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SECURITY AGREEMENT

(Execution Version)

Dated as of July 28, 2022

BRIGHTFIELD CLOUD SERVICES INC.

a Delaware corporation

(as Grantor)

in favor of

MERIDIAN WHITCOMB LLC

a Delaware limited liability company

(as Collateral Agent)

for the benefit of

PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION

(as Lender and Administrative Agent)

Reference is made to that certain Term Loan Agreement dated as of July 28, 2022 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Brightfield Cloud Services Inc., a Delaware corporation, as Borrower, Pinnacle National Bank, National Association, as Lender and Administrative Agent, and Meridian Whitcomb LLC, a Delaware limited liability company, as Collateral Agent, providing for a $35,000,000 senior secured term loan facility.

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RECITALS

A. Brightfield Cloud Services Inc. is a corporation duly organized and validly existing under the laws of the State of Delaware, with its principal place of business located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731. The Grantor is engaged in the business of enterprise cloud infrastructure software, including a proprietary software-as-a-service ("SaaS") platform, and proprietary hardware, including server appliance manufacturing and deployment (collectively, the "Business").

B. The Grantor, as Borrower, has entered into that certain Term Loan Agreement dated as of July 28, 2022 (the "Credit Agreement") with Pinnacle National Bank, National Association ("Pinnacle National Bank, N.A."), as Lender and Administrative Agent, and Meridian Whitcomb LLC ("Meridian Whitcomb"), as Collateral Agent, pursuant to which the Lender has agreed, subject to the terms and conditions set forth therein, to make a senior secured term loan to the Grantor in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Term Loan").

C. It is a condition precedent to the obligation of the Lender to fund the Term Loan under the Credit Agreement that the Grantor execute and deliver this Security Agreement (this "Agreement" or this "Security Agreement") and grant to the Collateral Agent, for the ratable benefit of the Secured Parties (as defined herein), a first-priority perfected security interest in substantially all of the assets of the Grantor to secure the prompt and complete payment and performance of all Obligations (as defined herein).

D. The Grantor desires to grant such first-priority perfected security interest in substantially all of its assets to the Collateral Agent, for the ratable benefit of the Secured Parties, in order to secure the Obligations as contemplated by the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement).

E. Concurrently with the execution of this Security Agreement, Solara Holdings Group LLC, a Delaware limited liability company ("Solara Holdings" or the "Guarantor"), has executed and delivered that certain Guaranty Agreement dated as of July 28, 2022 (the "Guaranty") in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, guaranteeing the payment and performance of the Obligations.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.1 — Defined Terms

As used in this Security Agreement, the following terms shall have the meanings set forth below:

"Administrative Agent" means Pinnacle National Bank, National Association, in its capacity as administrative agent under the Credit Agreement, and its successors and assigns in such capacity. The principal office of the Administrative Agent is located at 600 Lexington Avenue, 35th Floor, New York, New York 10022.

"Collateral" has the meaning set forth in Section 2.1 of this Security Agreement.

"Collateral Agent" means Meridian Whitcomb LLC, a Delaware limited liability company, in its capacity as collateral agent hereunder and under the Credit Agreement, and its successors and assigns in such capacity. The principal office of the Collateral Agent for purposes of this Security Agreement is located at 100 Wall Street, 18th Floor, New York, New York 10005. The designated contact person for the Collateral Agent is Laura Desmond, Vice President, Agency Services.

"Copyright Collateral" means all copyrights of the Grantor, whether registered or unregistered, and all copyright registrations and applications for registration thereof in the United States or any other jurisdiction, including all renewals and extensions thereof, and all rights to sue for past, present, and future infringement or misappropriation thereof.

"Credit Agreement" means that certain Term Loan Agreement dated as of July 28, 2022, among the Grantor (as Borrower), Pinnacle National Bank, N.A. (as Lender and Administrative Agent), and Meridian Whitcomb LLC (as Collateral Agent), as amended, restated, supplemented, or otherwise modified from time to time, together with all schedules, exhibits, annexes, and other attachments thereto.

"Debtor" means Brightfield Cloud Services Inc., a Delaware corporation, in its capacity as debtor for purposes of Article 9 of the UCC.

"Deposit Accounts" means all deposit accounts (as defined in the UCC) maintained by the Grantor at any financial institution, whether now existing or hereafter opened, including, without limitation, the operating account maintained by the Grantor at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356), and all funds and amounts from time to time on deposit therein.

"Equipment" means all "equipment" as defined in the UCC, whether now owned or hereafter acquired by the Grantor, including, without limitation, all server hardware, data center equipment (including racks, cabling, cooling systems, HVAC systems, and power distribution units), proprietary server appliances, networking equipment (including routers, switches, firewalls, and load balancers), computers, office equipment, furniture, fixtures, vehicles, tools, machinery, and all other tangible personal property of like nature, wherever located, together with all accessions thereto, all accessories, attachments, parts, and tools, and all replacements and substitutions therefor.

"Event of Default" has the meaning assigned to such term in the Credit Agreement.

"Grantor" means Brightfield Cloud Services Inc., a Delaware corporation, Employer Identification Number 84-3291057, and its successors and assigns.

"Guarantor" means Solara Holdings Group LLC, a Delaware limited liability company, Employer Identification Number 83-2047619, and its successors and assigns.

"Guaranty" means that certain Guaranty Agreement dated as of July 28, 2022, executed and delivered by the Guarantor in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, as amended, restated, supplemented, or otherwise modified from time to time.

"intellectual Property Collateral" means, collectively, all Patent Collateral, Trademark Collateral, Copyright Collateral, Trade Secret Collateral, and License Collateral of the Grantor.

"Lender" means Pinnacle National Bank, National Association, in its capacity as lender under the Credit Agreement, and its successors and assigns.

"License Collateral" means all licenses, sublicenses, and rights of the Grantor under license agreements, sublicense agreements, and similar arrangements relating to intellectual property, whether as licensor or licensee, including all rights to receive royalties, fees, and other payments thereunder.

"Loan Documents" has the meaning assigned to such term in the Credit Agreement and includes, without limitation, the Credit Agreement, this Security Agreement, the Guaranty, any notes, and all other agreements, instruments, documents, and certificates executed and delivered in connection therewith.

"Obligations" means all obligations of the Grantor now or hereafter existing under the Credit Agreement and the other Loan Documents, whether for principal, interest, fees, expenses, indemnities, or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, including, without limitation: (a) the principal amount of the Term Loan in the amount of Thirty-Five Million Dollars ($35,000,000); (b) all accrued and unpaid interest thereon at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR") plus 350 basis points (3.50%), with a SOFR floor of 0.50%; (c) the upfront fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000); (d) the annual administrative agent fee in the amount of Twenty-Five Thousand Dollars ($25,000); (e) all other fees payable under the Credit Agreement and the other Loan Documents; (f) all costs, expenses, and indemnification obligations of the Grantor under the Credit Agreement and the other Loan Documents (including, without limitation, reasonable attorneys' fees and expenses); and (g) all obligations of the Guarantor under the Guaranty. The term "Obligations" shall include all renewals, extensions, modifications, and refinancings of any of the foregoing.

"Patent Collateral" means all patents of the Grantor, whether domestic or foreign, all patent applications and provisional patent applications of the Grantor, all patents issuing therefrom, all reissues, divisions, continuations, continuations-in-part, and extensions thereof, and all rights to sue for past, present, and future infringement thereof, together with all patent licenses granted to or by the Grantor.

"Permitted Liens" has the meaning assigned to such term in the Credit Agreement.

"Pledged Equity" has the meaning set forth in Section 2.1(h) of this Security Agreement.

"Secured Parties" means, collectively, the Collateral Agent, the Administrative Agent, and the Lender, and their respective successors and assigns.

"Security Interest" means the security interest granted by the Grantor to the Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to Article II of this Security Agreement.

"Trademark Collateral" means all trademarks, service marks, trade names, trade dress, logos, designs, and other source identifiers of the Grantor, whether registered or unregistered, and all trademark registrations and applications for registration thereof in the United States or any other jurisdiction, including all renewals and extensions thereof, together with all goodwill of the business associated therewith and symbolized thereby, and all rights to sue for past, present, and future infringement, dilution, or misappropriation thereof.

"Trade Secret Collateral" means all trade secrets, know-how, proprietary information, confidential business information, software source code, algorithms, data compilations, databases, customer and supplier lists, technical data, inventions (whether or not patentable), processes, designs, formulas, methods, and techniques of the Grantor, and all documentation and media relating thereto.

"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if the perfection, the effect of perfection or non-perfection, or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.

Section 1.2 — UCC Definitions

Unless otherwise defined herein, terms used in this Security Agreement that are defined in the UCC as in effect in the State of New York shall have the meanings assigned to them therein. Without limiting the generality of the foregoing, the following terms shall have the meanings assigned to them in Article 9 (and, where applicable, Article 8) of the UCC: "Accounts," "Chattel Paper," "Commercial Tort Claims," "Deposit Accounts," "Documents," "Equipment," "Fixtures," "General Intangibles," "Goods," "Instruments," "Inventory," "Investment Property," "Letter-of-Credit Rights," "Payment Intangibles," "Proceeds," and "Supporting Obligations." To the extent the definitions of such terms are revised or expanded after the date hereof by any amendment to the UCC, the broadened meanings shall apply on and after the effective date of such amendment.

Section 1.3 — Interpretation

(a) All references in this Security Agreement to the Credit Agreement or any other Loan Document shall include all schedules, exhibits, annexes, and other attachments thereto, and all amendments, restatements, supplements, and other modifications thereto.

(b) This Security Agreement shall be governed by and construed in accordance with the laws of the State of New York, as more fully set forth in Article X hereof.

(c) The headings and captions contained in this Security Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Security Agreement or any provision hereof.

(d) Unless the context otherwise requires, (i) the singular includes the plural and vice versa, (ii) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," (iii) the word "or" is not exclusive, (iv) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Security Agreement as a whole, (v) references to Sections, Articles, Schedules, and Exhibits are to Sections, Articles, Schedules, and Exhibits of this Security Agreement unless otherwise specified, and (vi) references to any person include the successors and permitted assigns of such person.

(e) All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles as in effect in the United States of America ("GAAP").

ARTICLE II — GRANT OF SECURITY INTEREST

Section 2.1 — Collateral

As security for the prompt and complete payment and performance of all Obligations, the Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a continuing first-priority security interest in all of the Grantor's right, title, and interest in, to, and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of which is collectively referred to herein as the "Collateral"):

(a) Accounts Receivable. All accounts, accounts receivable, and other rights to payment of the Grantor, whether now existing or hereafter arising, including, without limitation, all health-care-insurance receivables (if any), and all rights to payment for goods sold or services rendered by the Grantor in the ordinary course of its Business. For the avoidance of doubt, this includes all rights to payment arising from the Grantor's SaaS subscription revenues and hardware sales revenues. As of the fiscal year ended December 31, 2021, the Grantor's total revenue was approximately $48,300,000, comprising approximately $31,400,000 in SaaS subscription revenues and approximately $16,900,000 in hardware sales revenues. All such accounts and rights to payment, whether evidenced by contract, invoice, purchase order, or otherwise, and whether or not earned by performance, are included in this grant.

