security agreements,
control agreements, custodial agreements and other instruments executed and delivered at any time by any of the Obligors pursuant
hereto or otherwise providing or relating to any collateral security for any of the Secured Obligations.

 

“Special Equity
Interest” means any Equity Interest that is subject to a Lien in favor of creditors of the issuer or the issuer’s
Affiliates of such Equity Interest; provided that (a) such Lien was created to secure Indebtedness owing by such issuer or the
issuer’s Affiliates to such creditors, (b) such Indebtedness was (i) in existence at the time the Obligors acquired such
Equity Interest, (ii) incurred or assumed by such issuer substantially contemporaneously with such acquisition or (iii) already
subject to a Lien granted to such creditors and (c) unless such Equity Interest is not intended to be included in the Collateral,
the documentation creating or governing such Lien does not prohibit the inclusion of such Equity Interest in the Collateral.

 

“Structured
Subsidiary” means a direct or indirect Subsidiary of the Borrower designated by the Borrower as a “structured subsidiary”
under the applicable Debt Documents and pursuant to the procedures specified in such Debt Documents (with notice to the Collateral
Agent).

 

“Subsidiary”
means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated
financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation,
limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled
by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Anything herein
to the contrary notwithstanding, the term “Subsidiary” shall not include any Person that constitutes an Investment
held by any Obligor in the ordinary course of business and that is not, under GAAP, consolidated on the financial statements of
the Borrower and its Subsidiaries. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.

 

“Subsidiary
Guarantors” has the meaning assigned to such term in the preamble of this Agreement.

 

    	 	17	 

     

    

 

“Swap Obligation”
means, with respect to any Subsidiary Guarantor, an obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Termination
Date” has the meaning assigned to such term in the Revolving Credit Agreement.

 

“Trademark Licenses”
means any and all agreements providing for the granting of any right in or to Trademarks (whether such Obligor is licensee or licensor
thereunder) including each agreement referred to in Annex 2.11 hereto.

 

“Trademarks”
means all United States and foreign trademarks, trade names, corporate names, company names, business names, fictitious business
names, Internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers,
designs and general intangibles of a like nature, and all registrations and applications for any of the foregoing including, but
not limited to: (i) the registrations and applications referred to in Annex 2.11 hereto, (ii) all extensions or renewals
of any of the foregoing, (iii) all of the goodwill of the business connected with the use of and symbolized by the foregoing, (iv)
the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and
(v) all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages, and proceeds of suit.

 

“Trade Secret
Licenses” means any and all agreements providing for the granting of any right in or to Trade Secrets (whether such Obligor
is licensee or licensor thereunder) including each agreement referred to in Annex 2.11 hereto.

 

“Trade Secrets”
means all trade secrets and all other confidential or proprietary information and know-how whether or not such Trade Secret has
been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in
any way to such Trade Secret, including but not limited to: (i) the right to sue for past, present and future misappropriation
or other violation of any Trade Secret, and (ii) all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages, and proceeds of suit.

 

“Transparent
Subsidiary” means an entity directly or indirectly owned by an Obligor that has no material assets other than Equity
Interests (held directly or indirectly through other Transparent Subsidiaries) in one or more CFCs.

 

“Trigger Event”
means any of the following events or conditions:

 

(a)          Acceleration
of Secured Obligations representing 66-2/3% or more of the aggregate Secured Obligations at the time outstanding;

 

    	 	18	 

     

    

 

(b)          an
involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of any Obligor or its debts, or of a substantial part of its assets, under any Federal or state bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Obligor or for a substantial part of its assets, and, in any such case, such proceeding
or petition shall continue undismissed for a period of sixty (60) or more days or an order or decree approving or ordering any
of the foregoing shall be entered; or

 

(c)          any
Obligor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief
under any Federal or state bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (b) above,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Obligor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any corporate or other
action for the purpose of effecting any of the foregoing.

 

“United States”
means the United States of America.

 

“U.S. Government
Security” means any security that is the direct obligation of, and an obligation the timely payment of principal and
interest on which is fully guaranteed by, the United States or any agency or instrumentality of the United States and the obligation
of which is backed by the full faith and credit of the United States and in the form of conventional bills, bonds and notes.

 

1.03         Terms
Generally. The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to
any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors
and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein
to Sections, Exhibits and Annexes shall be construed to refer to Sections of, and Exhibits and Annexes to, this Agreement and
(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

    	 	19	 

     

    

 

Section 2.          Representations
and Warranties. Each Obligor represents and warrants to the Secured Parties that:

 

2.01         Organization.
Such Obligor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

 

2.02         Authorization;
Enforceability. The execution, delivery and performance of this Agreement, and
the granting of the Liens contemplated hereunder, are within such Obligor’s corporate or other powers and have been duly
authorized by all necessary corporate or other action, including by all necessary shareholder, manager and/or member action and
action by the board of directors or other governing body of such Obligor. This Agreement has been duly executed and delivered
by such Obligor and constitutes a legal, valid and binding obligation of such Obligor, enforceable in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

 

2.03         Governmental
Approvals; No Conflicts. The execution, delivery and performance of this Agreement,
and the granting of the Liens contemplated hereunder, (a) do not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority, except for (i) such as have been or will be obtained or made and are or will
be in full force and effect and (ii) filings and recordings in respect of the Liens created pursuant hereto, (b) will not violate
any applicable law or regulation or the charter, by-laws or other organizational documents of any Obligor or any order of any
Governmental Authority (including the Investment Company Act of 1940, as amended from time to time, and the rules, regulations
and orders issued by the SEC thereunder), (c) will not violate or result in a default in any material respect under any indenture,
agreement or other instrument binding upon any Obligor or any of its assets, or give rise to a right thereunder to require any
payment to be made by any such Person, and (d) except for the Liens created pursuant hereto, will not result in the creation or
imposition of any Lien on any asset of any Obligor.

 

2.04         Title.
Such Obligor is the sole beneficial owner of the Collateral in which a security interest is granted by such Obligor hereunder
and no Lien exists upon such Collateral other than (a) the security interest created or provided for herein, which security interest
constitutes a valid first and prior perfected Lien, subject to Eligible Liens on the Collateral included in the Borrowing Base
and subject to Permitted Liens on all other Collateral (except that any such security interest in a Special Equity Interest may
be subject to a Lien in favor of a creditor of the issuer of such Special Equity Interest as contemplated by the definition of
such term in Section 1.02) and (b) other Liens not prohibited by the provisions of any Debt Document.

 

    	 	20	 

     

    

 

2.05         Names,
Etc. The full and correct legal name, type of organization, jurisdiction of organization,
organizational ID number (if applicable) and place of business (or, if more than one, chief executive office) of each Obligor
as of the ClosingAmendment
Effective Date are correctly set forth in Annex 2.05 (and of each additional Obligor as of the date of the Guarantee
Assumption Agreement referred to below are set forth in the supplement to Annex 2.05 in Appendix A to the Guarantee Assumption
Agreement executed and delivered by such Obligor pursuant to Section 7.05).

 

2.06         Changes
in Circumstances. No Obligor has (a) within the period of four months prior to the date hereof or
four months prior to the Amendment Effective Date (or, in the case of any Subsidiary Guarantor, within the period of
four months prior to the date it becomes a party hereto pursuant to a Guarantee Assumption Agreement), changed its location (as
defined in Section 9-307 of the NYUCC), (b) as of the date hereof and
as of the Amendment Effective Date (or, with respect to any Subsidiary Guarantor, as of the date it becomes a party
hereto pursuant to a Guarantee Assumption Agreement), changed its name or (c) as of the date hereof and
as of the Amendment Effective Date (or, with respect to any Subsidiary Guarantor, as of the date it becomes a party
hereto pursuant to a Guarantee Assumption Agreement), become a “new debtor” (as defined in Section 9-102(a)(56) of
the NYUCC) with respect to a currently effective security agreement previously entered into by any other Person and binding upon
such Obligor, in each case except as notified in writing to the Collateral Agent prior to the date hereof or
the Amendment Effective Date (or, in the case of any Subsidiary Guarantor, prior to the date it becomes a party hereto
pursuant to a Guarantee Assumption Agreement).

 

2.07         Pledged
Equity Interests. (i) Annex 2.07 sets forth a complete and correct list of all Pledged Equity Interests owned by any
Obligor onas of
the ClosingAmendment
Effective Date (or owned by a Subsidiary Guarantor on the date it becomes a party hereto pursuant to a Guarantee Assumption
Agreement) and on such date such Pledged Equity Interests constitute the percentage of issued and outstanding shares of stock,
percentage of membership interests, percentage of partnership interests or percentage of beneficial interest of the respective
issuers thereof indicated on Annex 2.07; (ii) on such date, the Obligors listed on Annex 2.07 are the record and
beneficial owners of the Pledged Equity Interests free of all Liens, rights or claims of other Persons and there are no outstanding
warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to,
or property that is convertible into, or that requires the issuance or sale of, any Pledged Equity Interests; and (iii) no consent
of any Person including any other general or limited partner, any other member of a limited liability company, any other shareholder
or any other trust beneficiary is necessary in connection with the creation, perfection or first priority (subject to Eligible
Liens on the Collateral included in the Borrowing Base and subject to Permitted Liens on all other Collateral) status of the security
interest of the Collateral Agent in any Pledged Equity Interests or the exercise by the Collateral Agent of the voting or other
rights provided for in this Agreement or the exercise of remedies in respect thereof.

 

2.08         Promissory
Notes. Annex 2.08 sets forth a complete and correct list of all Promissory Notes (other than any previously delivered
to the Custodian or held in a Securities Account referred to in Annex 2.09) held by any Obligor on the ClosingAmendment
Effective Date (or held by a Subsidiary Guarantor on the date it becomes a party hereto pursuant to a Guarantee Assumption
Agreement) that are either included in the Borrowing Base or have an aggregate unpaid principal amount in excess of $75,000.

 

    	 	21	 

     

    

 

2.09         Deposit
Accounts and Securities Accounts. Annex 2.09 sets forth a complete and correct
list of all Deposit Accounts, Securities Accounts and Commodity Accounts of the Obligors on the ClosingAmendment
Effective Date (and of any Subsidiary Guarantor on the date it becomes a party hereto pursuant to a Guarantee Assumption
Agreement), except for any Deposit Account specially and exclusively used for payroll, payroll taxes and other employee wage and
benefit payments.

 

2.10         Commercial
Tort Claims. Annex 2.10 sets forth a complete and correct list of all Commercial
Tort Claims of the Obligors on the ClosingAmendment
Effective Date (and of any Subsidiary Guarantor on the date it becomes a party hereto pursuant to a Guarantee Assumption
Agreement).