(b) Inventory. All inventory of the Grantor, whether now owned or hereafter acquired, of every kind and description, wherever located, including, without limitation, all raw materials, work-in-process, finished goods, goods held for sale or lease, goods furnished or to be furnished under contracts of service, and all materials and supplies of every kind and nature used or usable in connection with the manufacture, production, packing, shipping, or sale of any such inventory. Without limiting the generality of the foregoing, the Collateral includes all proprietary server appliances and hardware components manufactured, assembled, or held by the Grantor for sale to customers or for deployment in connection with the Grantor's SaaS platform operations.

(c) Equipment. All equipment of the Grantor, whether now owned or hereafter acquired, of every kind and description, wherever located, including, without limitation, all machinery, tools, furniture, fixtures (to the extent not otherwise classified as real property), vehicles, and other tangible personal property. Without limiting the generality of the foregoing, the Collateral includes all server hardware, data center equipment, networking infrastructure (including routers, switches, firewalls, and load balancers), HVAC systems, uninterruptible power supply units, power distribution units, generators, battery backup systems, cabling, and all other equipment located at, deployed at, or to be deployed at the following locations:

(i) the Dallas data center located at 2700 Stemmons Freeway, Building C, Dallas, Texas 75207;

(ii) the Phoenix data center located at 1850 West Buckeye Road, Suite 100, Phoenix, Arizona 85009; and

(iii) the Austin headquarters located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731.

Together with all accessions, additions, replacements, and substitutions relating to any of the foregoing, all accessories, attachments, parts, and tools belonging to any of the foregoing, and all manuals, instructions, warranties, and records in connection therewith.

(d) intellectual Property. All intellectual Property Collateral of the Grantor, including, without limitation:

(i) all Patent Collateral, including all patents, patent applications (including provisional applications), and patent licenses, whether domestic or foreign;

(ii) all Trademark Collateral, including all trademarks, service marks, trade names, trade dress, logos, and other source identifiers (including, without limitation, the "Brightfield" name and all related marks, logos, and trade dress), all trademark registrations and applications for registration, and all goodwill associated therewith;

(iii) all Copyright Collateral, including all copyrights, copyright registrations, and applications for copyright registration;

(iv) all Trade Secret Collateral, including all trade secrets, know-how, proprietary information, software source code (including source code for the Grantor's SaaS platform and proprietary cloud infrastructure software), algorithms, databases, and technical data;

(v) all License Collateral, including all licenses, sublicenses, and rights under license agreements relating to intellectual property; and

(vi) all goodwill associated with the foregoing intellectual Property Collateral, all rights to sue for past, present, and future infringement, dilution, misappropriation, or other violation of any of the foregoing, and all income, royalties, license fees, and other proceeds arising from or relating to any of the foregoing.

For the avoidance of doubt, the Grantor's technology platform is SOC 2 Type II certified, and all intellectual property associated with such platform is included in this grant.

(e) Deposit Accounts. All Deposit Accounts of the Grantor, whether now existing or hereafter opened, at any financial institution, including, without limitation:

(i) the BCS operating account maintained at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356); and

(ii) all other deposit accounts maintained by the Grantor at any financial institution, together with all funds and amounts from time to time on deposit therein.

All Deposit Accounts shall be subject to deposit account control agreements ("DACAs") as required under Section 3.2 hereof and under the Credit Agreement.

(f) General Intangibles and Payment Intangibles. All general intangibles and payment intangibles of the Grantor, whether now existing or hereafter arising, including, without limitation, all contract rights, customer lists, customer relationships, supplier relationships, vendor contracts, software licenses (including licenses of the Grantor's proprietary software and licenses of third-party software used by the Grantor), rights under non-compete and non-solicitation agreements, tax refunds and tax refund claims, and all other intangible personal property of the Grantor of every kind and nature.

(g) Investment Property, Instruments, Chattel Paper, Documents, and Letter-of-Credit Rights. All of the following property of the Grantor, whether now existing or hereafter acquired or arising:

(i) all investment property, including all certificated and uncertificated securities, securities accounts, securities entitlements, commodity accounts, and commodity contracts;

(ii) all instruments and promissory notes, whether negotiable or non-negotiable;

(iii) all chattel paper, whether tangible or electronic;

(iv) all documents of title, whether negotiable or non-negotiable; and

(v) all letter-of-credit rights and supporting obligations.

(h) Pledged Equity Interests. All equity interests now owned or hereafter acquired by the Grantor in each of the Grantor's direct and indirect subsidiaries (collectively, the "Pledged Equity"), including:

(i) one hundred percent (100%) of all equity interests (including all shares of capital stock, membership interests, partnership interests, and other ownership interests) in each direct and indirect domestic subsidiary of the Grantor;

(ii) sixty-five percent (65%) of the issued and outstanding voting stock (and one hundred percent (100%) of any non-voting stock) of each first-tier foreign subsidiary of the Grantor that is a direct subsidiary of the Grantor (it being understood that such limitation applies to avoid adverse tax consequences under Sections 956 and 1248 of the Internal Revenue Code of 1986, as amended);

(iii) all certificates, if any, representing such equity interests, together with undated stock powers or other transfer instruments duly executed in blank by the Grantor; and

(iv) all distributions, dividends (whether in cash, property, or stock), returns of capital, and other rights, preferences, privileges, and payments in respect of such equity interests, and all warrants, options, and other rights to acquire additional equity interests in such subsidiaries.

The Pledged Equity is more fully described in Schedule C attached hereto.

(i) Commercial Tort Claims. All commercial tort claims of the Grantor, whether now existing or hereafter arising, including those listed on Schedule D attached hereto (as such Schedule may be supplemented from time to time in accordance with Section 4.7 hereof).

(j) Books and Records. All books, records, ledger cards, files, correspondence, customer lists, computer programs, tapes, disks, magnetic media, cloud-based storage accounts, and related data processing software that at any time evidence, relate to, or are associated with any of the foregoing Collateral, together with all rights of access thereto.

(k) Proceeds and Products. All proceeds (as defined in the UCC) and products of any and all of the foregoing Collateral, in whatever form, including, without limitation, all cash and non-cash proceeds, insurance proceeds (including all rights under insurance policies relating to any Collateral), condemnation awards, tort claim proceeds, and all proceeds of proceeds, in each case to the fullest extent permitted by the UCC and other applicable law.

Section 2.2 — Exclusions from Collateral

Notwithstanding the provisions of Section 2.1, the Collateral shall not include the following:

(a) Any lease, license, contract, property right, or agreement to which the Grantor is a party or under which the Grantor has rights, to the extent (and only to the extent) that the grant of a security interest therein would constitute a breach or violation of the terms thereof or result in the forfeiture or termination thereof (after giving effect to the applicable anti-assignment override provisions of the UCC, including, without limitation, Sections 9-406, 9-407, 9-408, and 9-409 of the UCC as in effect in the applicable jurisdiction); provided that such exclusion shall apply only to the extent and for so long as such breach, violation, forfeiture, or termination would not be rendered ineffective pursuant to such UCC provisions or other applicable law; and provided, further, that upon the lapse, termination, or waiver of any such restriction, such previously excluded property shall automatically be deemed to constitute Collateral hereunder without any further action on the part of the Grantor or the Collateral Agent.

(b) Any intent-to-use trademark application filed with the United States Patent and Trademark Office pursuant to Section 1(b) of the Lanham Act (15 U.S.C. § 1051(b)), to the extent and for so long as the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law; provided that upon the filing of a statement of use or an amendment to allege use with respect to such intent-to-use trademark application (or upon the issuance of a registration based thereon), such trademark application (or registration) shall automatically be deemed to constitute Collateral hereunder without any further action on the part of the Grantor or the Collateral Agent.

(c) Any equity interests in any subsidiary of the Grantor to the extent that the pledge of such equity interests is prohibited by applicable law or regulation that is not preempted by the UCC or other applicable federal law.

(d) Any assets of the Grantor to the extent that a security interest therein could not be perfected by (i) the filing of a UCC financing statement in the applicable filing office, (ii) control (as defined in the UCC or other applicable law), or (iii) the delivery of certificated securities or instruments to the Collateral Agent.

For the avoidance of doubt, proceeds and receivables arising from any excluded property described in this Section 2.2 shall constitute Collateral to the extent permitted by applicable law.

Section 2.3 — Security for Obligations

The Security Interest granted pursuant to this Article II secures the prompt and complete payment and performance when due (whether at stated maturity, by acceleration, or otherwise) of all Obligations of the Grantor under the Credit Agreement, the Guaranty, this Security Agreement, and all other Loan Documents, including, without limitation: (a) the repayment of the outstanding principal amount of the Term Loan in the amount of Thirty-Five Million Dollars ($35,000,000); (b) the payment of all accrued and unpaid interest on the Term Loan at the applicable rate (SOFR plus 350 basis points, with a SOFR floor of 0.50%); (c) the payment of all fees (including the $350,000 upfront fee and the $25,000 annual administrative agent fee); (d) the reimbursement of all costs, expenses, and indemnification obligations; and (e) all obligations of the Guarantor under the Guaranty. This Security Interest shall secure all renewals, extensions, restructurings, refinancings, and modifications of any of the foregoing Obligations.

ARTICLE III — PERFECTION

Section 3.1 — Filing of Financing Statements

(a) The Grantor hereby irrevocably authorizes the Collateral Agent to file, and to cause to be filed, one or more UCC-1 financing statements (and any amendments or continuations thereof) under the UCC naming the Grantor as debtor and the Collateral Agent as secured party, describing the Collateral, in the following jurisdictions:

(i) The Office of the Secretary of State of the State of Delaware, the Grantor's state of organization; and

(ii) The Office of the Secretary of State of the State of Texas, the state in which the Grantor's chief executive office is located.

(b) Such financing statements may describe the Collateral as "all assets" of the Debtor, or any other description consistent with Article II of this Security Agreement, in each case as the Collateral Agent may determine in its sole discretion to be necessary or advisable to perfect the Security Interest.

(i) The Grantor's exact legal name as it appears in its Certificate of Incorporation filed with the Secretary of State of the State of Delaware is: Brightfield Cloud Services Inc.

(ii) The Grantor's organizational identification number is the number assigned by the Secretary of State of the State of Delaware.

(iii) The Grantor's mailing address is: 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731.

(d) The Grantor hereby irrevocably authorizes the Collateral Agent to file, without the signature of the Grantor where permitted by applicable law, any continuation statements (UCC-3), amendments, assignments, and any other UCC filings as may be necessary or advisable to maintain the perfection and priority of the Security Interest at all times during the term of this Security Agreement.

Section 3.2 — Control Agreements

(a) The Grantor shall execute and deliver, and shall cause each applicable depository bank or financial institution to execute and deliver, deposit account control agreements ("DACAs") with respect to all Deposit Accounts of the Grantor, including, without limitation, the BCS operating account maintained at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356) and any other deposit accounts maintained at any other financial institution. Each such DACA shall be in form and substance reasonably satisfactory to the Collateral Agent and shall grant the Collateral Agent "control" (within the meaning of Section 9-104 of the UCC) over such Deposit Account.

(b) The Grantor shall execute and deliver, and shall cause each applicable securities intermediary or commodity intermediary to execute and deliver, securities account control agreements with respect to any securities accounts or commodity accounts maintained by the Grantor. Each such control agreement shall be in form and substance reasonably satisfactory to the Collateral Agent and shall grant the Collateral Agent "control" (within the meaning of Sections 8-106 and 9-106 of the UCC) over such securities accounts or commodity accounts.

Section 3.3 — Intellectual Property Filings

In order to perfect the Security Interest in the intellectual Property Collateral, the Grantor shall execute and deliver to the Collateral Agent, and the Collateral Agent is hereby authorized to file or record, the following:

(a) A patent security agreement, in form and substance reasonably satisfactory to the Collateral Agent, for recordation with the United States Patent and Trademark Office ("USPTO") covering all Patent Collateral;

(b) A trademark security agreement, in form and substance reasonably satisfactory to the Collateral Agent, for recordation with the USPTO covering all Trademark Collateral; and

(c) A copyright security agreement, in form and substance reasonably satisfactory to the Collateral Agent, for recordation with the United States Copyright Office covering all Copyright Collateral.

A schedule of all registered intellectual property of the Grantor is attached hereto as Schedule B. The Grantor shall promptly update Schedule B to reflect any new registrations, applications, or acquisitions of intellectual property.

Section 3.4 — Pledged Equity

(a) With respect to all certificated equity interests constituting Pledged Equity, the Grantor shall deliver, or shall cause to be delivered, to the Collateral Agent all stock certificates or other certificates representing such equity interests, together with undated stock powers or other transfer instruments duly executed in blank by the Grantor, in each case in form and substance reasonably satisfactory to the Collateral Agent. Such delivery shall be made on or prior to the date hereof (or, with respect to any equity interests hereafter acquired, promptly upon the acquisition thereof).

(b) With respect to all uncertificated equity interests constituting Pledged Equity, the Grantor shall take all actions necessary to grant the Collateral Agent "control" (within the meaning of Section 8-106 of the UCC) over such equity interests, including, without limitation, causing the issuer of such equity interests to register the Collateral Agent as the registered pledgee on the books and records of such issuer, or executing and delivering a control agreement with respect to such equity interests, in each case in form and substance reasonably satisfactory to the Collateral Agent.

Section 3.5 — Further Assurances Regarding Perfection

The Grantor shall, at the Grantor's sole cost and expense, take all actions that may be necessary or that the Collateral Agent may reasonably request in order to perfect and maintain the first-priority perfected security interest of the Collateral Agent in the Collateral (subject only to Permitted Liens), including, without limitation: (a) executing and delivering additional UCC financing statements, amendments, and continuation statements; (b) executing and delivering additional control agreements; (c) executing and delivering additional intellectual property security agreements; (d) delivering additional certificated securities together with duly executed, undated stock powers in blank; (e) executing and delivering any other instruments, agreements, or documents as the Collateral Agent may reasonably request; and (f) taking all other actions as may be necessary or advisable under the UCC or other applicable law to create, perfect, preserve, and protect the Security Interest.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE GRANTOR

The Grantor hereby represents and warrants to the Collateral Agent and each of the other Secured Parties as follows:

Section 4.1 — Organization and Authority

(a) The Grantor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.

(b) The Grantor is duly qualified to transact business as a foreign corporation, and is in good standing, in each of the following jurisdictions where the nature of its business or the ownership or leasing of its properties makes such qualification necessary: the State of Texas, the State of Arizona, the State of California, and the Commonwealth of Virginia.

(c) The Grantor has full corporate power and authority to execute, deliver, and perform this Security Agreement and to grant the Security Interest contemplated hereby.

(d) The execution, delivery, and performance of this Security Agreement and the granting of the Security Interest have been duly authorized by all necessary corporate action on the part of the Grantor, including all required approvals of the Grantor's board of directors, as evidenced by the board resolutions certified in the Secretary's Certificate delivered to the Collateral Agent by Jerome Hartwell, the General Counsel and Secretary of the Grantor, on the date hereof.

Section 4.2 — Legal Name and Location

(a) The exact legal name of the Grantor, as it appears in its Certificate of Incorporation as filed with the Secretary of State of the State of Delaware, is: Brightfield Cloud Services Inc.

(b) The Grantor's Employer Identification Number (EIN) is 84-3291057.

(d) The Grantor's registered agent in the State of Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801.

(e) The Grantor's chief executive office and principal place of business is located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731.

(f) During the five (5) years preceding the date hereof, the Grantor has not changed its legal name, state of organization, or organizational form (i.e., corporate structure), except that (i) the Grantor was originally organized and incorporated in the State of Delaware in 2018, and (ii) the Grantor underwent a change of control in connection with the acquisition of the Grantor by Solara Capital Partners (through its portfolio company holding entity, Solara Holdings Group LLC) in October 2020. No merger, consolidation, or other organizational restructuring has occurred during such period.

Section 4.3 — Title to Collateral; No Liens

(a) The Grantor is the sole legal and beneficial owner of the Collateral (or, in the case of Collateral hereafter acquired, will be the sole legal and beneficial owner thereof at the time of acquisition), free and clear of all liens, security interests, pledges, charges, claims, and encumbrances of any nature whatsoever, other than (i) the Security Interest granted hereunder and (ii) Permitted Liens (as defined in the Credit Agreement).

(b) As of the date hereof, the only existing lien on any of the Collateral (other than Permitted Liens) is the security interest previously granted to Ridgeline Commercial Bank in connection with the Grantor's prior credit facility. The payoff amount required to release such lien is Eight Million Two Hundred Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($8,237,422), consisting of Eight Million Two Hundred Thousand Dollars ($8,200,000) in outstanding principal and Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($37,422) in accrued and unpaid interest. Such payoff amount is being paid in full on the date hereof from the proceeds of the Term Loan, and Ridgeline Commercial Bank has agreed to file UCC-3 termination statements in all applicable jurisdictions promptly upon receipt of the payoff proceeds.

(c) Upon the filing of such UCC-3 termination statements by Ridgeline Commercial Bank, no liens, security interests, or encumbrances will exist on any of the Collateral other than the Security Interest granted hereunder and Permitted Liens.

Section 4.4 — Deposit Accounts

A complete and accurate schedule of all deposit accounts maintained by the Grantor as of the date hereof is set forth on Schedule E attached hereto, including the BCS operating account at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356). DACAs have been or will be executed with respect to all such deposit accounts as a condition precedent to the funding of the Term Loan under the Credit Agreement. The Grantor does not maintain any deposit accounts other than those listed on Schedule E.

Section 4.5 — Intellectual Property

(a) The intellectual property listed on Schedule B attached hereto constitutes a true, correct, and complete list of all registered and applied-for patents, trademarks, service marks, and copyrights owned by the Grantor as of the date hereof.

(b) To the knowledge of the Grantor, all such intellectual property is valid, subsisting, and enforceable. The Grantor owns or has a valid license to use all intellectual property necessary for the conduct of its Business as presently conducted.

(c) There are no pending or, to the knowledge of the Grantor, threatened claims, actions, or proceedings alleging that the Grantor's use of any intellectual property infringes, misappropriates, or otherwise violates the rights of any third party. No third party has asserted any claim of ownership or interest in any intellectual property owned by the Grantor.

(d) The Grantor's technology platform is SOC 2 Type II certified, and such certification remains in full force and effect as of the date hereof.

Section 4.6 — Equity Interests in Subsidiaries

(a) Schedule C attached hereto sets forth a true, correct, and complete list of all direct and indirect subsidiaries of the Grantor as of the date hereof, including the name and jurisdiction of organization of each such subsidiary, the percentage of equity interests owned by the Grantor (directly or indirectly), the type of equity interests (voting or non-voting), and the certificate numbers (if certificated) representing such equity interests.

(b) All equity interests in each corporate subsidiary are duly authorized, validly issued, fully paid, and non-assessable. All equity interests in each limited liability company subsidiary have been duly authorized and validly issued in accordance with the applicable operating agreement.

(c) For any foreign subsidiary, the pledge of equity interests is limited to sixty-five percent (65%) of the outstanding voting stock (and one hundred percent (100%) of any non-voting stock) of each such first-tier foreign subsidiary.

(d) No outstanding options, warrants, rights of conversion, or other agreements exist with respect to the equity interests of any subsidiary, except as disclosed in Schedule C.

Section 4.7 — Commercial Tort Claims

As of the date hereof, the Grantor has no commercial tort claims, except as set forth on Schedule D attached hereto (which, as of the date hereof, reflects no existing commercial tort claims). The Grantor shall promptly (and in any event within fifteen (15) days) notify the Collateral Agent in writing of any new commercial tort claim hereafter arising or asserted by the Grantor, and shall supplement Schedule D accordingly. Upon such notification, the Grantor shall be deemed to have granted to the Collateral Agent, for the ratable benefit of the Secured Parties, a continuing first-priority security interest in such commercial tort claim as Collateral hereunder.

Section 4.8 — No Conflicts

The execution, delivery, and performance by the Grantor of this Security Agreement and the granting of the Security Interest contemplated hereby do not and will not: (a) conflict with, result in a breach of, or constitute a default under the Grantor's Certificate of Incorporation (as amended) or Bylaws (as amended); (b) conflict with, result in a breach of, violate, or constitute a default under any material agreement, contract, lease, license, or other instrument to which the Grantor is a party or by which the Grantor or any of its property is bound; or (c) violate any applicable law, rule, regulation, order, judgment, decree, or injunction of any governmental authority applicable to the Grantor or any of its property. No consent, approval, license, authorization, or validation of, or filing, recording, or registration with, any governmental authority is required in connection with the execution, delivery, or performance of this Security Agreement or the creation or perfection of the Security Interest, other than (i) UCC financing statement filings in the jurisdictions set forth in Section 3.1, (ii) intellectual property filings with the USPTO and the United States Copyright Office as set forth in Section 3.3, and (iii) any filings with the United States Securities and Exchange Commission to the extent applicable.