 

2.11         Intellectual
Property and Licenses.

 

(a)          Annex
2.11 sets forth a true and complete list on the date hereofAmendment
Effective Date (or on the date a Subsidiary Guarantor becomes a party hereto pursuant to a Guarantee Assumption Agreement)
of (i) all United States, state and foreign registrations of and applications for Patents, Trademarks, and Copyrights owned by
each Obligor and (ii) all Patent Licenses, Trademark Licenses, Trade Secret Licenses and Copyright Licenses;

 

(b)          on
the date hereof or thereofAmendment
Effective Date or the date of such joinder, each Obligor is the sole and exclusive owner of the entire right, title,
and interest in and to all Intellectual Property listed on Annex 2.11, and owns or has as of the date
hereof or thereofAmendment Effective Date or the date
of such joinder the valid right to use all other Intellectual Property used in or necessary to conduct its business,
free and clear of all Liens, claims, encumbrances and licenses, except for Permitted Liens and the licenses set forth on Annex
2.11;

 

(c)          as
of the date hereof or thereofAmendment
Effective Date or the date of such joinder, all Intellectual Property owned by the Obligors is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part, and as of the date hereof or thereofAmendment
Effective Date or the date of such joinder, each Obligor has performed all acts and has paid all renewal, maintenance,
and other fees and taxes required to maintain each and every registration and application of Copyrights, Patents and Trademarks
in full force and effect;

 

(d)          on
the date hereof or thereofAmendment
Effective Date or the date of such joinder, all Intellectual Property set forth in Annex 2.11 is valid and enforceable;
no holding, decision, or judgment has been rendered against any Obligor in any action or proceeding before any court or administrative
authority challenging the validity of, any Obligor’s right to register, or any Obligor’s rights to own or use, any
Intellectual Property and no such action or proceeding is pending or, to each Obligor’s knowledge, threatened;

 

    	 	22	 

     

    

 

(e)          on
the date hereof or thereofAmendment
Effective Date or the date of such joinder, all registrations and applications for Copyrights, Patents and Trademarks
owned by the Obligors are standing in the name of an Obligor, and none of the Trademarks, Patents, Copyrights or Trade Secrets
owned by the Obligors has been licensed by any Obligor to any Affiliate or third party, except as disclosed in Annex 2.11;

 

(f)          as
of the date hereof or thereofAmendment
Effective Date or the date of such joinder, each Obligor has been using appropriate statutory notice of registration
in connection with its use of registered Trademarks, proper marking practices in connection with the use of Patents, and appropriate
notice of copyright in connection with the publication of Copyrights, in each case if material to the business of such Obligor;

 

(g)          to
each Obligor’s knowledge, as of the date hereof or thereofAmendment
Effective Date or the date of such joinder, the conduct of each Obligor’s business does not infringe upon or otherwise
misappropriate or violate any trademark, patent, copyright, trade secret or other intellectual property right owned or controlled
by a third party; and no claim has been made, in writing or, to such Obligor’s knowledge, threatened, that the use of any
Intellectual Property owned or used by any Obligor (or any of its respective licensees) or the conduct of any Obligor’s business
infringes, misappropriates, or violates the asserted rights of any third party;

 

(h)          to
each Obligor’s knowledge, as of the date hereof or thereofAmendment
Effective Date or the date of such joinder, no third party is infringing upon or otherwise violating any rights in any
Intellectual Property owned or used by such Obligor, or any of its respective licensees;

 

(i)          as
of the date hereof or thereofAmendment
Effective Date or the date of such joinder, no settlement or consents, covenants not to sue, nonassertion assurances,
or releases have been entered into by any Obligor or to which any Obligor is bound that adversely affect any Obligor’s rights
to own or use any Intellectual Property; and

 

(j)          as
of the date hereof or thereofAmendment
Effective Date or the date of such joinder, no Obligor has made a previous assignment, sale, transfer or agreement constituting
a present or future assignment, sale, transfer or agreement of any Intellectual Property that has not been terminated or released,
and there is no effective financing statement or other document or instrument now executed, or on file or recorded in any public
office, granting a security interest in or otherwise encumbering any part of the Intellectual Property, other than in favor of
the Collateral Agent.

 

    	 	23	 

     

    

 

Section 3.          Guarantee.

 

3.01         The
Guarantee. The Subsidiary Guarantors hereby jointly and severally guarantee to
the Collateral Agent for the benefit of each of the Secured Parties and their respective successors and assigns the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of the Guaranteed Obligations. The Subsidiary Guarantors
hereby further jointly and severally agree that if the Borrower shall fail to pay in full when due (whether at stated or extended
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will jointly and severally
pay the same without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any
of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of such extension or renewal.

 

3.02         Obligations
Unconditional. The obligations of the Subsidiary Guarantors under Section 3.01
are irrevocable, absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Borrower under this Agreement, the other Debt Documents or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than the satisfaction in full of
the Guaranteed Obligations), it being the intent of this Section 3 that the obligations of the Subsidiary Guarantors hereunder
shall be absolute and unconditional under any and all circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder,
which shall remain absolute and unconditional as described above:

 

(a)          at
any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

 

(b)          any
of the acts mentioned in any of the provisions of this Agreement, the other Debt Documents or any other agreement or instrument
referred to herein or therein shall be done or omitted;

 

(c)          the
maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented
or amended in any respect, or any right under this Agreement, the other Debt Documents or any other agreement or instrument referred
to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall
be released or exchanged in whole or in part or otherwise dealt with; or

 

(d)          any
lien or security interest granted to, or in favor of, any Secured Party as security for any of the Guaranteed Obligations shall
fail to be perfected.

 

    	 	24	 

     

    

 

The Subsidiary Guarantors hereby expressly
waive diligence, presentment, demand of payment, protest and all notices whatsoever (except as expressly required by this Agreement
or any other Debt Document), and any requirement that any Secured Party exhaust any right, power or remedy or proceed against the
Borrower under this Agreement, the other Debt Documents or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.

 

3.03         Reinstatement.
The obligations of the Subsidiary Guarantors under this Section 3 shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise, and the Subsidiary Guarantors jointly and severally agree that they will indemnify the Secured Parties on demand
for all reasonable and documented out-of-pocket costs and expenses (including reasonable and documented fees and other charges
of counsel (but excluding the allocated costs of internal counsel)) incurred by the Secured Parties in connection with such rescission
or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted
a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

 

3.04         Subrogation.
The Subsidiary Guarantors hereby jointly and severally agree that until the payment and satisfaction in full in cash of all Guaranteed
Obligations (other than unasserted, contingent obligations), and the expiration and termination of all commitments to extend credit
under all Debt Documents, they shall not exercise any right or remedy arising by reason of any performance by them of their guarantee
in Section 3.01, whether by subrogation or otherwise, against the Borrower or any other guarantor of any of the Guaranteed Obligations
or any security for any of the Guaranteed Obligations.

 

3.05         Remedies.
The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the Secured Parties, a Guaranteed
Obligation may be declared to be forthwith due and payable as provided in the respective Debt Document therefor including, in
the case of the Revolving Credit Agreement, the provisions specifying the existence of an event of default (and shall be deemed
to have become automatically due and payable in the circumstances provided therein including, in the case of the Revolving Credit
Agreement, such provisions) for purposes of Section 3.01 notwithstanding any stay, injunction or other prohibition preventing
such declaration (or such obligations from becoming automatically due and payable) as against the Borrower or any Subsidiary Guarantors
and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Subsidiary Guarantors
for purposes of Section 3.01.

 

    	 	25	 

     

    

 

3.06         Continuing
Guarantee. The guarantee in this Section 3 is a continuing guarantee of payment
(and not of collection), and shall apply to all Guaranteed Obligations whenever arising.

 

3.07         Instrument
for the Payment of Money. Each Subsidiary Guarantor hereby acknowledges that the
guarantee in this Section 3 constitutes an instrument for the payment of money, and consents and agrees that any Secured Party,
at its sole option, in the event of a dispute by such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have
the right to bring motion action under New York CPLR Section 3213.

 

3.08         Rights
of Contribution. The Obligors hereby agree, as between themselves, that if any
Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor
of any Guaranteed Obligations, then each other Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but subject
to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Subsidiary Guarantor’s Pro Rata Share
(as defined below and determined, for this purpose, without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations. The payment obligation
of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section 3.08 shall be subordinate and subject in right of
payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Section
3 and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction
in full of all of such obligations.

 

For purposes of this
Section 3.08, (i) “Excess Funding Guarantor” means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess Payment”
means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share
of such Guaranteed Obligations and (iii) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed
as a percentage) of (x) the amount by which the aggregate fair saleable value of all properties of such Subsidiary Guarantor (excluding
any shares of stock or other equity interest of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities
of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations
of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all properties of the Borrower and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the Obligors hereunder) of the Borrower and all of the Subsidiary Guarantors,
determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the date hereof, as of the date hereof, and (B)
with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.

 

    	 	26	 

     

    

 

3.09         General
Limitation on Guarantee Obligations. In any action or proceeding involving any
state corporate or other law, or any Federal or state bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under Section 3.01 would otherwise, taking into account
the provisions of Section 3.08, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any
other creditors, on account of the amount of its liability under Section 3.01, then, notwithstanding any other provision hereof
to the contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor, any Secured Party
or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or proceeding.

 

3.10         Indemnity
by Borrower. In addition to all such rights of indemnity and subrogation as the
Subsidiary Guarantors may have under applicable law (but subject to Section 3.04), the Borrower agrees that (a) in the event a
payment shall be made by any Subsidiary Guarantor under this Agreement, the Borrower shall indemnify such Subsidiary Guarantor
for the full amount of such payment and such Subsidiary Guarantor shall be subrogated to the rights of the Person to whom such
payment shall have been made to the extent of such payment and (b) in the event any assets of any Subsidiary Guarantor shall be
sold pursuant to this Agreement or any other Security Document to satisfy in whole or in part the Guaranteed Obligations, the
Borrower shall indemnify such Subsidiary Guarantor in an amount equal to the greater of the book value or the fair market value
of the assets so sold.

 

3.11         Keepwell.
Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Obligor to honor all of its obligations under the guarantee
contained in this Section 3 in respect of Swap Obligations (provided, however that each Qualified ECP Guarantor shall only be
liable under this Section 3.11 for the maximum amount of such liability that can be incurred without rendering its obligations
under this Section 3.11, or otherwise under the guarantee contained in this Section 3, as it relates to such other Obligor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations
of each Qualified ECP Guarantor under this Section 3.11 shall remain in full force and effect until payment in full of all the
Secured Obligations (other than in respect of indemnities and contingent Obligations not then due and payable). Each Qualified
ECP Guarantor intends that this Section 3.11 constitute, and this Section 3.11 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Obligor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

 

Section 4.          Collateral.
As collateral security for the payment in full when due (whether at stated maturity, by acceleration or otherwise) of its Secured
Obligations, each Obligor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties as hereinafter
provided a security interest in all of such Obligor’s right, title and interest in, to and under all of the following property
and assets, in each case whether tangible or intangible, wherever located, and whether now owned by such Obligor or hereafter
acquired and whether now existing or hereafter coming into existence (all of the property described in this Section 4 being collectively
referred to herein as “Collateral”):

 

    	 	27	 

     

    

 

(a)          all
Accounts, all Chattel Paper, all Deposit Accounts, all Documents, all General Intangibles (including all Intellectual Property),
all Instruments (including all Promissory Notes), all Portfolio Investments, all Pledged Debt, all Pledged Equity Interests, all
Investment Property not covered by the foregoing (including all Securities, all Securities Accounts and all Security Entitlements
with respect thereto and Financial Assets carried therein, and all Commodity Accounts and Commodity Contracts), all letters of
credit and Letter-of-Credit Rights, all Money and all Goods (including Inventory and Equipment), and all Commercial Tort Claims;

 

(b)          to
the extent related to any Collateral, all Supporting Obligations;

 

(c)          to
the extent related to any Collateral, all books, correspondence, credit files, records, invoices and other papers (including all
tapes, cards, computer runs and other papers and documents in the possession or under the control of such Obligor or any computer
bureau or service company from time to time acting for such Obligor); and

 

(d)          all
Proceeds of any of the foregoing Collateral.