Section 4.9 — Enforceability

This Security Agreement has been duly executed and delivered by the Grantor and constitutes a legal, valid, and binding obligation of the Grantor, enforceable against the Grantor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 4.10 — Priority

The Security Interest constitutes (or, upon the completion of the applicable perfection steps described herein, will constitute) a valid, first-priority perfected security interest in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, in the Collateral, subject only to Permitted Liens. Such first-priority perfected security interest shall be created and perfected upon: (a) the filing of UCC-1 financing statements with the Secretary of State of the State of Delaware and the Secretary of State of the State of Texas; (b) the execution and delivery of DACAs and securities account control agreements with respect to all Deposit Accounts and securities accounts; (c) the delivery to the Collateral Agent of all certificated securities constituting Pledged Equity, together with duly executed, undated stock powers in blank; and (d) the filing and recordation of intellectual property security agreements with the USPTO and the United States Copyright Office.

ARTICLE V — COVENANTS OF THE GRANTOR

The Grantor hereby covenants and agrees with the Collateral Agent and each of the other Secured Parties as follows:

Section 5.1 — Maintenance of Collateral

The Grantor shall maintain all Collateral in good working order and condition (ordinary wear and tear excepted) and shall make all necessary repairs thereto and replacements thereof. Without limiting the generality of the foregoing, all data center equipment located at the Dallas facility (2700 Stemmons Freeway, Building C, Dallas, Texas 75207) and the Phoenix facility (1850 West Buckeye Road, Suite 100, Phoenix, Arizona 85009) shall be maintained in accordance with industry standards for enterprise data center operations, including compliance with applicable environmental, health, and safety regulations. The Grantor shall not permit any Collateral to be used in violation of any applicable law, rule, or regulation or in violation of any insurance policy covering such Collateral.

Section 5.2 — Insurance

(a) The Grantor shall maintain insurance coverage with respect to the Collateral and the Business in such amounts, with such insurers, and covering such risks as required under the Credit Agreement. Without limiting the generality of the foregoing, the Grantor shall maintain the following minimum insurance coverages:

(i) Property and Casualty Insurance: Coverage with limits of not less than $50,000,000 per occurrence, maintained with Northbrook Indemnity Insurance Co. (or such other insurer of comparable financial strength as may be approved by the Collateral Agent), covering all tangible Collateral against loss or damage by fire, theft, explosion, flood, and such other risks as are customarily insured against by companies engaged in the same or similar business.

(ii) Cyber Liability Insurance: Coverage with limits of not less than $10,000,000 per occurrence, maintained with Northbrook Indemnity Insurance Co. (or such other insurer of comparable financial strength as may be approved by the Collateral Agent), covering losses arising from network security failures, data breaches, privacy liability, and related cyber incidents.

(iii) Directors and Officers (D&O) Insurance: Coverage with aggregate limits of not less than $15,000,000, maintained with Crosshaven Specialty Underwriters, Inc. (or such other insurer of comparable financial strength as may be approved by the Collateral Agent).

(b) All property and casualty insurance policies shall name the Collateral Agent and the Lender as loss payee (or mortgagee, as applicable) pursuant to a standard lender's loss-payable endorsement. All liability insurance policies shall name the Collateral Agent and the Lender as additional insureds.

(d) Insurance proceeds relating to any loss, damage, or destruction of Collateral shall be applied in accordance with the Credit Agreement. The Grantor shall not take any action, or fail to take any action, that would permit any insurer to avoid liability under any policy of insurance maintained pursuant to this Section.

Section 5.3 — Disposition of Collateral

The Grantor shall not sell, transfer, assign, exchange, lease, or otherwise dispose of any Collateral, or attempt, offer, or contract to do so, except as expressly permitted under the Credit Agreement. For the avoidance of doubt, the Credit Agreement permits dispositions of assets not exceeding One Million Five Hundred Thousand Dollars ($1,500,000) individually or Five Million Dollars ($5,000,000) in the aggregate during any fiscal year, and other dispositions specifically defined as "Permitted Dispositions" under the Credit Agreement. Any disposition of Collateral not expressly permitted under the Credit Agreement shall require the prior written consent of the Collateral Agent (acting at the direction of the Lender).

Section 5.4 — Liens

The Grantor shall not create, incur, assume, or permit to exist any lien, security interest, pledge, charge, claim, or other encumbrance upon or with respect to any Collateral, except (a) the Security Interest granted hereunder and (b) Permitted Liens as defined in the Credit Agreement. The Grantor shall take all actions necessary to defend the Collateral against, and to remove from the Collateral, any lien, security interest, or other encumbrance that is not a Permitted Lien.

Section 5.5 — Changes in Name, Location, or Structure

The Grantor shall not, without providing at least thirty (30) days' prior written notice to the Collateral Agent: (a) change its legal name; (b) change its state of organization or organizational form; (c) change the location of its chief executive office; or (d) merge into or consolidate with any other entity, or change its organizational identity or corporate structure in any manner. In connection with any such change, the Grantor shall take (and shall cooperate with the Collateral Agent in taking) all actions necessary or advisable to maintain the perfection and priority of the Security Interest, including, without limitation, the filing of UCC-3 amendments in all applicable jurisdictions and the updating of all applicable records.

Section 5.6 — Defense of Collateral

The Grantor shall, at the Grantor's sole cost and expense, defend the Collateral against all claims, demands, actions, and proceedings of all persons other than the Secured Parties and shall protect and preserve the Grantor's rights in and to the Collateral. The Grantor shall promptly notify the Collateral Agent in writing of any claim or demand made against the Grantor or any Collateral that could reasonably be expected to result in a material adverse effect on the value of the Collateral or the Security Interest.

Section 5.7 — Notices Regarding Collateral

The Grantor shall promptly (and in any event within ten (10) Business Days) notify the Collateral Agent in writing of:

(a) any material loss, damage, or destruction of any Collateral (whether or not covered by insurance);

(b) any claim, action, or proceeding adverse to the Grantor's ownership of, or the Security Interest in, any material Collateral;

(d) any event or circumstance that could reasonably be expected to materially impair the value of the Collateral taken as a whole or the enforceability or priority of the Security Interest.

Section 5.8 — Intellectual Property Maintenance

(a) The Grantor shall maintain and preserve all material intellectual Property Collateral, and shall take all actions necessary or advisable to protect the validity, enforceability, and value thereof. Without limiting the foregoing, the Grantor shall: (i) timely file all necessary maintenance documents, renewal applications, statements of use, and declarations of continued use with the USPTO, the United States Copyright Office, and any applicable foreign intellectual property offices; (ii) timely pay all maintenance fees, annuities, renewal fees, and other fees required to maintain intellectual property registrations and applications in full force and effect; and (iii) diligently prosecute all pending patent and trademark applications.

(b) The Grantor shall not abandon, disclaim, dedicate to the public, or otherwise relinquish any material intellectual Property Collateral without the prior written consent of the Collateral Agent (such consent not to be unreasonably withheld or delayed). For purposes of this Section 5.8, intellectual property shall be deemed "material" if the abandonment, loss, or impairment thereof could reasonably be expected to have a material adverse effect on the Business or operations of the Grantor.

(c) The Grantor shall promptly notify the Collateral Agent of any infringement, misappropriation, or other unauthorized use of any material intellectual Property Collateral by any third party and shall take such action as the Collateral Agent may reasonably request to protect the Grantor's rights therein.