 

IT BEING UNDERSTOOD, HOWEVER, that (A)
in no event shall the security interest granted under this Section 4 attach to (1) any contract, property rights, obligation, instrument
or agreement to which an Obligor is a party (or to any of its rights or interests thereunder) if the grant of such security interest
would constitute or result in either (i) the abandonment, invalidation or unenforceability of any right, title or interest of such
Obligor therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such contract, property rights,
obligation, instrument or agreement (other than to the extent that any such terms would be rendered ineffective by Section 9-406,
9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the relevant jurisdiction), or (2) any Excluded Assets, and
notwithstanding anything to the contrary provided in this Agreement, the term “Collateral” shall not include, and the
Obligors shall not be deemed to have granted a security interest in, any Excluded Assets and (B) the Obligors, may by notice to
the Collateral Agent, exclude from the grant of a security interest provided above in this Section 4, any Special Equity Interest
designated by the Borrower in reasonable detail to the Collateral Agent in such notice (it being understood that the Borrower may
at any later time rescind any such designation by similar notice to the Collateral Agent).

 

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Section 5.          Certain
Agreements Among Secured Parties.

 

5.01         Priorities;
Additional Collateral.

 

(a)          Pari
Passu Status of Obligations. Each Secured Party by acceptance of the benefits of this Agreement and the other Security Documents
agrees that their respective interests in the Security Documents and the Collateral shall rank pari passu and that the Secured
Obligations shall be equally and ratably secured by the Security Documents subject to the terms hereof and the priority of payment
established in Section 8.06.

 

(b)          Sharing
of Guaranties and Liens. Each Secured Party by acceptance of the benefits of this Agreement and the other Security Documents
agrees that (i) such Secured Party will not accept from any Subsidiary of the Borrower any guarantee of any of the Guaranteed Obligations
unless such guarantor simultaneously guarantees the payment of all of the Guaranteed Obligations owed to all Secured Parties, and
(ii) such Secured Party will not hold, take, accept or obtain any Lien upon any assets of any Obligor or any Subsidiary of the
Borrower to secure the payment and performance of the Secured Obligations except and to the extent that such Lien is in favor of
the Collateral Agent pursuant to this Agreement or another Security Document to which the Collateral Agent is a party for the benefit
of all of the Secured Parties as provided herein.

 

Anything in this Section
5, or any other provision of this Agreement, to the contrary notwithstanding, this Agreement shall be inapplicable to any debtor-in-possession
financing that may be provided by any Secured Party to the Borrower or any of its Subsidiaries in any Federal or state bankruptcy
or insolvency proceeding, and no consent or approval of any other Secured Party shall be required as a condition to the provision
by any Secured Party of any such financing, and no other Secured Party shall be entitled to share in any Lien upon any Collateral
granted to any Secured Party to secure repayment of such debtor-in-possession financing; provided, that no Secured Party
shall be barred from objecting to any such financing on the basis of adequate protection or any other grounds.

 

5.02         Turnover
of Collateral. If a Secured Party acquires custody, control or possession of any
Collateral or the Proceeds therefrom, other than pursuant to the terms of this Agreement or on account of any payment that is
not expressly prohibited hereby, such Secured Party shall promptly (but in any event within five (5) Business Days) cause such
Collateral or Proceeds to be Delivered in accordance with the provisions of this Agreement. Until such time as such Secured Party
shall have complied with the provisions of the immediately preceding sentence, such Secured Party shall be deemed to hold such
Collateral and Proceeds in trust for the benefit of the Collateral Agent.

 

5.03         Cooperation
of Secured Parties. Each Secured Party will cooperate with the Collateral Agent
and with each other Secured Party in the enforcement of the Liens upon the Collateral and otherwise in order to accomplish the
purposes of this Agreement and the Security Documents.

 

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5.04         Limitation
upon Certain Independent Actions by Secured Parties. No Secured Party shall have
any right to institute any action or proceeding to enforce any term or provision of the Security Documents or to enforce any of
its rights in respect of the Collateral or to exercise any other remedy pursuant to the Security Documents or at law or in equity,
for the purpose of realizing on the Collateral, or by reason of jeopardy of any Collateral, or for the execution of any trust
or power hereunder (collectively, the “Specified Actions”), unless the Required Secured Parties have delivered
written instructions to the Collateral Agent and the Collateral Agent shall have failed to act in accordance with such instructions
within thirty (30) days thereafter. In such case but not otherwise, the Required Secured Parties may appoint one Person to act
on behalf of the Secured Parties solely to take any of the Specified Actions (the “Appointed Party”), and,
upon the acceptance of its appointment as Appointed Party, the Appointed Party shall be entitled to commence proceedings in any
court of competent jurisdiction or to take any other Specified Actions as the Collateral Agent might have taken pursuant to this
Agreement or the Security Documents (in accordance with the directions of the Required Secured Parties). The Obligors acknowledge
and agree that should the Appointed Party act in accordance with this provision, such Appointed Party will have all the rights,
remedies, benefits and powers as are granted to the Collateral Agent pursuant hereto or pursuant to any Security Documents.

 

5.05         No
Challenges. In no event shall any Secured Party take any action to challenge, contest
or dispute the validity, extent, enforceability, or priority of the Collateral Agent’s Liens hereunder or under any other
Security Document with respect to any of the Collateral, or that would have the effect of invalidating any such Lien or support
any Person who takes any such action. Each of the Secured Parties agrees that it will not take any action to challenge, contest
or dispute the validity, enforceability or secured status of any other Secured Party’s claims against any Obligor (other
than any such claim resulting from a breach of this Agreement by a Secured Party, or any challenge, contest or dispute alleging
arithmetical error in the determination of a claim), or that would have the effect of invalidating any such claim, or support
any Person who takes any such action.

 

5.06         Rights
of Secured Parties as to Secured Obligations. Notwithstanding any other provision
of this Agreement, the right of each Secured Party to receive payment of the Secured Obligations held by such Secured Party when
due (whether at the stated maturity thereof, by acceleration or otherwise) as expressed in any instrument evidencing or agreement
governing such Secured Obligations, or to institute suit for the enforcement of such payment on or after such due date, and the
obligation of the Obligors to pay their respective Secured Obligations when due, shall not be impaired or affected without the
consent of such Secured Party given in accordance with the Debt Documents to which such Secured Party is a party or its Secured
Obligations are bound; provided that, notwithstanding the foregoing, each Secured Party agrees that it will not attempt
to exercise remedies with respect to any Collateral except as provided in this Agreement.

 

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Section 6.          Designation
of Designated Indebtedness; Recordkeeping, Etc.

 

6.01         Designation
of Other Indebtedness. The Borrower may at any time designate as “Designated
Indebtedness” hereunder any other Indebtedness intended by the Borrower to be secured by the Collateral, provided
that such Designated Indebtedness satisfies at the time of incurrence thereof the terms and conditions of the definition of “Secured
Longer-Term Indebtedness” in the Revolving Credit Agreement, and Section 6.01(b)(ii) and the other provisions of the Revolving
Credit Agreement (as long as the Revolving Credit Agreement Obligations are outstanding (other than unasserted contingent obligations)),
such designation to be effected by delivery to the Collateral Agent of a notice substantially in the form of Exhibit A
or in such other form approved by the Collateral Agent (a “Notice of Designation”), which notice shall identify
such Indebtedness, provide that such Indebtedness be designated as “Designated Indebtedness” hereunder and be accompanied
by a certificate of a Financial Officer of the Borrower delivered to the Revolving Administrative Agent, each Financing Agent,
each Designated Indebtedness Holder party hereto and the Collateral Agent:

 

(a)          certifying
that such Indebtedness satisfies the conditions of this Section 6.01 and the Revolving Credit Agreement, and that after giving
effect to such designation and the incurrence of such Designated Indebtedness, no Default or Event of Default shall have occurred
and be continuing;

 

(b)          attaching
(and certifying as true and complete) copies of the Designated Indebtedness Documents for such Designated Indebtedness (including
all schedules and exhibits, and all amendments or supplements, thereto); and

 

(c)          identifying
the Financing Agent, if any, for such Designated Indebtedness (or, if there is no Financing Agent for such Designated Indebtedness,
identifying each holder of such Designated Indebtedness).

 

No such designation shall
be effective unless and until the Borrower and such Financing Agent (or, if there is no Financing Agent, each holder of such Designated
Indebtedness) shall have executed and delivered to the Collateral Agent an agreement in form and substance reasonably satisfactory
to the Collateral Agent, appropriately completed and duly executed and delivered by each party thereto, pursuant to which such
Financing Agent (or, if there is no Financing Agent, such holder) shall have become a party hereto and assumed the obligations
of a Financing Agent (or holder) hereunder, as applicable.

 

6.02         Recordkeeping.
The Collateral Agent will maintain books and records necessary to enable it to determine at any time all transactions under this
Agreement which have occurred on or prior to such time. Each Obligor agrees that such books and records maintained in good faith
by the Collateral Agent shall be conclusive as to the matters contained therein absent manifest error. Each Obligor shall have
the right to inspect such books and records at any time upon reasonable prior notice. In the event of any conflict between the
books and records maintained by any Secured Party and the books and records of the Collateral Agent in respect of such matters,
the books and records of the Collateral Agent shall control in the absence of manifest error.

  

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Section 7.          Covenants
of the Obligors. In furtherance of the grant of the security interest pursuant
to Section 4, each Obligor hereby agrees with the Collateral Agent for the benefit of the Secured Parties as follows:

 

7.01         Delivery
and Other Perfection.

 

(a)          With
respect to any Portfolio Investment or other Collateral as to which physical possession by the Collateral Agent or the Custodian
is required in order for such Portfolio Investment or Collateral to have been “Delivered”, such Obligor shall take
such actions as shall be necessary to effect Delivery thereof on or prior to the Closing Date and within ten (10) days after the
acquisition thereof by an Obligor with respect to any such Portfolio Investment or Collateral acquired after the Closing Date.
As to all other Collateral, such Obligor shall cause the same to be Delivered within three (3) Business Days of the acquisition
thereof, provided that Delivery shall not be required with respect to (1) accounts of the type described in clauses (A)
– (E) of Section 7.06 to the extent set forth therein, and (2) immaterial assets so long as (x) such assets are not included
in the Borrowing Base, (y) the Collateral Agent has a perfected first priority lien (subject to Eligible Liens) on such assets
and no other Person exercises Control over such assets and such assets have not been otherwise “Delivered” to any other
Person, and (z) the aggregate value of such assets described in this Section 7.01(a)(2) does not at any time exceed $75,000. In
addition, and without limiting the generality of the foregoing, each Obligor shall promptly from time to time give, execute, deliver,
file, record, authorize or obtain all such financing statements, continuation statements, notices, instruments, documents, account
control agreements or any other agreements or consents or other papers as may be necessary in the reasonable judgment of the Collateral
Agent to create, preserve, perfect, maintain the perfection of or validate the security interest granted pursuant hereto or to
enable the Collateral Agent to exercise and enforce its rights hereunder with respect to such security interest, and without limiting
the foregoing, shall:

 

(i)          keep
full and accurate books and records relating to the Collateral in all material respects; and

 

(ii)         subject
to compliance with Section 9.13 of the Revolving Credit Agreement and analogous clauses in other Debt Documents permit representatives
of the Collateral Agent, upon reasonable notice, at any time during normal business hours to inspect and make abstracts from its
books and records pertaining to the Collateral, and permit representatives of the Collateral Agent to be present at such Obligor’s
place of business to receive copies of communications and remittances relating to the Collateral, and forward copies of any notices
or communications received by such Obligor with respect to the Collateral, all in such manner as the Collateral Agent may reasonably
require; provided that each such Obligor shall be entitled to have its representatives and advisors present during any inspection
of its books and records at such Obligor’s place of business.

 

(b)          Unless
released from the Collateral pursuant to Section 10.03(e) or (f), once any Portfolio Investment has been Delivered, the Obligors
shall not take or permit any action that would result in such Portfolio Investment no longer being Delivered hereunder and shall
promptly from time to time give, execute, deliver, file, record, authorize or obtain all such financing statements, continuation
statements, notices, instruments, documents, account control agreements or any other agreements or consents or other papers as
may be necessary or desirable in the reasonable judgment of the Collateral Agent to continue the Delivered status of any Collateral.
Without limiting the generality of the foregoing, the Obligors shall not terminate any arrangement with the Custodian unless and
until a successor Custodian reasonably satisfactory to the Collateral Agent has been appointed and has executed all documentation
necessary to continue the Delivered status of the Collateral, which documentation shall be in form and substance reasonably satisfactory
to the Collateral Agent.

 

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7.02         Name;
Jurisdiction of Organization, Etc. Each Obligor agrees that (a) without providing
at least twenty (20) days prior written notice to the Collateral Agent (or such shorter period as may be approved by the Collateral
Agent in its sole discretion), such Obligor will not change its name, its place of business or, if more than one, chief executive
office, or its mailing address or organizational identification number if it has one, (b) if such Obligor does not have an organizational
identification number and later obtains one, such Obligor will forthwith notify the Collateral Agent of such organizational identification
number, and (c) such Obligor will not change its type of organization, jurisdiction of organization or other legal structure unless
such change is specifically permitted hereby or by the Revolving Credit Agreement and such Obligor provides the Collateral Agent
with at least twenty (20) days prior written notice of such permitted change (or such shorter period as may be approved by the
Collateral Agent in its sole discretion).

 

7.03         Other
Liens, Financing Statements or Control. Except as otherwise permitted under the
Revolving Credit Agreement (as long as any of the Revolving Credit Agreement Obligations are outstanding (other than unasserted
contingent obligations)) and the applicable provisions of each other Debt Document, the Obligors shall not (a) create or suffer
to exist any Lien upon or with respect to any Collateral, (b) file or suffer to be on file, or authorize or permit to be filed
or to be on file, in any jurisdiction, any financing statement or like instrument with respect to any of the Collateral in which
the Collateral Agent is not named as the sole Collateral Agent for the benefit of the Secured Parties, or (c) cause or permit
any Person other than the Collateral Agent to have “control” (within the meaning of the Uniform Commercial Code) of
any Deposit Account, Electronic Chattel Paper, Investment Property or Letter-of-Credit Right constituting part of the Collateral.

 

7.04         Transfer
of Collateral. Except as otherwise permitted under the Revolving Credit Agreement
(as long as any of the Revolving Credit Agreement Obligations are outstanding (other than unasserted contingent obligations))
and the other Debt Documents, the Obligors shall not sell, transfer, assign or otherwise dispose of any Collateral.

 

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7.05         Additional
Subsidiary Guarantors. As contemplated by the Revolving Credit Agreement, new Subsidiaries (other than a CFC or Transparent
Subsidiary (each as defined in the Revolving Credit Agreement) or Financing Subsidiary) of the Borrower formed or acquired by
the Borrower after the date hereof, Subsidiaries of the Borrower that after the date hereof cease to constitute Florida Sidecar
Subsidiaries (as defined in the Revolving Credit Agreement), CFCs, Transparent Subsidiaries or Financing Subsidiaries under the
Revolving Credit Agreement, and any other Person that otherwise becomes a Subsidiary (other than a Financing Subsidiary, CFC or
Transparent Subsidiary) within the meaning of the definition thereof, are required to become a “Subsidiary Guarantor”
under this Agreement, by executing and delivering to the Collateral Agent a Guarantee Assumption Agreement in the form of Exhibit
B hereto; provided, however, that, notwithstanding any provision to the contrary in this Agreement or any Debt
Document, no CFC or Transparent Subsidiary will be required to become a “Subsidiary Guarantor”. Accordingly, upon
the execution and delivery of any such Guarantee Assumption Agreement by any such Subsidiary, such Subsidiary shall automatically
and immediately, and without any further action on the part of any Person, become a “Subsidiary Guarantor” and an
“Obligor” for all purposes of this Agreement, and Annexes 2.05, 2.07, 2.08, 2.09, 2.10
and 2.11 hereto shall be deemed to be supplemented in the manner specified in such Guarantee Assumption Agreement.
In addition, upon execution and delivery of any such Guarantee Assumption Agreement, the new Subsidiary Guarantor makes the representations
and warranties set forth in Section 2 as of the date of such Guarantee Assumption Agreement and shall be permitted to update the
Annexes with respect to such Subsidiary.

 

7.06         Control
Agreements. No Obligor shall open or maintain any account with any bank, securities intermediary or commodities intermediary
(other than (A) any such accounts that are maintained by the Borrower in its capacity as “servicer” for a Financing
Subsidiary or any Agency Account, (B) any such accounts which hold solely money or financial assets of a Financing Subsidiary,
(C) any payroll account so long as such payroll account is coded as such, (D) withholding tax and fiduciary accounts or any trust
account maintained solely on behalf of a Portfolio Investment, and (E) any account in which the aggregate value of deposits therein,
together with all other such accounts under this clause (E), does not at any time exceed $75,000, provided that in the
case of each of the foregoing clauses (A) through (E), no other Person (other than the depository institution at which such account
is maintained) shall have “control” over such account (within the meaning of the Uniform Commercial Code) and such
account shall not have been otherwise “Delivered” to any other Person), unless such Obligor has notified the Collateral
Agent of such account and the Collateral Agent has NYUCC Control over such account pursuant to a control agreement in form and
substance reasonably satisfactory to the Collateral Agent.

 

7.07         Revolving
Credit Agreement . Each Subsidiary Guarantor agrees to perform, comply with and be bound by the covenants of the Revolving
Credit Agreement (as long as any of the Revolving Credit Agreement Obligations are outstanding (other than unasserted contingent
obligations)) (which provisions are incorporated herein by reference), applicable to such Subsidiary Guarantor as if each Subsidiary
Guarantor were a signatory to the Revolving Credit Agreement.

 

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7.08         Pledged
Equity Interests.

 

(a)          In
the event any Obligor acquires rights in any Pledged Equity Interest after the date hereof or any Excluded Equity Interest held
by any Obligor becomes a Pledged Equity Interest after the date hereof because it ceases to constitute an Excluded Equity Interest,
such Obligor shall deliver to the Collateral Agent a completed Pledge Supplement, together with all supplements to Annexes thereto,
reflecting such new Pledged Equity Interests. Notwithstanding the foregoing, it is understood and agreed that the security interest
of the Collateral Agent shall attach to all Pledged Equity Interests immediately upon any Obligor’s acquisition of rights
therein and shall not be affected by the failure of any Obligor to deliver a supplement to Annex 2.07 as required hereby;

 

(b)          Without
the prior written consent of the Collateral Agent, no Obligor shall vote to enable or take any other action to: (a) amend or terminate
any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents
in any way that materially and adversely changes the rights of such Obligor with respect to any Pledged Equity Interest or that
adversely affects the validity, perfection or priority of the Collateral Agent’s security interest or the ability of the
Collateral Agent to exercise its rights and remedies under this Agreement with respect to such Pledged Equity Interest, (b) other
than as permitted under the Revolving Credit Agreement and each other Debt Document, permit any issuer of any Pledged Equity Interest
to dispose of all or a material portion of their assets, or (c) cause any issuer of any Pledged Equity Interests which are interests
in a partnership or limited liability company and which are not securities (for purposes of the NYUCC) on the date hereof to elect
or otherwise take any action to cause such Pledged Equity Interests to be treated as securities for purposes of the NYUCC; except
if such Obligor shall promptly notify the Collateral Agent in writing of any such election or action and, in such event, shall
take all steps necessary or advisable in the Collateral Agent’s reasonable discretion to establish the Collateral Agent’s
NYUCC Control thereof; and

 

(c)          Each
Obligor consents to the grant by each other Obligor of a security interest in all Pledged Equity Interests to the Collateral Agent
and, without limiting the foregoing, consents to the transfer of any Pledged Equity Interest to the Collateral Agent or its nominee
following the occurrence and during the continuation of an Event of Default and to the substitution of the Collateral Agent or
its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related
thereto.

 

7.09         Voting
Rights, Dividends, Etc. in Respect of Pledged Interests.

 

(a)          So
long as no Event of Default or Trigger Event shall have occurred and be continuing:

 

(i)          each
Obligor may exercise any and all voting and other consensual rights pertaining to any Pledged Interests for any purpose not inconsistent
with the terms of this Agreement or any Debt Document; provided, however, that (A) each Obligor will give the Collateral
Agent at least five (5) Business Days’ notice of the manner in which it intends to exercise, or the reasons for refraining
from exercising, any such right that could reasonably be expected to adversely affect in any material respect the value, liquidity
or marketability of any Collateral or the creation, perfection and priority of the Collateral Agent’s Lien; and (B) none
of the Obligors will exercise or refrain from exercising any such right, as the case may be, if the Collateral Agent gives an Obligor
notice that, in the Collateral Agent’s judgment, such action (or inaction) could reasonably be expected to adversely affect
in any material respect the value, liquidity or marketability of any Collateral or the creation, perfection and priority of the
Collateral Agent’s Lien or the ability of the Collateral Agent to exercise its rights and remedies under this Agreement with
respect to such Pledged Interest;

 

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(ii)         each
of the Obligors may receive and retain any and all dividends, interest or other distributions paid in respect of the Pledged Interests
to the extent not prohibited by the Debt Documents; provided, however, that (except with respect to any Pledged Debt
that is also a Portfolio Investment) any and all (A) dividends and interest paid or payable other than in cash in respect of, and
Instruments and other property received, receivable or otherwise distributed in respect of or in exchange for, any Pledged Interests,
(B) dividends and other distributions paid or payable in cash in respect of any Pledged Interests in connection with a partial
or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in surplus, and (C) cash
paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Interests, together with any dividend,
interest or other distribution or payment which at the time of such payment was not permitted by the Debt Documents, shall constitute
Collateral, be Delivered hereunder and remain subject to the Lien of the Collateral Agent to hold as Pledged Interests, and shall,
if received by any of the Obligors, be received in trust for the benefit of the Collateral Agent, shall be segregated from the
other property or funds of the Obligors, and shall be forthwith delivered to the Collateral Agent in the exact form received with
any necessary indorsement and/or appropriate stock powers duly executed in blank, to be held by the Collateral Agent as Pledged
Interests and as further collateral security for the Secured Obligations, provided that the Obligors shall be permitted
to take any action with respect to cash described in clauses (B) and (C) not prohibited by the other Debt Documents; and

 

(iii)        the
Collateral Agent will execute and deliver (or cause to be executed and delivered) to any Obligor all such proxies and other instruments
as such Obligor may reasonably request for the purpose of enabling such Obligor to exercise the voting and other rights which it
is entitled to exercise pursuant to Section 7.09(a)(i) hereof and to receive the dividends, interest and/or other distributions
which it is authorized to receive and retain pursuant to Section 7.09(a)(ii) hereof.