Section 5.9 — Further Assurances

SECURITY AGREEMENT
(Execution Version)
Dated as of July 28, 2022
by
BRIGHTFIELD CLOUD SERVICES INC.
a Delaware corporation
(as Grantor)
in favor of
MERIDIAN WHITCOMB LLC
a Delaware limited liability company
(as Collateral Agent)
for the benefit of
PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION
(as Lender and Administrative Agent)
Reference is made to that certain Term Loan Agreement dated as of July 28, 2022 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Brightfield Cloud Services Inc., a Delaware corporation, as Borrower, Pinnacle National Bank, National Association, as Lender and Administrative Agent, and Meridian Whitcomb LLC, a Delaware limited liability company, as Collateral Agent, providing for a $35,000,000 senior secured term loan facility.
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RECITALS
A. Brightfield Cloud Services Inc. is a corporation duly organized and validly existing under the laws of the State of Delaware, with its principal place of business located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731. The Grantor is engaged in the business of enterprise cloud infrastructure software, including a proprietary software-as-a-service ("SaaS") platform, and proprietary hardware, including server appliance manufacturing and deployment (collectively, the "Business").
B. The Grantor, as Borrower, has entered into that certain Term Loan Agreement dated as of July 28, 2022 (the "Credit Agreement") with Pinnacle National Bank, National Association ("Pinnacle National Bank, N.A."), as Lender and Administrative Agent, and Meridian Whitcomb LLC ("Meridian Whitcomb"), as Collateral Agent, pursuant to which the Lender has agreed, subject to the terms and conditions set forth therein, to make a senior secured term loan to the Grantor in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Term Loan").
C. It is a condition precedent to the obligation of the Lender to fund the Term Loan under the Credit Agreement that the Grantor execute and deliver this Security Agreement (this "Agreement" or this "Security Agreement") and grant to the Collateral Agent, for the ratable benefit of the Secured Parties (as defined herein), a first-priority perfected security interest in substantially all of the assets of the Grantor to secure the prompt and complete payment and performance of all Obligations (as defined herein).
D. The Grantor desires to grant such first-priority perfected security interest in substantially all of its assets to the Collateral Agent, for the ratable benefit of the Secured Parties, in order to secure the Obligations as contemplated by the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement).
E. Concurrently with the execution of this Security Agreement, Solara Holdings Group LLC, a Delaware limited liability company ("Solara Holdings" or the "Guarantor"), has executed and delivered that certain Guaranty Agreement dated as of July 28, 2022 (the "Guaranty") in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, guaranteeing the payment and performance of the Obligations.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.1 — Defined Terms
As used in this Security Agreement, the following terms shall have the meanings set forth below:
"Administrative Agent" means Pinnacle National Bank, National Association, in its capacity as administrative agent under the Credit Agreement, and its successors and assigns in such capacity. The principal office of the Administrative Agent is located at 600 Lexington Avenue, 35th Floor, New York, New York 10022.
"Collateral" has the meaning set forth in Section 2.1 of this Security Agreement.
"Collateral Agent" means Meridian Whitcomb LLC, a Delaware limited liability company, in its capacity as collateral agent hereunder and under the Credit Agreement, and its successors and assigns in such capacity. The principal office of the Collateral Agent for purposes of this Security Agreement is located at 100 Wall Street, 18th Floor, New York, New York 10005. The designated contact person for the Collateral Agent is Laura Desmond, Vice President, Agency Services.
"Copyright Collateral" means all copyrights of the Grantor, whether registered or unregistered, and all copyright registrations and applications for registration thereof in the United States or any other jurisdiction, including all renewals and extensions thereof, and all rights to sue for past, present, and future infringement or misappropriation thereof.
"Credit Agreement" means that certain Term Loan Agreement dated as of July 28, 2022, among the Grantor (as Borrower), Pinnacle National Bank, N.A. (as Lender and Administrative Agent), and Meridian Whitcomb LLC (as Collateral Agent), as amended, restated, supplemented, or otherwise modified from time to time, together with all schedules, exhibits, annexes, and other attachments thereto.
"Debtor" means Brightfield Cloud Services Inc., a Delaware corporation, in its capacity as debtor for purposes of Article 9 of the UCC.
"Deposit Accounts" means all deposit accounts (as defined in the UCC) maintained by the Grantor at any financial institution, whether now existing or hereafter opened, including, without limitation, the operating account maintained by the Grantor at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356), and all funds and amounts from time to time on deposit therein.
"Equipment" means all "equipment" as defined in the UCC, whether now owned or hereafter acquired by the Grantor, including, without limitation, all server hardware, data center equipment (including racks, cabling, cooling systems, HVAC systems, and power distribution units), proprietary server appliances, networking equipment (including routers, switches, firewalls, and load balancers), computers, office equipment, furniture, fixtures, vehicles, tools, machinery, and all other tangible personal property of like nature, wherever located, together with all accessions thereto, all accessories, attachments, parts, and tools, and all replacements and substitutions therefor.
"Event of Default" has the meaning assigned to such term in the Credit Agreement.
"Grantor" means Brightfield Cloud Services Inc., a Delaware corporation, Employer Identification Number 84-3291057, and its successors and assigns.
"Guarantor" means Solara Holdings Group LLC, a Delaware limited liability company, Employer Identification Number 83-2047619, and its successors and assigns.
"Guaranty" means that certain Guaranty Agreement dated as of July 28, 2022, executed and delivered by the Guarantor in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, as amended, restated, supplemented, or otherwise modified from time to time.
"intellectual Property Collateral" means, collectively, all Patent Collateral, Trademark Collateral, Copyright Collateral, Trade Secret Collateral, and License Collateral of the Grantor.
"Lender" means Pinnacle National Bank, National Association, in its capacity as lender under the Credit Agreement, and its successors and assigns.
"License Collateral" means all licenses, sublicenses, and rights of the Grantor under license agreements, sublicense agreements, and similar arrangements relating to intellectual property, whether as licensor or licensee, including all rights to receive royalties, fees, and other payments thereunder.
"Loan Documents" has the meaning assigned to such term in the Credit Agreement and includes, without limitation, the Credit Agreement, this Security Agreement, the Guaranty, any notes, and all other agreements, instruments, documents, and certificates executed and delivered in connection therewith.
"Obligations" means all obligations of the Grantor now or hereafter existing under the Credit Agreement and the other Loan Documents, whether for principal, interest, fees, expenses, indemnities, or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, including, without limitation: (a) the principal amount of the Term Loan in the amount of Thirty-Five Million Dollars ($35,000,000); (b) all accrued and unpaid interest thereon at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR") plus 350 basis points (3.50%), with a SOFR floor of 0.50%; (c) the upfront fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000); (d) the annual administrative agent fee in the amount of Twenty-Five Thousand Dollars ($25,000); (e) all other fees payable under the Credit Agreement and the other Loan Documents; (f) all costs, expenses, and indemnification obligations of the Grantor under the Credit Agreement and the other Loan Documents (including, without limitation, reasonable attorneys' fees and expenses); and (g) all obligations of the Guarantor under the Guaranty. The term "Obligations" shall include all renewals, extensions, modifications, and refinancings of any of the foregoing.
"Patent Collateral" means all patents of the Grantor, whether domestic or foreign, all patent applications and provisional patent applications of the Grantor, all patents issuing therefrom, all reissues, divisions, continuations, continuations-in-part, and extensions thereof, and all rights to sue for past, present, and future infringement thereof, together with all patent licenses granted to or by the Grantor.
"Permitted Liens" has the meaning assigned to such term in the Credit Agreement.
"Pledged Equity" has the meaning set forth in Section 2.1(h) of this Security Agreement.
"Secured Parties" means, collectively, the Collateral Agent, the Administrative Agent, and the Lender, and their respective successors and assigns.
"Security Interest" means the security interest granted by the Grantor to the Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to Article II of this Security Agreement.
"Trademark Collateral" means all trademarks, service marks, trade names, trade dress, logos, designs, and other source identifiers of the Grantor, whether registered or unregistered, and all trademark registrations and applications for registration thereof in the United States or any other jurisdiction, including all renewals and extensions thereof, together with all goodwill of the business associated therewith and symbolized thereby, and all rights to sue for past, present, and future infringement, dilution, or misappropriation thereof.
"Trade Secret Collateral" means all trade secrets, know-how, proprietary information, confidential business information, software source code, algorithms, data compilations, databases, customer and supplier lists, technical data, inventions (whether or not patentable), processes, designs, formulas, methods, and techniques of the Grantor, and all documentation and media relating thereto.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if the perfection, the effect of perfection or non-perfection, or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.
Section 1.2 — UCC Definitions
Unless otherwise defined herein, terms used in this Security Agreement that are defined in the UCC as in effect in the State of New York shall have the meanings assigned to them therein. Without limiting the generality of the foregoing, the following terms shall have the meanings assigned to them in Article 9 (and, where applicable, Article 8) of the UCC: "Accounts," "Chattel Paper," "Commercial Tort Claims," "Deposit Accounts," "Documents," "Equipment," "Fixtures," "General Intangibles," "Goods," "Instruments," "Inventory," "Investment Property," "Letter-of-Credit Rights," "Payment Intangibles," "Proceeds," and "Supporting Obligations." To the extent the definitions of such terms are revised or expanded after the date hereof by any amendment to the UCC, the broadened meanings shall apply on and after the effective date of such amendment.
Section 1.3 — Interpretation
(a) All references in this Security Agreement to the Credit Agreement or any other Loan Document shall include all schedules, exhibits, annexes, and other attachments thereto, and all amendments, restatements, supplements, and other modifications thereto.
(b) This Security Agreement shall be governed by and construed in accordance with the laws of the State of New York, as more fully set forth in Article X hereof.
(c) The headings and captions contained in this Security Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Security Agreement or any provision hereof.
(d) Unless the context otherwise requires, (i) the singular includes the plural and vice versa, (ii) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," (iii) the word "or" is not exclusive, (iv) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Security Agreement as a whole, (v) references to Sections, Articles, Schedules, and Exhibits are to Sections, Articles, Schedules, and Exhibits of this Security Agreement unless otherwise specified, and (vi) references to any person include the successors and permitted assigns of such person.
(e) All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles as in effect in the United States of America ("GAAP").
ARTICLE II — GRANT OF SECURITY INTEREST
Section 2.1 — Collateral
As security for the prompt and complete payment and performance of all Obligations, the Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a continuing first-priority security interest in all of the Grantor's right, title, and interest in, to, and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of which is collectively referred to herein as the "Collateral"):
(a) Accounts Receivable. All accounts, accounts receivable, and other rights to payment of the Grantor, whether now existing or hereafter arising, including, without limitation, all health-care-insurance receivables (if any), and all rights to payment for goods sold or services rendered by the Grantor in the ordinary course of its Business. For the avoidance of doubt, this includes all rights to payment arising from the Grantor's SaaS subscription revenues and hardware sales revenues. As of the fiscal year ended December 31, 2021, the Grantor's total revenue was approximately $48,300,000, comprising approximately $31,400,000 in SaaS subscription revenues and approximately $16,900,000 in hardware sales revenues. All such accounts and rights to payment, whether evidenced by contract, invoice, purchase order, or otherwise, and whether or not earned by performance, are included in this grant.