 

(b)          Automatically
upon the occurrence of a Trigger Event, and upon the election of the Collateral Agent upon the occurrence and during the continuance
of an Event of Default:

 

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(i)          all
rights of each Obligor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant
to Section 7.09(a)(i) hereof, and to receive the dividends, distributions, interest and other payments that it would otherwise
be authorized to receive and retain pursuant to Section 7.09(a)(ii) hereof, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole right to exercise such voting and other consensual rights and
to receive and hold as Pledged Interests such dividends, distributions and interest payments;

 

(ii)         the
Collateral Agent is authorized to notify each debtor with respect to the Pledged Debt or other Portfolio Investments to make payment
directly to the Collateral Agent (or its designee) and may collect any and all moneys due or to become due to any Obligor in respect
of the Pledged Debt or other Portfolio Investments, and each of the Obligors hereby authorizes each such debtor to make such payment
directly to the Collateral Agent (or its designee) without any duty of inquiry;

 

(iii)        without
limiting the generality of the foregoing, the Collateral Agent may at its option exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any of the Pledged Interests or any Portfolio Investments
as if it were the absolute owner thereof, including the right to exchange, in its discretion, any and all of the Pledged Interests
or any Portfolio Investments upon the merger, consolidation, reorganization, recapitalization or other adjustment of any issuer
thereof, or upon the exercise by any such issuer of any right, privilege or option pertaining to any Pledged Interests or any Portfolio
Investments, and, in connection therewith, to deposit and deliver any and all of the Pledged Interests or any Portfolio Investments
with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as it may determine;
and

 

(iv)        all
dividends, distributions, interest and other payments that are received by any of the Obligors contrary to the provisions of Section
7.09(b)(i) hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of the
Obligors, and shall be forthwith paid over to the Collateral Agent as Pledged Interests in the exact form received with any necessary
indorsement and/or appropriate stock powers duly executed in blank, to be held by the Collateral Agent as Pledged Interests and
as further collateral security for the Secured Obligations.

 

7.10         Commercial
Tort Claims. Each Obligor agrees that with respect to any Commercial Tort Claim in excess of $100,000 individually hereafter
arising it shall deliver to the Collateral Agent a completed Pledge Supplement, together with all supplements to Annexes thereto,
identifying such new Commercial Tort Claims.

 

7.11         Intellectual
Property. Each Obligor hereby covenants and agrees as follows:

 

(a)          it
shall not do any act or omit to do any act whereby any of the Intellectual Property which such Obligor determines in its reasonable
business judgment is material to the business of such Obligor may lapse, or become abandoned, dedicated to the public, or unenforceable,
or which would adversely affect the validity, grant, or enforceability of the security interest granted therein;

 

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(b)          it
shall not, with respect to any Trademarks which such Obligor determines in its reasonable business judgment are material to the
business of such Obligor, cease the use of any of such Trademarks or fail to maintain the level of the quality of products sold
and services rendered under any such Trademarks at a level which such Obligor determines in its reasonable business judgment to
be appropriate to maintain the value of such Trademarks, and each Obligor shall take all steps reasonably necessary to ensure that
licensees of such Trademarks use such consistent standards of quality;

 

(c)          it
shall promptly notify the Collateral Agent if it knows or has reason to know that any item of the Intellectual Property that is
material to the business of any Obligor may become (a) abandoned or dedicated to the public or placed in the public domain, (b)
invalid or unenforceable, or (c) subject to any adverse determination or development (including the institution of proceedings)
in any action or proceeding in the United States Patent and Trademark Office, the United States Copyright Office, any state registry,
any foreign counterpart of the foregoing, or any court, other than in the ordinary course of prosecuting and/or maintaining the
applications or registrations of such Intellectual Property;

 

(d)          it
shall take all reasonable steps in the United States Patent and Trademark Office, the United States Copyright Office, any state
registry or any foreign counterpart of the foregoing, to pursue any application and maintain any registration of each Trademark,
Patent, and Copyright owned by any Obligor that such Obligor determines in its reasonable business judgment is material to its
business which is now or shall become included in the Intellectual Property Collateral;

 

(e)          in
the event that it has knowledge that any Intellectual Property owned by or exclusively licensed to any Obligor is infringed, misappropriated,
or diluted by a third party, such Obligor shall, except as it determines otherwise in its reasonable business judgment, promptly
take all reasonable actions to stop such infringement, misappropriation, or dilution and protect its rights in such Intellectual
Property including, but not limited to, the initiation of a suit for injunctive relief and to recover damages;

 

(f)          it
shall promptly (but in no event more than thirty (30) days after any Obligor obtains knowledge thereof) report to the Collateral
Agent (i) the filing by or on behalf of such Obligor of any application to register any Intellectual Property with the United States
Patent and Trademark Office, the United States Copyright Office, or any state registry or foreign counterpart of the foregoing
and (ii) the registration of any Intellectual Property owned by such Obligor by any such office, in each case by executing and
delivering to the Collateral Agent a completed Pledge Supplement, together with all supplements to Annexes thereto;

 

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(g)          it
shall, promptly upon the reasonable request of the Collateral Agent, execute and deliver to the Collateral Agent any document required
to acknowledge, confirm, register, record, or perfect the Collateral Agent’s interest in any part of the Intellectual Property
Collateral, whether now owned or hereafter acquired by or on behalf of such Obligor, including intellectual property security agreements
in the form of Exhibit C hereto;

 

(h)          it
shall hereafter use commercially reasonable efforts so as not to permit the inclusion in any contract to which it hereafter becomes
a party of any provision that could or might in any way materially impair or prevent the creation of a security interest in, or
the assignment of, such Obligor’s rights and interests in any property included within the definitions of any Intellectual
Property acquired under such contracts;

 

(i)          it
shall take all steps reasonably necessary to protect the secrecy of all Trade Secrets, including entering into confidentiality
agreements with its employees and labeling and restricting access to secret information and documents; and

 

(j)          it
shall continue to collect, at its own expense, all amounts due or to become due to such Obligor in respect of the Intellectual
Property Collateral or any portion thereof. In connection with such collections, each Obligor may take (and, while an Event of
Default exists, at the Collateral Agent’s reasonable direction, shall take) such action as such Obligor or the Collateral
Agent may deem reasonably necessary or advisable to enforce collection of such amounts. Notwithstanding the foregoing, while an
Event of Default exists, the Collateral Agent shall have the right at any time, to notify, or require any Obligor to notify, any
obligors with respect to any such amounts of the existence of the security interest created hereby.

 

Section 8.          Acceleration
Notice; Remedies; Distribution of Collateral.

 

8.01         Notice
of Acceleration. Upon receipt by the Collateral Agent of a written notice from any Secured Party which (i) expressly refers
to this Agreement, (ii) describes an event or condition which has occurred and is continuing and (iii) expressly states that such
event or condition constitutes an Acceleration as defined herein, the Collateral Agent shall promptly notify each other party
hereto of the receipt and contents thereof (any such notice is referred to herein as a “Acceleration Notice”).

 

8.02         Preservation
of Rights. The Collateral Agent shall not be required to take steps necessary to preserve any rights against prior parties
to any of the Collateral.

 

8.03         Events
of Default, Etc. During the period during which an Event of Default or a Trigger Event shall have occurred and be
continuing:

 

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(a)          each
Obligor shall, at the request of the Collateral Agent, assemble the Collateral owned by it at such place or places, reasonably
convenient to both the Collateral Agent and such Obligor, designated in the Collateral Agent’s request;

 

(b)          the
Collateral Agent may make any reasonable compromise or settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, any of the Collateral;

 

(c)          the
Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not the Uniform Commercial Code is in effect in the jurisdiction where the rights and remedies are
asserted) and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted, including the right, to the fullest extent permitted by applicable law,
to exercise all voting, consensual and other powers of ownership pertaining to the Collateral as if the Collateral Agent were the
sole and absolute owner thereof (and each Obligor agrees to take all such action as may be appropriate to give effect to such right);

 

(d)          the
Collateral Agent in its discretion may, in its name or in the name of any Obligor or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of or in exchange for any of the Collateral, but shall be under
no obligation to do so; and

 

(e)          the
Collateral Agent may, upon reasonable prior notice (provided that at least ten (10) Business Days’ prior notice shall be
deemed to be reasonable) to the Obligors of the time and place (or, if such sale is to take place on the NYSE or any other established
exchange or market, prior to the time of such sale or other disposition), with respect to the Collateral or any part thereof which
shall then be or shall thereafter come into the possession, custody or control of the Collateral Agent, the other Secured Parties
or any of their respective agents, sell, assign or otherwise dispose of all or any part of such Collateral, at such place or places
as the Collateral Agent deems appropriate, and for cash or for credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or notice of intention to effect any such disposition or of the
time or place thereof (except such notice as is required above or by applicable statute and cannot be waived), and the Collateral
Agent or any other Secured Party or anyone else may be the purchaser, assignee or recipient of any or all of the Collateral so
disposed of at any public sale (or, to the extent permitted by law, at any private sale) and thereafter, to the fullest extent
permitted by law, hold the same absolutely, free from any claim or right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Obligors, any such demand, notice and right or equity being hereby expressly waived and released,
to the fullest extent permitted by law.

 

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The Collateral
Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may
be so adjourned.

 

The proceeds of each collection, sale or
other disposition under this Section 8.03 shall be applied in accordance with Section 8.06.

 

The Obligors recognize
that, by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and applicable state securities laws,
the Collateral Agent may be compelled, with respect to any sale of all or any part of the Collateral, to limit purchasers to those
who will agree, among other things, to acquire the Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. The Obligors acknowledge that any such private sales may be at prices and on terms less favorable
to the Collateral Agent than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances,
agree that to the extent any such private sale is conducted by the Collateral Agent in a commercially reasonable manner, the Collateral
Agent shall have no obligation to engage in public sales and no obligation to delay the sale of any Collateral for the period of
time necessary to permit the Obligors, or the issuer thereof, to register it for public sale.

 

8.04         Deficiency.
If the proceeds of sale, collection or other realization of or upon the Collateral pursuant to Section 8.03 are insufficient to
cover the costs and expenses of such realization and the payment in full of the Secured Obligations, the Obligors shall remain
liable for any deficiency.

 

8.05         Private
Sale. The Collateral Agent and the Secured Parties shall incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 8.03 conducted in a commercially reasonable manner. Each Obligor hereby
waives any claims against the Collateral Agent or any other Secured Party arising by reason of the fact that the price at which
the Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale
or was less than the aggregate amount of the Secured Obligations, even if the Collateral Agent accepts the first offer received
and does not offer the Collateral to more than one offeree, so long as such private sale was conducted in a commercially reasonable
manner.

 

8.06         Application
of Proceeds. Except as otherwise herein expressly provided, after the occurrence and during the continuance of an Event of
Default pursuant to the exercise of any remedies under this Section 8, the proceeds of any collection, sale or other realization
of all or any part of the Collateral of any Obligor (including any other cash of any Obligor at the time held by the Collateral
Agent under this Agreement) shall be applied by the Collateral Agent as follows:

 

First,
to the payment of costs and expenses of such collection, sale or other realization, including reasonable out-of-pocket costs and
expenses of the Collateral Agent and the reasonable fees and expenses of its agents and counsel, and all expenses incurred and
advances made by the Collateral Agent in connection therewith;

 

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Second,
to the payment of any fees and other amounts then owing by such Obligor to the Collateral Agent in its capacity as such;

 

Third, to the payment of
the Secured Obligations of such Obligor then due and payable, in each case to each Secured Party ratably in accordance with the
amount of Secured Obligations then due and payable to such Secured Party (it being understood that, for the purposes hereof, the
outstanding principal amount of the Loans under the Revolving Credit Agreement shall be deemed then due and payable whether or
not any Acceleration of such loans has occurred); and

 

Fourth, after application
as provided in clauses “First”, “Second”, and “Third” above, to the payment
to the respective Obligor, or their respective successors or assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining.

 

For the avoidance of
doubt, payments made pursuant to Section 2.08(b), (c), (d) or (e) of the Revolving Credit Agreement (or any analogous provisions
in any amendment, modification, supplement, amendment, restatement, extension, refinancing or replacement thereof) shall not be
subject to this Section 8.06 or to Section 5.02, unless the Collateral Agent, after the occurrence and continuation of an Event
of Default, has directed the actions giving rise to such payments.

 

In making the allocations
required by this Section 8, the Collateral Agent may rely upon its records and information supplied to it pursuant to Section 9.02,
and the Collateral Agent shall have no liability to any of the other Secured Parties for actions taken in reliance on such information,
except to the extent of its gross negligence or willful misconduct as determined by a court of competent jurisdiction by final
and nonappealable judgment. The Collateral Agent may, in its sole discretion, at the time of any application under this Section
8, withhold all or any portion of the proceeds otherwise to be applied to the Secured Obligations as provided above and maintain
the same in a segregated cash collateral account in the name and under the exclusive Control of the Collateral Agent, to the extent
that it in good faith believes that the information provided to it pursuant to Section 9.02 is either incomplete or inaccurate
and that application of the full amount of such proceeds to the Secured Obligations would be disadvantageous to any Secured Party.
All distributions made by the Collateral Agent pursuant to this Section 8 shall be final (subject to any decree of any court of
competent jurisdiction), and the Collateral Agent shall have no duty to inquire as to the application by the other Secured Parties
of any amounts distributed to them.

 

Excluded Swap Obligations
with respect to any Subsidiary Guarantor shall not be paid with amounts received from such Subsidiary Guarantor or its assets,
but appropriate adjustments shall be made with respect to payments from other Obligors to preserve the allocation to Secured Obligations
otherwise set forth above in this Section 8.06.

 

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8.07         Attorney-in-Fact.
Without limiting any rights or powers granted by this Agreement to the Collateral Agent while no Event of Default or Trigger Event
has occurred and is continuing, upon the occurrence and during the continuance of any Event of Default or Trigger Event, the Collateral
Agent is hereby appointed the attorney-in-fact of each Obligor for the purpose of carrying out the provisions of this Section
8 and taking any action and executing any instruments which the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Collateral Agent shall be entitled under this Section 8 to make collections in
respect of the Collateral, the Collateral Agent shall have the right and power to receive, endorse and collect all checks made
payable to the order of any Obligor representing any dividend, payment or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same.

 

8.08         Grant
of Intellectual Property License. For the purpose of enabling the Collateral Agent, upon the occurrence and during the continuance
of an Event of Default or a Trigger Event, to exercise rights and remedies hereunder at such time as the Collateral Agent shall
be lawfully entitled to exercise such rights and remedies, each Obligor hereby grants to the Collateral Agent, if and only to
the extent of such Obligor’s rights to grant the same, an irrevocable, non-exclusive license to use, assign, license or
sublicense any of the Intellectual Property Collateral (other than any Excluded Assets) now owned or hereafter acquired by such
Obligor. Such license shall include access to all media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof.

 

8.09         Authority.
Notwithstanding anything to the contrary contained herein, in no event shall the Collateral Agent take, or be permitted to take,
any enforcement action with respect to the Collateral without at least three (3) Business Days prior notice to the Secured Parties,
and will refrain from taking such enforcement action if so directed by the Required Secured Parties during such three (3) Business
Day period, provided that the Collateral Agent may take such enforcement action during such three (3) Business Day period
if so directed by the Required Secured Parties.

 

Section 9.          The
Collateral Agent.

 

9.01         Appointment;
Powers and Immunities. Each Revolving Lender, the Revolving Administrative Agent, each Financing Agent and, by acceptance
of the benefits of this Agreement and the other Security Documents, each Designated Indebtedness Holder hereby irrevocably appoints
and authorizes ING to act as its agent hereunder with such powers as are specifically delegated to the Collateral Agent by the
terms of this Agreement, together with such other powers as are reasonably incidental thereto. The Collateral Agent (which term
as used in this sentence and in Section 9.06 and the first sentence of Section 9.07 shall include reference to its Affiliates
and its own and its Affiliates’ officers, directors, employees and agents):

 

(a)          shall
have no duties or responsibilities except those expressly set forth in this Agreement and shall not by reason of this Agreement
be a trustee for, or a fiduciary with respect to, any Revolving Lender, Financing Agent or any Designated Indebtedness Holder;

 

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(b)          shall
not be responsible to the Revolving Lenders, the Revolving Administrative Agent, the Financing Agents or the Designated Indebtedness
Holders for any recitals, statements, representations or warranties contained in this Agreement or in any notice delivered hereunder,
or in any other certificate or other document referred to or provided for in, or received by it under, this Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document referred to
or provided for herein or therein or for any failure by the Obligors or any other Person to perform any of its obligations hereunder;

 

(c)          shall
not be required to initiate or conduct any litigation or collection proceedings hereunder except, subject to Section 9.07, for
any such litigation or proceedings relating to the enforcement of the guarantee set forth in Section 3, or the Liens created pursuant
to Section 4; and

 

(d)          shall
not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct
as determined by a court of competent jurisdiction by final and nonappealable judgment.

 

9.02         Information
Regarding Secured Parties. The Borrower will at such times and from time to time as shall be reasonably requested by the Collateral
Agent, supply a list in form and detail reasonably satisfactory to the Collateral Agent setting forth the amount of the Secured
Obligations held by each Secured Party (excluding, so long as ING is both the Collateral Agent and the Revolving Administrative
Agent, the Revolving Credit Agreement Obligations) as at a date specified in such request. The Collateral Agent shall provide
any such list to any Secured Party upon request. The Collateral Agent shall be entitled to rely upon such information, and such
information shall be conclusive and binding for all purposes of this Agreement, except to the extent the Collateral Agent shall
have been notified by a Secured Party in writing that such information as set forth on any such list is inaccurate or in dispute
between such Secured Party and the Borrower.

 

9.03         Reliance
by Collateral Agent. The Collateral Agent shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy, telex, telegram, cable or electronic mail) believed by it in good faith to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Collateral Agent. As to any matters not expressly provided
for by this Agreement, the Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Secured Parties and such instructions of the Required Secured
Parties and any action taken or failure to act pursuant thereto shall be binding on all of the Secured Parties. If in one or more
instances the Collateral Agent takes any action or assumes any responsibility not specifically delegated to it pursuant to this
Agreement, neither the taking of such action nor the assumption of such responsibility shall be deemed to be an express or implied
undertaking on the part of the Collateral Agent that it will take the same or similar action or assume the same or similar responsibility
in any other instance.

 

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9.04         Rights
as a Secured Party. With respect to its obligation to extend credit under the Revolving Credit Agreement, ING (and any successor
acting as Collateral Agent) in its capacity as a Revolving Lender under the Revolving Credit Agreement shall have the same rights
and powers hereunder as any other Secured Party and may exercise the same as though it were not acting as Collateral Agent, and
the term “Secured Party” or “Secured Parties” shall, unless the context otherwise indicates, include the
Collateral Agent in its individual capacity. ING (and any successor acting as Collateral Agent) and its Affiliates may (without
having to account therefor to any other Secured Party) accept deposits from, lend money to, make investments in and generally
engage in any kind of banking, trust or other business with any of the Obligors (and any of their Subsidiaries or Affiliates)
as if it were not acting as Collateral Agent, and ING and its Affiliates may accept fees and other consideration from any of the
Obligors for services in connection with this Agreement or otherwise without having to account for the same to the other Secured
Parties.

 

9.05         Indemnification.
Each Revolving Lender and each Designated Indebtedness Holder by acceptance of the benefits of this Agreement and the other Security
Documents agrees to indemnify the Collateral Agent and each Related Party of the Collateral Agent (each such Person being called
an “Indemnitee”) (to the extent not reimbursed under Section 10.04, but without limiting the obligations of
the Obligors under Section 10.04) ratably in accordance with the aggregate Secured Obligations held by the Revolving Lenders and
the Designated Indebtedness Holders, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against
any Indemnitee (including by any other Secured Party) arising out of or by reason of any investigation in connection with or in
any way relating to or arising out of this Agreement, any other Debt Documents, or any other documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby (including the costs and expenses that the Obligors are
obligated to pay under Section 10.04, but excluding, unless an Event of Default or a Trigger Event has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any
of the terms hereof or thereof or of any such other documents; provided, that no Revolving Lender or Designated Indebtedness
Holder shall be liable for any of the foregoing to the extent they are determined by a court of competent jurisdiction in a final,
nonappealable judgment to have resulted from the gross negligence or willful misconduct of the party to be indemnified.

 

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9.06         Non-Reliance
on Collateral Agent and Other Secured Parties. The Revolving Administrative Agent and each Financing Agent (and each Revolving
Lender and each Designated Indebtedness Holder by acceptance of the benefits of this Agreement and the other Security Documents)
agrees that it has, independently and without reliance on the Collateral Agent or any other Secured Party, and based on such documents
and information as it has deemed appropriate, made its own credit analysis of the Borrower, the Subsidiary Guarantors and their
Subsidiaries and decision to extend credit to the Borrower in reliance on this Agreement and that it will, independently and without
reliance upon the Collateral Agent or any other Secured Party, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement and any Debt
Document to which it is a party. Except as otherwise expressly provided herein, the Collateral Agent shall not be required to
keep itself informed as to the performance or observance by any Obligor of this Agreement, any other Debt Document or any other
document referred to or provided for herein or therein or to inspect the properties or books of any Obligor. The Collateral Agent
shall not have any duty or responsibility to provide any other Secured Party with any credit or other information concerning the
affairs, financial condition or business of any Obligor or any of its Subsidiaries (or any of their Affiliates) that may come
into the possession of the Collateral Agent or any of its Affiliates, except for notices, reports and other documents and information
expressly required to be furnished to the other Secured Parties by the Collateral Agent hereunder.

 

9.07         Failure
to Act. Except for action expressly required of the Collateral Agent hereunder, the Collateral Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall receive further assurances to its satisfaction from the
other Secured Parties of their indemnification obligations under Section 9.05 against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The Collateral Agent shall not be required to take
any action that in the judgment of the Collateral Agent would violate any applicable law.

 

9.08         Resignation
of Collateral Agent. Subject to the appointment and acceptance of a successor Collateral Agent as provided below, the Collateral
Agent may resign at any time by giving notice thereof to the other Secured Parties and the Obligors. Upon any such resignation,
the Required Secured Parties shall have the right, with the consent of the Borrower not to be unreasonably withheld provided that
no such consent shall be required if an Event of Default or a Trigger Event has occurred and is continuing to appoint a successor
Collateral Agent. If no successor Collateral Agent shall have been so appointed by the Required Secured Parties and shall have
accepted such appointment within thirty (30) days after the retiring Collateral Agent’s giving of written notice of resignation
of the retiring Collateral Agent, then the retiring Collateral Agent may, on behalf of the other Secured Parties, appoint a successor
Collateral Agent, that shall be a financial institution that has an office in New York, New York and has a combined capital and
surplus and undivided profits of at least $1,000,000,000. Upon the acceptance of any appointment as Collateral Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations hereunder. After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions
of this Section 9 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Collateral Agent. The Borrower shall pay to any successor Collateral Agent the customary fees and charges
necessary to induce such successor Collateral Agent to accept its appointment hereunder, such payment to be made as and when invoiced
by the successor Collateral Agent.

 

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9.09         Agents
and Attorneys-in-Fact. The Collateral Agent may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it and in good faith.