(b) Inventory. All inventory of the Grantor, whether now owned or hereafter acquired, of every kind and description, wherever located, including, without limitation, all raw materials, work-in-process, finished goods, goods held for sale or lease, goods furnished or to be furnished under contracts of service, and all materials and supplies of every kind and nature used or usable in connection with the manufacture, production, packing, shipping, or sale of any such inventory. Without limiting the generality of the foregoing, the Collateral includes all proprietary server appliances and hardware components manufactured, assembled, or held by the Grantor for sale to customers or for deployment in connection with the Grantor's SaaS platform operations.
(c) Equipment. All equipment of the Grantor, whether now owned or hereafter acquired, of every kind and description, wherever located, including, without limitation, all machinery, tools, furniture, fixtures (to the extent not otherwise classified as real property), vehicles, and other tangible personal property. Without limiting the generality of the foregoing, the Collateral includes all server hardware, data center equipment, networking infrastructure (including routers, switches, firewalls, and load balancers), HVAC systems, uninterruptible power supply units, power distribution units, generators, battery backup systems, cabling, and all other equipment located at, deployed at, or to be deployed at the following locations:
(i) the Dallas data center located at 2700 Stemmons Freeway, Building C, Dallas, Texas 75207;
(ii) the Phoenix data center located at 1850 West Buckeye Road, Suite 100, Phoenix, Arizona 85009; and
(iii) the Austin headquarters located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731.
Together with all accessions, additions, replacements, and substitutions relating to any of the foregoing, all accessories, attachments, parts, and tools belonging to any of the foregoing, and all manuals, instructions, warranties, and records in connection therewith.
(d) intellectual Property. All intellectual Property Collateral of the Grantor, including, without limitation:
(i) all Patent Collateral, including all patents, patent applications (including provisional applications), and patent licenses, whether domestic or foreign;
(ii) all Trademark Collateral, including all trademarks, service marks, trade names, trade dress, logos, and other source identifiers (including, without limitation, the "Brightfield" name and all related marks, logos, and trade dress), all trademark registrations and applications for registration, and all goodwill associated therewith;
(iii) all Copyright Collateral, including all copyrights, copyright registrations, and applications for copyright registration;
(iv) all Trade Secret Collateral, including all trade secrets, know-how, proprietary information, software source code (including source code for the Grantor's SaaS platform and proprietary cloud infrastructure software), algorithms, databases, and technical data;
(v) all License Collateral, including all licenses, sublicenses, and rights under license agreements relating to intellectual property; and
(vi) all goodwill associated with the foregoing intellectual Property Collateral, all rights to sue for past, present, and future infringement, dilution, misappropriation, or other violation of any of the foregoing, and all income, royalties, license fees, and other proceeds arising from or relating to any of the foregoing.
For the avoidance of doubt, the Grantor's technology platform is SOC 2 Type II certified, and all intellectual property associated with such platform is included in this grant.
(e) Deposit Accounts. All Deposit Accounts of the Grantor, whether now existing or hereafter opened, at any financial institution, including, without limitation:
(i) the BCS operating account maintained at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356); and
(ii) all other deposit accounts maintained by the Grantor at any financial institution, together with all funds and amounts from time to time on deposit therein.
All Deposit Accounts shall be subject to deposit account control agreements ("DACAs") as required under Section 3.2 hereof and under the Credit Agreement.
(f) General Intangibles and Payment Intangibles. All general intangibles and payment intangibles of the Grantor, whether now existing or hereafter arising, including, without limitation, all contract rights, customer lists, customer relationships, supplier relationships, vendor contracts, software licenses (including licenses of the Grantor's proprietary software and licenses of third-party software used by the Grantor), rights under non-compete and non-solicitation agreements, tax refunds and tax refund claims, and all other intangible personal property of the Grantor of every kind and nature.
(g) Investment Property, Instruments, Chattel Paper, Documents, and Letter-of-Credit Rights. All of the following property of the Grantor, whether now existing or hereafter acquired or arising:
(i) all investment property, including all certificated and uncertificated securities, securities accounts, securities entitlements, commodity accounts, and commodity contracts;
(ii) all instruments and promissory notes, whether negotiable or non-negotiable;
(iii) all chattel paper, whether tangible or electronic;
(iv) all documents of title, whether negotiable or non-negotiable; and
(v) all letter-of-credit rights and supporting obligations.
(h) Pledged Equity Interests. All equity interests now owned or hereafter acquired by the Grantor in each of the Grantor's direct and indirect subsidiaries (collectively, the "Pledged Equity"), including:
(i) one hundred percent (100%) of all equity interests (including all shares of capital stock, membership interests, partnership interests, and other ownership interests) in each direct and indirect domestic subsidiary of the Grantor;
(ii) sixty-five percent (65%) of the issued and outstanding voting stock (and one hundred percent (100%) of any non-voting stock) of each first-tier foreign subsidiary of the Grantor that is a direct subsidiary of the Grantor (it being understood that such limitation applies to avoid adverse tax consequences under Sections 956 and 1248 of the Internal Revenue Code of 1986, as amended);
(iii) all certificates, if any, representing such equity interests, together with undated stock powers or other transfer instruments duly executed in blank by the Grantor; and
(iv) all distributions, dividends (whether in cash, property, or stock), returns of capital, and other rights, preferences, privileges, and payments in respect of such equity interests, and all warrants, options, and other rights to acquire additional equity interests in such subsidiaries.
The Pledged Equity is more fully described in Schedule C attached hereto.
(i) Commercial Tort Claims. All commercial tort claims of the Grantor, whether now existing or hereafter arising, including those listed on Schedule D attached hereto (as such Schedule may be supplemented from time to time in accordance with Section 4.7 hereof).
(j) Books and Records. All books, records, ledger cards, files, correspondence, customer lists, computer programs, tapes, disks, magnetic media, cloud-based storage accounts, and related data processing software that at any time evidence, relate to, or are associated with any of the foregoing Collateral, together with all rights of access thereto.
(k) Proceeds and Products. All proceeds (as defined in the UCC) and products of any and all of the foregoing Collateral, in whatever form, including, without limitation, all cash and non-cash proceeds, insurance proceeds (including all rights under insurance policies relating to any Collateral), condemnation awards, tort claim proceeds, and all proceeds of proceeds, in each case to the fullest extent permitted by the UCC and other applicable law.
Section 2.2 — Exclusions from Collateral
Notwithstanding the provisions of Section 2.1, the Collateral shall not include the following:
(a) Any lease, license, contract, property right, or agreement to which the Grantor is a party or under which the Grantor has rights, to the extent (and only to the extent) that the grant of a security interest therein would constitute a breach or violation of the terms thereof or result in the forfeiture or termination thereof (after giving effect to the applicable anti-assignment override provisions of the UCC, including, without limitation, Sections 9-406, 9-407, 9-408, and 9-409 of the UCC as in effect in the applicable jurisdiction); provided that such exclusion shall apply only to the extent and for so long as such breach, violation, forfeiture, or termination would not be rendered ineffective pursuant to such UCC provisions or other applicable law; and provided, further, that upon the lapse, termination, or waiver of any such restriction, such previously excluded property shall automatically be deemed to constitute Collateral hereunder without any further action on the part of the Grantor or the Collateral Agent.
(b) Any intent-to-use trademark application filed with the United States Patent and Trademark Office pursuant to Section 1(b) of the Lanham Act (15 U.S.C. § 1051(b)), to the extent and for so long as the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law; provided that upon the filing of a statement of use or an amendment to allege use with respect to such intent-to-use trademark application (or upon the issuance of a registration based thereon), such trademark application (or registration) shall automatically be deemed to constitute Collateral hereunder without any further action on the part of the Grantor or the Collateral Agent.
(c) Any equity interests in any subsidiary of the Grantor to the extent that the pledge of such equity interests is prohibited by applicable law or regulation that is not preempted by the UCC or other applicable federal law.
(d) Any assets of the Grantor to the extent that a security interest therein could not be perfected by (i) the filing of a UCC financing statement in the applicable filing office, (ii) control (as defined in the UCC or other applicable law), or (iii) the delivery of certificated securities or instruments to the Collateral Agent.
For the avoidance of doubt, proceeds and receivables arising from any excluded property described in this Section 2.2 shall constitute Collateral to the extent permitted by applicable law.
Section 2.3 — Security for Obligations
The Security Interest granted pursuant to this Article II secures the prompt and complete payment and performance when due (whether at stated maturity, by acceleration, or otherwise) of all Obligations of the Grantor under the Credit Agreement, the Guaranty, this Security Agreement, and all other Loan Documents, including, without limitation: (a) the repayment of the outstanding principal amount of the Term Loan in the amount of Thirty-Five Million Dollars ($35,000,000); (b) the payment of all accrued and unpaid interest on the Term Loan at the applicable rate (SOFR plus 350 basis points, with a SOFR floor of 0.50%); (c) the payment of all fees (including the $350,000 upfront fee and the $25,000 annual administrative agent fee); (d) the reimbursement of all costs, expenses, and indemnification obligations; and (e) all obligations of the Guarantor under the Guaranty. This Security Interest shall secure all renewals, extensions, restructurings, refinancings, and modifications of any of the foregoing Obligations.
ARTICLE III — PERFECTION
Section 3.1 — Filing of Financing Statements
(a) The Grantor hereby irrevocably authorizes the Collateral Agent to file, and to cause to be filed, one or more UCC-1 financing statements (and any amendments or continuations thereof) under the UCC naming the Grantor as debtor and the Collateral Agent as secured party, describing the Collateral, in the following jurisdictions:
(i) The Office of the Secretary of State of the State of Delaware, the Grantor's state of organization; and
(ii) The Office of the Secretary of State of the State of Texas, the state in which the Grantor's chief executive office is located.
(b) Such financing statements may describe the Collateral as "all assets" of the Debtor, or any other description consistent with Article II of this Security Agreement, in each case as the Collateral Agent may determine in its sole discretion to be necessary or advisable to perfect the Security Interest.
(c) For purposes of the UCC financing statements to be filed hereunder:
(i) The Grantor's exact legal name as it appears in its Certificate of Incorporation filed with the Secretary of State of the State of Delaware is: Brightfield Cloud Services Inc.
(ii) The Grantor's organizational identification number is the number assigned by the Secretary of State of the State of Delaware.
(iii) The Grantor's mailing address is: 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731.
(d) The Grantor hereby irrevocably authorizes the Collateral Agent to file, without the signature of the Grantor where permitted by applicable law, any continuation statements (UCC-3), amendments, assignments, and any other UCC filings as may be necessary or advisable to maintain the perfection and priority of the Security Interest at all times during the term of this Security Agreement.
Section 3.2 — Control Agreements
(a) The Grantor shall execute and deliver, and shall cause each applicable depository bank or financial institution to execute and deliver, deposit account control agreements ("DACAs") with respect to all Deposit Accounts of the Grantor, including, without limitation, the BCS operating account maintained at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356) and any other deposit accounts maintained at any other financial institution. Each such DACA shall be in form and substance reasonably satisfactory to the Collateral Agent and shall grant the Collateral Agent "control" (within the meaning of Section 9-104 of the UCC) over such Deposit Account.
(b) The Grantor shall execute and deliver, and shall cause each applicable securities intermediary or commodity intermediary to execute and deliver, securities account control agreements with respect to any securities accounts or commodity accounts maintained by the Grantor. Each such control agreement shall be in form and substance reasonably satisfactory to the Collateral Agent and shall grant the Collateral Agent "control" (within the meaning of Sections 8-106 and 9-106 of the UCC) over such securities accounts or commodity accounts.
Section 3.3 — Intellectual Property Filings