 

Section 10.         Miscellaneous.

 

10.01         Notices.
All notices, requests, consents and other demands hereunder and other communications provided for herein shall be given or made
in writing, (a) to any party hereto, telecopied, (to the extent provided in the Revolving Credit Agreement) emailed or delivered
to the intended recipient at the “Address for Notices” specified below its name on the signature pages to this Agreement
or, in the case of any Financing Agent or Designated Indebtedness Holder that shall become a party hereto after the date hereof,
at such “Address for Notices” as shall be specified pursuant to or in connection with the joinder agreement executed
and delivered by such Financing Agent or Designated Indebtedness Holder pursuant to Section 6.01 (provided that notices
to any Subsidiary Guarantor shall be given to such Subsidiary Guarantor care of the Borrower at the address for the Borrower specified
herein) or (b) as to any party, at such other address as shall be designated by such party in a written notice to each other party.
All notices to any Revolving Lender or Designated Indebtedness Holder that is not a party hereto shall be given to the Revolving
Administrative Agent or Financing Agent for such Designated Indebtedness Holder.

 

10.02         No
Waiver. No failure on the part of the Collateral Agent or any other Secured Party to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by any Secured Party of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

 

10.03         Amendments
to Security Documents, Etc.

 

Except as otherwise provided
in any Security Document, the terms of this Agreement and the other Security Documents may be waived, altered or amended only by
an instrument in writing duly executed by each Obligor and the Collateral Agent, with the consent of the Required Secured Parties;
provided that:

 

(a)          no
such amendment shall adversely affect the relative rights of any Secured Party as against any other Secured Party without the prior
written consent of such first Secured Party;

 

    	 	47	 

     

    

 

(b)          without
the prior written consent of each of the Revolving Lenders under the Revolving Credit Agreement, the Collateral Agent shall not
release all or substantially all of the collateral under the Security Documents or release all or substantially all of the Subsidiary
Guarantors from their guarantee obligations under Section 3 hereof prior to the Termination Date (except that if any amounts have
become due and payable in respect of any Designated Indebtedness Obligations or Hedging Agreement Obligations, and shall have remained
unpaid for thirty (30) or more days, then the prior written consent (voting as a single group) of the holders of a majority in
interest of the Designated Indebtedness Obligations and the Hedging Agreement Obligations, whichever of such obligations are then
due and payable, will also be required to release all or substantially all of such collateral or guarantee obligations, whether
before or after the Termination Date);

 

(c)          without
the consent of each of the Secured Parties, no modification, supplement or waiver shall modify the definition of the term “Required
Secured Parties” or modify in any other manner the number of percentage of the Secured Parties required to make any determinations
or waive any rights under any Security Document;

 

(d)          without
the consent of the Collateral Agent, no modification, supplement or waiver shall modify the terms of Section 9;

 

(e)          the
Collateral Agent is authorized to release (and shall, within ten Business Days of written request by the Borrower, release) any
Collateral that is either the subject of a disposition not prohibited under the Revolving Credit Agreement, or to which the Revolving
Lenders, subject to the Revolving Credit Agreement, shall have consented and will, at the Obligors’ expense, execute and
deliver to any Obligor such documents (including any UCC termination statements, lien releases, re-assignments of trademarks, discharges
of security interests, and other similar discharge or release documents (and, if applicable, in recordable form)) as such Obligor
shall reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted hereby;
notwithstanding the foregoing, Portfolio Investments constituting Collateral shall be automatically released from the lien of this
Agreement, without any action of the Collateral Agent, in connection with any disposition of Portfolio Investments that (i) occurs
in the ordinary course of the Borrower’s business and (ii) is not prohibited under the Revolving Credit Agreement;

 

(f)          the
Collateral Agent is authorized to release (and shall, within ten Business Days of written request by the Borrower, release) any
Subsidiary Guarantor from any of its guarantee obligations under Section 3 hereof to the extent such Subsidiary is (x) the subject
of a disposition not prohibited under the Debt Documents, (y) ceases to be a Subsidiary as a result of a transaction not prohibited
under the Debt Documents, or (z) to which the Required Secured Parties shall have consented, and, upon such release, the Collateral
Agent is authorized to release (and shall release) any collateral security granted by such Subsidiary Guarantor hereunder and under
the other Security Documents; and

 

    	 	48	 

     

    

 

(g)          this
Section 10.03 shall be subject to the provisions related to “Defaulting Lenders” in the Revolving Credit Agreement.

 

Any such amendment or waiver shall be binding
upon the Collateral Agent, each Secured Party and each Obligor. In connection with any release of Collateral from the lien of this
Agreement and the other Security Documents, the Collateral Agent shall, within ten Business Days of written request by the Borrower
(and at the sole cost and expense of the Borrower), (i) execute and deliver termination statements and other releases and instruments
(in recordable form if appropriate) that the Collateral Agent reasonably believes is necessary to effect such release and (ii)
otherwise take such actions as the Borrower may reasonably request in order to effect the release and transfer of such Collateral.

 

10.04         Expenses;
Indemnity; Damage Waiver.

 

(a)          Costs
and Expenses. The Obligors hereby jointly and severally agree to reimburse the Collateral Agent and each of the other Secured
Parties and their respective Affiliates for all reasonable and documented out-of-pocket fees, costs and expenses incurred by them
(including the reasonable fees, charges and disbursements of legal counsel (and excluding the allocated costs of internal counsel))
in connection with (i) any Event of Default or Trigger Event and any enforcement or collection proceeding resulting therefrom,
including all manner of participation in or other involvement with (w) performance by the Collateral Agent of any obligations
of the Obligors in respect of the Collateral that the Obligors have failed or refused to perform in the time period required under
this Agreement, (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings of any Obligor, or
any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Collateral,
and for the care of the Collateral and defending or asserting rights and claims of the Collateral Agent in respect thereof, by
litigation or otherwise, including expenses of insurance, (y) judicial or regulatory proceedings arising from or related to this
Agreement and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of this Section 10.04, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral security provided pursuant to Section 4.

 

(b)          Indemnification
by the Obligors. The Obligors shall indemnify each Indemnitee against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the reasonable and documented out-of-pocket fees, charges
and disbursements of one outside counsel for all Indemnitees (and, if reasonably necessary, of one local counsel in any relevant
jurisdiction for all Indemnitees) unless, in the reasonable opinion of an Indemnitee, representation of all Indemnitees by such
counsel would be inappropriate due to the existence of an actual or potential conflict of interest)), incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or
any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder,
or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory and whether brought by the Borrower, any Indemnitee or a third party, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall not as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses (1) are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the willful misconduct or gross negligence of such Indemnitee, (2) result
from a claim brought against such Indemnitee for breach of such Indemnitee’s obligations under this Agreement or the other
Loan Documents, if there has been a final and nonappealable judgment against such Indemnitee on such claim as determined by a
court of competent jurisdiction or (3) result from a claim arising as a result of a dispute between Indemnitees (other than (x)
any dispute involving claims against the Revolving Administrative Agent, the Collateral Agent or any Financing Agent, in each
case in their respective capacities as such, and (y) claims arising out of any act or omission by any Obligor or its Affiliates).
Notwithstanding the foregoing, it is understood and agreed that indemnification for Taxes (as defined in the Revolving Credit
Agreement) is subject to the provisions of Section 2.14 of the Revolving Credit Agreement and analogous provisions, if
any, in Designated Indebtedness Documents.

 

    	 	49	 

     

    

 

Neither the Borrower
nor any Obligor shall be liable to any Indemnitee for any special, indirect, consequential or punitive damages arising out of,
in connection with, this Agreement asserted by an Indemnitee against the Borrower or any other Obligor, provided that the foregoing
limitation shall not be deemed to impair or affect the Obligations of the Borrower under the preceding provisions of this subsection.

 

10.05         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the
Obligors and the Secured Parties; provided that none of the Obligors shall assign or transfer its rights or obligations
hereunder without the prior written consent of each of the Collateral Agent and the Revolving Administrative Agent.

 

10.06         Counterparts;
Integration; Effectiveness; Electronic Execution.

 

(a)          Counterparts;
Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement
and any separate letter agreements with respect to fees payable to the Collateral Agent constitute the entire contract between
and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed
by the Collateral Agent and when the Collateral Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page to this Agreement
by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

    	 	50	 

     

    

 

 

(b)          Electronic
Execution of Assignments. The words “execution,” “signed,” “signature” shall be deemed
to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may
be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

10.07         Severability.
If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (a) the
other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of
the Secured Parties in order to carry out the intentions of the parties hereto as nearly as may be possible and (b) the invalidity
or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.

 

10.08         Governing
Law; Submission to Jurisdiction.

 

(a)          Governing
Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.

 

(b)          Submission
to Jurisdiction. Each Obligor hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Nothing in this Agreement shall affect any right that any Secured Party may otherwise have to
bring any action or proceeding relating to this Agreement against any Obligor or its properties in the courts of any jurisdiction.

 

(c)          Waiver
of Venue. Each Obligor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement in any court referred to in paragraph (b) of this Section 10.08. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.

 

(d)          Service
of Process. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in
Section 10.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner
permitted by law.

 

    	 	51	 

     

    

  

10.09         Waiver
of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.09.

 

10.10         Headings.
Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

10.11         Termination.
Promptly after the Termination Date and receipt of instructions from the Revolving Administrative Agent pursuant to Section 9.15
of the Revolving Credit Agreement, the Collateral Agent shall, on behalf of the Revolving Administrative Agent, the Collateral
Agent and the Revolving Lenders, deliver to the Obligors such termination statements and releases and other documents necessary
and appropriate to evidence the termination of this Agreement, the Loan Documents, and each of the documents securing the obligations
hereunder as the Obligors may reasonably request, all at the sole cost and expense of the Obligors; provided however that
the Collateral Agent shall not have any obligation to do so under the circumstances set forth in the parenthetical provision in
Section 10.03(b) except to the extent provided therein.

 

10.12         Confidentiality.
The Collateral Agent acknowledges and agrees that Section 9.13 of the Revolving Credit Agreement will bind the Collateral Agent
to the same extent as it binds the Revolving Administrative Agent.

 

[Signature page follows]

 

    	 	52	 

     

    

  

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

 

	 	CAPITALA FINANCE CORP.
	 	   	   
	    	By:	             
	 	Name:  	 
	 	Title:  	 

 

	    	Address for Notices
	 	 
	 	Capitala Finance Corp.
	 	4201 Congress Street, Suite 360
	 	Charlotte, NC  28209
	 	Attention:  Joseph B. Alala, III
	 	Telephone:  (704) 376-5502
	 	Telecopier:  (704) 376-5877
	 	 
	 	With a copy to:
	 	 
	 	Mayer Brown LLP
	 	214 North Tryon Street, Suite 3800
	 	Charlotte, North Carolina  28202
	 	Attention:  Keith F. Oberkfell, Esq.
	 	Telephone:  (704) 444-3549
	 	Telecopier:  (704) 377-2033

 

[Guarantee, Pledge and Security Agreement]

 

     

     

    

 

	 	ING CAPITAL LLC,
	 	as Revolving Administrative Agent and Collateral Agent
	 	 	 
	 	By	       
	 	Name:	 
	 	Title:	 
	 	 	 
	 	By	                 
	 	Name:	 
	 	Title:	 

 

	 	Address for Notices
	 	 
	 	ING Capital LLC
	 	13251133 Avenue of the Americas
	 	New York, New York 1001910036
	 	Attention:  Patrick Frisch
	 	Telecopier:  (646) 424-6919
	 	Telephone:  (646) 424-6912
	 	 
	 	with a copy to:
	 	 
	 	Dechert LLP
	 	1095 Avenue of the Americas 
	 	New York, NY 10036-6797
	 	Attention:  Jay R. Alicandri, Esq.
	 	Telecopier: (212) 698-3599
	 	Telephone: (212) 698-3800 

 

[Guarantee, Pledge and Security Agreement]avdx_ex41.htm

EXHIBIT 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

Original Issue Date: ___________, 2016

 

Purchase Price: $_____

Principal Amount: $_____

 

CONVERTIBLE PROMISSORY NOTE

DUE ___________, 2017

 

THIS CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued Convertible Promissory Notes of Avant Diagnostics, Inc., (the “Company”), having its principal place of business at 8561 East Anderson Dr #104, Scottsdale, AZ 85255, designated as its Convertible Promissory Note due ____ , 2017 (this Note, the “Note” and, collectively with the other Notes of such series, the “Notes”).

 

FOR VALUE RECEIVED, the Company promises to pay to or its registered assigns (the “Holder ‘), or shall have paid pursuant to the terms hereunder, the principal sum of $_____ on ____ , 2017 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder.

 

This Note is subject to the following additional provisions:

 

Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings :

 

“Alternate Consideration” shall have the meaning set forth in Section 5(e).

 

“Alternate Conversion Price” means 65% of the lowest VWAP in the twenty (20) Trading Days prior to the Conversion Date.

 
	 
	1
	

 
	 

 

“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule l-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days aft.er commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition , adjustment or restructuring of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Base Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(d). “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Buy-In” shall have the meaning set forth in Section 4(c)(v).

 

“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(l) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers al1 or substantially al1 of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a six-month period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

 
	 
	2
	

 
	 

 

“Conversion” shall have the meaning ascribed to such term in Section 4.

 

“Conversion Date” shall have the meaning set forth in Section 4(a).

 

“Conversion Price” shall have the meaning set forth in Section 4(b).

 

“Conversion Schedule” means the Conversion Schedule in the form of Schedule I attached hereto.

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.

 

“Dilutive Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“OTC” means the Depository Trust Company.

 

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

 

“DWAC” means Deposit Withdrawal at Custodian as defined by the DTC.

 

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

 

	 
	3
	

 
	 

 

“Equity Conditions” means, during the period in question, (a) no Event of Default shall have occurred, (b)_the Company has timely filed (or obtained extensions in respect thereof and filed within the applicable grace period) all reports other than Form 8-K reports required to be filed by the Company after the date hereof pursuant to the Exchange Act, (c) on any date that the Company desires to make a payment of interest, the average daily dollar volume of the Common Stock for the previous twenty (20) Trading Days must be greater than $20,000, (d) the Common Stock must be DWAC Eligible and not subject to a “DTC chill” and (e) the Conversion Shares must be delivered via an “Automatic Conversion” of principal and/or interest.

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided that such securities have not been amended since the Original Issue Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities,(c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) securities which are not Common Stock or Common Stock Equivalents in connection with a public offering.

 

“ Event of Default” shall have the meaning set forth in Section 6(a):. “Fundamental Transaction” shall have the meaning set forth in Section 5(e).

 

“Mandatory Default Amount” means the payment of 18% of the outstanding principal amount of this Note, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect of this Note.

 

“Florida Courts” shall have the meaning set forth in Section 7(d). 

 

“Notice of Conversion” shall have the meaning set forth in Section 4(a).

 

“Original Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

 
	 
	4
	

 
	 

 

“Permitted Indebtedness” means the indebtedness evidenced by the Notes.

 

“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen ‘s and mechanics ‘ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien and (c) Liens incurred in connection with Permitted Indebtedness.

 

“Purchase Agreement” means the Securities Purchase Agreement, dated as of October __, 2016 among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share Delivery Date” shall have the meaning set forth in Section 4(c)(ii). “Successor Entity” shall have the meaning set forth in Section 5(e).

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board or OTCQB (or any successors to any of the foregoing).

 

“VWAP” means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

 
	 
	5
	

 
	 

 

Section 2. Interest; Prepayment.

 

a) Interest. Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at a rate of 12% per annum. All interest payments hereunder will be payable in cash, or subject to the Equity Conditions in the event of a conversion, in cash or Common Stock in the Holder’s discretion. Accrued and unpaid interest shall be due and payable on each Conversion Date, Prepayment Date, and/or Maturity Date, or as otherwise set forth herein.

 

b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the “Note Register”).

 

c) Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

d) Prepayment. At any time upon five (5) days notice written notice to the Holder, (a “Prepayment Notice”), the Company may prepay any portion of the principal amount of this Note. If the Company exercises its right to prepay the Note, the Company shall within three (3) days after such five-day period (the “Prepayment Period”), make payment to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of this Note that it desires to prepay, multiplied by (a) 1.1, during the first thirty (30) days after the execution of this Note, 1.15, during the thirty-first (31st) to sixtieth (60th) days after the execution of this Note, (c) 1.20, during the sixty-first (61st) to ninetieth (90th ) days after the execution of this Note, and (d) , on the ninety-first (91st) day and thereafter after the execution of this Note (the “Prepayment Multiplier”). If the Company does not make such payment within the relevant Prepayment Period, it shall be required to deliver a new Prepayment Notice, and repeat the procedures set forth in this Section 2, prior to pre-paying any portion of this Note. The Holder may continue to convert the Note from the date of its receipt of any Prepayment Notice until the beginning of the Prepayment Period. If the Company engages in any Subsequent Financing (as defined in the Purchase Agreement) in which the Holder elects not to participate, or sells any of its assets other than in the ordinary course, while any portion of this Note remains outstanding, any proceeds of such Subsequent Financing or asset sale in excess of $500,000 must be applied toward repayment of this Note, subject to the Prepayment Multiplier, within three (3) days of the closing of such Subsequent Financing or asset sale. For the avoidance of doubt, the Prepayment Multiplier shall be applicable to any payment of principal under this Note, including on the Maturity Date.

 
	 
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Section 3. Registration of Transfers and Exchanges.

 

a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the HoIder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

b) Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

 

c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

Section 4. Conversion.

 

a) Voluntary Conversion. At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion only if the Company has different calculation in conversion formula. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 
	 
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b) Conversion Price. The conversion price in effect on any Conversion Date shall be equal to the lower of (i) twenty-five cents ($0.25) and (ii) the closing sales price of the Common Stock on the Conversion Date (the “Conversion Price”). Notwithstanding anything herein to the contrary, at any time after the occurrence of any Event of Default the Holder may require the Company to, at such Holder’s option and otherwise in accordance with the provisions for conversion herein, convert all or any part of this Note into Common Stock at the Alternate Conversion Price. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

c) Mechanics of Conversion.

 

i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted by (y) the Conversion Price.

 

ii. Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing the Conversion Shares which, on or after the earlier of the six month anniversary of the Original Issue Date or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note. All certificate or certificates required to be delivered by the Company under this Section 4(c) shall be delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions. If the Conversion Date is prior to the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, then the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.”

 
	 
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iii. Conversion Cost. The Company agrees to reimburse the Holder’s certificate processing cost by adding $1,000 to the Principal for each note conversion effected by Holder.

 

iv. Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

 

v. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company sham issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 
	 
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vi. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in at the market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 
	 
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vii. Reservation of Shares Issuable Upon Conversion. The Company covenants that, subject to the terms and conditions set forth in the Purchase Agreement, it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to the following formula: 3 x (P/CP), where P equals the outstanding principal amount of this Note from time to time and CP equals the Conversion Price in effect from time to time, in the name of the Holder, for the sole purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable .

 

viii. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

 

ix. Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

 
	 
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d) Holder’s Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder; For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.

 
	 
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Section 5. Certain Adjustments.

 

a) Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition),any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

 
	 
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c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d) Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off: reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 
	 
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e) Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization , recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If older of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver lo the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

f) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/1OOth of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

 
	 
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g) Notice to the Holder.

 

i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 
	 
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Section 6. Events of Default.

 

(a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i. any default in the payment of the principal amount of this Note and other amounts owing to the Holder of this Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise);

 

ii. the Company shall fail to observe or perform any other material covenant or material agreement contained in the Notes (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (ix) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure;

 

iii. a material default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv. any material representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;

 

v. the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

 

vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced , any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $200,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 
	 
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vii. the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository Trust Company System is no longer available or “chilled”;

 

viii. the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or substantially all of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);

 

ix. the Company shall fail for any reason to deliver certificates via DWAC to a Holder prior to the third Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;

 

x. the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(l) (or Rule 144(i)(2), if applicable), including maintaining XBRL financial information on the Company’s corporate website, provided that the Company shall have five (5) Trading Days to cure such failure;

 

xi. if the Company or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;

 

xii. if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Significant Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;

 
	 
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xiii. the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $200,000 individually or in the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after the date thereof;

 

xiv. the Company shall fail to maintain sufficient reserved shares pursuant to Section 4(c)(vi) of this Note; or

 

xv. any monetary judgment , writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $200,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days.

 

b) Remedies Upon Event of Default. If any Event of Default occurs, then the outstanding principal amount of this Note, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the Note shall accrue interest at an interest rate equal to the lesser of I.5 % per month (18% per annum) or the maximum rate permitted under applicable law (the “Default Rate”). The Default Rate shall be computed from the occurrence of the Event of Default until the date upon which the event of default is cured . Interest calculated at the Default Rate shall be immediately added to the principal due under the Note, without any action on the part of the Holder. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 
	 
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Section 7. Miscellaneous.

 

a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the Purchase Agreement.

 

c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 
	 
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d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of Florida, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party her to o its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the Broward County Florida (the “Florida Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Florida Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Florida Courts, or such Florida Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such]party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. 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 Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

e) Attorney Fees. In the event the Holder hereof shall refer this Note to an attorney to enforce the terms hereof, the Company agrees to pay all the costs and expenses incurred in attempting or effecting the enforcement of the Holder’s rights, including reasonable attorney’s fees, whether or not suit is instituted.

 

f) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

 
	 
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g) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

 

h) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.

 

i) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day .

 

j) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

 

*********************

 

(Signature Pages Follow)

 
	 
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

 

	 	
AVANT DIAGNOSTICS, INC.
	
	 	 	 
	 	 	
	
 
	Name:	 
	 	Title:	 
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	Facsimile No. for delivery of Notices: ___________________

 
	 
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ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the Convertible Promissory Note due ________,2017 of Avant Diagnostics, Inc. (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned , the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock docs not exceed the amounts specified w1dcr Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

 

 

Conversion calculations: ____________________________

 

	
 
	
Date to Effect Conversion: ____________________________________

	
 
	
 

	
 
	
Principal Amount of Note to be Converted: ________________________

	
 
	
 

	
 
	
Number of shares of Common Stock to be issued: ___________________

	
 
	
 

	
 
	
Signature: _________________________________

	
 
	
 

	
 
	
Name: ____________________________________

	
 
	
 

	
 
	
DWAC Instructions: _________________________

	
 
	
 

	
 
	
Broker No: _________________________________

	
 
	
 

	
 
	
Account No: _______________________________

  
	 
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Schedule 1

 

CONVERSION SCHEDULE

 

This Convertible Promissory Note due on __________, 2017 in the original principal amount of $_____ is issued by Avant Diagnostics, Inc. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated: ______________

 

	
Date of Conversion

(or for first entry,
Original Issue Date)
	
Amount of
Conversion
	
Aggregate Principal Amount
Remaining Subsequent to Conversion
(or original Principal Amount)
	
Company
Attest

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

 

	
25

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