In order to perfect the Security Interest in the intellectual Property Collateral, the Grantor shall execute and deliver to the Collateral Agent, and the Collateral Agent is hereby authorized to file or record, the following:
(a) A patent security agreement, in form and substance reasonably satisfactory to the Collateral Agent, for recordation with the United States Patent and Trademark Office ("USPTO") covering all Patent Collateral;
(b) A trademark security agreement, in form and substance reasonably satisfactory to the Collateral Agent, for recordation with the USPTO covering all Trademark Collateral; and
(c) A copyright security agreement, in form and substance reasonably satisfactory to the Collateral Agent, for recordation with the United States Copyright Office covering all Copyright Collateral.
A schedule of all registered intellectual property of the Grantor is attached hereto as Schedule B. The Grantor shall promptly update Schedule B to reflect any new registrations, applications, or acquisitions of intellectual property.
Section 3.4 — Pledged Equity
(a) With respect to all certificated equity interests constituting Pledged Equity, the Grantor shall deliver, or shall cause to be delivered, to the Collateral Agent all stock certificates or other certificates representing such equity interests, together with undated stock powers or other transfer instruments duly executed in blank by the Grantor, in each case in form and substance reasonably satisfactory to the Collateral Agent. Such delivery shall be made on or prior to the date hereof (or, with respect to any equity interests hereafter acquired, promptly upon the acquisition thereof).
(b) With respect to all uncertificated equity interests constituting Pledged Equity, the Grantor shall take all actions necessary to grant the Collateral Agent "control" (within the meaning of Section 8-106 of the UCC) over such equity interests, including, without limitation, causing the issuer of such equity interests to register the Collateral Agent as the registered pledgee on the books and records of such issuer, or executing and delivering a control agreement with respect to such equity interests, in each case in form and substance reasonably satisfactory to the Collateral Agent.
Section 3.5 — Further Assurances Regarding Perfection
The Grantor shall, at the Grantor's sole cost and expense, take all actions that may be necessary or that the Collateral Agent may reasonably request in order to perfect and maintain the first-priority perfected security interest of the Collateral Agent in the Collateral (subject only to Permitted Liens), including, without limitation: (a) executing and delivering additional UCC financing statements, amendments, and continuation statements; (b) executing and delivering additional control agreements; (c) executing and delivering additional intellectual property security agreements; (d) delivering additional certificated securities together with duly executed, undated stock powers in blank; (e) executing and delivering any other instruments, agreements, or documents as the Collateral Agent may reasonably request; and (f) taking all other actions as may be necessary or advisable under the UCC or other applicable law to create, perfect, preserve, and protect the Security Interest.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE GRANTOR
The Grantor hereby represents and warrants to the Collateral Agent and each of the other Secured Parties as follows:
Section 4.1 — Organization and Authority
(a) The Grantor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.
(b) The Grantor is duly qualified to transact business as a foreign corporation, and is in good standing, in each of the following jurisdictions where the nature of its business or the ownership or leasing of its properties makes such qualification necessary: the State of Texas, the State of Arizona, the State of California, and the Commonwealth of Virginia.
(c) The Grantor has full corporate power and authority to execute, deliver, and perform this Security Agreement and to grant the Security Interest contemplated hereby.
(d) The execution, delivery, and performance of this Security Agreement and the granting of the Security Interest have been duly authorized by all necessary corporate action on the part of the Grantor, including all required approvals of the Grantor's board of directors, as evidenced by the board resolutions certified in the Secretary's Certificate delivered to the Collateral Agent by Jerome Hartwell, the General Counsel and Secretary of the Grantor, on the date hereof.
Section 4.2 — Legal Name and Location
(a) The exact legal name of the Grantor, as it appears in its Certificate of Incorporation as filed with the Secretary of State of the State of Delaware, is: Brightfield Cloud Services Inc.
(b) The Grantor's Employer Identification Number (EIN) is 84-3291057.
(c) The Grantor's state of organization is the State of Delaware.
(d) The Grantor's registered agent in the State of Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801.
(e) The Grantor's chief executive office and principal place of business is located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731.
(f) During the five (5) years preceding the date hereof, the Grantor has not changed its legal name, state of organization, or organizational form (i.e., corporate structure), except that (i) the Grantor was originally organized and incorporated in the State of Delaware in 2018, and (ii) the Grantor underwent a change of control in connection with the acquisition of the Grantor by Solara Capital Partners (through its portfolio company holding entity, Solara Holdings Group LLC) in October 2020. No merger, consolidation, or other organizational restructuring has occurred during such period.
Section 4.3 — Title to Collateral; No Liens
(a) The Grantor is the sole legal and beneficial owner of the Collateral (or, in the case of Collateral hereafter acquired, will be the sole legal and beneficial owner thereof at the time of acquisition), free and clear of all liens, security interests, pledges, charges, claims, and encumbrances of any nature whatsoever, other than (i) the Security Interest granted hereunder and (ii) Permitted Liens (as defined in the Credit Agreement).
(b) As of the date hereof, the only existing lien on any of the Collateral (other than Permitted Liens) is the security interest previously granted to Ridgeline Commercial Bank in connection with the Grantor's prior credit facility. The payoff amount required to release such lien is Eight Million Two Hundred Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($8,237,422), consisting of Eight Million Two Hundred Thousand Dollars ($8,200,000) in outstanding principal and Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($37,422) in accrued and unpaid interest. Such payoff amount is being paid in full on the date hereof from the proceeds of the Term Loan, and Ridgeline Commercial Bank has agreed to file UCC-3 termination statements in all applicable jurisdictions promptly upon receipt of the payoff proceeds.
(c) Upon the filing of such UCC-3 termination statements by Ridgeline Commercial Bank, no liens, security interests, or encumbrances will exist on any of the Collateral other than the Security Interest granted hereunder and Permitted Liens.
Section 4.4 — Deposit Accounts
A complete and accurate schedule of all deposit accounts maintained by the Grantor as of the date hereof is set forth on Schedule E attached hereto, including the BCS operating account at Pinnacle National Bank, N.A. (Account Number 7841-0029-3356). DACAs have been or will be executed with respect to all such deposit accounts as a condition precedent to the funding of the Term Loan under the Credit Agreement. The Grantor does not maintain any deposit accounts other than those listed on Schedule E.
Section 4.5 — Intellectual Property
(a) The intellectual property listed on Schedule B attached hereto constitutes a true, correct, and complete list of all registered and applied-for patents, trademarks, service marks, and copyrights owned by the Grantor as of the date hereof.
(b) To the knowledge of the Grantor, all such intellectual property is valid, subsisting, and enforceable. The Grantor owns or has a valid license to use all intellectual property necessary for the conduct of its Business as presently conducted.
(c) There are no pending or, to the knowledge of the Grantor, threatened claims, actions, or proceedings alleging that the Grantor's use of any intellectual property infringes, misappropriates, or otherwise violates the rights of any third party. No third party has asserted any claim of ownership or interest in any intellectual property owned by the Grantor.
(d) The Grantor's technology platform is SOC 2 Type II certified, and such certification remains in full force and effect as of the date hereof.
Section 4.6 — Equity Interests in Subsidiaries
(a) Schedule C attached hereto sets forth a true, correct, and complete list of all direct and indirect subsidiaries of the Grantor as of the date hereof, including the name and jurisdiction of organization of each such subsidiary, the percentage of equity interests owned by the Grantor (directly or indirectly), the type of equity interests (voting or non-voting), and the certificate numbers (if certificated) representing such equity interests.
(b) All equity interests in each corporate subsidiary are duly authorized, validly issued, fully paid, and non-assessable. All equity interests in each limited liability company subsidiary have been duly authorized and validly issued in accordance with the applicable operating agreement.
(c) For any foreign subsidiary, the pledge of equity interests is limited to sixty-five percent (65%) of the outstanding voting stock (and one hundred percent (100%) of any non-voting stock) of each such first-tier foreign subsidiary.
(d) No outstanding options, warrants, rights of conversion, or other agreements exist with respect to the equity interests of any subsidiary, except as disclosed in Schedule C.
Section 4.7 — Commercial Tort Claims
As of the date hereof, the Grantor has no commercial tort claims, except as set forth on Schedule D attached hereto (which, as of the date hereof, reflects no existing commercial tort claims). The Grantor shall promptly (and in any event within fifteen (15) days) notify the Collateral Agent in writing of any new commercial tort claim hereafter arising or asserted by the Grantor, and shall supplement Schedule D accordingly. Upon such notification, the Grantor shall be deemed to have granted to the Collateral Agent, for the ratable benefit of the Secured Parties, a continuing first-priority security interest in such commercial tort claim as Collateral hereunder.
Section 4.8 — No Conflicts
The execution, delivery, and performance by the Grantor of this Security Agreement and the granting of the Security Interest contemplated hereby do not and will not: (a) conflict with, result in a breach of, or constitute a default under the Grantor's Certificate of Incorporation (as amended) or Bylaws (as amended); (b) conflict with, result in a breach of, violate, or constitute a default under any material agreement, contract, lease, license, or other instrument to which the Grantor is a party or by which the Grantor or any of its property is bound; or (c) violate any applicable law, rule, regulation, order, judgment, decree, or injunction of any governmental authority applicable to the Grantor or any of its property. No consent, approval, license, authorization, or validation of, or filing, recording, or registration with, any governmental authority is required in connection with the execution, delivery, or performance of this Security Agreement or the creation or perfection of the Security Interest, other than (i) UCC financing statement filings in the jurisdictions set forth in Section 3.1, (ii) intellectual property filings with the USPTO and the United States Copyright Office as set forth in Section 3.3, and (iii) any filings with the United States Securities and Exchange Commission to the extent applicable.
Section 4.9 — Enforceability
This Security Agreement has been duly executed and delivered by the Grantor and constitutes a legal, valid, and binding obligation of the Grantor, enforceable against the Grantor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 4.10 — Priority
The Security Interest constitutes (or, upon the completion of the applicable perfection steps described herein, will constitute) a valid, first-priority perfected security interest in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, in the Collateral, subject only to Permitted Liens. Such first-priority perfected security interest shall be created and perfected upon: (a) the filing of UCC-1 financing statements with the Secretary of State of the State of Delaware and the Secretary of State of the State of Texas; (b) the execution and delivery of DACAs and securities account control agreements with respect to all Deposit Accounts and securities accounts; (c) the delivery to the Collateral Agent of all certificated securities constituting Pledged Equity, together with duly executed, undated stock powers in blank; and (d) the filing and recordation of intellectual property security agreements with the USPTO and the United States Copyright Office.
ARTICLE V — COVENANTS OF THE GRANTOR
The Grantor hereby covenants and agrees with the Collateral Agent and each of the other Secured Parties as follows:
Section 5.1 — Maintenance of Collateral
The Grantor shall maintain all Collateral in good working order and condition (ordinary wear and tear excepted) and shall make all necessary repairs thereto and replacements thereof. Without limiting the generality of the foregoing, all data center equipment located at the Dallas facility (2700 Stemmons Freeway, Building C, Dallas, Texas 75207) and the Phoenix facility (1850 West Buckeye Road, Suite 100, Phoenix, Arizona 85009) shall be maintained in accordance with industry standards for enterprise data center operations, including compliance with applicable environmental, health, and safety regulations. The Grantor shall not permit any Collateral to be used in violation of any applicable law, rule, or regulation or in violation of any insurance policy covering such Collateral.
Section 5.2 — Insurance
(a) The Grantor shall maintain insurance coverage with respect to the Collateral and the Business in such amounts, with such insurers, and covering such risks as required under the Credit Agreement. Without limiting the generality of the foregoing, the Grantor shall maintain the following minimum insurance coverages:
(i) Property and Casualty Insurance: Coverage with limits of not less than $50,000,000 per occurrence, maintained with Northbrook Indemnity Insurance Co. (or such other insurer of comparable financial strength as may be approved by the Collateral Agent), covering all tangible Collateral against loss or damage by fire, theft, explosion, flood, and such other risks as are customarily insured against by companies engaged in the same or similar business.
(ii) Cyber Liability Insurance: Coverage with limits of not less than $10,000,000 per occurrence, maintained with Northbrook Indemnity Insurance Co. (or such other insurer of comparable financial strength as may be approved by the Collateral Agent), covering losses arising from network security failures, data breaches, privacy liability, and related cyber incidents.
(iii) Directors and Officers (D&O) Insurance: Coverage with aggregate limits of not less than $15,000,000, maintained with Crosshaven Specialty Underwriters, Inc. (or such other insurer of comparable financial strength as may be approved by the Collateral Agent).
(b) All property and casualty insurance policies shall name the Collateral Agent and the Lender as loss payee (or mortgagee, as applicable) pursuant to a standard lender's loss-payable endorsement. All liability insurance policies shall name the Collateral Agent and the Lender as additional insureds.
(c) The Grantor's insurance broker of record is Ashford & Crane Insurance Brokerage LLC, Houston, Texas.
(d) Insurance proceeds relating to any loss, damage, or destruction of Collateral shall be applied in accordance with the Credit Agreement. The Grantor shall not take any action, or fail to take any action, that would permit any insurer to avoid liability under any policy of insurance maintained pursuant to this Section.
Section 5.3 — Disposition of Collateral
The Grantor shall not sell, transfer, assign, exchange, lease, or otherwise dispose of any Collateral, or attempt, offer, or contract to do so, except as expressly permitted under the Credit Agreement. For the avoidance of doubt, the Credit Agreement permits dispositions of assets not exceeding One Million Five Hundred Thousand Dollars ($1,500,000) individually or Five Million Dollars ($5,000,000) in the aggregate during any fiscal year, and other dispositions specifically defined as "Permitted Dispositions" under the Credit Agreement. Any disposition of Collateral not expressly permitted under the Credit Agreement shall require the prior written consent of the Collateral Agent (acting at the direction of the Lender).
Section 5.4 — Liens
The Grantor shall not create, incur, assume, or permit to exist any lien, security interest, pledge, charge, claim, or other encumbrance upon or with respect to any Collateral, except (a) the Security Interest granted hereunder and (b) Permitted Liens as defined in the Credit Agreement. The Grantor shall take all actions necessary to defend the Collateral against, and to remove from the Collateral, any lien, security interest, or other encumbrance that is not a Permitted Lien.
Section 5.5 — Changes in Name, Location, or Structure
The Grantor shall not, without providing at least thirty (30) days' prior written notice to the Collateral Agent: (a) change its legal name; (b) change its state of organization or organizational form; (c) change the location of its chief executive office; or (d) merge into or consolidate with any other entity, or change its organizational identity or corporate structure in any manner. In connection with any such change, the Grantor shall take (and shall cooperate with the Collateral Agent in taking) all actions necessary or advisable to maintain the perfection and priority of the Security Interest, including, without limitation, the filing of UCC-3 amendments in all applicable jurisdictions and the updating of all applicable records.
Section 5.6 — Defense of Collateral
The Grantor shall, at the Grantor's sole cost and expense, defend the Collateral against all claims, demands, actions, and proceedings of all persons other than the Secured Parties and shall protect and preserve the Grantor's rights in and to the Collateral. The Grantor shall promptly notify the Collateral Agent in writing of any claim or demand made against the Grantor or any Collateral that could reasonably be expected to result in a material adverse effect on the value of the Collateral or the Security Interest.
Section 5.7 — Notices Regarding Collateral
The Grantor shall promptly (and in any event within ten (10) Business Days) notify the Collateral Agent in writing of:
(a) any material loss, damage, or destruction of any Collateral (whether or not covered by insurance);
(b) any claim, action, or proceeding adverse to the Grantor's ownership of, or the Security Interest in, any material Collateral;
(c) any new commercial tort claim asserted by or on behalf of the Grantor (in accordance with Section 4.7); and
(d) any event or circumstance that could reasonably be expected to materially impair the value of the Collateral taken as a whole or the enforceability or priority of the Security Interest.
Section 5.8 — Intellectual Property Maintenance
(a) The Grantor shall maintain and preserve all material intellectual Property Collateral, and shall take all actions necessary or advisable to protect the validity, enforceability, and value thereof. Without limiting the foregoing, the Grantor shall: (i) timely file all necessary maintenance documents, renewal applications, statements of use, and declarations of continued use with the USPTO, the United States Copyright Office, and any applicable foreign intellectual property offices; (ii) timely pay all maintenance fees, annuities, renewal fees, and other fees required to maintain intellectual property registrations and applications in full force and effect; and (iii) diligently prosecute all pending patent and trademark applications.
(b) The Grantor shall not abandon, disclaim, dedicate to the public, or otherwise relinquish any material intellectual Property Collateral without the prior written consent of the Collateral Agent (such consent not to be unreasonably withheld or delayed). For purposes of this Section 5.8, intellectual property shall be deemed "material" if the abandonment, loss, or impairment thereof could reasonably be expected to have a material adverse effect on the Business or operations of the Grantor.
(c) The Grantor shall promptly notify the Collateral Agent of any infringement, misappropriation, or other unauthorized use of any material intellectual Property Collateral by any third party and shall take such action as the Collateral Agent may reasonably request to protect the Grantor's rights therein.
Section 5.9 — Further Assurances
(a) The Grantor shall, at the Grantor's sole cost and expense, promptly execute and deliver all instruments, documents, and agreements, and take all further action, that the Collateral Agent may from time to time reasonably request in order to perfect, protect, and maintain the Security Interest and the first-priority lien status thereof, and to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral.
(b) Without limiting the generality of the foregoing, the Grantor shall file (or authorize the Collateral Agent to file) UCC-3 continuation statements within six (6) months prior to the expiration of any filed UCC-1 financing statement (or any continuation statement previously filed with respect thereto) so as to maintain the effectiveness of such financing statement and the perfection of the Security Interest at all times during the term of this Security Agreement.
Section 5.10 — Books and Records
(a) The Grantor shall maintain complete and accurate books and records regarding the Collateral, including, without limitation, records reflecting the existence, nature, location, and value of all items of Collateral. Such books and records shall be maintained at the Grantor's chief executive office or at such other location as shall have been disclosed to and approved by the Collateral Agent.
(b) The Collateral Agent and the Lender (and their respective officers, employees, agents, accountants, and other representatives) shall have the right, upon reasonable prior written notice (which notice shall not be required during the continuance of an Event of Default), to inspect, audit, and examine the Grantor's books and records relating to the Collateral, and to inspect and examine the Collateral, at any reasonable time during normal business hours. The Grantor shall provide the Collateral Agent and the Lender with such information regarding the Collateral as the Collateral Agent or the Lender may reasonably request from time to time.
ARTICLE VI — RIGHTS AND REMEDIES OF THE COLLATERAL AGENT
Section 6.1 — Remedies Upon Default
(a) Upon the occurrence and during the continuance of an Event of Default (as defined in the Credit Agreement), the Collateral Agent shall have, in addition to all other rights and remedies granted to the Secured Parties under the Loan Documents, all of the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral) and all rights and remedies available at law or in equity. Without limiting the generality of the foregoing, the Collateral Agent may exercise the following rights and remedies:
(i) All rights and remedies provided under this Security Agreement;
(ii) All rights and remedies provided under the Credit Agreement and the other Loan Documents;
(iii) All rights and remedies of a secured party under Article 9 of the UCC as in effect in the applicable jurisdiction, including, without limitation, the right to take possession of any Collateral and the right to sell, lease, license, or otherwise dispose of any or all of the Collateral at one or more public or private sales, in one or more parcels, at such time or times, at such place or places, and upon such terms as the Collateral Agent may deem commercially reasonable; and
(iv) All other rights and remedies available under any other applicable law.
(b) For reference, the Events of Default under the Credit Agreement include, without limitation: (i) failure to pay principal when due (with no grace period); (ii) failure to pay interest or fees when due (subject to a five (5) Business Day grace period for interest payments); (iii) breach of any financial covenant (subject to a thirty (30) day cure period, limited to two (2) cure exercises during the term of the Credit Agreement); (iv) cross-default to other indebtedness of the Grantor or any Guarantor exceeding One Million Dollars ($1,000,000) in aggregate principal amount; (v) the entry of one or more material judgments against the Grantor or any Guarantor in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) not covered by insurance or not vacated, bonded, discharged, or stayed within the applicable cure period; (vi) a change of control of the Grantor (including, without limitation, Solara Holdings Group LLC ceasing to own, directly or indirectly, at least fifty-one percent (51%) of the outstanding voting equity interests of the Grantor); (vii) the occurrence of any bankruptcy, insolvency, receivership, or similar event with respect to the Grantor or any Guarantor; and (viii) any material misrepresentation or material breach of warranty in any Loan Document.
Section 6.2 — Sale of Collateral
(a) The Collateral Agent may sell, lease, license, or otherwise dispose of any or all of the Collateral, at one or more public or private sales, at any broker's board or on any securities exchange, for cash, upon credit, or for future delivery, at such prices and upon such terms as the Collateral Agent may deem commercially reasonable, irrespective of the impact of any such sale on the market price of the Collateral. The Collateral Agent may be the purchaser at any public sale and, if the Collateral is of a type customarily sold on a recognized market or the Collateral is of a type that is the subject of widely distributed standard price quotations, may be the purchaser at any private sale.
(b) The Grantor acknowledges that: (i) the Collateral Agent may be unable to effect a public sale of any or all of the Collateral due to certain prohibitions contained in the Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities laws; and (ii) the Collateral Agent may resort to one or more private sales to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities or interests for their own account for investment and not with a view to the distribution or resale thereof. The Grantor acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale, and agrees that such private sales shall not, for such reason alone, be deemed not to have been made in a commercially reasonable manner.
(c) Ten (10) Business Days' prior written notice of: (i) the time and place of any public sale; or (ii) the time after which any private sale or other intended disposition of the Collateral may be made, shall constitute commercially reasonable notice to the Grantor within the meaning of Section 9-611 of the UCC.
(d) All proceeds received by the Collateral Agent from any disposition of Collateral pursuant to this Section 6.2 shall be applied in accordance with Article VII hereof.
Section 6.3 — Collection of Receivables
Upon the occurrence and during the continuance of an Event of Default:
(a) The Collateral Agent may notify any or all account debtors and other obligors of the Grantor to make payments directly to the Collateral Agent, and the Collateral Agent may take control of any proceeds of the Collateral.
(b) The Collateral Agent may settle, compromise, or adjust any amounts owed on, and grant extensions of time for payment of, any accounts or other receivables constituting Collateral, and may otherwise exercise all rights of the Grantor with respect thereto.
(c) Any amounts received by the Grantor in respect of accounts or other receivables constituting Collateral shall be held in trust by the Grantor for the benefit of the Secured Parties and shall be promptly remitted to the Collateral Agent in the form received (duly endorsed, if applicable) for applicatio

SECURITY AGREEMENT

BRIGHTFIELD CLOUD SERVICES INC.

MERIDIAN WHITCOMB LLC

PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION

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Record

Parties

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